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Wednesday, January 26, 2005

Econ 101: Prologue

As a Christian, my first calling in life is to love God with all my being. Secondly is to love my neighbor. For centuries, Christians have led the charge in helping the poor and needy. As such I believe that Christians should understand how best to help those in need. This assumes that not only should we have good motives but that we actually help those in need.

That being said, I am a firm believer that capitalism offers the best economic system for helping those in need. I'm going to defer to some economists to give a good definition of economics. Thomas Sowell cites the British economist Lionel Robbins who said:

"Economics is the study of the use of scarce resources which have alternative uses.":

Sowell goes on to say the following:
"What does 'scarce' mean? It means that what everybody wants adds up to more than there is....Not only scarcity but also 'alternative uses' are at the heart of economics. If each resource had only one use, economics would be much simpler...While there are controversies in economics, as there are in science, this does not mean that economics is just a matter of opinion. There are basic propositions and procedures in economics on which a Marxist economist like Oskar Lange did not differ in any fundamental way from a conservative economist like Milton Friedman... All sorts of economies - capitalist, socialist, feudal, etc - must determine in one way or another how the available resources are directed toward their various uses. But how well they do it can lead to poverty or affluence for a whole country." - Basic Economics: A Citizens Guide to the Economy, Revised and Expanded

I particularly like what Sowell says about economics not being a matter of opinion. The law of supply in demand is just as much a law as the law of gravity. Economics gives us a way of understanding supply and demand.

Let me give a quick disclaimer: in no way do I believe capitalism to be the THE WAY or to be TRUTH with a capital T. To the contrary, it often appears to me that it is those on the opposite end of the economic spectrum that hold their worldview up as truth. I am only interested in capitalism insofar as it is a system that 1) recognizes humans as fallen 2) also recognizes that humans are made in the image of God and therefore have the capacity to do good 3) gives hope to those in need in a material manner.

I am going to start posting various economic myths, particularly those related to assisting those in need.

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