The Christian Economist by Dave Arnott

The Pilgrims tried socialism and it failed. Then private property led to so much prosperity that they hosted the first Thanksgiving. If you have enough to eat this Thanksgiving, you should be thankful for the private property system that produced the food. We live in the most prosperous, fruitful time in human history. Let’s take a brief look at how we got here. In October of 1621, Plymouth Colony governor William Bradford called a three-day festival, inviting the ninety Indians to join the 50 Pilgrims. This feast, which included times of thanks to God as well as athletic competitions and food and fellowship, is commonly celebrated as the first Thanksgiving festival in America. So, if you celebrate it with football games and food with your neighbors, you are re-enacting this cherished Christian tradition, but who were these Pilgrims, and how did they get here? Fight or Flight That’s the basic idea from psychology that our minds are built to either change ideas we disagree with, or run from them. It’s a pretty big discussion among Christians in the United States today. Or, at least, it SHOULD be. I delve into the question in podcast #72 titled Two Worlds. Being in the world, but not of the world is becoming more difficult in post modernity. The Pilgrims response was flight, as explained by David Barton at WallBuilders: The Pilgrims are well known today for their association with the first Thanksgiving festival. The Pilgrims were Separatists — a set of Protestants who felt that they would be unable to reform the Church of England and therefore they chose “flight” over “fight.” They went to Holland and then eventually to America. But the other group who came later, were Puritans. They were “fighters” who believed they could reform the Church of England. It turned out that they were wrong, and following severe persecution, some 20,000 followed the Pilgrims to America. The Pilgrims had obtained a land grant for Virginia and set sail in the Mayflower on September 6, 1620. But after a rough ocean crossing, they landed 200 miles north of Virginia in what became known as Massachusetts. On November 11, 1620, they finally dropped anchor and came ashore. Grateful or Entitled Of the hundreds of books and articles I’ve read and the hundreds of speeches I’ve heard, the one that makes the most impact on today’s subject is a little five-minute video by Dennis Prager, titled The Key to Unhappiness. He says there are two groups of people: Those who are grateful and those who are entitled. The grateful will always be happy, the entitled will never be happy. And here’s the strange part: Dennis is a Jew, who does not believe Jesus died for him. Think about it: A Jew is telling a Christian that HE should be grateful. Kinda backward, isn’t it? I’m the one who should be telling HIM to be grateful. Jesus had to die for your sins because there’s no such thing as a free lunch. Somebody had to pay. And it wasn’t you. That’s why Christians are grateful, and why we celebrate Thanksgiving. We have a lot to be grateful for. You’re welcome to feel sorry for atheists during this season. They have no one to be grateful TO. I don’t know how you can be grateful FOR, without being grateful TO. Oh, then the non-believer has to suffer through Christmas, and not celebrate the birth of Christ. You know, for all we complain about the difficulty of being a Christian, this time of year, it’s quite a blessing. Our grandkids sometimes tell each other, “You get what you get, and you don’t throw a fit.” Actually, that’s a pretty good Christian economic philosophy. Be happy for what you have. After all, being happy is not having what you want, it’s wanting what you have. In our book Biblical Economic Policy, Sergiy Saydometov and I mention this concept as one of the Ten Commandments of Economics, which we borrowed from the list by Moses. It’s #4 for us, and it’s called “Don’t Covet.” If you Don’t Work

Trade with China makes Americans richer, but China is likely using the profits from their exports to build a military that the US will fight someday. In the 19th century, if a sailor got too drunk in a port city, he might wake up the next day on a ship steaming toward Shanghai. The noun became a verb, and he had been “Shanghaied,” but in the current US-China trade relationship, who is getting Shanghaied? Trade with China makes us richer, but they might be using those profits to build a military that we will fight someday. I’ve often said, you won’t find a one-armed economist because we will always say, “On the other hand.” Trade with China reflects this conflict. Trade makes us richer, but it also makes China richer. What do we do? I think it would be difficult to find a scripture that encouraged market discrimination against a people group, just because they are from another country. That’s where Christianity and Economics support each other. They BOTH call for open markets and trade, among all people groups and all countries. Trade is Good Of course, trade is good. The entire Adam Smith economic legacy might be neatly tied up in a two-step process: First, increase production via specialization, then trade your surplus. Trade