Toxic Inequality - A Review

In the last decade or so, economic discourse on the left has begun to focus on inequality rather than poverty alleviation. Thomas Shapiro’s recent book, Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide, and Threatens Our Future, explores that theme. Analysis like that in Shapiro’s volume relies on catching people at the stage after the Great Recession before they had fully recovered and blaming their lot on insufficiency of government regulation. Books like this do well for their cause to claim a crisis for their advantage.

There are basic ideas that Shapiro relies upon that are flawed. He speaks of “tax expenditures” when dealing with exemptions, cuts, and other deductions in the tax code. This is indicative of an underlying assumption that the state is the primary owner of all property and has the right to determine who should get to keep it or not. He also simply assumes that inequality is fundamentally immoral, which he makes no effort to defend.

Despite these assumptions, the book does highlight problems that deserve common concern, even if the solutions differ from those that are likely to be successful in the long run. The fundamental problem is not that rich people have too much, but that the poor are significantly disadvantaged by their poverty. The poor are, in many cases, cut off from adequate (there will never be equal) opportunity to flourish merely because of their poverty.

That should raise concerns among people across the political spectrum. Some of the case studies that Shapiro highlights reflect the logical outcomes of choices made by the subjects of the study. There are several instances that his subjects made irrational decisions and reaped the whirlwind during the financial crisis. However, there are many more cases where circumstances beyond the control of the individual or family drove negative outcomes or closed doors.

Shapiro’s book emphasizes the ongoing changes in the job market, which should be a significant concern to us all. Upper and lower skill jobs are increasing in number while middle skill jobs are largely being outsourced or automated. This is creating a narrower window for people to climb the social ladder, as the gap between low and high skill often involves a significant capital investment for a college education. This represents a challenge our factory-style schools need to adapt to, but also one which lower income, lower funding districts will increasing have difficulty overcoming.

The data in this book is sound and points toward the need for meaningful action on the part of society to seek to increase opportunities for success for those on the bottom end of the financial spectrum and their children. Some of the means that Shapiro suggests to solve the dilemma are likely to lead to worse conditions and be financially unsustainable. For example, Shapiro argues for the creation of make-work jobs by the government designed to inspire full employment. He also argues for increasing the already often unsustainable defined benefit pension plans, like those offered by many municipalities. Additionally, increasing the ability for unions to force people to join is a proposed solution. This assumes that unions always use their dues well, represent the interests of their members effectively, and facilitate authentic human flourishing. In short, many of Shapiro’s suggestions are more likely to exacerbate the negative attributes of our present economy, though they are well-intentioned.

Although the solutions are questionable, Shapiro reveals are real societal problems that need to be addressed. These are just the sorts of issues Ben Sasse was attempting to address in his recent book, The Vanishing American Adult. This conversation needs to continue as we work together across political lines to address the significant problem of the dissociative impact of poverty in our society.

Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide, and Threatens Our Future

$15.12

By Thomas M. Shapiro

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The Road to Serfdom - A Review

One sign of a classic book is that the critiques it offers remain valid for years after being penned. F. A. Hayek’s famous book, The Road to Serfdom, demonstrates that quality. As the battle continues to rage between advocates of free market systems and various forms of socialism, Hayek’s diagnosis of the likely end of directed economic systems—namely, tyranny—illustrates why advocates of markets have not simply rolled over and played dead, despite the economic and social realities of economic problems.

Another sign of a classic book is that it has explanatory power and offers brief summaries that could have been expanded to book length treatises. The Road to Serfdom contains dozens of examples of succinct statement of a deep, complex economic and social problems that arise from attempts to plan the economy.

The book, overall, is a masterpiece that deserves to be read and that contemporary supporters of socialism should be forced to reckon with. A few points, however, arise from the wider tapestry of the work that deserve especial note.

First, contrary to popular representations that attempt to associate free markets to National Socialism, Hayek shows that the fascism promoted by the Nazi’s was an exacerbation of the socialist ideals that had been embedded in German society for several generations rather than a market response. This, of course, violates Godwin’s Law by invoking the Nazis. However, to be fair, the volume was written during World War II. However, the close connection between the totalitarianism of Nazism, much like Italian fascism and Stalinist communism, is a significant point of the entire volume. Attempts to plan the economy centrally lead to tyranny of various degrees.

Second, Hayek is careful to differentiate the welfare state from economic socialism. He actually lauds the work of the British safety net in helping to ensure the basic needs of people are met when they are out of work. At the same time, he cautions against welfare efforts that that undermine the market.

An element that is missing from Hayek is a discussion of why liberty is a worthy end. That is, after all, the great advantage he lauds in the market system. Despite its inequities, the market system enables a greater freedom of choice for people. He argues for individualism, which is not quite the bogeyman contemporary opponents of markets make it out to be, but an effort to value the individual and to assert the rights of the individual even amidst the collective. Because of this lack, this work by Hayek is open to criticism that it can result in atomistic selfishness, but there are answers that are implied by the context. Hayek represents there are limits to human freedom, which should be enshrined in law. He is, therefore, not arguing for a Randian version of anarcho-capitalism. Hayek also recognizes there are externalities (like pollution) that may need to be regulated apart from market influences.

