Justice, Mercy, and Economics

Paul A. Cleveland

Religion and Liberty. September/October 1994

Paul A. Cleveland is Assistant Professor of Economics and Business Administration at Birmingham-Southern College

"He has showed you, O man, what is good. And what does the LORD require of you? To act justly and to love mercy and to walk humbly with your God." Micah 6:8

Justice and mercy. What are they? At one time or another everyone has experienced feelings of anger and indignation when they were violated by others. Everyone has an inherent sense of what is just, and that sense is heightened when one is the victim of injustice. Likewise, it is perhaps safe to say that everyone has either been the recipient of someone else's benevolence, personally extended benevolence to someone else, or has seen benevolence bestowed upon someone else. Yet, in spite of much personal experience, there is a great deal of conflict among people over the true meaning of justice and the true meaning of mercy.

No area is more embroiled in the controversy over the true meaning of these terms than economics. The ongoing debate over national economic policy attests to this state of affairs. Therefore, much is said of the need to pursue economic justice and fairness in the tax system and in the programs administered by government, but with little resolution of the conflict over exactly what policies are in fact just. In addition to disagreement about what constitutes economic justice, there are numerous calls for more compassion towards those who find themselves in unfortunate circumstances.

In matters relating to material possessions, three biblical commandments are immediately relevant. These include the Lord's prohibition against stealing, lying, and coveting.{1} The application of these commandments can be used to define a biblical understanding of economic justice and mercy.

What is stealing? Theft involves taking something that belongs to another person by the use of force or deception without the owner's approval. It can take numerous forms such as robbery, extortion, burglary, and fraud. In all cases, either through the direct use of force, or through trickery and deceit which would involve lying, the thief takes what he wants from someone else without permission. As A.W. Pink observed, "The root from which theft proceeds is discontent with the portion God has allotted, and therefrom a coveting of what He has withheld from us and bestowed upon others."{2} Thus the violation of God's prohibition against theft is always preceded by a violation of His commandment against coveting. That is, the mental act of coveting is the fertile ground from which the violent act of theft comes.

Scripture indicates that government is established to temporally punish individuals whose coveting has led to violent acts against others. As the apostle Paul says in his epistle to the Romans, the government is "an agent of wrath to bring punishment on the wrongdoer."{3} It is important to note that Paul says that government is to punish "wrongdoers" and not "wrongthinkers". Consequently, in economic matters, it is properly instituted to stop and punish actual thieves. Government's economic charge is to protect the property rights of all citizens from those whose lust would incite them to the unjust violation of those rights. Alternatively, the government is not charged with the job of punishing those who covet. It is simply unable to accomplish this task since it cannot see what is at a person's heart.

A vast potential for evil arises at this point. Since government is the organized use of force, rather than protecting the individual , it can be used by tyrants to take someone's life, liberty, or property. Frederic Bastiat, a French economist, wrote a book in 1850 entitled, The Law, in which he considered this very possibility. He referred to such situations as cases of "legal plunder."{4} "Legal plunder" occurs when one individual or interest group seeks to procure governmental favors at the expense of the broader populace. When this happens, government has been diverted from its proper course. A major theme of George Washington's Farewell Address was a warning for the nation to be on guard against this very possibility as it would destroy liberty.

Regrettably, the U.S. government has been subverted by way of a vast array of programs aimed at redistributing property. This follows since the actions undertaken by the government to promote these programs would have been totally unjust if committed by an individual. It is not wrong for an individual to protect his life, liberty, and property. Therefore, it is not wrong for government to do so collectively. Likewise, since it is wrong for the individual to violate the property rights of another, it is also unjust behavior for the collective. Nevertheless, the redistributional programs of the U.S. are designed precisely to take property from some individuals and give it to others, and this done through the use of force. Since government's only legitimate function is to punish the evildoer, its right of forced taxation is only legitimate when it raises money to provide for the equal protection of all citizens. Such force becomes illegitimate when it is applied to redistributional causes.

