Taken from Economics for Everybody Study Guide, Chapter 11: Economics Has Consequences
A 60-year Foot Race
The time has come to look at the true consequences of economic systems on the men and women who live within them. As always, let’s keep our North Star principle in front of us and ask: what is the impact these economic choices have on Biblical stewardship?
It is interesting to compare the economic outcomes of two countries that essentially started life at the same time in the 20th-century: North and South Korea. Here’s a brief history.
At one time, Korea was a unified peninsula. It was taken over by the Japanese in 1905 and controlled by them until the end of WWII. In 1945, the Soviet Union took over control of the northern half of the peninsula and began work at setting up a socialist command and control government and economy. Their ultimate goal was to control the entire peninsula, but the United States supervised the Southern half.
The next three years of political struggle ended in the establishment in 1948 of a socialist dictatorship in North Korea and a democratic, generally free market economy in South Korea.
By 1950, due to the withdrawal of American troops and other political developments, Stalin thought the South was vulnerable and encouraged an invasion. The result was the Korean War in which American forces and the South Koreans won a victory for the South in 1953 by pushing the North back to its original borders.
Since that time, North Korea has pursued a highly controlled socialist economy. The government controls all its industries, all its vocations, all its production, everything.
On the other hand, South Korea has pursued a generally free market economy with the government intervening in the economy to a far lesser degree. In contrast, we can say industries are free, production is free, vocations are free.
As a result, Korea is a fascinating comparison of two different economies starting from the same point and running a side-by-side race for six decades.
If you look at a recent satellite photo of the entire peninsula taken at night, it reveals a radical difference.
North Korea is literally living in darkness as a result of its socialist economic decisions. There’s not enough electricity to power the country for an entire day, so they have blackouts at night.
South Korea, on the other hand, is a market economy that is impressive in its prosperity. In just 60 years, there has been such a radical divergence between the two countries that one is at the top of the world’s economic scale and the other is at the bottom.
The South has food surpluses both through its own farming and its international trade; the North struggles through ongoing famines and regular starvation, often requiring food supplies from International and South Korean governments and charities just to survive.
The South has full and thriving cities with bustling streets and full buildings; the North has empty and dead cities with empty streets and empty buildings.
The South has renowned robotics, aerospace, and biotechnology industries and is one of the top 10 exporters and importers in the world; the North struggles to maintain its burgeoning military at the expense of all other industries.
The South is one of the fastest growing and richest economies in the world, ranked in the top 20 with more than $20,000 in per capita income; the North is one of the poorest countries, in the bottom 20 with less than $2,000 in per capita income.
A Tale of Two Outcomes
And what is the effect on Christianity and stewardship?
South Korea is one of the most Christian nations in the world. A 2005 census put the number of Christians in South Korea at almost 20 million in this nation of 48 million people. That’s 40% Christian. Seoul boasts 11 of the 12 largest Christian congregations in the world, with one Assemblies of God church having 1,000,000 members. (Really!)
Every year South Korea sends tens of thousands of missionaries all over the world. After the US, South Korea is the second largest missionary sending nation. South Korea’s market based economy has fueled incredible conquests for the Kingdom of God both internally and world-wide.
North Korea, on the other hand, is one of the most atheistic nations in the world.
It is considered one of the greatest national persecutors of Christians. Outlawed by the government, Christians are imprisoned, tortured, and killed. Right now, there are approximately 50 to 70 thousand Christians detained in North Korean prisons. The Voice of the Martyrs regularly reports on the horrific situation Christians face in North Korea.
This quick comparison shows us the extreme difference in results between a socialist economy and a generally free market economy.
But this isn’t the only case: compare Taiwan or Hong Kong and mainland China (especially 30 years ago before China started its market reforms); compare the former East Germany and West Germany; compare Cuba before and after Castro. And there are many other examples of the dire failures of socialism and the triumphs of the free market.
Socialism, both in its revolutionary as well as its gradual interventionist ways, always ends in the persecution of Christians, the growth of Satan’s kingdom, and the denial of Biblical stewardship, not to mention great poverty and distress for all those living inside those economies.