In short, despite the lack of explicit reasoning about certain moral assumptions, the market economy that Hayek lauds in this text is a far cry from the strawman constructed by many of capitalism’s critics. It is also quite a distance from the dangerous individualistic vision of market participation that is offered by some of the free markets popular supporters. There is a moral thickness to Hayek that, while still falling short of biblical adequacy, represents a better foundation than many, both supporters and detractors, assume.

A strength of the text is that Hayek shows that good intentions in economic planning do not make up for the inability of humans to adequately plan. The range of social goods that are valued by different people make it impossible for central planners to prioritized the preferred goods of the population, since there will always be competition between those goods. The priority of goods must, therefore, be imposed rather than derived and will thus lead to the constraint of reasonable and warranted freedoms of many to meet the goods of the empowered few planners.

Here again, the lack of an ethical consensus that can drive the social action of the planners reveals that economic reasoning is second order. That is, moral virtue must precede the economic system. Any economic system is doomed to reveal the moral failings of its constituent members. Hayek’s argument and historical economic evidence reveals that markets have the best internal mechanism for mitigating vices apart from centralized planning. Still, a market driven by an immoral people will merely enlarge their immoralities. There is, perhaps, greater danger in enforcing evil as an intended “good” in collectivist economics that makes the ability in a market system of to refuse to participate in immorality preferable.

Hayek also reveals that today’s arguments that “socialism must be implemented because of impending doom” is nothing new. There is nothing new under the sun. Human nature is consistent in any economic system. Our task is to work toward the best possible system of economics that will encourage human flourishing. There are many who believe, as Hayek does, that free markets tend to do that better than various forms of collectivist economics.

The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2)

$9.83

By F. A. Hayek

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The Poverty Industry

Perverse incentives woven into the fabric of systems have the tendency to undermine positive outcomes and exacerbate abuses of the most well-intentioned programs. In his 2016 book, The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens, Daniel L. Hatcher, a law professor, exposes the manifold perverse incentives of our various contemporary aid systems.

From the start, it should be clear that Hatcher is not an angry Republican bemoaning money wasted on the bottom end of the social scale. In fact, the book is published by New York University Press, which is not known for being a bastion of conservativism. Also, Hatcher especially highlights as many as Republicans who are abusing the intent of various Federal aid programs, while being much less intrusive and accusatory toward Democrats. Toward the end of the volume, he makes it clear that he is not calling for an end to the Federal programs or a reduction in their expenditures, but rather a deeper look at abuses that prevent the programs from achieving their ends.

There are several examples, but Hatcher spends a great deal of time walking through abuses that are endemic in the child protection systems. In an attempt to recoup funds, these government departments often confiscate property from their wards, seek ways to maximize streams of income from the Federal government, and fail to use the resultant funds for the benefit of the children. It becomes advantageous, given the current arrangement, for agents to terminate parental rights from poorer kids, refuse to place them, and lengthen adoption processes because the lower the income the child’s parents have, the larger the aid income stream the state can harvest.

Similarly, Hatcher highlights Medicaid programs in which states transfer large sums of money to hospitals to garner matching grants from the Federal government. The state “expenditures” are then funneled back into state coffers via bed taxes or ledger transfers. This means that the state actually does not spend the money that the Federal government was intended to match. It also means that the intended recipients of the redistribution—the poor—do not receive the intended benefit.

Clearly, Hatcher is highlighting abuses, which may be representative, but likely are not normative. Much of the social work done by agents of the state is heartbreaking and hard, so we should not read his book in a condemnatory manner. However, there are fundamental systemic flaws and, more significantly, failures of virtue in the people overseeing the systems.

The vast majority of the abuses Hatcher cites are, in fact, legal. If a hospital is owned by the government, then a ledger transfer is a legitimate means for it to transfer excess funds back to the parent government. However, when such transfers are examples of playing shell games with money, since money is fungible, then it undermines the sense of fair play and incentivizes everyone to misuse the system.

Some of the systemic failures Hatcher highlights can be remedied by law. For example, the practice of the state receiving child support on behalf of its wards and then attempting to collect debts from often poverty-stricken “dead beat dads” can lead to the permanent estrangement of fathers from their children and warrants for the arrest of men and women who simply cannot pay the demanded support. This is, in one sense, the criminalization of poverty, which may lead to parents in arrears on their support payments fleeing from officers and, perhaps, being shot repeatedly in the back. Welfare is an indication of a failure of our economic system, so at some point, the law should simply recognize that much of that money is sunk and stop trying to claw it back from the poor.

The greater problem, however, is an absence of virtue in society. (This is my conclusion, not Hatchers.) When legislators, governors, and administrators do legal, but unintended things to maximize their take from the Federal government it represents a failure of virtue. Economists and politicians can debate the relative merits of various social programs, but people should have the integrity not to attempt to game the system. Or, at least, if they do choose to milk the system for every advantage, they should pass those advantages on to the targeted recipient. Unfortunately, there is a too broad acceptance of the equivalence of legality with morality, which is intellectually sloppy and spiritually damaging.

Hatcher’s book is an important one for understanding some of the reasons the so-called war on poverty has been so ineffective. The problem of poverty is not going away, and it may be that systemic flaws and a lack of virtue are contributing as much as the oft-cited lack of funding.

