Posts Tagged ‘Economics and Christianity’

Capitalism is the dominant economic system today. While there are countries that are still controlled by communist governments their economies are in transition to capitalist (mixed market) systems. While both systems provide mechanisms for distributing resources and satisfying wants they do it in very different ways.

In short, capitalism is marked by private ownership of resources and the use of competitive markets and self-interested individuals to create an efficient allocation of resources. Individuals acting out of self-interest will direct resources in markets to produce an efficient and effective outcome. Markets where there is strong competition will produce a least cost (efficient) allocation of resources in production.

Capitalism and communism are considered to be at opposite ends of the spectrum, especially considering that communism presents the strongest criticism of capitalism.

Communism is marked by the ideal that humans are basically good, however this goodness is suppressed by social structures (feudal, capitalist, etc).  By removing these structures all things would be commonly held (public ownership) for the common good, decisions of what to produce and how much are determined by the central government.

Communism was never thought of as a system that existed in isolation. It was envisaged as the final step in the evolution of human social structures. A final stable (ideal) human system where humans could realise their full potential (goodness). Capitalism is seen as inherently unstable, containing the seeds of its own destruction. A system built on promoting the self-interest of individuals would only seek to alienate people from one another and devalue any community that exists. Just as capitalism had evolved from former structures the ultimate future of capitalism lay in communism.

It becomes clear that the ideal of the inherent goodness of humanity and the ultimate perfection of human societal structures in the present age is at odds with Christian doctrine. Seeking perfection of human community apart from Christ and the persistence of sin in the present age is against the core message of the Bible. It is this fundamental misunderstanding of human nature that caused the fall of communism.

In my next post I will begin discussing capitalism more fully.


The purpose of this new series of posts is to provide Christians with a sound basis for understanding economics in the present age and the age to come. This should help to dispel many of the misconceptions and misrepresentations of economic theory and its application today.

What is Economics?
Despite the wide-reaching application of economics to almost every area of life it is primarily concerned with solving one seemingly simple problem that arrises from 2 simple assertions:
1. Mankind has a finite resources available to it.
2. Humans have an unlimited number of wants and desires (including needs).

Therefore the problem economics seeks to answer is:

How do you satisfy the unlimited wants of mankind using the limited resources available?

This means, at its core, economics is primarily concerned with efficiency. Therefore economics is concerned with organising society for the purpose of efficiently directing resources to satisfy the wants of individuals and groups. For thousands of years practical philosophers have proposed various solutions to this problem. Seeking to determine which human wants and desires should be satisfied, i.e. what and how much should be produced?

3 Simple facts
There are 3 simple facts that need to be stated before continuing:
1. Economic systems are human systems, primarily concerned with human interactions.
2. Current economic theory does not have an ethical system built into it. This needs to be added by the society in which it operates.
3. Neither capitalism nor communism (2 dominant economic systems) are inherently Christian.

Keep these facts in mind when reading future posts in this thread.