On September 2 and 3, Cedarville University hosted theologian Wayne Grudem and economist Barry Asmus, who presented talks aimed at students and faculty on economics and human flourishing.  Much of what they said related to their relatively new book, The Poverty of Nations: A Sustainable Solution.  To summarize the book’s argument, the authors assert that the only way for poor nations (as opposed to poor individuals) to begin to prosper (and in the process, bring economic well-being to their citizens) is to produce more goods and services (increase GDP and per capita income), creating more jobs, leading to “earned success,” and allowing the nation to solve its own problems and emerge from dependency.  The best institutional arrangement to accomplish this is markets, along with appropriate laws establishing and protecting property rights, contract, preventing fraud and duress.  Associated with all that is freedom, political and economic.  The results will not achieve utopia–which does not and never will exists on Earth–but they will tend to lead a nation out of poverty toward prosperity.  The means to that end are encapsulated in 79 principles contained in the book.  I have recommended it before and will again.

But here I would like to address some of the questions and concerns raised by students and faculty about the lectures and the book or what one may have perceived the book to be about.

One major concern raised (a good one) is that the authors didn’t seem to address the issues of social justice, inequality and the “evil corporation.”  They did not address social justice in their lectures or directly  in the book.  But if social justice is defined as some outcome of more equalized income, then they did address it indirectly in the book under the heading of redistribution of income.  Both authors and many economists believe that redistribution of income in various ways harms both individuals and nations.  When it is done with individuals it breeds dependency, it reduces the incentives of those from who income is taken and it poses significant ethical questions (why should the state coerce some to give involuntarily to others).  The subject of social justice is much bigger and needs more discussion, but Grudem and Asmus could not say everything in their lectures.  I advocate serious and ongoing and open debate on this subject in the coming months–and look for an announcement on that.

The authors did address inequality and perhaps their answer didn’t satisfy everyone, but it did stimulate thinking.  Essentially they and others are saying that income inequality by itself means little if anything.  The crucial piece of information is not how much more a CEO makes than someone at the bottom, but how much that bottom person makes and how well-off he or she actually is.  Are they really poor, or is it just that they make much less than the CEO?  If they are poor then we presumably are dealing with life and death–subsistence living, malnutrition, lack of shelter or clothing.  But if it is a difference between driving a compact car and being driven to work in a limousine then that is a completely different situation.  The inequality bugaboo is being put out there as a major economic problem, but is it?  Or are some using it to promote envy?

And what about the “evil corporation”?  I am not saying that all CEOs and those working for them are necessarily virtuous people.  Neither are all non-corporate employees.  People are people, all born with the same nature and tendencies to selfishness (sin).  But does that mean that corporations that make large (or small) profits are automatically bad?  For example, if we didn’t have them, who would be able to accumulate the capital necessary to engage in businesses big enough to hire lots of people at pretty good wages?   Very few individuals could do that on their own, and jobs would be fewer as a result.

Again I am not absolving corporations of all “sin.”  Many are all too quick to take advantage of what they can get from government at taxpayer expense.  This is cronyism and it is bad and should be ruthlessly eliminated–if it were so easy.  But to spout the old line that corporations are the source of all economic evil is naive and sometimes disingenuous.  Like the other issues above, I am willing to have that discussion, an honest and rational discussion.

All in all, the Grudem and Asmus visit was very stimulating and beneficial for the Cedarville campus.  It can’t answer all objections, but it did leave an opening for more honest dialogue.  If you agree with that, I urge you to talk to your professors or colleagues or even respond to this blog.