The Poverty Industry: The Exploitation of America's Most Vulnerable Citizens (Families, Law, and Society)

$24.13

By Daniel L. Hatcher

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Empirical Foundations of the Common Good - A Review

Empirical Foundations of the Common Good is the sort of project that offers hope for interdisciplinary dialogue. The premise of the book is to provide a response to the basic question how social sciences can inform theology. For the most part, the essays are helpful in this regard, especially for those who rely on traditional Catholic Social Teachings as a foundation for their theology.

With a few exceptions, the non-theologians’ explanations of their contribution to theology are helpful. The majority of the authors avoided the assumption that theology should conform to the findings of their discipline; instead they argued that their disciplines could inform the application of theology.

For example, Christian theology makes the moral claim that Christians should be engaged in seeking the welfare of the poor. Economics provides evidence for how best that should take place. Or, to state it differently, theology provides the telos for the method of economics. When political science, public policy, sociology, and economics claim to provide both the definition of the common good and the method for attaining to the common good, they transgress into the area of applied theology, or ethics. When discipline failure like that happen, the result is the current elevation of politics, economics, and sexuality to the status of summum bonum for society. That, as we see around us, is a guarantee of the pursuit of anything but a true common good.

After Daniel Finn’s editorial introduction, the volume contains eight essays by experts in a variety of disciplines, all making arguments about how their particular discipline contributes to theological arguments about the common good. Chapter One is political scientist, Matthew Carnes, showing how his discipline contributes to a cross-disciplinary discussion through four emphases within Political Science. In the second chapter, Andrew Yuengert asserts that economics can help theologians understand the role of individual choice in seeking the common good. Mary Jo Bane, a public policy specialist, argues in Chapter Three for the contribution of her discipline in helping theologians understand trade-offs implicit in pursuing the common good. In the fourth chapter, Douglas Porpora argues that sociologists have little to say about the constitution of the common good, but have a great deal of expertise in showing how to measure and evaluate the pursuit of those theologically identified ends.

Charles Wilber, an economist, echoes Porpora in his essay in Chapter Five. He argues that economics can help measure progress toward human flourishing, while acknowledging the failure of most economists to separate economic metrics from a holistic understanding of the common good. The sixth chapter puts bureaucracy in perspective, as Gerardo Sanchis Muños dissects the failure of public service to serve the common good. Theologian David Cloutier critiques contemporary iterations of Catholic social teaching, pointing to less individualistic emphases in earlier stages of the tradition in Chapter Seven. The eighth and final chapter, theologian-economist Mary Hirschfeld reasserts the importance of theology for the social sciences, so that a proper understanding of the common good may develop.

The clear message of this volume is that theology needs social sciences to understand how to accomplish its moral ends, while the social sciences need theology to inform them of the nature of the common good. In the present fragmented state of academia, there is too much isolation in separate ivory towers. That is unhealthy for students and tragic for the development of robust worldviews that have a defined end and cogent methodology.

Somewhat surprisingly, this volume is favorable toward markets, though critical of market economics untethered to a moral foundation. However, the various authors regularly affirm the improved possibilities for flourishing that come from enabling market economics. Given the use of Catholic Social Teaching by some to argue for forms of economic socialism, this is volume that deserves careful attention. It may be that proponents of various forms of socialism are, in fact, conflating a pursuit of the common good with discredited means to achieve it.

Like other volumes that Finn has edited, this collection of essays reflects careful conversation. The essays refer to one another and show signs of having been shaped by the arguments in various chapters. This makes the volume easier to read and more helpful for classroom instruction or dialog than many edited volumes that appear to be a random collection of voices shouting in the wilderness.

If there are two things clearly explained in this volume it is (1) that we need more interdisciplinary dialogue, else theology and social sciences tend toward tyranny, and (2) we need not abandon the methodology of market economics for central planning to better approximate the common good.

Empirical Foundations of the Common Good: What Theology Can Learn from Social Science

$85.17

Oxford University Press

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Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

A Recent Book on the Ten Commandments - Review

The Ten Commandments, known among Bible scholars and theologians as the Decalogue (literally, ten words), are a significant focus of the Christian ethical tradition. In popular American culture, they are often seen as the epitome of biblical ethics. Some, misunderstanding the nature of the gospel, will state they are good with God because “they follow the Ten Commandments.” (If you haven’t encountered this, you haven’t shared the gospel in the so-called Bible Belt.) One cannot understand Christian ethics without delving into the text and interpretation of the Decalogue.

As a result of the importance of the Ten Commandments in the Judeo-Christian ethics, the study of the topic continues at a steady pace. David Baker’s recent book, The Decalogue: Living as the People of God, represents one of the more recent entries into the ongoing discussion.

Summary

The structure of The Decalogue is simple and straightforward. Part One has four chapters that survey the background of the Ten Commandments, including their shape, form, origin, and purpose. Part Two has a chapter on each of the first five commandments; this section focuses on loving God properly. Part Three discusses the last five commandments; these chapters emphasize loving neighbor. The fourth part consists of a single chapter that attempts to further develop the idea that the Ten Commandments are applicable to contemporary life.

It should be clear from the outset that this book is a scholarly volume representing a specific approach of the Decalogue. Baker is a good biblical scholar and interacts with key textual resources and commentaries in laying out his argument. He provides some of the background on the textual history of the Ten Commandments, including how different denominations number them and how they divide up the tablets, but it focuses mainly on the text itself and not the traditional ethical interpretations of the Decalogue.

