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Part 3 in a series on Income Inequality

What Does the Bible Say about Income Inequality?Editor’s Note: The Institute for Faith, Work & Economics released a new research report entitled, “Why Does Income Inequality Exist? An Economic and Biblical Explanation” by Dr. Anne Bradley, Ph.D. This week our blog will highlight the key findings from this report. 

Income inequality, as we have been discussing, is a fact of economic life. People are born with different gifts, they choose to pursue them differently, and they value those gifts differently. As such, our gifts carry unequal earthly rewards, one of which is in the form of income. The market is an earthly construct which can dole out only earthly rewards.

The looming question is whether this economic reality is necessarily unbiblical. To best understand this, we need to go to scripture on two fundamental points: the distribution of gifts and abilities; and examples of God’s earthly rewards for stewardship within the context of market exchange. We’ll discuss the first today.

Scripture tells us that we are created in God’s image (Genesis 1:26-27) and that implies uniqueness. God is unique—there is only one God. Man too is unique both physically and spiritually. Each person on this earth has a unique genetic code, or DNA, that distinguishes us. From that code we each have a unique voice, fingerprint, personality, etc., all of which makes us matchless.

In addition to our specific genetic proclivities we are all created with unique sets of spiritual gifts. Tim Tebow was created uniquely to become a quarterback just as Billy Graham was created uniquely to become a public evangelist. They both can and arguably have furthered the Kingdom of God through their very different gifts and their different application of those gifts. It’s not the gifts that matter as much as how we apply them to this life.

Economists refer to this uniqueness as comparative advantage. If one individual or company can produce a good or service at a lower marginal and opportunity cost than they are better off specializing in the production of that good/service and trading with others. This is a relative comparison of skills across individuals or companies or even countries.

There may be good reason why you choose to take your suit to the dry-cleaners rather than pressing it at home. It takes a specific skill and specialized machines to press a suit or shirt. You might be able to get something clean by doing it at home, but it would take time. That time may be better dedicated to other things.

A similar calculation is made by the dry-cleaning business. They don’t make their own hangers, even though they are a critical part of a successful dry-cleaning business. The dry-cleaners could try but they could spend months, years even, and the hanger would not be nearly as good as the hangers they purchase from businesses who specialize in hangers.

Specialization frees up our time to focus in on using our gifts productively and that freed time is an opportunity to further the Kingdom of God.

All of this comes down to the fact that each individual is born with unique skills and abilities. Our work on earth, pursued with a true understanding of how God has called us to use those gifts—our purpose—can further His Kingdom. And that can occur through owning a dry-cleaning business, playing professional football, being a professional evangelist and countless other vocations, even though those gifts can and do bring different earthly rewards.

The uniqueness and purpose in our creation is quite evident in scripture. If this is true then income inequality is an economic reality woven into the very fabric of our creation, and some of us will earn higher incomes than others. Income is not the only earthly reward. It’s just the only reward bestowed by the market. Scripture is clear that some will earn more earthly rewards for efficient stewardship over the resources with which we are endowed.

It’s not just what we are endowed with, it’s how we use what we have been given. What we are given refers to abilities, gifts and talents. As we are all created in God’s image, we are all given different degrees, types and combinations of talents.

I Corinthians 12:4-11, in reference to spiritual gifts, says:

4 There are different kinds of gifts, but the same Spirit distributes them. 5 There are different kinds of service, but the same Lord. 6 There are different kinds of working, but in all of them and in everyone it is the same God at work.

7 Now to each one the manifestation of the Spirit is given for the common good. 8 To one there is given through the Spirit a message of wisdom, to another a message of knowledge by means of the same Spirit, 9 to another faith by the same Spirit, to another gifts of healing by that one Spirit, 10 to another miraculous powers, to another prophecy, to another distinguishing between spirits, to another speaking in different kinds of tongues, and to still another the interpretation of tongues. 11 All these are the work of one and the same Spirit, and he distributes them to each one, just as he determines.

In the context of income inequality, verses 4-6  are of particular importance. Paul writes that the gifts are different, the service of those gifts is different and there are different types of working (the gifts manifest themselves in entirely different ways) but in all of them God is at work for the common good. So we are unequal, and that inborn inequality serves to make us all better off. How so? Because it releases us from trying to become perfect in all things, thus we can focus on our gifts and make positive contributions to the world.

If I had to possess all of the gifts in a fallen world, I could never accomplish anything. The market is a God-given construct, a methodology for exercising our gifts, and through our unique contributions whether they are through the business world or motherhood, we can make a contribution to the common good.

Question: Think about your own job or daily tasks. Is your income the only way in which you measure success or value in your work? Leave a comment here.

Dr. Anne Bradley

About Dr. Anne Bradley

Anne Bradley, Ph.D. is Vice President of Economic Initiatives at the Institute for Faith, Work & Economics. Anne received her Ph.D. in Economics from George Mason University. She is a visiting professor at Georgetown University and has previously taught at George Mason University and at Charles University in Prague. Read More...

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  • http://twitter.com/travisthornton Travis Thornton

    Once you understand the mechanics, you’ll find inflation to be the root of income inequality. Productive elements of our society can profit from new money entering a market, but static sectors usually do not. That’s why prices rise faster than wages, causing much of the pain we see in our economy today. Studying the Bible, you will find the command to “use honest scales, weights, & measures” remained a covenant, and was not updated to allow for fluctuations, i.e., revaluations of our currency. So, accordingly, I have a moral issue with debasing our currency, even if the rest of the world is doing so to theirs.

