Poverty and Equality

Posted on January 13, 2012 at 11:17 am,

This is the latest in a series of posts critiquing the arguments in Wayne Grudem’s book Politics According to the Bible. Today we’re tackling the twin issues of poverty and equality.

Should we tax the rich?

Grudem begins by arguing that it isn’t fair for governments to take more money from the rich simply because they are rich. In support of this, he quotes Exodus 23:3 and Exodus 23:6, which warn against showing bias towards or against the poor in a lawsuit. He then goes on to assume that progressive taxation (where the rich pay a higher proportion of their income than the poor) is there to punish the rich, and argues that punishing people for any reason other than them having done evil is wrong (quoting Proverbs 17:26). He then says that the government has no inherent right to take their wealth unless it can be shown that they got it through criminal activity (he doesn’t mention the possibility of it being from highly immoral actions that are within the law – something that is more common in big corporations than many of us think). He then portrays such taxation as stealing – in his view, the wealth is rightfully theirs, and the government has no right to tax them.

Hopefully, it should be clear from this summary that Grudem’s view on taxing the rich depends on assumptions about what taxation is, rather than being something drawn from Biblical principles. If taxation is theft, then he is right. If, however, the government has the right to levy taxes, then he offers no reason why it should not tax those who can afford it more heavily than those who cannot. We’ll go into the issue of taxation in a lot more detail next week, but for now we’ll just note that Grudem’s arguments about how government should interact with the rich show a clear hostility to the principle of taxation.

Should we strive for economic equality?

Grudem agrees that it is appropriate for government to run welfare programs to provide a safety net so that people don’t go without food, clothing, or shelter. That such programs should give people the opportunity to gain enough skills and education to earn a living. And that such programs can be funded from general taxation, as this is clearly something that fits with the government’s purpose to promote the general well-being of society. He does, however, disagree with the idea that reducing inequality is something the government should do.

He believes that policies to reduce inequality harm both the economy and society. In his view, they penalise hard work, productivity, and frugality whilst rewarding profligate spending, wastefulness, and frittering away time on unproductive activities. He insists that taking extensive action to reduce inequality would lead productive people to give up and that any society which tries it would spiral downwards into poverty and despair. He also claims that attempts to make people equal in their economic possessions, will necessarily mean that they become unequal in terms of political power, citing the Soviet Union as an example.

I could probably spend a whole series of posts dealing with this line of argument, but I’ll try to be brief.

Firstly, Grudem is clearly unaware of the very large body of research that links economic equality with better outcomes in terms of healthcare and a range of social problems (much of this research was summarised in the book The Spirit Level by Wilkinson and Pickett – which is pretty much essential reading if you want to contribute to the political debate around this issue). If this research is correct, then promoting economic equality is most definitely promoting the well-being of society.

Secondly, the Soviet Union is far from the only example of government heavily promoting economic equality. If Grudem’s arguments were correct, then the Scandinavian countries would be hopeless, despotic, poor countries rather than strongly democratic nations which routinely top league tables on quality of life issues.

Thirdly, there’s something of a paradox to Grudem’s views. The vices he lists are exactly the kind of things that today’s Western free-market economy not only encourages, but utterly depends on. If Grudem were consistent with his view of what constitutes a virtue and a vice, he would be advocating policies that put a curb on consumerism, rather than arguing forcefully for the economic system which created it, and depends on it.

Fourthly, economic inequality produces political inequality. Bill Gates has far more political power than any voter earning the average wage. Which pretty much destroys any argument about economic equality causing political inequality. At worst, you could argue for an Animal Farm situation, where normal people are relatively powerless either way.

Should Government help the poor?

When it comes to poverty, Grudem agrees that the Bible is crystal clear on the need to help the poor. However, he rejects the idea that government has the right to compel rich people to help the poor or to tax the rich to give to the poor – claiming that there are no Bible passages which justifies that idea. He rejects the idea that government handouts are the solution, as they have to be repeated forever. Instead, he believes that the solution is to encourage businesses to grow and thrive, and hence produce jobs. He again claims that a free-market solution is the way to do this, combined with punishing crime, enforcing contracts, enforcing patent and copyright laws (he doesn’t address the question of whether such laws are compatible with a free market), and protects private property. He also claims that relatively low taxation (we’ll address this next week), an effective education system, and a trustworthy banking system are needed.