By focusing on the text of the Decalogue, Baker provides a resource that opens up the topic and introduces the Ten Commandments for a contemporary audience. He divides each of his chapters on a commandment into three basic parts: (1) Explaining the Ancient Near Eastern context; (2) Exposition of the commandment in the context of the Bible; (3) Some application of the text.

Analysis and Conclusion

In explaining his structure, Baker notes, “There are a good number of books with valuable insights concerning the relevance of the commandments, but these often lack a firm basis in the study of the text.” (pg. x) His observation is correct and his emphasis on trying to explain the text makes this volume a good addition to ongoing study of the Decalogue.

At the same time, the contemporary ethical application of the Decalogue is often best informed by the historical uses of the text. Baker’s volume lacks this theological history. For example, there is little interaction with the way historic confessions of the Reformation dealt with the Ten Commandments, and very little reference to significant sermons preached by pastor-theologians on the commandments. Baker did not set out to accomplish this is his volume, so this is not a fault, but those considering purchasing it should be aware of the limit of the scope.

Also, the explanation of the purpose of the Decalogue in chapter four is thin in comparison to many texts dealing mainly with the moral theological significance. He summarizes three views on how broadly the commandments were intended to be applied and settles on his preferred interpretation, which is that they apply to all of God’s people. Neglected in this discussion is the nature of the Ten Commandments, which informs their applicability. If, as some argue, the Decalogue reflects the very character of God, then they reflect a moral standard for all people. Baker moves beyond those foundational arguments too quickly, which, again, is largely a result of the scope. However, some of those discussions would have made this volume a more complete treatment of the topic.

Baker accomplishes what he set out to do. He effectively explains the context and text of the Ten Commandments. He also brings these divine directives into our time through contemporary application. His exegesis and synthesis of biblical scholarship on the topic make this a touchstone volume for future Decalogue studies.

This is not a comprehensive treatment, but The Decalogue, will make an excellent addition to a pastor’s library as an aid to sermon preparation. It will also make a strong complimentary volume to a biblical ethics course at the undergraduate or graduate level. Baker has done good work for the Kingdom in researching and writing this book.

The Decalogue: Living as the People of God

$11.97

By David L. Baker

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Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review. Also, purchasing the book through the above link will direct a small portion of the proceeds to supporting this website.

Just Capitalism - A Review

A lot of public debate about economics deals in caricature, particularly of capitalism. Critics of markets tend to argue that it is fundamentally unjust and based primarily on greed.

Some beneficiaries of capitalism tend to sheepishly agree with the injustice of the system but either shrug their shoulders because they feel they can’t change it or support it anyway because they like the prosperity that comes through the market system.

Brent Waters takes a significantly different approach. He writes,

“My principal contention is that globalization is the only credible means at present for alleviating poverty on a global scale. Consequently, a well-ordered global capitalism is compatible with such core convictions as the preferential option for the poor and promoting human flourishing. To be naively anticapitalism is thereby to effective opt against the poor and diminish human flourishing. Therefore, an ethic of globalization necessarily entails a defense of capitalism.”

This is, in fact, why I am pro-markets and anti-socialism. No economic system is perfect because they all involve imperfect, sinful humans. The free market economic system will not prevent all human suffering; however, it has proven to be a better tool to alleviating human suffering than various attempts at socialism.

Summary

Waters argues his thesis in two parts. The first five chapters of the volume outline the necessity of exchange and the place of Christians to argue for market systems. His first chapter summaries some of the historical arguments about wealth and poverty. Chapter Two defines what Waters means by markets and argues for the good in competition and cooperation that are necessary for a market economic system. In the third chapter, the author addresses the topic of creative destruction, the relationship of markets to governance, and an argument that markets represent the best means for improving human flourishing on a broad scale. Chapter Four makes a case for the good of affluence as a pathway to flourishing. The fifth chapter, which closes out the first part of the book, makes the case that affluence is the best means of eradicating poverty on a wide scale.

Part Two of Just Capitalism builds on the general affirmation of free markets, as offered in the first part, but critiques the failures in most current forms of capitalism.  The upshot of the last five chapters is that free markets without virtuous people engaged in exchange are no less evil than socialism. In Chapter Six, Waters argues that exchange is necessary for human flourishing, but it must be oriented toward that end rather than simply focusing on increasing one’s economic status. The seventh chapter shows that for markets to achieve their purpose, they must function within the context of a civil society with the purpose of sharing the goods of creation. Chapter Eight offers some provisional thoughts on possible relationships between a free, civil society that enables exchange with political orderings that prevent abuse. The ninth chapter fleshes out the concepts of freedom and justice, making an implicit case about the differences between positive and negative rights and their relationship with justice. Chapter Ten functions as a conclusion, where Waters draws together the threads of his earlier arguments to further emphasize the good that global capitalism can do to alleviate poverty.

Analysis and Conclusion

Waters is clearly not arguing that every instance of capitalism is good. Neither is he arguing that the present instantiation of global capitalism has no flaws. Many contemporary critics of global capitalism assume that the abuses that arise within existing markets are necessarily a feature and not a bug of the system. On the other hand, some proponents for markets insufficiently critique the sin that is evidenced in current markets and often make a similar assumption that some of the worst aspects of global capitalism are a necessary evil.

