#117 Economic Sanctions

 

Economic sanctions can be used for good, as they are against Russia, or Ill, as they were against Canadian truckers. 

 

Christian Worldview

I’m beginning today’s podcast by citing three books that made the same prediction. 

First: The Commanding Heights by Yergin and Stanislav tell the history of economics and politics throughout the 20th century.  The story begins in 1900 with most of the world enjoying free-market capitalism.  In the mid-century, many countries moved to a more socialist economy.  By 2000, they had mostly moved back to free-market economies.  The book was made into a three-part video series in 2002.  When the story closes, they re-assure the viewer that the world has established free-market capitalism that will probably endure.  Then the very last line is an eerie predictor of the events of the last few days of February 2022.  

Second: In The World is Flat, Thomas Friedman makes the same assumption in 2005: That the world has become Flat, and that individuals trading across the globe will make all of us richer. 

History tells us when one country knocked off its neighbor, to extend the border of the victorious country.  In our third book The End of History and the Last Man, Francis Fukuyama observed in 2006 that the world had moved almost exclusively to political democracies and economic free-market capitalist systems.  Thus, he predicted there would be no more wars because they interrupt economic growth.  Mr. Fukuyama did not consider the Christian Worldview.  People are still fallen, and while there was a very nice period of relative peace in the world, the war would return.  And now, it has. 

Back to that first book I mentioned.  In the video version, the voice-over is done by David Ogden Stiers who my generation remembers as Doctor Winchester in the TV series MASH.  With the world safely ensconced in political democracies and economic free-market capitalism, in the very last line of the video program, he leans into the microphone and asks, “But no one knows what will happen, come economic hardship, or a world war.”  Now we know.  The world did NOT remain solidly in the free-market capitalist category.  

Russia’s invasion of Ukraine stunned much of the world.  But not those of us who understand the Christian Worldview.  Because, when we read The Commanding Heights in 2002 and The World is Flat in 2005, and The End of History in 2006, we knew those authors were not looking at the world through the lens of reality.  In economics, we call their view “normative,” which means, the way they wanted the world to be.  Christian Economists see the world as it is, and that’s fallen.  We call that “positive” economics.  

 

The Cold War

We won the cold war via economics.  Referring to Commanding Heights again by Yergin and Stanislav, they tell the fascinating story of Oleg Gordievsky, a double-agent who was squired out of Russia in the trunk of a car across the Finish border.  The next day in London, when agents asked him about military power, he directed their attention to the economy, which was cratering under Socialism, as all economies do.  This message was sent to President Reagan,

#116 The Resurgence of Socialism

Whole Foods founder John Mackey calls capitalism “The greatest thing humanity’s ever done.”  Then why do young people favor socialism?  This podcast explains five reasons, based on the work of Niall Ferguson.  

As the Christian Economist, sometimes I get caught between conflicting prescriptions.  Christians, and really, anyone who believes in a Higher Being, are concerned about the means.  We believe that God has prescribed a certain way for us to lead our lives, and our objective is to align with it.  Economists, on the other hand, tend to focus on the outcome of a transaction.  They almost always take the utilitarian view.  

Today’s topic: Socialism, fails on both the Christian worldview and the economic outcome.  As the means, Socialism uses power, of which Christians don’t approve.  And on the ends measure, Socialism has failed everywhere it has been tried. 

Then why do 65% of young Americans favor it?  My information source for this podcast comes from an article titled Capitalism, Socialism, and Nationalism: Lessons from History by Niall Ferguson, at the Hoover Institution at Stanford University.  After establishing Socialism’s awful historical record, he asks the question, “Why, then, has socialism come back into vogue in our time—and in America, of all places?”  He provides four answers, and I will add a fifth if time allows. 

Of course, it depends what is meant by “capitalism.” Which, by the way, Whole Foods founder John Mackey calls “The greatest thing humanity’s ever done.”  That’s not only worth repeating, it deserves an entire podcast, but for now, I will simply repeat: Whole Foods founder John Mackey calls capitalism “The greatest thing humanity’s ever done.”  But perhaps people don’t understand it very well.  According to a Gallup poll, just 56 percent of all Americans have a positive view of capitalism.  However, 92 percent have a positive view of small business,  86 percent have a positive view of “entrepreneurs,” and 79 percent have a positive view of “free enterprise.”  It also depends on what is meant by “socialism.” Asked by Gallup to define socialism, a quarter said it meant equality.  I’ll look into that idea in a few minutes, stay tuned. 