There are, again, a number of problems with Grudem’s analysis. Firstly, growing businesses do not necessarily create more jobs. For example, the shift from local shops to supermarkets in an area increases the profits made by the retail sector at the same time as reducing the total number of retail jobs. Secondly, some of the things he says are necessary are somewhat at odds with each other. Patent laws, for example, are an artificial restriction on the free market

However, on the key principle of whether it is wrong for government to intervene directly on behalf of the poor, Grudem has clearly missed a large chunk of what the Bible has to say. If we look at the laws God gave to the nation of Israel in Exodus, Leviticus, Numbers, and Deuteronomy then we see a number of laws specifically designed to force the rich to help the poor, and to reduce the extent of inequality. Here are a few of them:

The Year of Jubilee

Leviticus 25:8-34 establishes a practice called the Year of Jubilee. Every 50th year, land was to be returned to the family who originally owned it. In an agricultural society, land is the ability to produce wealth. It’s worth nothing that, when this was written, individualism was thousands of years in the future – families mattered more than their members. Furthermore, the original distribution of land was pretty much equal – so every family should have had pretty much the same amount of land. In short, the law ensured that everybody had equal access to the means of production.

The 21st Century equivalent of this would be something along the lines of requiring that, every 50 years, stocks and shares would be taken off their owners and redistributed equally amongst the population. You could keep what you had gained from the investment, but not the investment itself. The principle here is more radical than any pro-equality measure that’s being seriously talked about today, and it seems somewhat surprising that Grudem missed it. No, it isn’t the communist ideal, but it’s far closer than anything capitalist societies have to offer.

The Sabbath Year

Whilst the Jubilee only came around every 50 years, there was a more frequent law to restore some measure of economic equality. According to Deuteronomy 15:1-18, every seven years all loans were to be cancelled and all slaves to be set free. To understand this, though, we need some historical context. In the Old Testament era, loans were not something you took out as an investment – they were something you did so you could get bread tomorrow. The equivalent of today’s payday loans. And slavery was something you sold yourself into because you needed to eat. Unless you were prepared to beg or steal, these were the only options open to the destitute in the cultures of the bronze age Middle East. And it’s worth noting that other laws ensured some level of protection and basic dignity for people forced into either option.

However, the important thing for our topic is that the Sabbath Year put people back on a more equal footing. Unlike with modern bankruptcy, there were no lasting consequences for the cancellation of debts. Nor were there any conditions. You didn’t have to deserve your freedom from debt or slavery, you simply got given it, and had a chance to start again. No, it’s not a law designed to bring everybody to the same level. But it does place limits on how far the effects of inequality could be felt.

Tithing

In Deuteronomy 14:28-29, every third year people were expected to give a tithe (10%) of the food that they grew (essentially their income) so that the alien, the widow, and the orphan (the socially disadvantaged who made up the bulk of the poor in that era) would be able to eat. When Grudem claims that there is no justification in the Bible for government taking money from the rich to give to the poor, I can’t help wonder who he thinks was supposed to enforce this law.

The modern equivalent of this is the welfare state – paying taxes to ensure that people can’t fall below the absolute poverty line. In a modern industrial (or post-industrial) society, the state is the only institution capable of doing this on a large enough scale. The equivalent arrangements should include adequate benefits for those out of work because our societies simply don’t create enough jobs for everybody. They should also ensure as a high priority that there are adequate benefits for those who cannot work due to illness or disability.

Gleaning

Finally, Leviticus 19:9-10 establishes that farmers were to deliberately leave some of their crops so that the poor could harvest them. The law specifically required those who owned the means of production to give a portion of that to the poor. Yes, the poor had to do some work to get the produce, rather than just being given it. But this is almost certainly the first (and possibly the only) example of a law which forced people to give to charity. The nearest equivalent today would be government programs which use tax money to fund charitable programs.

In Conclusion

Yes, Grudem is right to say that the Bible doesn’t teach that we should aim for the (impossible) ideal where everybody is economically equal (though nobody outside of the far left is advocating this). And that it doesn’t say that having some very rich people is a bad thing. But the Bible does very clearly show that society as a whole has a responsibility to prevent absolute poverty. And it provides examples of laws which require the rich to use at least some of their wealth for that end. And, of course, there is a fairly substantial (and increasing) body of empirical evidence that shows that the kind of extreme inequality we see in today’s world is not helpful in dealing with a wide range of health and social problems.

If government genuinely intends to serve the common good, then one of the things it does should be taking action to reduce poverty and decrease levels of inequality. In my opinion, the question should not be whether government does these things, but instead what is the best way of doing so.

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