This book challenges assumptions on both sides. Economic systems are not inherently unjust or just. However, Waters carefully argues that free markets have a higher probability in resulting in just outcomes due to the self-corrective nature of the market system. At the same time, simply accepting capitalism without working to morally form the members of the market will lead to exclusion of potential market contributors due to social injustices. Waters’ book explains that markets can be good, but we have to work at keeping them moral.

This is the best moral case for the free market economic system that I have seen. There are points where one can disagree with Waters, but he realistically examines the benefits and risks of capitalism, showing that in the balance global capitalism is the best means of alleviating poverty.

Just Capitalism

$31.70

By Brent Waters

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Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review. The above link is an affiliate link.

I Have No Opinion About Whatever Is Making You So Mad

I have no opinion about whatever it is that someone did, said, wrote, or believed that has you so upset.

Even if I had an opinion about it, I might not want to air it publicly.

Simply because I am not speaking out for or against whatever just happened does not mean that I am against or for it. Nor does it mean that I am a co-conspirator in injustice. That isn’t how guilt works. Really.

Opinions

I have strong opinions about many things. Many of them are also deeply researched. I am, academically and vocationally speaking, competent and qualified to speak on a number of issues. I am personally acquainted with some things well enough to comment on them and have reasonable and warranted opinions.

I am not, however, prepared to comment on the latest snippet of news, out of context interview sound bite, or social hoopla that has been uncovered or invented in the last 24 hours. In fact, to speak on this issue would be inappropriate unless I had some unique background in the subject matter, additional context to add, and awareness of more than the drive by commentary that has everyone so upset.

A Historical View

When the historians write the story of our present age, I fully expect them to describe how much disinformation and overreaction there was because people didn’t take time to think and weren’t equipped to do the necessary thinking.

They may call us this the age of the flip out, the knee jerk, and the public flop and twitch.

It’s not like these are different fundamentally than any other generation. Propaganda was alive and well in previous centuries. Wars have been started due to failed romances and jilted lovers.

What is different is that the flop and twitch is constant and ever shifting. We don’t even have the common decency to get upset about one thing and rail against it for several weeks. Instead, we have a new freak out every day.

Also, something different is this foolish idea that not flopping and twitching over everything that makes X upset—which may or may not be true—constitutes material participation in the alleged evil that is being freaked out about.

Just the Facts, Ma'am

In fact, many times, the freak out is not over what someone actually did or said, but what someone thinks they meant based on misreading or misunderstanding what they wrote, said, or did.

Someone sees something and misinterprets it as malicious. Several people blog about the evils of the malevolent action. Suddenly there is a fire storm in which anyone who doesn’t storm the battlements is guilty of hating puppies. Several people blog about the lack of response by “important people” who haven’t spoken out about the issue because they obviously don’t care. Meanwhile, half the people being maligned may actually know something that gives them a different position, not be aware of the situation, or simply not feel that the issue is worth addressing with such vigor. However, they must be burned at the altar of activism for their sin of inactivity.

While all of this is happening, before a response can be ventured and research conducted a new “crisis” has arisen that demands instantaneous, fact-less condemnation. Even if a correction is made, it is rarely read and the “hot take” condemnation of the event and the silent people allegedly condoning the supposed evil remain permanent artifacts on the internet. Rinse and repeat.

False Alarm Fatigue

Do you remember the red cups at Starbucks? I don’t think anyone was actually ever upset about the cups themselves, but there was a veritable cyclone of blame and aspersion flying around the web.

This is creating an environment in which Twitter—a social media platform that could be fun—is dying because smart, thinking people are getting tired of people with too little information demanding absolute agreement with their opinion of everything instantaneously and without qualification.

How many well-wrought books are we going to lose to foolish reactions on the internet? How many reputations are going to be ruined on the altar of condemnation for an improper or insufficient response?

In the meanwhile, I have no opinion about what you are upset about. Or, perhaps I have an opinion, but I don’t think it adds to the conversation.

Is Governance Apart from Government Possible?

How much government is sufficient? What sort of governance is appropriate?

Contrary to popular belief, the common view even among free market advocates is that some government is good. Most people argue government is necessary to enforce contracts, ensure market participants act in good faith, maintain law and order in the street, etc.

Edward Stringham’s recent book, Private Governance: Creating Order in Economic and Social Life, seeks to upend that common view. What he ends with is a thesis that points toward valuing and celebrating private governance, which is an idea vastly different that anarchy.

Summary

The book is divided into three uneven parts. Part One consists of three chapters that explain what private governance is and why it is often preferable to government. Part Two contains eight chapters in which Stringham walks through historical and modern examples of private governance in action. Part Three has three chapters attempting to summarize the lessons learned about private governance from the previous eleven chapters.

As Stringham outlines in his introduction, “Private Governance describes some of the major mechanisms that private parties use to produce social order and highlights how modern markets would not be possible without them.” Basically, he is describing the reality that the government cannot effectively regulate the market, no matter how hard it tries. That, however, is something entirely different than saying the market is unregulated.

The “legal centralist” view, as Stringham calls it posits the law as a sort of Deus ex machina that can step in to settle disputes, enforce contracts, and make everything go just right. Even among free market advocates, there is still a strong acceptance of legal centralism.