Why does government tend to stray from its proper role in society? There are two reasons. As Bastiat pointed out, government is diverted from its true course as a result of greed and false philanthropy.{5} The first of these is self-evident. Tyrants always have an interest in gaining political control over people to wield the sword of the state for their own selfish ends. How better to steal than to gain control of government and use it to carry out one's own evil schemes with impunity!

The second is perhaps the most pervasive reason for government's drift, especially in the U.S. Generosity for those in need has been a hallmark feature of the American experience. Private charities, churches, and nonprofit organizations are a salient feature of the culture. Stated simply, the American people have a passion for helping out those in need. Yet it is this very passion which threatens to undermine the fabric of society because it is being falsely pursued by way of governmental mandate.

It is not hard to see how this situation can arise. As a fact of nature, at any given point in time, the resources available to achieve certain ends are always limited ; yet people can always imagine a better circumstance than the one presently being experienced. It is, therefore, easy to see the temptation all charitable organizations face. Namely, to use the scarce resources obtained through voluntary contributions as seed money to lobby the legislative authority. If the effort is successful, the organization can tap into the much larger pool of resources available in the public treasury. If passion for their cause should blur the vision of otherwise civil individuals, they may well be incited to promote their end by way of government force and, as a result, inflict harm upon their fellow citizens. Such is the American story during the twentieth century whose people have generally forgotten the proverbial warning, "It is not good to have zeal without knowledge, nor to be hasty and miss the way."{6}

Rather than finding contentment with one's limited ability, and looking for legitimate ways to more effectively promote one's ends, people seek the easy, though unjust, alternative. In turn, the true meaning of mercy is forgotten. Mercy is unmerited favor. Since it is unmerited, it cannot be forced. Instead, it is a matter of voluntary choice on the part of the giver. If a thief should hold a gun to one's head and demand the victim to hand over his money, the acquiescence to the demand is not called an act of generosity. As A. W. Pink pointed out, "God has often forgiven sinners, but He never forgives sin; and the sinner is only forgiven on the ground of Another having borne his punishment; for 'without shedding of blood is no remission'."{7}

There are certain unavoidable consequences which arise as a result of the failure to keep government in its proper place. These consequences are economic hardship, increasing hatred and discord in society, and the loss of freedom.

As a college professor, I have taught long enough to expect a grade distribution among my students. Some students work harder, others are more naturally gifted, some students are better prepared to take the course, and still others are more conscientious about classroom attendance. Thus, even though they all complete the same assignments, inevitably they do not all receive the same grade.

Suppose for a moment that I decided that this inequality of grades was unacceptable and that I determined to eliminate this situation by redistributing test scores. Imagine how the better students would feel upon learning that their scores had been reduced as a result of my grade redistribution plan. There is no doubt that they would not think highly of it. In addition, it would not make them feel better about the situation if I offered to put the plan up for a vote among their classmates because their side would lose. A democracy alone cannot guarantee justice.

I once posed this analogy to a colleague. He immediately took exception to it by arguing that grade redistribution and income redistribution are not the same thing. So I asked him to explain the substantive difference between the two. Immediately, he proclaimed that one involved the transfer of points while the other involved the transfer of money. To his response, I asked him again to explain the substantive difference. After pondering the issue more deeply, he finally admitted there was none. If grade redistribution is wrong, how then can anyone argue for forced income redistribution?

To carry the analogy one step further, how hard will the better students work to prepare for the remaining examinations if my redistributional plan remains in place? If they work less, the average exam scores for the class as a whole will fall and if I desire to give the impression that this is not the case, I only have two choices. I can either make future exams easier, or I can artificially inflate the grades. In reality though, there will be less actual learning taking place than there was prior to my scheme. Though there is no cap to the level of wealth attainable, the same principle of reduced results is true in the economy, which is one reason why governments have such a marked propensity for inflationary economic policies.

