When Economics & Theology Don’t Mix: A Review of ‘The Poverty of Nations’

This piece was originally published by the Bible Society of Australia‘s Eternity Newspaper. You can read the original post here.

A review of The Poverty of Nations: a Sustainable Solution by Wayne Grudem and Barry Asmus. Published by Crossway.

All Christians can strongly affirm the premise of this book: God cares deeply for the plight of the poor, and the church must seek out ways to alleviate such suffering. Unfortunately, The Poverty of Nations represents an unpersuasively narrow engagement with economics instead of the robust economic and theological engagement that we need.

The Poverty of Nations: A Sustainable SolutionTheologian Wayne Grudem and economist Barry Asmus seek to present ‘a sustainable solution’ for the poverty of majority-world nations. Their solution, in short, is a particular brand of free-market capitalism, characterized by continuously creating more goods and services in order to enter ‘a path of ever-increasing prosperity’ (p. 25). The authors seek to persuade their readers by comparing alternative economic systems with free-market capitalism and proposing a series of policies nations can adopt to move from poverty to prosperity. In addition, they seek to show how the Christian scriptures affirm the economic policies they propose.

The book is unpersuasive on both counts. Firstly, the authors only engage with a narrow range of economic thinkers from one wing of economic theory. While the information is presented as almost universally agreed upon by economists of repute, the issues and policies the authors raise are in fact still debated fiercely in the pages of such magazines as The Financial Times and The Economist. It is a major weakness of the book that instead of engaging with alternative economic theories and policies the authors simply dismiss those who fall outside their own views.

One such economist is Jeff Sachs, a highly influential development economist who has spend much of the last two decades advising the World Bank and the United Nations on poverty alleviation. His best-known book, The End of Poverty, is a detailed 400-page analysis of the causes of poverty in several majority-world nations and his own policy prescriptions to alleviate their policy – all of which is based on his successful interventions in those countries. Grudem & Asmus simply dismiss Sachs’ work as ‘a simple approach’ (p. 29).

Such an attitude to the work of other economists means the authors don’t engage with important and influential thinkers like Ha-Joon Chang, whose book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism shows historically how the wealthy nations of the world became wealthy precisely by employing policies that Grudem & Asmus dismiss as harmful and destructive – only employing free-market principles once their wealth was already established. Grudem & Asmus do the reader a great disservice by presenting a one-sided case that fails to engage with the significant number of economists with whom they disagree. More sustained engagement with economists like Sachs and Chang would have made their case much more persuasive.

This criticism applies even more tellingly to the authors’ use of biblical texts. The book’s use of the bible is characterized by poor, unpersuasive proof-texting. The authors need to give greater support for their use of several passages, since many world-class theologians would disagree with the way they are used here. For example, God’s command to ‘subdue’ the earth (Genesis 1:28) is frequently cited as an obvious biblical mandate for ‘mak[ing] the earth useful for human beings’ benefit and enjoyment’ (p. 217). This may be part of what ‘subduing’ entails; but the authors simply state it as fact. Other interpretations are possible, including ‘subduing’ is to work for the flourishing of the whole creation, not just exploiting it for our own benefit (see, for example, Richard Bauckham’s Bible and Ecology).

At the same time, biblical texts that many would think crucial for any discussion of wealth, poverty and economics are absent entirely. For example, while asserting that equality is not a wise goal for poor nations, they fail to engage with a passage like 2 Corinthians chapters 8 & 9, in which the Apostle Paul, urging the Corinthians to give money to the struggling saints in Jerusalem, states simply: ‘Our desire is not that others might be relieved while you are hard pressed, but that there might be equality’ (8:13). For passages such as this to be absent from the authors’ discussion – along with the Wisdom Literature, most of the New Testament epistles and Jesus’ teaching in the gospels – is disappointing. The absence of the Old Testament prophets, with their emphasis on social and economic justice, is startling. Instead, the weight of the texts discussed fall on passages from the Old Testament law. Again, these are used uncritically as proof-texts, without the authors doing the necessary work of showing how God’s new covenant people are to relate to the Law. The authors’ use of scripture therefore leaves much to be desired.

There are far more rewarding theological engagement with economics available. Books like Craig Blomberg’s Neither Poverty Nor Riches, William Cavanaugh’s Being Consumed: Economics and Christian Desire and M. Douglas’ Meeks’ (more technical) God the Economist: The Doctrine of God and Political Economy engage critically with economic theory on the basis of the Christian scriptures. Instead of employing the scriptures after the fact, they explore what God’s intentions are for his people and his creation in his Word before asking what an economy based on those principles might look like – and comparing it to our own.

Grudem & Asmus are right to bring the issue of poverty to the attention of Christians. Sadly, they do not present a good model of how this should be done. If you want to read on this issue, start with one of the other books mentioned above.