Instead, Stringam argues, club rules are both more effective, more fair, and more likely to result in mutually acceptable outcomes. Voluntary associations, which are a bedrock of a free society, are typically more effective in governing because they tend to be interested in overall success, not merely seeking self-justification or simply unconcerned for the outcome as much of the government can be.

This is a bold thesis, so Stringham provides a number of case studies to illustrate when private governance worked well in the absence of legal support. The most startling example is of the world’s first stock market, which was founded in the early 17th century in Amsterdam. The early market had a wide range of securities with contracts that the government expressly refused to enforce. And yet stock in the East India Company and other ventures were traded successfully between willing market participants. New derivative forms of stock were invented and futures contracts arranged, all without legal enforcement.

Similarly, the London Stock Exchange arose as a club designed to self-regulate to ensure fair play among its members. Because access to the market was not guaranteed, it encouraged right dealing. So, Stringham is showing, it isn’t that there was no governance, it is that the governance came from non-legal, club-style regulations.

Self-governance led to the creation of mandatory reporting requirements and audit requirements in some stock exchanges. However, those who were willing to accept more risk could form different privately regulated exchanges that managed risks less rigorously.

Stringham provides several other very interesting examples where, undeniably, private governance worked more effectively that legal structures could have. He recounts how PayPal uses private governance to ensure good faith on the vast majority of transactions; transactions that are too small to make legal recourse worthwhile. He recounts the successful use of private police forces in San Francisco when the government was unable or unwilling to deal with threats. He also spends a chapter talking about self-governance, which can be more successful than we allow often simply because of common grace. Stringham spends a chapter outlining the role and benefits of arbitration. He also helps to explain how private governance actually helped mitigate the 2008 financial crisis and how government action significantly contributed to the problems.

Whether you accept his final thesis or not, the examples he provides all illustrate the possibility of significant, complex forms of private governance that help markets and the people who engage in them flourish.

In the last few chapters, Stringham seeks to show how government strips away agency from the customer by intruding in the relationship between the customer and the company. He argues that more often than most acknowledge, governments cross over the threshold from helping to hurting those in the market. Surprisingly, he applies his thesis to the economic philosophy of Hayek and argues that Hayek was too strongly reliant upon government to regulate the market. Stringham concludes the book with an appeal to continue to value private governance, to argue for it, and to seek to reduce imperial entanglements in the market as much as possible.

Analysis and Conclusion

Stringham’s thesis is thought provoking. He argues it well and provides a number of case studies that illustrate clearly how private governance succeeded when most people would expect it to fail. While he didn’t pull me all the way into his camp in eschewing reliance on government enforcement, he does provide a great deal to reflect upon.

Significantly, it isn’t clear that Stringham adequately considers that lack of parity between customers and many corporations. For example, mandatory arbitration clauses are now included in many contracts as a standard feature. So, for example, customers defrauded by Wells Fargo’s malicious creation of accounts on their behalf were prohibited from legal action because of an arbitration clause. When there are no other legitimate options (most banks use some form of this clause), it creates a situation where the customer gets a far worse deal by some accounts. There is more to deal with on this topic, so I hope to conversation continues in the future.

Private Governance: Creating Order in Economic and Social Life

$34.48

By Edward Peter Stringham, Edward P. Stringham, Edward Stringham

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Note: I was given a gratis copy of this volume with no expectation of a positive review.

A Book for Our Times

Trevin Wax is among the most astute cultural commentators of our day. It is not uncommon for a thorny question to arise in the public square only to find he has dealt with it concisely and clearly on his blog the next day. He reads the culture well, understands a biblical worldview well, and writes very well.

This is Our Time: Everyday Myths in Light of the Gospel is no exception to Wax’s normal standard of clarity and excellence. In this volume, Wax considers eight significant myths that are especially significant to the present milieu, unpacks them and their significance in our world, and shows how a biblical worldview undermines them. In each case, Wax seeks to show how authentic Christianity has a better answer to offer than the cultural myth.

SUMMARY

Wax dissects eight myths that are cultural flashpoints. In the first chapter, he shows how the smartphone functions to alter our perception of reality. Smart phones tie us in to the world around us, make us feel smart because we find information quickly, and allow us to expose every moment of our lives (really just the good ones) to the world in an instant. In Chapter Two, Wax tackles the storytelling of power of Hollywood. He avoids the typical moralistic finger-wagging about too much sex and focuses on the power of story and the greater imaginative scope available to those with a regenerate mind.

Next Wax examines the faulty pursuit of happiness, which is often based more clearly on a goal destined to fail us. Instead, Wax notes that the Christian gospel offers us hope apart from the usual trappings of happiness our culture advertises. Chapter Four wrestles with the myth that consumerism will make people happy. This is the cause of so much heartache and misery in our world, but Wax reveals how it pales in comparison to our hope in Christ.

In the fifth chapter, This is Our Time, deals with the sense of dis-ease Christians often have in the world. The myth is that we should feel at home in this present world, but Wax shows how we should always long for a perfect future not to try to make our world like a supposedly great past. Chapter Six tackles the modern myth that marriage is fundamentally about human happiness. Instead, Wax demonstrates that, as God intended it, marriage is about sanctification and giving glory to God.