is Good is one of the Ten Commandments of Economics that I found with my co-author Sergiy Saydometov, when we wrote the book titled Biblical Economic Policy. If we didn’t trade, we would be very poor. I’m pretty good at giving economics lectures and writing, I’m an average farmer, a lousy tailor, and even a worse auto mechanic. I couldn’t make a car if my life depended on it. Instead, I specialize in writing and speaking, and I trade for food, clothes, and cars. That little economic system works at the national level too. This is still Adam Smith territory: he noticed that the French were better at making wine, but the Scots were better at making Whiskey. That’s why some wines, like Champagne and Bordeaux, are named for the region where they are made. I’ll presume you know why they call it “Scotch Whiskey.” In the first nine months of this year, China exported to us $210 billion more in goods than we exported to them. That’s the FRONT part of the equation that they explain to you on CNN and Fox News. The back part of the equation is a little more complex, so you only find that in the Wall Street Journal and The Economist. That’s where you find this Chinese businessman holding a million US dollars and trying to exchange it for something. He ends up buying a shopping mall in Cincinnati, or a wheat farm in Kansas because that’s where the US dollar is honored. That back side of the equation is where you hear people complain “The Chinese will own the US someday.” That’s chicken little economics. I heard the same thing about the Japanese in the 1990’s. If the Chinese buy $210 billion worth of real estate in the US every year, there really is not even an ESTIMATE of how long it would take them to own a meaningful percentage of US assets. Recently, there have been reports that they are buying land near military installations. That’s concerning. Trading Avoids War There’s something called the Golden Arches theory of Conflict Prevention that goes something like this “No two countries that both have a McDonald's have ever fought a war against each other.” It was first proposed by Thomas Friedman in a New York Times column, then became part of his book titled The Lexus and the Olive Tree, which I read years ago. Maybe it was disproven by the UK’s struggle with Argentina over the Falklands, and the current Russian war on Ukraine, but the concept is still valid. Trading avoids war. Part of the reason that Imperial Japan attacked the US was because the US stopped trading oil and steel with them. OK, the US had good reason. They were responding to Japan’s atrocious treatment of the Chinese, just across the Japanese border. That’s interesting to think about: My podcast today,

ChatGPT leans liberal and can be deceptive, but Christians should not be afraid of it; It's simply another machine that will cause creative destruction that makes us economically richer. Toward the end of last semester, I wrote to my Dean in the College of Business, “I either have the best student in the history of our program, or he’s using ChatGPT to write his essay answers.” After noticing some similarity in a few students’ essays, I got something of a sense for what was written by students, and what was written by the Bot. I had asked a strategy question, and the guilty answers contained more financial information than I had asked for. This is not a huge deal. Students have been cheating on answers since Cain said he didn’t know where his brother was. Keeping up with cheating is what we do as teachers and professors. This is simply a new technique. It IS cheating, by the way. Passing off someone else’s work as your own, is cheating. Even if the “someone” is a computer program. There are many Biblical warnings about deception. Here’s just one from the Old Testament, and one from the New Testament. Job 15:31 “Let him not deceive himself by trusting what is worthless, for he will get nothing in return”. And in 2 Timothy 3:13-14, the apostle Paul warns us, “Evil people and impostors will go from bad to worse as they deceive others and are themselves deceived. But as for you, continue in what you have learned and found to be true, because you know from whom you learned it”. So we shouldn’t be alarmed by a bot trying to change our thinking. Assumptions An article in the Washington Post by Gerrit De Vynck is titled “ChatGPT leans liberal, research shows.” I assume Mr. De Vynck wrote the article, and that he didn’t use AI to write it for him. Now THAT would be interesting, wouldn’t it? Asking a bot to write an article criticizing a bot? He cited a research paper that said the following, “The paper adds to a growing body of research on chatbots showing that despite their designers trying to control potential biases, the bots are infused with assumptions, beliefs and stereotypes found in the reams of data scraped from the open internet that they are trained on.” So, it’s “garbage in – garbage out.” All computer programs are that way. The frightening thing about this one, is its apparent ability to teach itself. That’s reminiscent of the robot Hal’s response in the 1968 movie, 2001 A Space Odyssey, “Sorry Dave, ‘m afraid I can’t do that.” But for now, let’s look