 

Creative Destruction

The first of our five concepts is creative destruction, and yes, free-market capitalism allows for it.  The horse and buggy were creatively destroyed by the automobile.  Typewriters were creatively destroyed by computers.  VHS tapes were creatively destroyed by youtube, the program on which you are watching this video.  Aren’t these creative destructions good?

The guy who invented the phrase “Creative destruction,” Joseph Schumpeter has an opinion on the subject.  in his book Capitalism, Socialism and Democracy from 1942, he predicted that free-market capitalism would fail and socialism would replace it.  Let’s hope he’s wrong. 

In the Christian worldview, creative destruction is part of creation, not the fall.  We believe that humans, made in the image of God use their creative nature to come up with new ways to redeem the earth back to God’s creational intent for it.  A couple of quotes from my little book Economics and the Christian Worldview apply here.  One is: As long as the fallen nature produces unlimited wants, and the creative nature has unlimited creativity, there will be unlimited employment.  Another is: There is a limited amount of land, and God is not making any more.   But He is making creative human beings who discover more efficient ways of using it. 

It’s always seemed strange to me that progressives ...

Who Made the Market?

Whole Foods founder John Mackey said recently, “Capitalism is the greatest thing humanity’s ever done.”  Who gets credit for this marvelous invention?  Who made the market? 

 

Whole Foods founder John Mackey said recently, “Capitalism is the greatest thing humanity’s ever done.”  That’s worth repeating and thinking about it for a moment, “Capitalism is the greatest thing humanity’s ever done.”  My first response is, “Christ coming to earth was greater, but humans didn’t do that.  

The capitalist market is where people vote.  It’s really the most democratic of systems.  As the Christian Economist, I would suggest that the market is where we love our neighbor as we love ourselves.  In my little book Economics and the Christian Worldview, I make the statement, “If you love your neighbor you will supply him products and services he demands.  If you love yourself, you will make a profit while doing so.”  

In class this week, I tried to simplify the market.  It’s not easy to do.  But, very briefly: Demand changes because of price, and quantity demanded changes with SPITE.  That’s an acronym for substitutes, population, income, taste, and expectations.  Supply changes because of price, and quantity demanded changes because of SITE, which stands for the number of suppliers, input cost, technology, and expectations.  There are 11 things moving all at the same time.  Now you know why the idea of ceteris paribus is so important.  Because, if I said that demand would go down, because of a price increase, you would argue about any of the other ten.  Ceteris paribus is a Latin term that means, “All else being equal.”  So, when prices increase – all else being equal – demand goes down.  Think about those 11 effects, all moving at the same time.  Who can set prices in such a dynamic environment?   Fed Chairman Jerome Powell can’t do it.  Treasury Secretary Janet Yellen can’t do it.  President Biden can’t.  No one can!  

Humility really is at the heart of Christianity and Economics.  The first two steps in Alcoholics Anonymous are: Step 1 – We admitted we were powerless over our addiction – that our lives had become unmanageable

Step 2 – Came to believe that a Power greater than ourselves could restore us to sanity

The four spiritual laws require humility because we believe we have to admit that God is greater than we are. The first is: God loves me.  The second is: I am sinful and separated from God.  

Humility is a critical lesson to learn in Economics as well.  As I’m recording this, in February of 2022, the Federal Reserve Bank is promising to decrease bond-buying and increase the interest rate next month.  They’re probably too late.  I cover some of that humility in podcast #21 titled Economic Humanism, and #41 In the Fed we Trust.    