The destructiveness of this behavior should be clear to everyone. If I am the only thief in town and everyone else is hard at work producing things of value, then I will have many potential things to steal. However, as others decide to leave their productive jobs to join me, there will be more thieves competing to steal fewer available items. In the limit, when everyone becomes a thief, everyone will starve for there will be nothing to steal.

The second consequence of "legal plunder" is a growing division among special interest groups in society which gives rise to increasing hatred and discord amongst people. Once again the words of Federic Bastiat are valuable. Writing under a section titled, "Perverted Law Causes Conflict", Bastiat observed,

As long as it is admitted that the law may be diverted from its true purpose--that it may violate property instead of protecting it--then everyone will want to participate in making law, either to protect himself against plunder or to use it for plunder. Political questions will always be prejudicial, dominant, and all-absorbing. There will be fighting at the door of the Legislative Palace, and the struggle within will be no less furious.{8}

Though his work is almost one hundred and fifty years old, Bastiat's description is an amazingly accurate description of politics in America today. The evidence of this fact is overwhelming. For example, consider the vast amount of money expended by special interest groups to lobby Congress. Or, consider the amount of media coverage devoted to the political agenda. It dwarfs all other events in news worthiness. Furthermore, when the media are not covering the political battles among elected officials directly, it is usually informing the nation about various protests aimed at affecting political outcomes. All of this behavior pits one person against another and promotes enmity between groups as each seeks to gain for itself some piece of political largess.

The final consequence is a loss of freedom. It is perhaps best illustrated in an essay entitled, "Whose Bread I Eat--His Song I Sing", written by J.G. McDaniel who describes a barbecue his father took him to when he was a child.{9} The barbecue was held on a river bank in Georgia and was the occasion of an address given by Congressman Stephen Pace. Mr. Pace's task that day was to explain why he opposed a federal spending bill that would subsidize farmers. Given the rural nature of his district, many farmers were in attendance. Congressman Pace told a story about wild hogs that had once lived along the river.

No one was sure where the hogs came from nor how they were able to survive the floods, fires, freezes and droughts which occurred in the area. Of course there was the occasion when one of the hogs would be killed by a pack of dogs or by a hunter, but that was not the norm.

One day a man stopped at the local store to find out where the hogs lived. After obtaining the desired information, the man went on his way. The store owner had forgotten about the man until he showed up a few months later in search of assistance to help bring the hogs to market as he had penned them all up. The news created a stir in the town and, of course, the townspeople had to see the hogs in the pen for themselves. Upon viewing the sight, they were all amazed and wondered how this man had been able to achieve this incredible feat.

The man said, "It was all very simple. First I put out some corn. For three weeks they would not eat it. Then some of the young ones grabbed an ear and ran off into the thicket. Soon they were all eating it; then I commenced building a pen around the corn, a little higher each day. When I noticed that they were all waiting for me to bring the corn and had stopped grubbing for acorns and roots, I built a trap door. Naturally, they raised quite a ruckus when they seen they was trapped, but I can pen any animal on the face of the earth if I can just get him to depend on me for a free handout."{10}


{1} Exodus 20:15-17

{2} A.W. Pink, The Best of Arthur W. Pink, Baker Book House: Grand Rapids, Michigan, 1978, p.249.

{3} Romans 13:4

{4} Frederic Bastiat, The Law, Foundation for Economic Education: Irvington-on-Hudson, New York, 1987.

{5}Ibid, p. 9.

{6} Proverbs 19:2

{7} Pink, The Best of Arthur W. Pink, p.145.

{8} Bastiat, The Law, pp 18-19.

{9} McDaniel, J.G., "Whose Bread I Eat-His Song I Sing", Essays on Liberty, The Foundation for Economic Education: Irvington-on-Hudson, New York, vol IX, 1962, 19-21.

{10} Ibid, p. 20.