back – to assumptions – not forward. The Economics textbook I use in my Macro class at Dallas Baptist University was authored by Gregory Mankiw. He has a section in an early chapter about assumptions. As a warning about false assumptions, I tell this story. I bought this painting while waiting for the vaporetto – that’s the water bus – in Venice, Italy. In 1609, Galileo hauled the Doge – that’s the governor of the city state of Venice – up the 323 steps of San Marco tower to show him what he’d found in the night sky, using his newly refined telescope. It seemed to indicate that my predecessors – Catholic Priests – were wrong, and that the earth was NOT the center of the solar system. Galileo was tried by my predecessors, who claimed to contain all the information in the world at the time. He tried to defend himself by saying it was only a theory, and he didn’t really believe it. Well, he spent the rest of his life under house arrest. The message was pretty clear: Don’t mess with the folks who held the power of information. Legend has it that after his prosecution, he uttered the famous phrase, “Yet it moves.” You still hear that phrase used occasionally when someone thinks they are clearly correct after losing an argument. Maybe like a reasonable person who does the math and finds that the Inflation Reduction Act actually CAUSED inflation. But,

The powerful religion of Karl Marx and of Islam leads to the powerful political system of totalitarianism, which leads to the powerful economic system of Marxism, which impoverishes its people. How we see God has a lot to do with how we see our fellow man. Belief – Politics - Economics When I wrote the curriculum for International Economics at Dallas Baptist University, I used this simple diagram to begin each session. Belief systems produce political systems, which produce economic systems. I know, there is a lot of interplay and it goes back and forth. But the diagram is mostly correct. That’s why we should not be surprised that the Muslim Palestinians of Hamas have a totalitarian political system and a socialist economic system. Power begets power. All three of those systems are based on power structures. If Israel didn't exist, the Palestinians would still live in abject poverty. That is not Israel's fault. It's a cultural thing. In most cases, the powerful top-down religion of Islam does not produce a bottom-up political system like democracy, nor an economic system like free market capitalism that enriches the poor. What we study in social science is differences. That’s it. We want to know why there are differences in the world. Economics is a social science. So, we want to know why the Israelis make $55,000, their neighbors, the Jordanians and Lebanese make less than $13,000, and the Palestinians make under $7,000. Israelis make eight times more than their Palestinian neighbors. Why? Top-down religions like Islam identify more easily with top-down political ideas like totalitarianism, and top-down economics like Marxism. Karl Marx and the Devil That happens to be the title of my podcast #106. That one is based on some comments by Dr. David Jeremiah. I am struggling through a book right now titled The Devil and Karl Marx by Paul Kengor. The subtitle is “Communism’s long march of death, deception, and infiltration.” That sounds like the recent Hamas attack on Israel, doesn’t it? The book I’m currently reading is hard to read because Karl Marx was such an evil person. If you are sickened by the atrocities performed by Hamas against Israelis recently, then you won’t want to read the book. Karl Marx exercised power whenever he could. He impregnated his housemaid, who was about as close to an owned servant as you can get. Two of his daughters committed suicide. His personal life is as disordered and calamitous as the economic system he designed. He bullied people on many occasions, and very rarely worked. He lived off his partner, Friedrich Engels. Maybe I’ll explain more about his disastrous and immoral life in another podcast someday. For now, just be assured, that in his personal life and in Marxism, it’s all based on power. At the heart of Marxism is the idea of the oppressors and the oppressed. It’s such a lousy economic system because it fails to recognize that both parties in a transaction can benefit at the same time. Milton Friedman famously said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” Well, Marxism is one of those economic fallacies. The left thinks Israel’s prosperity was caused by the Jews stealing wealth from the Palestinians. That’s not how it works. About those oppressed and oppressors. There are about 475 million Arabs in the countries that surround Israel. Their population increased by 8.2 million last year alone. There are.... are you ready for it......just over 7 million Jews in Israel. Get it? The Arab population increase in ONE YEAR was greater than the entire Jewish population. But we’re being told that 7 million people oppress 475 million? You see, some of this misaligned sympathy for the Palestinians is because they are portrayed as the oppressed. That’s just nonsense. They are poor because their religion produces totalitarian polit...