The Benevolent Social Planner

I often draw a simple happy face and replace the two “eyes” with the letters “I.”  And, I explain that there could never be a benevolent social planner because that person would need perfect vision through two “I’s”:  Information and Intent.  You should wonder how any supplier sets prices with 11 dynamic effects changing at the same time.  They can’t  No one can.  It’s impossible to predict where all 11 of those are going to land at the end of the day.  My class at Dallas Baptist University starts at 8:00 central time, so the stock market opens at 8:30.  Sometimes I will ask the students, “Do you think the stock market has gone up or down in the last 15 minutes?  They don’t know.  No one knows.  There are three explanations for what moves prices, and the three suppliers of the answers happen to have different worldviews. 

#114 The Fiscal Financial Fake

The Government has thrown another financial fake to the poor.  This time, they increased child tax credits, then removed the spending power of the poor, via inflation. 

 

Another possible title for today’s podcast could be “The Government giveth, and the Government taketh away.  In this case, they gave families an increased child tax credit, but that cause inflation that wiped out the spending power of the money the families received.  

A Wall Street Journal article from December 26 is about whether a larger child allowance reduces child poverty.  It reads, “The larger allowance’s effect on poverty has been overstated because the benefit as structured crushes the incentive to work. Traditionally someone needed $2,500 in income to claim the child credit, which became more generous as a person earned more to encourage advancement. This is an extremely modest amount of income, and Democrats torpedoed this threshold for the sole purpose of sending large checks to people who don’t work.”  

OK, I will deal with the “People who don’t work” section of that quote in a little bit.  First, the idea of how the poor should be cared for.   Every reasonable person born since William Wilberforce, agrees that the poor should be cared for.  The only question is “how?”  Christian Economists generally like to quote scripture about taking care of widows and orphans from James 1:27 which clearly states the role belongs to the church.  Non-Christian economists favor government care of the poor.  

 

All Money Comes from Capitalist Ventures

I get a little frustrated with folks who say, “Well, the church used to be able to do it, but now it’s gotten too expensive for the church.”  That’s usually entoned about healthcare.  But the economics answer is something like this: The money is somewhere.  Which reminds me of the fund-raising technique where the pastor says, “There is plenty of money in this church.  It’s just in the wrong pockets!”  Actually, that’s a pretty good economics statement.  The person who says that the church can’t afford to pay for healthcare is simply putting more trust in the government’s ability to forcefully extract the money from citizens, than trust in the church to raise the money via free-will donations.  See, that’s how economists think.  If 17% of the US economy is going to be spent on healthcare, it can go through a couple of different pockets – church or government in our analysis here.  But the initial source is the production of value by people in a free-market economy.  In another recent podcast #105 titled The Free Market Feeds the Poor.  I made the point that only capitalist exchanges create profit that can be expunged by the government.  Today, I’m simply extending that point forward in the transaction exchange, to say that you can pay for healthcare via the church or the government, but it still comes out of the same pocket.  

The Wall Street Journal article I am quoting today, goes on to point out that any reduction in poverty caused by increasing child care credits is consumed by the current inflation that reduces the buying power of the poor.  This is the same game we’ve seen many times before.  The government increases giving to the poor, but that causes inflation, which harms the poor.  That’s only the fiscal part of the equation.

#113 People Should be Free

God wants people to be as free as possible in their political and economic lives.  There are ten ways in which freedom is being constrained in our world today.

 

The Declaration of Independence calls them “Inalienable rights,” because it assumes they come from God, not from Government.  Here’s the philosophical background.  The free view aligns with the Protestant concept that the human being is a free moral agent whose moral function requires the exercise of free will. For the Christian, every person is tasked with making moral decisions as voluntary acts of their own free will. The non-Christian view has no use for moral agency based on free will because the materialistic morality of utilitarianism is based on simple conformity to a social consensus of best practices. Conceptually, there is no room for an individual’s moral choice. It is this conformist materialist philosophy that is the root cause of the “cancel culture” aspect of the non-free folks.  In the free view, it is the individual who chooses; under the non-free view, the individual is one who conforms.  I’ve used a simple diagram showing that in free-market capitalism, economic decisions are made by individual choice.  In socialism, decisions are made by group force. 

In Biblical Economic Policy, Sergiy Saydometov and I list ten Commandments of Economics.  The first one is, “People Should Be Free.”  Increasingly, people are becoming less free.  Here are ten ways.