Chapter Seven offers a reflection on the changing standards for sex in our culture, noting that self-control and chastity have become insults rather than virtues for society. Wax argues that sex cannot be both everything and nothing as culture claims, but that it must serve the purpose ordained by the Creator if it is to satisfy. In the eighth chapter, the author takes on the pervasive myths of eternal progress and constant decline. Both narratives are compelling for different reasons, but they often distract from our true hope in Christ.

ANALYSIS

Books that provide cultural critique are a dime a dozen. They have been standard fare for theologically conservative Christians for decades. When I inherited my grandfather’s library, I got dozens of books that had scathing critiques of the culture of previous decades.

In most cases, those critiques were just and warranted, but This is Our Time does something many cultural critiques fail to do: it explains why the gospel is better. That is what makes Wax’s book so helpful; it exposes the myth as a fraud and tells the true story in a deeper, more powerful way.

By telling the gospel truth instead of simply condemning, Wax equips his reader to share the good news. He fills out the necessary understanding of repentance, which is turning away from wrong doing and pursuing the good.

By writing such pointed cultural commentary, Wax has produced a volume that is a treasure for our time. The downside is that This is Our Time is distinctly time-bound. In twenty years, the volume will provide an excellent example of how to write cultural critique for the benefit of the church, but its shelf life as an antidote for the ills of our age is limited.

Therefore, people should snap up This is Our Time in the near term. Read this book. Talk about it in your small groups and consider not just the content, but the way Wax has put together his critique. This volume is a gift to the church, but it needs to be read in our day if it is to have its best impact.

This Is Our Time: Everyday Myths in Light of the Gospel

$9.59

By Trevin Wax

Buy on Amazon

Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

We Need the Substitutionary Atonement

Not too long ago someone told me in an off-hand manner that the Conservative Resurgence of the Southern Baptist Convention should have never happened.

The Cross by Michael Craven. Used by CC License. http://ow.ly/RDIe30aJ2tm

I tend to agree, but for different reasons. I’ve heard the Conservative Resurgence objected to based on it being divisive. Inasmuch as it was divisive (and for some it certainly was just a power play), it is a shame that the split happened.

However, most of the people I’ve heard object to the Conservative Resurgence do so because they don’t think that the doctrines in question were worth dividing over. Typically, these are individuals who are sympathetic with revising gender roles in the church and who want to undermine belief in the reliability of Scripture.

Those two issues were certainly the most discussed issues during the controversy in the SBC, which has become known as the Conservative Resurgence. In reality, though, they were simply the tip of the iceberg for a deeper theological debate. There were legitimate heresies that were being tolerated in the seminaries and churches of the SBC and the denomination needed to be called back to doctrinal faithfulness.

One of the major outcomes of the Conservative Resurgence was the formation of another association of Baptist churches. The Cooperative Baptist Fellowship (CBF) formed to support those churches who disagreed with the SBC on key doctrinal disputes. The CBF became a home for theological liberals and moderates.

The moderates were those who were willing to tolerate the erosion of traditional Christian doctrines, as long as they didn’t go too far. At least, that was the general idea. In truth, many moderates ended up tolerating outright theological liberalism, which eats at orthodoxy and the essentials of Christianity like a canker.

A Recent Example

A case in point is a recent opinion article by a Kentucky-based CBF pastor, who is a regular contributor to Baptist News Global, a partner organization to the CBF. The author, Chuck Queen, argues against the substitutionary atonement:

“Popular Baptist preachers and evangelists over the years have emphasized trust in Jesus’ substitutionary death as essential for salvation. It is such a staple in many Baptist churches that pastors, even though they don’t believe it themselves, refuse to touch it.”

He goes on:

“Many Christians believe this to be the gospel truth. To deny this truth is to deny Christ. But this theory of the redemptive significance of Jesus’ death is seriously flawed. The major problem with substitutionary atonement is the way it imagines God. This interpretation of Jesus’ death makes God the source of redemptive violence. God required/demanded a violent death for atonement to be made. God required the death of an innocent victim in order to satisfy God’s offended sense of honor or pay off a penalty that God imposed. What kind of justice or God is this? Would a loving parent make forgiveness for the child conditioned upon a violent act?”

His argument against the substitutionary atonement is actually a portion of a known heresy called Socinianism. It has huge theological and Christological problems. Sam Storms has helpfully posted a summary of this doctrine previously, in which he notes that the Socinian rejection of the substitutionary atonement requires a rejection of the essential justice of God. That is, Socinians must reject the idea that God must be just; instead he can simply ignore sin. Here is Socinus in his own words:

““If we could but get rid of this justice, even if we had no other proof, that fiction of Christ’s satisfaction would be thoroughly exposed, and would vanish” (De Servatore, III, i).”

““There is no such justice in God as requires absolutely and inexorably that sin be punished, and such as God himself cannot repudiate. There is, indeed, a perpetual and constant justice in God; but this is nothing but his moral equity and rectitude, by virtue of which there is no depravity or iniquity in any of his works. . . . Hence, they greatly err who, deceived by the popular use of the word justice, suppose that justice in this sense is a perpetual quality in God, and affirm that it is infinite. . . . Hence it might with much greater truth be affirmed that that compassion which stands opposed to justice is the appropriate characteristic of God” (Praelectiones Theologicae, Caput xvi; Bibliotheca Fratrum Polonorum, I, 566).”

