Blog
Part 1 in a series on Economic Lessons from Matthew

Matthew is a book written for first-century Jewish Christians. It is full of important lessons and facts about Jesus’ life and ministry, and like all the gospels, is primarily focused on individuals and personal behavior as opposed to the Old Testament which deals more with the conditions of the nations.

Matthew records the most famous Christian sermon of all time, the Sermon on the Mount, in chapters 5:2 to 7:27. The Sermon contains a number of great lessons with economic application.

One of the most important lessons in the Sermon of the Mount deals with keeping one’s word in agreements and contracts. In Matthew 5:33-36 Jesus tells us that we should not swear or take oaths. We should simply let our “yes” and “no” stand for themselves. The implication here is twofold:

  • One, Jesus explicitly states we cannot impact what happens in heaven or on earth. We can’t even always control what happens to the hair on our own heads, so on what grounds can we swear an oath by any of these?
  • The second is implied. We should tell the truth and keep our word, and should not need to emphasize our willingness to keep it by swearing an oath.

As Calvin states in his commentary on Matthew 5:37,

Christ now prescribes, in the second place, a remedy; which is, that men act towards each other sincerely and honestly: for then simplicity of speech will have quite as much weight as an oath has among those who are not sincere. Now, this is certainly the best way of correcting faults, to point out the sources from which they spring. Whence comes the great propensity to swearing, but from the great falsehood, the numerous impositions, the unsteady and light conduct, so that hardly anything is believed? Fairness and honesty in our words are, therefore, demanded by Christ, that there may be no longer any occasion for an oath.

Trustworthy contracts are the glue of a market economy. Any exchange is a contract , requires trust, and assumes honesty by all the parties to the deal. Calvin explains that this is how men should act toward each other. Men most often act toward each other when they conduct business. The teaching is much broader, but it has many implications for business.

There are many levels of trust involved in even the simplest of contracts. Think about purchasing gas. You drive into a station, put a credit card into a machine, pump fifteen gallons of liquid into your car, and drive off. You never talk to anyone, they never talk to you, you never verify that the liquid is actually gas, and the station workers never verify that you are the actual owner of the card. At any of these points, the transaction can come undone if either party is untrustworthy. Fortunately, we have not had such a universal breakdown in basic trust.

The deterioration of trust has changed the way we do business. There was a time when a man’s word was trusted as reliable. It may be that the era of the “handshake deal” was not as prominent as nostalgia may lead us to remember. It was, however, much more prominent than it is now, as were things such as “signature loans” at the bank. These sorts of business deals are rare now because we do not trust each other as much.

The breakdown of honesty is very costly, as even the simplest deals now require reams of paperwork, signatures, initializing, disclosures, notarizing, and so forth. All of this costs time and money, and slows down and even prevents deals getting done. Economists call these “transaction costs.” Think of them as roadblocks. They prevent the smooth flow of goods and services, and in some cases, they stop the flow altogether.

If all men followed Jesus’ teaching, not only would we have more peace and harmony, but we would actually be wealthier since we would have fewer transaction costs.

Leave your comments here.

Photo: Saint Matthew and the Angel by Rembrandt. Courtesy of Jean Louis Mazieres.

This post is part of a series on Economic Lessons from Matthew
  • Part 1: An Economic Lesson from the Sermon on the Mount
Dr. Brian Baugus

About Dr. Brian Baugus

Brian Baugus is an assistant professor of economics at Regent University in Virginia Beach, Virginia. Dr. Baugus is also a visiting professor of the African Bible University in Kampala, Uganda. He holds a doctorate and masters in economics from George Mason University, and MBA in finance from Vanderbilt University and a BA in economics from McDaniel College. He has worked in banking, consulting and government.

Please read our comment policy.
  • christian_in_asia

    So in the OT (at mount sinai, after the commmandments on the tablets, these were followed by a discourse on the regulations of communal living. Now here in this passage, the setting is the NT with the Beatitudes given (orally) and then followed by also a discourse on the (new) communal living. The same pattern but in different settings ???

    • Brian Baugus

      I agree that there is certainly a significant parallel between Moses on the Mount receiving the Ten Commandments and Jesus on the Mount delivering a sermon that essentially explains and rightly interprets the Ten Commandments. While I am not a theologian, it seems to me that both Deuteronomy and the Sermon on the Mount cover much of the same ground.

  • http://flamingfundamentalist.blogspot.com/ Curt Day

    But the Sermon On The Mount is not the only part of the Scriptures that should guide our honesty and commitment to keep our word. For what about those agreements and contracts that are exploit one side? Should those being exploited be obligated to keep their word.

    We need to look at James 5:1-6 and think about whether poverty wages is part of the mix when James condemns those who are rich who steal the pay of their employees. This is an important part of what is said in the above article because exploitive agreements can act as stumbling blocks (see Mark 9:42: http://www.biblegateway.com/passage/?search=Mark+9%3A42&version=NIV) to those who have made agreements and contracts.

    Currently, there are many jobs that pay poverty wages, wages where the employee must receive gov’t aid to survive. Many people associate poverty wages with fast food and big box stores. But other places pay poverty wages as well (see http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=11156).

    • Brian Baugus

      Thank you for reading and taking the time to comment. It is a tricky thing when we get into ideas of exploitation. James is condemning crooks and thieves and greed; he is referencing those who trust in their wealth and
      are so greedy that they won’t keep an agreement. I am sure the laborers that James is referring to entered into an agreement with the landowners that seemed fair and just, but the landowners refused to honor it. But one need not be rich to break agreements; the true exploitation is dishonest gain, whether it be large or small.

      I would argue that the true exploitation comes in the form of government intervention into the labor market in the form of closed shop states and heavy licensing and regulation requirements in many professions. These enforced laws and regulations keep many people out of the labor force who would like to be working. It is difficult for non-coercive institutions to exploit anyone; exploitation comes with the ability and willingness to use force.

  • dallmovieguy

    The great Master Miyamoto Musashi, said in the introduction to The Book of Five Rings – Do not think dishonestly. This was one of nine tenets by which he felt one must live to be a Master and to have honor. It is uncommon for people to still talk about signature loans and handshake agreements without someone suggesting that those a phony values or ideals of a sucker, it was the way of business in Texas 40 years ago – not so much now. Thank you for having an honest discussion about what is honor in life and in Christ.

Subscribe to receive more content like
"An Economic Lesson from the Sermon on the Mount"

CLOSE