 

1. Free Enterprise

The title kind of explains what Christian Economists favor, doesn’t it?  Do you want a free economy or a government-constrained economy?  I’ve explained in many other podcasts that it’s only in a free-market capitalist economy that an individual can exercise the command to give.  In a Socialist economy, where the mantra is “From each according to his ability, and to each according to his need,” people only get what they need.  What’s left-over to give?

2. Free trade

Free trade makes nations richer, constrained trade makes them poorer.  Constrained trade is one of the few choices on which President Trump and President Biden agree, and they are both wrong.  100% of economists agree with the statement, “Trade with China makes most Americans better off because, among other advantages, they can buy goods that are made or assembled more cheaply in China.”  Whenever you get 100% of economists agreeing, we should probably pay attention.  If we really did get richer by buying products and services from our own country, wouldn’t buying only at the state level make our state even richer?  What about buying only in our county? City?  Maybe we should buy only products made on our street?  At our home?  Gets kinda ridiculous after a while doesn’t it?  The same rules apply at the national and house level: Make what you do best and buy the rest.  It’s pretty simple economics, and it also happens to agree with our Christian worldview.  I can’t find a scripture that tells us to discriminate against Mexicans or the Chinese.

3. Freedom from Government 

In his book, Three Felonies a Day, Harvey Silverglate and Alan Dershowitz point out that we have so many confusing and contradictory laws, that bureaucrats make decisions for us.  Their point is that we are no longer guided by-laws made by our legislative bodies, that role has been turned over to entrenched bureaucrats whose job is supposed to be only the implementation of the laws. 

In The False Promise of Big Government, Patrick Garry writes, “Big government does not help the poor, the working class, and the middle class, even though those groups provide the justification for big government.  In fact,

#112 The Great Reset

The World Economic Forum is attempting “The Great Reset”, after learning of problems with the US capitalist economy.  Christians believe in two: When Christ came, and when He returns. In-between them, we do the best we can in a fallen world.

 

In Christianity, we believe in two Great Resets: The first was when Jesus came to earth, Emmanuel: God with us.  We believe Jesus was fully man and fully God.  The second reset will be when Christ returns.  In the “in-between times,” we seek gradual improvements in the condition of humanity, knowing we can’t find perfection.  “Utopian plans are not in our wheelhouse,” is one of the defining statements of the book I wrote with Sergiy Saydometov, titled Biblical Economic Policy.  

The specific phrase “Great Reset” came into general circulation over a decade ago, with the publication of a 2010 book, The Great Reset, by American urban studies scholar Richard Florida.  

Four years after Florida’s book was published, at the 2014 annual meeting of the World Economic Forum, Klaus Schwab declared: “What we want to do in Davos this year . . . is to push the reset button”—and that’s what is now meant by the term “The Great Reset.”

What do they want?  Well, they intend to “reset” the economy so it serves everyone better.  Hmmm, let’s look back at history.  Has anyone tried that before?  Lenin promised that with Communism, the nation’s wealth would serve the proletariat, instead of the bourgeois.  That didn’t work out so well.  Hugo Chavez was praised by US loud mouths Sean Penn, Oliver Stone, and Michael Moore when he captured the industries of Venezuela, promising the wealth of the nation would serve the people, not the owners of the corporations. 

Oh, by the way, one of the guys attending the Davos Economic Forum many years ago asked himself why we didn’t have a Christian version, so he started it.  I’m a member of the Christian Economic Forum.  Here’s the website.  

 

Markets Work

In my introductory Econ lecture this week, I covered some of Gregory Mankiw’s Ten Principles of Economics.  One of them is “Markets are usually a good way to organize economic activity.”  I tell my DBU students, “When you hear the “beep” at the check-out counter at Wal-Mart, someone just voted.  And if it’s Hunt’s Ketchup in the 24-ounce bottle at $2.35, they voted for the brand, the size and the price.  The next time you shop, if it’s Heinz ketchup in the 36-ounce bottle for $3.35, it will be because your fellow shoppers voted for it.  Ok, I realize it’s not a totally free market, and fallen people are continually trying to put their thumb on the scale, but generally, in free markets, the products and services we receive are determined by almost a perfect democratic vote of your fellow consumers.  The Davos crowd doesn’t like free markets.  They don’t like it when “everyone votes” because the outcome is inequality.  I deal with inequality in podcast #6 titled Jesus Distributed the Gospel Unequally.

