Thursday, October 25, 2012

Economic Moral History

Thousands of years ago people lived by hunting and gathering.  They survived off of what they could find.  Then, at some point, some guy discovered farming.

Many people then lived by growing most of their food rather than scrounging for it.

At some point, a group of people decided to live in the same general area.  When they did this many of them traded with each other.  (Many probably stole and murdered too, but they were not productive and were/ are more of a pest than useful.)

The reason for trade is simple.  Two people each have something that the other wants.  Trading made specialization possible.  Specialization is good because if you spend all day, every day, making clothes, then you'll probably be a better clothing maker than someone who only makes clothes occasionally.  So one guy makes clothing, one farms, one hunts, one makes spears, etc.

A problem arises when two people want to trade but they don't have what the other wants.  Say person A has shoes and wants some bread, person B has bread and wants a spear.  In this case no trade could be made.  Another trading problem is what happens when one of the trade items is more valuable than the other?  How many loaves of bread for a pair of shoes?  If they decided that ten loaves of bread are what it takes to trade for a pair of shoes then that is not helpful.  Who wants ten loaves of bread at once?

The solution to these two problems is a medium of exchange.

If the traders have a medium of exchange then trade will be much easier.  Shells, gold, and rice were all once used as mediums of exchange.  But all have their drawbacks.  "Money" is now our medium of exchange.

With money person A can buy one loaf of bread for $1 from person B, and person B did not need to take shoes in exchange.  Unlike bread, money would not go bad with age.  Money can be used now, or later.  And one trader does not need to have the trade items that the other trader wants in order to make a trade.


In the past the people who were wealthiest were the people who forced others to work for them.  These were the kings and emperors who lived off of what others had created.  Sometimes the people doing the created were forced to work or threatened with death (slaves), and sometimes a group of people paid some of what they had to their king for protection from outsiders and each other.  The kings got paid to keep law and order.

When we read stories in the Bible about the wealthy not being good people it is those kings and barons, etc that the Bible was talking about.  2000 years ago the only people who were rich were the people who were responsible for protecting their citizens or had slaves or peasants that worked for them.

Often times today those of us who are to the left politically point to Bible verses that say that the wealthy are not as morally righteous as the poor.  This is not true for many of the wealthy today.

Many of the wealthy today got that way through voluntary exchange.  Voluntary exchange is not evil, it is good.  The wealthy today got rich because they are good at trading, for a profit.

Trading for a profit is not an evil either; it is good.  When you trade your carrot for your friend's apple you have both profited.  You valued that apple more than your carrot and your friend valued your carrot for his apple.  If this is not true, then why did you trade?  Was this trade evil?  Was it morally wrong?

The people who get wealthy, honestly, today do so through good trades where their profits accumulate.  They make wise trades and hold onto their profits.

If we look at the people who were wealthy 2000 years ago, they were the people who collected taxes, kept the peace, provided law and order, and protected their citizens from outsiders.  Do they remind you of any organization today?

Many of the ancient rich cared little for the people who did the work that created wealth.  They were only interested in how much wealth that they could extract from those peasants, citizens or slaves.  Do they remind you of any organization today?

The Bible was right to call most of the rich in that time poor morally.  The Bible was right to point out the moral superiority of the poor.  The poor, then, lived off of their own work, not the work of others.  They lived by creating goods providing goods and providing services to their fellow man.  Do they remind you of anyone today?

Ask yourself this: 

Did Bill Gates become wealthy by protecting peasants from each other and outsiders? Did he become wealthy by providing a judicial system? 

Or did he become wealthy by creating goods or providing services and trading them for a profit?

Did Henry Ford, Andrew Carnegie, and Cornelius Vanderbilt become wealthy by taxing their peasants?

Or did they become rich by trading cars, steel, and train rides for a profit?

Who sounds more like the wealthy in the Bible: Henry Ford or our congress?

Who sounds more like the poor in the Bible: Vanderbilt or government bureaucrats?


Not only are those who earn their wealth honestly today more morally righteous, but they have also improved the lives of everyone...unlike our governments.

In all of the world's history the common man lived at barely above a subsistence level.  All of the inventions that we use everyday, the things that make our lives immeasurably better than the lives of our ancestors.

Electricity, cars, television, aspirin, airplanes, incandescent light bulbs, etc. were all mostly invented once the people who survived off of the work of others left those creators alone.

It was in free America (and a little in England before it) that all of the things that we use today came into being.

Bill Gates, Henry Ford, and many others got wealthy buy creating and providing their goods and services to the public.  Who benefited more?  Do you value having a computer, and smartphone, more than the few dollars it took to acquire them?  If not, then why did you acquire them? 

Bill Gates, Michael Dell, Steve Jobs and others became wealthy by providing these things for you.  Were they oppressing peasants?  Did they own slaves?  Even in the sweatshops are their employees forced to work for them?  Or are the sweatshop jobs those employees' best option?  Are those sweatshop employees better off with a paying job or no job at all?


There are many who have become wealthy today the same way that the wealthy did when the Bible was written.  There are many who live off of the work of others.  These people do through the government.

Who is more likely to be a better person: a wealthy restaurant owner (who provides goods, services, and jobs) or someone who gets a subsidy from the government (and provides the public with nothing)?


The people who acquire their wealth honestly, not through theft or through the government, should be admired and praised.  Asking them to provide things for you is the same as an ancient king demanding that his slaves provide him with his wants and needs.

Whose side are you on?

The side that honestly creates wealth by working hard?

Or the side that demands a percentage from the creators?

Are you more like the ancient king or his slaves?

1 comment:

  1. Great article. The only thing more I might mention is "crony" capitalism that is not free exchange, but uses government power to create advantages for certain industries against others. Still fits with your morality of free trade gain vs the immorality of gain through power alone.