Basic Economics

"But he answered one of them, and said, Friend, I do thee no wrong: didst not thou agree with me for a penny? Take that thine is, and go thy way: I will give unto this last, even as unto thee. Is it not lawful for me to do what I will with mine own? Is thine eye evil, because I am good?"

Matthew 20:1-16

In the Parable of the Labourers, Jesus spoke of a householder that hired people at different times throughout the day. The householder hired more labourers as the urgency of the harvest increased. He "had agreed with the labourers for a penny a day". Then came the time for pay. "And when they came that were hired about the eleventh hour, they received every man a penny". The ones who had worked longer complained. They had worked harder and longer. "But he answered one of them, and said, Friend, I do thee no wrong: didst not thou agree with me for a penny? Take that thine is, and go thy way: I will give unto this last, even as unto thee. Is it not lawful fori had me to do what I will with mine own? Is thine eye evil, because I am good?"

Economics is based on the exchange of goods and services — things of value. When both parties agree to certain terms — free of external intervention, both see the agreement as beneficial. In other words, a win — win. This is what Jesus taught. No one was treated unfairly in the scripture referenced. When you agree to certain terms, you should not be angry or envious of the good that others may receive — even if their blessings might be greater. Shouldn't we choose instead to celebrate with our neighbors and friends when success and fortune comes to them? If we do feel bad, it should be for those who don't get to particpate in an exchange. In other words, those who don't get to work.

Why is it that our country has prospered so much and others have not? This was possible because we as Americans have a constitution that allowed us "to be the first nation to practice the free-market principles set forth in a famous book by Adam Smith entitled The Wealth of Nations". This book influenced our founders. In the book, The Making of America, Cleon Skousen explains why. "By the 1920's the debunking of the Founding Fathers was in full swing. The obsolescence of the Constitution was discussed openly. The ideas of Adam Smith were considered archaic. John Chamberlain, one of the foremost writers of our own day, was just coming up through college. He describes the academic climate of that era:

'When I was taking a minor in economics as a congruent part of a history major back in the 1920's , Robert Hutchins had not yet started his campaign to restore a reading of the 'great books' to college courses. So we never read Adam Smith's The Wealth of Nations. We heard plenty about it, however. The professors treated it condescendingly; we were told it was the fundamendalist Bible of the old dog-eat-dog type of businessman.'

It was in this climate that Adam Smith and the free-market economy fell out of favor. Collectivism, socialism, government ownership of industry, subsidy of the farmers, and a whole spectrum of similar ideas were permeating the country when World War I broke out. This greatly accelerated the idea of strong centralized government with regulatory power over every aspect of the market-place." ^[1]

What are some of the principles taught in The Wealth of Nations? In the Introduction, we find this principle:

"Enthusiasm for commerce had arisen with the recent expansion of the world-market, and men, seeing trade continually produce large fortunes, instinctively came to the conclusion that in trade — that is, exchange — is to be found the source of wealth, and that its symbol and agent, money, was its sole repository. This was the celebrated mercantile system;"^[2]

Smith also introduces other principles that affect the wealth of a nation, such as self-interest, how regulations and interference from Government and others can affect wealth negatively, labour and how it affects the value of things, and the Law of Supply and Demand and how that can affect wages and values. Consult his writings and see if you don't enrich your knowledge.

[1]: The Making of America — The Substance and Meaning of the Constitution, W. Cleon Skousen, p. 216 ISBN: 0-88080-017-8, National Center for Constitutional Studies — http://www.nccs.net

[2]: The Wealth of Nations, Part One, Adam Smith, Introduction by E. Belfort Bax, p. 19, Internet Archives, The Wealth of Nations — https://archive.org/details/wealthofnations00smituoft