So the Great Reset, as defined by the Davos bunch, is a power play.  Those of us who live in relatively free-market economies have voted for the production and distribution of services in a very democratic way.  But they don’t like the outcome of the vote. 

In a very good article in Imprimis, published by Hillsdale College, Michael Rectenwald states, “While approved corporations are not necessarily monopolies, the tendency of the Great Reset is toward monopolization—vesting as much control over production and distributi...

#111 President Biden’s Sphere Sovereignty

President Biden admitted that there is no Federal solution for COVID.  From a Christian economist’s point of view, he said that there are elements outside what Abraham Kuyper would call “God’s sphere sovereignty.”

 

President Biden had his “Abraham Kuyper moment” this week, when he stated about COVID, “There is no Federal Solution.”  Without knowing it, he was citing the great Abraham Kuyper’s idea of sphere sovereignty.  

I will try to resist the very easy example of a politician not keeping a promise, because this one is too easy.  During the presidential campaign, candidate Biden promised, “to shut down the virus, not the country.”

Abraham Kuyper

On the back cover of the book On Business & Economics, it explains that Abraham Kuyper “Was a leading Dutch figure in education, politics, and theology.  He was a minister in the Dutch Reformed Church, was appointed to Parliament, and served as prime minister.  Kuyper also founded the Free University in Amsterdam, a political party, and a denomination in addition to writing on a wide array of subjects.”

The AbrahamKuyper.com website simply reads, “Abraham Kuyper was one of the most extraordinary individuals of his time.”  

Joe Biden is not one of the most extraordinary individuals of his time.  He is a career politician.  He is not a leader in education nor theology.  He is not a minister, and did not found a University, a political party, nor a denomination.  He is the very definition of a follower, who never hired an employee, and seldom took a stand that he didn’t later retreat from.  This podcast is about one of those many retreats.   But in this retreat, he might finally be stating something that is true, as the Wall Street Journal title quotes him as saying about COVID, “There is no Federal solution.” 

Kuyper is mostly known for the concept of common grace.  But he’s also known for our subject today: Sphere sovereignty.  Here’s how he wrote it, “If you allow society to be absorbed by the state, you will be putting the state in the place of God and destroying a divinely ordered, free society for the sake of the state.  We Christians must uphold the view that state and society each has its own sphere.  Each has its own sovereignty, and the social question cannot be properly resolved unless we respect this duality.”  

From the introduction to the book: “The idea that every sphere of society, including business, is charged with the ordinances of God and has the task of discerning them and acting on them was fundamental to Kuyper’s social vision.”  

The introduction of the book continues,  “Each sphere of society has a fundamental moral purpose: From its divinely endowed moral purpose, rather than from any dictate from the state, each sphere of society develops a free life of its own…..  Every sphere of society enjoys a certain freedom because its authority comes from God rather than from the state. “

Stay in Your Sphere

Perhaps the best-known example of sphere sovereignty is when the Baptist pastors of Danbury , Connecticut wrote to Thomas Jefferson, complaining that they were not allowed to preach because of a state church regulation.  The same situation was true in neighboring Massachusetts, where the Congregational church was the state church.  When the Baptist pastors appealed to Thomas Jefferson, he wrote them a letter stating “There should be a wall of separation between church and state.”  He was essentially stating Kuyper’s idea, about a hundred years before he wrote it.  He was clarifying that the state should not violate the sphere sovereignty of the churches.

Here’s an example of sphere confusion.  Some years ago,

#110 Going Back to the Office

Going back to the office after the pandemics exemplifies the flexibility of both Christianity and economics.  

The US labor market is going through an epic change in supply and demand, as we exit the Covid pandemic.  Each industry, and firm, is making the decision about whether to continue remote work, or bring labor back to the workplace.  The labor-management relationship will never be the same.  It will be better in many ways, because the market is flexible in allowing supply to meet demand.  Christianity is flexible also.

