Is There a Christian Defense of Markets?: Book Review

Posted on November 18, 2013 by

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In their new book, published by Crossway in 2013, The Poverty of Nations: A Sustainable Solution, the authors Wayne Grudem and Barry Asmus tackle the issue of whether one can make a distinctively Christian defense of markets and economic growth.  The book involves a unique combination of authors and perspectives.  Grudem is a well-known and respected evangelical theologian while Asmus is a widely traveled and popular economist.  Together they have made what is a very rare (though hopefully not for long) foray into the world of a topic usually reserved for professional economists, political scientists, bureaucrats and politicians–the topic of human flourishing in the economic realm.  The authors’ thesis is very simple:  If a nation (their level of analysis is the nation as a whole) wishes to achieve true economic prosperity and genuine opportunity for all its citizens to achieve that goal, it must follow the route of free markets rather than the socialist or social democratic solutions.  They do not mean by free markets unfettered markets.  There is not only room for government but its necessity, to protect from fraud, theft, coercion, to establish and protect property rights, to engage in appropriate environmental protection, to ensure accurate information for consumers, and to create a working and just rule of law for all citizens.  But within that framework, markets ought to be free–meaning that individuals should be free–to do what they do best: increase the total amount of goods and services produced, leading to propserity for the entire nation.  This propsperity is for all, not a favored few but also not artifically constrained by misguided notions of equality that levels and destroys prosperity.

So why is this book unique?  It isn’t in certain respects.  Most of the solutions for national poverty suggested by the authors have been at least mentioned somewhere else.  But they have not been collected into a comprehensive “list” by anyone.  Grudem and Asmus discuss 79 factors enabling a nation to overcome poverty.  But moreover, they examine these factors not only from the prespective of traditional economic theory (they work–utilitarian) but also from a Biblical perspective, underpinning what might appear as merely utilitarian with Scriptural support.  With very few exceptions their use and interpretation of Scripture in specific instances is quite appropriate and accurate.  In addition, as the authors state, their book deals with the povery problem at the national level. not the individual level, as important as that is as well and as the authors admit.  Therefore, the book deals with what national leaders could do and should do to bring prosperity to their nations.  One might say they address insitutional change designed to modify the incentives and actions of individuals in order to create conditions for opportunity and human flourishing.  Now of course Grudem and Asmus do not limit themselves to just governmental institutional changes.  They address change in values as necessary, and these cannot be produced by government (although government can open the way).  Values for the authors crucially include Christian values, whether explicit or implicit.

Most of the book is taken up by a careful, methodical analysis of the factors that lead a nation out of poverty.  But for each factor, Grudem and Asmus include a useful discussion of what Scripture has to say about that element.  Another quality of this book is its appeal to the average reader or college student (or below).  The language is clear and non-technical.  Still another quality is its ability to build in a popular style, the insights of many other schools of thoght in economics that have proven solid–some Austrian ideas, some Public Choice, New Institutional Economics, Development Economics–but all from within a Christian paradigm.  Finally, I appreciated the emphasis placed on a nation’s governmental-legal structure and its freedoms.  These may not substitute for virtue but they are necessary where virtue is lacking.  There are many insights to be gleaned here, too many to list in this short review.

As to criticisms, I do not have many, though I have anticipated a few.  Some would question the authors’ measures of prosperity–per capita income and GDP–but so have the authors themselves, recognizing the shortcomings but acknowledging that no one has any unequivocally better ones that can be measured accurately on a consistent basis.  The authors might be criticized for their relatively strong opposition to foreign aid, but here they make their case well, and, at any rate, they do not oppose any and all aid.  Their focus on values and cultural factors might be criticized, but I would defend Grudem and Asmus here.  These kinds of factors, including a belief in God, importance of truthfulness, character related to work, moral values, personal responsibility, importance of humans, orderliness of creation, and many others, ground a society and in turn ground an economic system.  I think they have been underestimated among economists.  The economics here is pretty simple, but that is really a reason to like the book, given its audience.  Finally, are the authors too optimistic?  Only time will tell.

This is a must read for Christian economists and for theologians who care about these issues.  It is only a beginnning of what I hope will be a series of works at both the scholarly level and the popular level addressing and countering the attitude of too many that markets are the cause of poverty.  Grudem and Asmus make the case that markets, properly bounded,  are the solution.  I agree.

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