In the same way, the free market in countries with relatively mild interventionism leads toward the freedom of Christians, growth of the Kingdom, and the flowering of Biblical stewardship.
One Key Question About Sin
One key question determines everything about the consequences of an economic system: how does an economy take into account man’s sin?
The reality of sin in every person must never be forgotten. Those economic systems that recognize man’s basic sinfulness are consistently free because they take steps to protect men from other men. Those systems that deny man’s sinfulness are consistently enslaved since they were designed by a few men to control all others.
Here is the irony: socialist systems start with the assumption that most men (especially poor men) are basically good, but misguided and exploited by the wealthy. All they need is education, leadership and organization to create a utopia here on earth. This socialist utopia is a nation of plenty that has been freed from poverty. It has also been freed from Christianity and all its doctrines of heaven and hell.
Never underestimate the utopian vision even if it comes in different versions.
It is the rationale behind all the work that socialists do to advance their causes. They have been able to capture the hearts and minds of millions and millions of people with a vision of “heaven on earth.” This thinking continues to be used even here in the United States where people are promised that the government can give them ‘a better tomorrow.’
This is why it is necessary to banish Christianity from their system: Christ teaches that man will never be perfected on this earth, the poor will always be with us, and the only utopia possible is in heaven above.
The question of the poor or the exploited worker has often been at the forefront of socialist economic endeavors.
Sometimes this has been there to mask someone else taking control – as in the case of Lenin or Mao. Sometimes it has been a legitimate, if not well thought out, concern – as in the case of gradual socialists such Roosevelt.
In both cases, however, it’s always someone acting on behalf of others to setup a new economic system that is somehow going to solve their problems and usher in a utopia. Yet history shows it is not plenty that comes with socialism, but poverty; and in most cases, it is not heaven that is established on earth, but a type of hell.
Visions of Utopia and Cities of Hell
Let’s begin with the consequences of revolutionary socialism.
The most famous revolutionary socialist was Karl Marx, a German economist who took up residence in England in the mid-19th century. He called his form of socialism communism. It was the most influential economic movement in the 20th-century, and still remains highly influential in the 21st century.
Marx argued that free market economies (which he called capitalist) should be violently overthrown with much bloodshed; socialist economies should then be set up in their places.
Many people do not realize that Communist socialism starts with economics and builds its system from economic premises. Marx’s economics are confused and often illogical, but they are still followed today with varying degrees in many parts of the world.
Marx hated God, and intentionally designed a political and economic system that would dethrone Him from heaven. All his disciples who tried to implement his visions wanted to do the same. These are the true atheist systems, designed to be the polar opposite of anything Christian.
Why is it so important for an economic system to war against God? It always comes back to whom the world is being stewarded for: God or Satan. The revolutionary socialists were very consistent in their thinking.
Socialists do not believe in the fall of man or sin, in the cultural mandate, or in vocational stewardship. They consistently deny these ideas and work off an economic system that ignores or flatly contradicts them. What is the result?
As we have seen before, a socialist political and economic system ultimately removes all freedom from individual men to work, raise families, live and worship as they choose. This is instead the role of the State and its central planners.
Which countries have implemented revolutionary socialist systems either currently or sometime in their past? Russia, China, North Korea, Cuba, Vietnam, Cambodia, Angola, Ethiopia, among many others.
Every one of these countries remained a picture of poverty as long as they were pursuing a socialist economy. It was only in trying to implement some market conditions that these countries started to grow economically. But while still socialist, they were economic disasters.
Economic calculation is impossible in a socialist economy. Central planners will inevitably misallocate a nation’s land, labor, and capital because they deny the role of the individual consumer and importance of the market, especially its freedom. The logical results are ongoing economic depression and stagnation. This is what happens:
There is a shortage of basic goods. Stores in these socialist countries irregularly had bare shelves or, more bizarrely, were filled with things no one actually wanted. Lines in front of stores are not an uncommon sight in socialist countries. People wait not to buy the newest gadget but to get their ration of groceries.
This shortage is the combined result of maximum and minimum prices, government control of the means of production, and lack of market feedback.
