The Source of All Blessings (and Curses)
Gary North’s REALITY CHECK
September 17, 2004
I made a big mistake in my report, “Count Your Blessings.” I forgot about members of one of the largest religious organizations in America, Slogans for God. The SFG crowd let me have it, good and hard. One reader complained:
HELLO, WHAT WORLD ARE YOU TALKING ABOUT FOR THESE BLESSING. SEEM LIKE YOU LEFT OUT SOMETHING. THESE SEEM LIKE MAN’S BLESSING AND NOT GOD’S BLESSING.
When you belong to SFG, grammar is not a top priority. Self-confidence is. Maggie was among the more self-confident.
You left out the First Commandment: “Thou shalt have no other gods before me” – neither capitalists and capitalism – or any other “…ism.” You also left out the part about the natural resources of the world so generously provided by our Maker. These fueled the industrial revolution, which could not have taken place without them. You and I take not one breath nor enjoy any other gift in this life if God does not will it. The very thought of thanking capitalists and capitalism for my blessings instead of God makes me shudder. It obvious that the modern West has completely lost its spiritual bearings and are once again worshipping golden calves. However, I did not expect you to lead the degenerate parade to this altar. If capitalism is your god, please quit masquerading as a Christian.
I sometimes wonder if these people send outraged letters to physicians who praise modern medicine’s role in increased life expectancy, telling their targets that it is God who keeps people alive, and that “medicinism” is a false God. The critics probably believe this, but I suspect that they have restrained themselves.
The libertarian publicist Leonard E. Read used to say that the average person has no strong opinions about chemistry, but he has lots of opinions about economics, which are usually wrong. Read never had to deal with SFG. I do.
WHAT CHANGED IN 1750?
History has meaning, contrary to Eastern mysticism. The world is not maya: illusion. Reality is not an illusion. There is cause and effect in history. There are also non-causes and effects.
For SFG, the cause is God. The effect is everything else. This doesn’t get us too deeply into the issues of economic cause and effect, does it?
Prior to the advent of capitalism, poverty was nearly universal. The rich were a tiny fraction of the total population. There were famines, plagues, and widespread ignorance. There was little literacy prior to 1450. The printing press had not lowered the cost of books and pamphlets to such levels that it paid the average person to learn how to read.
Economist Julian Simon and author Stephen Moore made this point in a 1999 article:
The roughly fourfold rise in the living standards of Americans in this century is particularly impressive when we consider that for thousands of years human progress occurred at a glacial pace. For the thousand years before the Industrial Revolution, incomes were virtually flat, growing by about 0.5 percent per year. Life expectancy was not much greater in 1700 than it was at the time of the Greek and Roman Empires.
Was God in control in 1400? Yes, say SFG. Problem: Was the world that God governed prior to 1500 a world in which anyone reading this report would like to live? Would the skills of any reader have found a ready market in, say, 750 A.D. in what is now central Germany? No? Why not? What was missing?
I’ll tell you what was missing: capitalism.
History has meaning. Today is better than 1700, as I argued in “Count Your Blessings.” How should Christians explain today’s wealth and still uphold God’s providence? What is different today?
I have been trying to answer this question since 1960. I have written approximately 12,000 pages on the topic. It may be more. I lost track years ago. I have written 8,500 pages of Bible commentaries that are exclusively devoted to economics. I have posted them for free on-line. You can get a list by sending an email to:
But for the Maggies of this world, all of this is irrelevant. To understand this requires thought, historical knowledge, and the ability to deal cause and effect — what used to be called natural law. SFG members dislike such complexity. Economics is much too complicated for them. It’s so much easier to say, “God gave us health and wealth.” He did, indeed. But what about the bad stuff? How about sickness and poverty? How about sickness and poverty for all of man’s history until 1750?
Maggie pointed out the following:
You also left out the part about the natural resources of the world so generously provided by our Maker. These fueled the industrial revolution, which could not have taken place without them.
Apparently, in Maggie’s mental universe, these natural resources came out of heaven, like the manna (Exodus 16). They were not there in (say) 1400. Then, wonder of wonders, they appeared in England around 1750.
Maggie is not alone in her explanation. I grew up on an public school ideological diet of “resources made the West rich.” Socialists refused to explain the Industrial Revolution in terms of capital markets, freedom of contract, the defense of private property, and free trade. Natural resources: that’s what made the difference. That was why Russia back in 1965 was going to overtake the West, one of these days, Real Soon Now. Or South Africa would, if a man like Nelson Mandela could ever gain political power. Or Rhodesia would, if a man like Robert Mugabe could ever displace Ian Smith.
But there was this nagging problem: Hong Kong, which has no natural resources. Its people got very wealthy after 1945. Hong Kong was a bothersome factor for the socialists of the world. Its success had to be explained in terms of something other than natural resources, which it did not possess. It also had to be explained in terms of something other than socialism, of which there were few traces.