Christianity is flexible

When I taught at a Christian College in Eastern Europe, the provost related a story about Orthodox Christian students who came to his office to complain that a professor prayed in class.  That’s because in Orthodox Christianity, only priests can pray.  In Baptist belief, we are at the other end of the spectrum, where we use the phrase, “The priesthood of the believer.”  

Catholics have seven sacraments, while Protestants usually have two.  The Orthodox- Catholic split was called the Great Schism of 1054.  Then, Martin Luther, along with John Calvin, and Ulrich Zwingli, all contributed to the Protestant reformation in 1517.  There are lots of details that I’m skipping over, because I’m making one clear point in this section of the podcast: Christianity has flexed to meet the demands of age, region, geography, culture, and time.  In Baptist circles, we even joke about splitting churches, explaining that it’s our growth plan. 

In my little book Economics and the Christian Worldview, I make the point that about 2.2 billion of the world’s 7.7 billion people are Christians because of the flexibility of our religion.  

Institutions will come and go, but God’s word will not change.  Ginger and I visited the church of a family member just yesterday, where their culture was somewhat different from ours.  They had a quite professional band, with lights, stage fog, multiple videos, and a lead pastor that sent in the sermon that was video-recorded.  As we drove away, I mentioned to Ginger, “I don’t care how they dress it up, as long as they invite us to accept Jesus Christ as our personal savior.”  And, they did, in both the recorded message and the live presentation.  You see, the core message of Jesus flexibly adapts to multiple venues and situations.  Labor is flexible also. 

Labor is Flexible

In a lecture at Dallas Baptist University, I point out that Abraham went from Ur of the Chaldeans to the Land of milk and honey.  Perhaps that is the first recorded movement of labor for the purpose of increasing productivity.  He moved to BETTER land, which was not only God-ordained, but it was better for Abraham and his descendants also.  That’s always the case, isn’t it?  Labor moves to where it is demanded.  

I tell students that if they have a job offer of $50,000 in Dallas and $70,000 in Kansas City, they should take the Kansas City job.  

So many people outside economics miss this very critical integration of Christianity and Economics.  By taking the $70,000 job, the student is agreeing that she should create more value for her neighbors.  People outside the economics discipline see it as selfish that the graduate takes the $70 grand for herself.  In Christian economics, we understand that she will show more love for her neighbors by producing the extra $20,000 in value.  

Remote vs Office Work

Lots is being writing about the movement back to the office after the pandemic, but I will cite only one very good article from the Epoch Times titled, Companies offering remote work thrive amid labor shortage, by Rachel Hartman, December 19, 2021

#109 Corruption and the Christian Worldview

Corruption is caused by the fallen nature.  The best way to limit it, on this side of heaven, is to give more free-market power to privately owned entities, not to fallen government bureaucrats.

Humpty Dumpty

When Willie Sutton said, “Because that’s where the money is,” he was answering two questions.  The first: Why he robs banks.  The second: Why the four richest counties in America are suburbs of Washington, DC.

The Wall Street Journal published an article this week titled, “Biden Administration Unveils Plans to Fight Corruption.”  Okay, let’s get past the easy and snarky proposed headline, “The Head of the Biden Family Syndicate Fights Corruption.”  But, as you will see in a few minutes, YOU could substitute YOUR name in that headline. 

The first line of the article reads, “The Biden administration unveiled steps to combat corruption globally.”  Globally?!  That’s quite a large windmill to tilt against, wouldn’t you think?  I’ve often mused about corruption and made the observation, “I’m not surprised that other countries have high levels of corruption.  I AM surprised that the US has such low levels.”  Why?  I think the Judeo-Christian value system has something to do with it.  But I digress.  Back to the WSJ article:  “The Biden administration wants to improve cooperation between federal agencies, including the State Department, Treasury, Commerce and the US Agency for International Development.”  Ok, that’ ‘s interesting: People don’t naturally cooperate, they naturally compete.  The Biden administration is trying to fight corruption GLOBALLY, but the 38-page plan is directed at internal bureaucracies.  

In his book The False Promise of Big Government, Patrick Garry, writes, “Instead of helping the average person at the expense of the wealthy, bigger government helps the politically powerful at the expense of the average person.  As government has grown so powerful in such far-reaching ways, it has become more aligned with the centers of power in society.”