This mismanagement of production eventually ends in famines. There were many famines in Russia caused by Soviet policies, such as in 1921 & 1922, 1932 & 1933, 1946 & 1947; these famines resulted in the deaths of approximately 17 million people.
China’s Great Famine from 1958 to 1961 was a direct result of Mao’s ludicrous economic ideas; it resulted in the deaths of between 35-45 million people. North Korea continues to have famines to this day, all a result of its extreme socialist policies.
This kind of famine in the modern world can only happen as a result of government action. Socialism ultimately results in starvation for its people.
Socialist nations are technologically primitive. Since there isn’t a market to encourage growth, then socialist economies are always “looking over the fence” to see what the market economy is creating and mimicing it in terms of products.
Nevertheless, it’s impossible to keep up. Western tourists who visited the Soviet Union and Eastern bloc countries after the fall of the Berlin Wall were amazed at what they saw: old cars, old buildings, old clothing – as if the countries were somehow stuck in a time warp.
Since the free market is ignored, the black market grows to meet the needs of the people. All socialist countries that deny free markets have enormous black markets that are the only sources for certain basic goods. Here’s the point: markets can never be completely denied from a society. The black market is always there to provide customers what they really want. They are the backbone of commerce in any socialist economy.
Finally, socialist countries consistently evidence poor living conditions compared to free market countries. One need only visit a socialist country then a free market country to see the extreme differences. The keynote of socialism is always widespread poverty. This is the curse for denying the truth about God and economics.
But there is also a Satanic side to socialism. Denying that sin exists just means it will be more prevalent and unchecked.
If a free market ultimately moves toward decentralization of power in countless individuals determining their own lives, socialism moves toward centralization of power into one individual who determines the lives of all around him.
By denying God and sin, that person will necessarily be a devil. Some of the great revolutionary socialist leaders are Lenin, Stalin, Hitler, Mao, Pol Pot, Castro.
In order to control the economic and political actions of a people, it’s necessary to have an enormous internal police force to control, and ultimately persecute, its own people. Historically, it has followed three steps:
1. Establishment of a Police State
The size of a socialist police force is always many times the size of a police force in a free and Christian nation. This is necessary to ensure that the economic policies of the central planners are carried out.
Think about it: socialist governments have to force others to their economic will in terms of managing the factors of production. It’s a perfect example of external controls vs. internal controls. And those that violate the political or economic system? They must be physically removed, either by putting them in a labor camp or by executing them.
2. Establishment of a Labor Camp System
The great Christian Russian writer Alexander Solzynetizan documented the enormous Russian prison system that enslaved millions of people in his massive work The Gulag Archipelago. The title is telling: there was a long island chain of prisons stretching throughout the nation.
In a socialist country, the prisons are for citizens whose crimes may be as insignificant as wanting to work their own way economically, desiring political freedom or trying to worship God.
Stalin alone put 14 million Russian people in labor camps from 1939-1953 – and millions more were imprisoned before and after him.
Many other millions have been or still are imprisoned in China, North Korea and Cuba. During the history of the labor camps, many millions died within them. From an economic perspective, this is the enslaving of countless people for their labor with the added benefit of removing them from society.
3. Establishment of Execution Squads
For the true enemies of the state – such as many Christians – execution is the best policy. The State sees these people as intractable and necessary to remove permanently from society.
As a result, their children are taken away, then they are shot by the police without trial and without recourse to justice. Many tens of millions of men and women have been executed by the police in Russia, China, Cambodia, Vietnam and other socialist countries for their religious beliefs, political beliefs, or because someone in the State simply decreed it.
Sin has no check in revolutionary socialism and so it destroys the lives of the people living in that economy.
In their attempt to deny God and sin, God gives a socialist economy over to their depravity. As a result, their whole society is consumed in poverty and destruction.
Death is the destiny of the socialist system. And since Christianity is a light that reveals their judgment, it is necessary for the government to remove all traces of it from their society. Wherever socialism reigns, it inevitably wars against Christianity.
If you’d like to learn more about the relationship between economics and Christianity, try out our economics curriculum.