So, the socialists solved this problem by not discussing Hong Kong. “Hong Kong? Never heard of it.”
Neither has Maggie.
It is the creativity of man that turns natural resources into factors of production. This includes the creativity of men who bid for the output of such resources. In capitalism, the high bid usually wins. This puts pressure on people to become productive, in order to make high bids.
Don’t tell me about God’s gift of natural resources. Tell me about how black goo becomes gasoline, and why. Tell me about God’s gift of technical knowledge and capital markets.
Which would be the better policy to fight poverty:
1. Invest 10% of all profits?
2. Give 10% of all profits to the poor?
We know the answer: #1. Capital formation is the most powerful force in man’s history for the elimination of poverty.
The Bible, like all other religious books, does not command the reinvestment of profits. It commands charity.
Is there a cognitive disconnect here?
I regard John Wesley as the person who did more to relieve poverty than anyone in history. He showed the way to wealth to millions of poor people who had not read Adam Smith. He preached this of money: Earn all you can. Give all you can. Save all you can. (Sermon #50, “The Use of Money” , Part 6.)
Wesley preached to the poorest people in the British Isles. He spent most of his adult life on horseback. He preached sobriety, hard work, and thrift to those poverty-stricken people who came to be called Methodists. He changed the face of England. Within a century of his death, Methodists had become middle class. Then the denomination went theologically liberal. This would not have surprised Wesley. He had warned against the effects of riches in Sermon 126 (1790).
His followers experienced what religious orders and monks did throughout the Middle Ages: they got rich by practicing systematic frugality. That was why, every few centuries, there was a wave of religious reform among the mendicant orders that had sworn vows of poverty. Too much money was rolling in. The monks were enjoying the life style of the rich and famous.
Thrift is the key element in the reduction of poverty. Thrift capitalizes the entrepreneurs and inventors whose ideas overcome poverty for the masses.
The fact that wealth corrupts some of those who create it and makes their children feel guilty after four years at an Ivy League school is a valid theological and moral issue. But as to how poverty is overcome, capitalism has proven more effective than any other system of ownership and production.
I argue in many of my books that the worldview of the Bible presents the case for private ownership, which in turn produces the capitalist order. Socialists may disagree. So may Randians. But the fact remains that the capitalist order is what has made the difference historically in the conquest of poverty. Before capitalism, there were many varieties of Christianity, but none of them produced the society-wide cornucopia of wealth that has given us all of those blessings to count.
The ability to think straight is not widely dispersed. The ability to think straight economically is even less widely dispersed.
It was not Adam Smith who convinced the poor Methodist in his hovel to decrease his expenditures and start saving. It was a highly educated man on horseback, who rose at 4 A.M., preached a sermon at 5 A.M., and rode off to the next town, year after year, decade after decade. It was not the case for capitalism in the books of political economy that changed the minds of the poor, but the simple words of a complex man who said to earn all you can, save all you can, and give all you can. He called dissolute people on the fringes of society to straighten up and fly right. Millions of them did.
It never ceases to amaze me that those people who say they follow the same God that Wesley followed don’t understand the message of Wesley and his original followers, just as they don’t understand the logic of Adam Smith, which reinforced Wesley’s words. “Thou shalt not steal” is a good place to begin economics in one lesson. So are the words of the land owner in Jesus’ parable of the complaining laborers, who groused that they had been paid exactly what they had been promised. “Is it not lawful for me to do what I will with mine own? Is thine eye evil, because I am good?” (Matthew 20:15).
We should do our best to think straight. When we do, we will be better able to count the costs, another message of Jesus (Luke 14:28-30).
In my original essay, I spoke of capitalism’s blessings. The loudest of the SFG crowd do not understand history, theology, or economics. Yet they are the heirs of these blessings. We all are. And for maintaining and extending this inheritance, we are responsible.
There are no free lunches, capitalism teaches. If you do one thing with your wealth, you cannot do another. There is a social function of ownership. The owner decides whose demand to fill: the highest-bidding consumer, the poverty-stricken child, or his own desire to consume.
There is a price to be paid, in history and eternity. The free market imposes historical prices most clearly, for it allows consumers and beggars to make their bids and pleas for ownership. No system has empowered consumers and beggars more effectively than capitalism has. Beggars these days would have been rich people in Wesley’s day: used stereos, used color televisions, and warm clothing. There is more wealth in a Salvation Army thrift store than in most shops in London in 1700.
This is not random. It is also not the result of natural resources, all by their lonesome.
To be grateful for what we have, we had better understand how we got it. We got it through free market capitalism. God was in charge in 1700, but He has provided greater benefits to more people since 1750 than ever before in history. If those who claim to be Christians cannot understand the difference between medieval guild socialism, free market capitalism, Keynesianism, and communism as ways of allocating resources and responsibility, then they are likely to fall into error: the error of slogans at the expense of thought.
I recommend that people say a prayer of thanks for capital markets. In the providence of God, they keep us alive.