Back to this week’s Wall Street Journal article.  Maybe the most interesting phrase is highlighted by the authors, “Changing embedded cultures of corruption requires significant political will….”  Ok, let’s think about that: Politicians are writing laws to prevent political corruption.  Good luck with that.  Another section of the article states that the Biden administration is trying to keep gate-keepers, like lawyers, from taking corrupt actions.  Lawyers are writing laws to control lawyers.  Brings to mind the old rhyme, “All the king’s horses, and all the king’s men, couldn’t put Humpty back together again.”  You know why?  Because all the king’s men wrote the original law, and all the king’s men are those breaking the current law, and all the king’s men are now writing new laws.  You see, something OUTSIDE the system is required to fix something that’s broken INSIDE the system. 

Back to The False Promise of Big Government, where Patrick Garry observes, “Human freedom will further erode when government must pass even more laws and create even more bureaucratic programs to try to replace all the social guidance and support once provided by families, communities, schools, and religions.”

I’m not saying the Biden Administration should not be making attempts to lower corruption.

#108 God’s Frameworks

God made a complex world. Humans categorize it using frameworks.

Frameworks.  That’s what we teach in college level education.  God made a complex world.  Humans try to categorize it so we can understand it better.  In the second session of my Econ class, I give framework assignments to groups of students.  They come to the board and draw a simple explanation of baseball or Chemistry or biology or marketing.  It’s fun, and it’s fascinating.  They prove to themselves their ability to understand their world in simple frameworks. 

All dancers, or football players if you choose, move in only three dimensions.  Every painting or picture you take is a combination of only three colors.  The Old Testament points forward to Jesus, the New Testament points back.  There are only 118 items in the periodic table of elements.  The Biology framework is kingdom, phylum, class, order, family, genus, species.

Two Diagrams

I want my economics students to understand two diagrams.  The first explains microeconomics, which is price setting.  The second explains macroeconomics, where only two entities: The government and the central bank, each having two levers to affect the economy.

Sorry, but that reminds me of a very funny sketch from Saturday Night Live in the mid 1980’s by the character Father Guico Sarducci, titled “The Five Minute University.”  He claims he can tell you in five minutes what the average college graduate remembers five years after graduating.  On economics, he explains, “Economics: supply and demand.”  Uh…he’s really pretty close to correct about that.  In the textbook I use, by Greg Mankiw, he states that the two words used most by economists are supply and demand. 

I attended a very detailed and complex lecture on hypertension last week.  The presenter used a simple four-part outline: Exercise, diet, drugs, bioelectronics.  He made a complex subject simple.  Albert Einstein said, “You don’t fully understand a subject until you can explain it simply.”

In college education, we use textbooks.  When learning more casually, you read practical books.  Here’s the difference.  This is the textbook I’m using in Graduate Strategic Management this semester.  It was written by Hitt, Ireland and Hoskisson.  Textbooks do NOT give you the author’s opinions.  They are full of facts, confirmed by numerous scholars, whose research has been studied and verified by peer reviewers and published in academic journals.  Here’s an example: Chapter four is about Competitive Advantage, arguably, the most important concept students learn in their entire business education.  At the end of the chapter, the authors list 133 citations.  Those are all from one chapter!  You see, a textbook is a compilation of hundreds, even thousands of research-based facts.  The book I wrote with Sergiy Saydometov, Biblical Economic Policy, contains 602 citations.

But practical books are the very opposite.  They are the ideas of one person, the author, who sits at her computer and spouts her subjective views.  Pankaj Ghemewhat gives a Ted talk where he counters the ideas of Thomas Friedman in The World is Flat.  He says there are no citations in the book.  He’s right. 

In this sense, practical books like The World is Flat, give interesting, and often insightful opinions, while textbooks like Strategic Management convey facts.  It’s good to know what kind of book you’re reading. 

 

The Christian Worldview

Here’s the most important framework I’ve ever learned.  It’s called the Christian worldview.  Sometimes it’s called “The three-chapter gospel.”  God created a perfect world.  Fallen humans have messed it up.  Christians believe we find redemption in the acceptance...