    Coming back to the article, however, I think our duty, as both Christians and as a free people, is to ensure fairness in the marketplace, but not in outcomes. Providing charity and social safety nets is our duty as individuals, and sometimes as collectives, but not through coercion of the law. Requiring society to provide charity to their less fortunate neighbors dilutes any associated sense of honor and kindness, and coercion therein usually renders a lower result.

    Furthermore, the argument for a merit-driven society – where people profit based on their merit – is not the argument I would use in favor of the free market. Profiting in the market is based on the value added by – not the merit of – products within the market. Setting up regulations based on a subjective view on the merits of products often opens the doors wide for corruption. Solyndra comes to mind, but also GE paying $0 in taxes, hitting many of the tax breaks and credits they helped author into the Stimulus Bill.

    For more on a value vs. merit-based argument, see the link below:
    http://www.libertarianism.org/blog/bad-arguments-libertarianism-merit

    Travis

    • Roy

      Sorry Travis, this is some weird Ron Paul-inspired rhetoric (‘inflation’ ‘debasing currency” ‘Solyndra’). If you look current inflation rates, they’re quite low–almost historically low– even with the insane amounts of public/government spending and printing within the past 3 years. The fact is, in economics it’s too simple of a picture to say, like Ron Paul does, that inflation automatically happens JUST because government is spending (although it certainly can). Inflation actually depends on a number of factors that I wanna avoid getting into, so we don’t turn this into an economics debate.

      http://www.usinflationcalculator.com/inflation/current-inflation-rates/

      Because most importantly, the ultimate point of this article is NOT to talk economics, but it’s to talk about the BIBLE. Please, please, please, do not mix in the Bible with Ron Paul Austrian, because it’s wrong and awkward on so many levels. Please please please do not say stuff like “the Fed is acting unbiblically” …What does that even MEAN?

      I’m an economics major in college. It’s hard enough being Christian here. And we don’t exactly tend to get a lot of credit for being “intelligent thinkers.” So guys, I’m begging you in most earnest but most urgent way possible, please dont mix up religious and economic discourse like this.

      There is obviously a place for Christian ethics in the marketplace, but let’s not get carried away here.

      • anne bradley

        Roy,
        I agree with your point about oversimplification of the arguments when we are trying to explain dynamic and interrelated phenomena. I don’t think talking about inflation is purely rhetorical though. One reason for low current inflation rates is that people are holding on to more of their money. When something like the Great Recession happens, people are reluctant to let go of their money until they have a sense about what will happen in the future. To this end, it makes sense that we see people holding on to their money (saving more) for now, we also see that U.S. factories are at lower production capacities, for the same reason (which is why we have seen losses in manufacturing jobs). When unemployment is high, people save more.

        All that said, I want to come back to your second point, which is that the article was not about economics. We believe that economics is a helpful tool for living a full life in Christ, because economic principles are based on biblical truths that we as Christians are called to live out. My research on income inequality is an effort to understand this debate in light of biblical principles. I think the clearest example of this is the biblical principle of private property. We see property delineated and protected as a biblical principle but it is also an important economic concept. It is important for Christians to understand not just because it makes good economic sense to have well-defined and protected private property rights.
        It is important because it is based on a biblical truth and it is the only way we can unleash the creativity with which we are created and foster human flourishing, which God wants for us.

        Thank you for your thoughts and comments. I hope that you are enjoying your studies in economics and that you can look at them from a biblical lens and get even more inspired about your studies and your work.

      • anarchobuddy

        Ron Paul has not claimed that “inflation automatically happens JUST because government is spending.” You’re creating a straw man.

        And I’m not sure why you think talking about biblical morality and economic matters in the same discussion is “wrong and awkward”. If Travis believes that money debasement is wrong, and that the Fed is debasing the money supply, can he not then conclude that what the Fed is doing is wrong?

        Is your view that theology and other subjects of study are so compartmentalized that you shouldn’t talk about religion and ethics at the same time? Would you freak out if an archaeologist started talking about how his findings are relevant to biblical accounts? Or if a cosmologist related his studies to creation?

  • Anne bradley

    Travis,

    I agree with much of what you say here. I do agree that we are called to provide charity and support for those who are disadvantaged and poor, excluding the sluggard referenced in Proverbs.
    I also agree with your concerns over currency debasement and I would argue that inflation hurts the poorest among us most severly, because they have the least (if any) disposable income to absorb rising prices. I would say the government is doing great harm through the actions of the Fed and the Treasury.
    I think the paper demonstrates that value creation is the key to profit through markets. The flip side of that is market discipline, which come through losses. This encourages future value-creating behavior.
    I would disagree that inflation is the root of income inequality, although I agree that it is a current contributors to US income inequality. Absent inflation, we would not expect to see wage/wealth/income equity. I argue that this is due to the unique gifts that we each bring to the table, and the subjective valuation of consumers. I think those mechanics will always be at work, because of how we are created.

    Thanks so much for your comment! Soon, I hope to do research on the Biblical principles over currency management.

  • Truth Unites… and Divides

    “Question: Think about your own job or daily tasks. Is your income the only way in which you measure success or value in your work?”

    No.

    The Bible says that Jesus was a carpenter, but it doesn’t say what his income was. Or even whether he received income for being a carpenter. Maybe he was a pro bono carpenter!

  • anarchobuddy

    Dr. Bradley,

    I was wondering if you could comment on the sentiment I get from left-libertarians: that with truly freed markets we would see a dramatic decrease in inequality. I can partially see this; as Travis said, the problem of inflation would cease. There would be no bailouts of the wealthy bankers, no corporate welfare for the special interests, no regulations that have a greater negative impact on smaller competitors, no tax code that disfavors labor, etc. Of course, not everyone would be completely equal in wealth, but how close would they be?