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One thought on “When Economics & Theology Don’t Mix: A Review of ‘The Poverty of Nations’

  1. Richard, I was very disappointed in the review you did on Poverty of Nations. I am not an intellectual, and do not have the time to mount an argument on all of the aspects on which I am saddened by your comments.

    It appears to me that your presuppositions prevented you from objectively reading this book. I have many Christian friends who bristle and burr up (and close their minds to anything that follows) just at the thought of the free market because of all the sin they see.

    It is clear to me when I read the scriptures that God wants freedom for his people, and part of that freedom is the freedom to trade without coercion or threat of violence. Do you think that there is an alternative to free trade advocated by The Bible? My guess is that anything that is not free trade is not free.

    When God gave his people the Law before they entered the promised land, he was giving it to a people who knew only slavery to a saviour state and who needed the framework to live as free people. This included a ceremonial, civil and moral aspect, with the later two still applying for the most part. When his people followed the Law, it went well with them as individuals and as a nation.

    A look at the nations of the world over the last 200-400 years sees that the more a nation’s political and legal system resembles Mosaic Law, the more that nation has experienced freedom and prosperity.

    The freest and most prosperous nations in the world all have one thing in common. They all have a system that incorporates elements of Mosaic Law, and the only system in that incorporated this Mosaic Law was the British Common Law system. A brief overview sees King Alfred adopt Mosaic Law in the late 10thC, we see the Magna Charta some time later, we then see the Glorious Revolution and so on. Britain committed many sins along with other colonial nations, but lets not throw the baby out with the bathwater. The biblical work ethic, protestant desire for literacy, and BCL all worked to lift Britain up, and it is no coincidence that the industrial revolution began there.

    All the nations of the world that adopted BCL through the Reception Statute are among the most desirable places to live, work and raise a family. I am talking the likes of NZ, Australia, Canada, US (who took it a step further) and of course the UK. It simply makes sense that the more Gods’ Law and principles are followed, the better it will be, both in our personal lives and in our national lives. The countries I list harnessed the productivity of the people to climb out of poverty, and so can other nations if they do the same. (please do not get caught up on the exploitation argument, although true in part, it will distract from the point) No nation is or has been perfect, but Gods Law allows people to flourish, and flourish they mostly have in the countries I list above. They have not seen genocide, famine and despotic governments. Wealth is created, and the BCL more than any other system allows that to happen, and that is only because it has elements of Mosaic Law in it.

    One simple point more than any other will chart the course for the nation and the people: Does its system acknowledge God or at a minimum a higher power? If not, it is doomed, and history shows that again and again. All the nations that run under an offshoot of Roman Civil Law, tribal law, communism and the like have mankind as the highest authority and all are “busted” to a lesser or greater degree.

    One can also note a watershed moment in the life of the British colonies as they were spun out: Pre WW1 the nations adopted BCL with the Reception Statute, and post WW1 the humanist and socialist thinking had overtaken British intellectual circles and the colonies after this time were all heavily affected by Fabian Socialism. India’s first PM was a Fabian, Ghana is similar, Singapore is socialist and on it goes. It is not hard to see that Socialism is antithetical to Gods word, so it is easy to see why “it has not gone well with these nations” that adopted socialism.

    God’s Word has the runs on the board, which should not surprise us. The free market (regulated by the other principles in Gods Law and not allowed to be overrun with sin) is Gods system. I hate the sin I see in the world, and I hate the sin that I see attach itself to the free market, but that is not the fault of the free market system, it is sin, and it is the role of the government to restrain the evil doer. Ever other aspect of life sees sin attach itself to it. People see greed get out of hand and blame the free market and ridicule it, yet ignore the greed in ever other system and the atrocities that happen in every other system. Too many people throw the baby out with the bathwater.

    May I humbly suggest that you read Poverty of Nations with fresh eyes and not ones that are affected by a CNN view of the world. Grudem and Asmus are not just ranting on about the free market. There is so much more to the book. There is so much in the book that gives the credit where it is due, and that is the way the Bible can transform a nation.

    I can never understand why when trying to eradicate poverty in nations around the world, no one wants to look at what worked in NZ, Australia, Canada and the US. They somehow write that off by saying it was all based upon exploitation of the natives. If a nation climbing out of poverty was as simple as exploiting others, then every nation on earth should be prosperous, because all have done it to some degree, and ironically the poorer the nation often the more they have exploited others, particularly their own people.
    I suspect that the reason why no one wants to acknowledge the real reason NZ, Aust. et al are free and prosperous is because it would give credit to God’s Word, and these people are convinced that God does not exist, so they persist in their humanist ways whilst billions suffer from such ignorance.

    For any Christian to not read and consider Poverty of Nations is for them to miss out on so much.

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