The Problem of Justice

The CBF pastor contends that God does not have to be consistent in his justice in order to be just. He argues,

“If God is sovereign, as advocates of substitutionary atonement contend, then God is the source of all justice. God is not subject to some sort of cosmic principle of justice outside of God’s own nature. If God chooses to simply forgive sin the way a loving parent would forgive sin, without requiring some sort of pay off or sacrifice, there is no one to tell God that God is violating the demands of justice. God sets the standards of justice.”

This sounds good to some, but what Queen has essentially done is simply picked one of the two wrong choices in the Euthyphro Dilemma. He is right to note that moral justice is not an absolute imposed on God, but he is 100% wrong to assert that God simply makes up what is just. This is a huge theological problem.

If God can simply change the rules at any point, then your sin today could be tomorrow’s self-sacrifice. There are many within the ranks of the sexual revolution that hope this is true: they hope that earlier condemnations of sexual immorality have been revised by God to say that more sex is good as long as it is “loving.” Or, they might hope that despite the clear prohibition of killing innocents as a private individual in the Ten Commandments, it is now a good thing to commit an abortion. This would be convenient.

The proper answer to the Euthyphro Dilemma is “none of the above.” God isn’t bound by a moral law that existed prior to him. Neither can the moral law—and the just application of that law—change. Instead, the moral law is a reflection of God’s character. There is a reason that many times during the giving of the law, God commands the Israelites, “Be holy as I am holy.” (e.g., Leviticus 11:44) Since God does not change (cf. James 1:17), the moral law that reflects his character does not change.

But apart from the logical problems that Queen faces in trying to create a God that changes, he has many scriptural problems. The most obvious is Paul’s statement in 1 Corinthians 15:3-5:

“For I delivered to you as of first importance what I also received: that Christ died for our sins in accordance with the Scriptures, that he was buried, that he was raised on the third day in accordance with the Scriptures, and that he appeared to Cephas, then to the twelve.”

In contrast, let us compare Queen’s comments:

“Jesus didn’t have to die in order to make atonement to God for sin.”

And,

“Jesus didn’t die because God needed a sacrifice. Jesus died because the powers that be had him killed.”

Paul claims that the atonement is of first importance. Queen claims that the real issues is that “the sacrificial images employed by Paul and other New Testament writers carry a lot of baggage.”

This should not be overlooked. Queen is arguing that Paul got the core of Christianity wrong and that he has misled the vast majority of Christians since his time. 

In other words, what Queen is saying is that Scripture is wrong. He is also saying that orthodox Christianity for millennia have been wrong.  And they are wrong not about something that resides on the edge of Christian conviction, but the very heart of the message of Christianity.

Queen is arguing that the definition of the gospel—that Christ died for our sins—is wrong.

This is why I am thankful for the Conservative Resurgence. We may spend time fighting about politics, but at least we can all agree on the gospel. As for Queen, we should pray that he repents and places his faith in Christ for the propitiation of his sins. I'm not sure what he places his hope in otherwise.

No Legitimate Support is Offered

The strongest part of Queen’s defense is that he has struck first and anticipated the logical response of orthodox Christians. He anticipates that those of us foolish enough to accept Scripture and traditional Christian doctrines will argue that the atonement that is at the center of the gospel is at the center of the gospel. By anticipating the argument, he is inoculating some of his readers against the response. But careful readers won’t fall for his trap.

Queen never explains why his capricious, ever changing god is consistent with the God of the Bible. Instead, he simply asserts that “the God of Jesus, however, does not need to be propitiated.”

He also inserts an ahistorical fact with no evidence that the so-called Constantinian shift pushed substitutionary language to the forefront of the Church’s discussions of God. This is a theory in search of support, which Queen can’t provide because it doesn’t exist.

The reason the Eucharist has been a part of the Church’s liturgy since the beginning is because it remembers the significance of Christ’s death on the cross. It isn’t just a nice way to remember a nice guy that died because of injustice. If that were the case, there are a lot of Christian martyrs we should remember with meals.

Similarly, baptism, when properly performed, recalls the significance of Christ’s death, burial, and resurrection.

It’s almost as if Jesus Christ himself and the authors of the New Testament anticipated the false gospel Queen and others like him present. In fact, they did.

Instead of making an argument, Queen makes some assertions based on a twisted, anemic idea of a false god that provides no justice. He makes no effort to deal with significant texts of Scripture, like the letter to the Hebrews, which makes it clear that “without the shedding of blood there is no forgiveness of sins” and that Christ is the sacrifice that enabled our sins to be forgiven. (Heb 9:15-28)

Conclusion

The cross is absolutely necessary for the forgiveness of our sins. If you lose the substitutionary atonement, you lose the gospel. There are certainly other aspects and significances of the atonement, but if we miss Christ’s sacrifice on our behalf, then we’ve missed a central truth of Christianity. I'm thankful for the SBC where, despite our warts, we aren't arguing about gospel basics.

As we celebrate Christ’s death on the cross, his burial, and his resurrection, ponder the truth of the substitutionary atonement. It is bloody and horrid. It’s meant to be. He took our place. We deserved that fate. However, it’s also joyful, because God used Christ’s sacrifice to make a way for our redemption.

Hallelujah, what a savior.