Restraining Capitalism

I was talking to a preacher buddy of my dad’s a while ago, discussing my future plans, and I told him how I wanted to be an economist.  Being a free-market apologist who had the audacity to challenge him on his favorable views of unions (from a historical perspective), he felt compelled to tell me that while he was pro-capitalism, he thought that some restrictions were necessary.
His argument for interfering in the market was based on how God had interfered with the free market under the old law.  Specifically, he cited how God required that farmers leave remnants in their fields for the poor to borrow and how God forbade the Israelites from charging their brethren interest on loans).  Unfortunately, there are at least three problems with this line of thinking.

First, God presumably possesses more knowledge than any central planner would.  This difference is crucial because it means that the Old Testament theocracy is not comparable to any human-devised system.  The biggest difference between the two systems would be that the theocratic system would not face near the knowledge constraints that a human system would.  As such, God could be reasonably sure of the future and plan accordingly; mere mortals do not have these powers and abilities and thus would not have the ability to plan out an economy.

Second, not even God’s command was enough to ensure compliance with regulations that would work in theory.  Time and again, the children of Israel ignored God’s laws.  (It should be noted that usury laws and gleanings laws are not the only “economic” laws.  Mandatory sacrifices have an economic component, as do the various regulations on commerce and production.)  There were multiple times when the Israelites failed to keep God’s commands, which goes to show that even the laws implemented by the Lord of Hosts can be violated.  If God’s laws can be violated then how can we expect any different for man’s laws?

Finally, note that some of God’s laws were intended to be signs of the Abrahamic covenant (e.g. dietary restrictions).  Also note that some of God’s laws were intended to be signs of the coming Christ (e.g. sacrificial laws).  As such, a good portion of God’s interference served a spiritual purpose.  Not all laws that interfered with the Israelite economy had spiritual significance, but some did, and it is not always easy to discern between the two (e.g. Lev. 19:19).

At this point, it should be obvious that the argument that God’s interference in the Israelite economy during Old Testament times justifies Man’s interference in any economy today fails because it is an invalid comparison, it neglects to consider how even with God non-compliance with economic statutes was possible, and it fails to consider to consider the spiritual component of some of God’s economic laws, which is also an invalid comparison.

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