There are Ten Reasons for Hope in the New Year I often explain that as an economist, I’m a pessimist, but as a Christian, I have hope. Hope is endemic to the Christian spirit and idea. We believe God is at work, even when the US debt clock shows that each individual’s share of the $34 trillion in national debt has increased from $85,000 to $100,000 in just the last three years. Think about it: Each of your children and grandchildren owes $100,000 in national debt. Still, there is hope. Here are some economic hopes we can have for 2024. The Omniscient God From seeing God as a small g to God with a big G God IS sovereign, so He can do whatever He wants, without our help, but He chooses to allow us to join Him in his great work. I explained this concept in my last economics lesson of the semester at Dallas Baptist University because it helps us understand HOW MUCH humans should do. That’s the whole ballgame in macroeconomics: How active should monetary and fiscal policy be? For an atheist, it’s easy: Since they don’t believe there IS a God, humans have to do everything, but for Christians, or really, anyone who believes in a greater being, we have decisions to make about how active fiscal and monetary policy should be. It’s pretty easy to see that Christians should hope for less active fiscal and monetary policies in 2024. Accepting responsibility When GK Chesterton was asked, “What’s wrong with the United Kingdom?” He answered, “Me.” Increasingly, people believe that there’s nothing wrong with individuals, and what’s wrong in society. That’s why liberal college professors train their students to be activists. Their objective is to change the regulatory systems of society. Well, THEY are wrong. What IS wrong is the fallen nature of individuals, not societal structure. If folks start to see that the problem is based on the fallen nature, 2024 would be a better year. A Free Economic System From Karl Marx to Adam Smith Adam Smith explained a free-market capitalist system, where both producers and consumers could benefit in the same exchange. Karl Marx countered it with a system that calls for the oppressed to rise up and throw off their oppressors. Guess what happens next? Another revolution, followed by guess what? Another revolution. Marxism is a system of continual battles because they can always find oppressed groups. It never ends in peace. I asked my students just last week, “Do they still make you read Animal Farm in high school?” Most heads nodded. There’s a lot of Marxist thinking in the world today: People who support Hamas against Israel have been duped into believing that the smaller, weaker group is always oppressed. From socialism to free-market capitalism A Christian Economist favors a middle position, typically somewhere near the free-market end of the spectrum, where there is enough freedom to exchange goods fairly, but where government has the role of maintaining competition, and preventing monopolies. Socialism always produces monopolies that serve the supplier at the expense of the demander. It’s not even a debatable subject. From spending to saving Brazil went through a period of sustained high inflation between about 1980 and the year 2000. During high inflationary cycles, it’s not wise to save, because your money becomes worth less, the longer you hold it. This period created a culture of spending and not saving, which is still obvious in Brazil today. The US is moving that way. Before the covid pandemic, in 2019, the US saving rate was about 7%. It’s now half that, about 3.5% and total consumer credit card debt crossed the $1 trillion threshold last month. I don’t have time to unpack all the various reasons for this, but one of them is inflation, and the other is a moral hazard. The government bailed out many folks during the pandemic, and now people assume the government will take care of them. So, why save?