“WEEKEND AT BERNIE SANDERS” — The Church vs Socialism


by Dr. Gary North

And the multitude of them that believed were of one heart and of one soul: neither said any [of them] that ought of the things which he possessed was his own; but they had all things common (Acts 4:32).

But Peter said, Ananias, why hath Satan filled thine heart to lie to the Holy Ghost, and to keep back [part] of the price of the land? Whiles it remained, was it not thine own? and after it was sold, was it not in thine own power? why hast thou conceived this thing in thine heart? thou hast not lied unto men, but unto God (Acts 5:3-4).EmilyCarr-Indian-Church-1929

The first-century church was not opposed to private property, as Peter’s words clearly indicate. But great wealth is too great a temptation for most people. Jesus laid down the general rule: “And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God” (Matt. 19:24). Nevertheless, this rule is not absolute: “When his disciples heard it, they were exceedingly amazed, saying, Who then can be saved? But Jesus beheld them, and said unto them, With men this is impossible; but with God all things are possible” (Matt. 19:25-26).

10 commandments...The deciding factor is personal self-government under God’s law, whether we are speaking of great wealth, great power, great intelligence, great beauty, or any other blessing in abundance. Christians have been suspicious of great personal wealth in the hands of the spiritually average person. They are aware of God’s covenantal warning to Israel: beware, lest “thou say in thine heart, My power and the might of mine hand hath gotten me this wealth. But thou shalt remember the LORD thy God: for it is he that giveth thee power to get wealth, that he may establish his covenant which he sware unto thy fathers, as it is this day” (Deut. 8:17-18).modern pool home

God gives individuals the power to get wealth. Should civil governments deny this principle by passing legislation that deliberately reduces this power for some men — specifically, the successful? On what biblical basis could such legislation be justified? These are rhetorical questions. There is no possibility of legitimately invoking biblical judicial standards to defend either socialism or modern egalitarianism, i.e., hard-core liberation theology or soft-core liberation theology. Peter’s words to Ananias are judicially and ethically authoritative. Socialism is therefore a form of ethical rebellion. This is why liberation theologians, not to mention outright Christian socialists, do not begin their analyses or manifestos with a detailed exegesis of this passage.

sunset churchUntil modern times, the leadership of orthodox churches steadfastly opposed socialism. They did not proclaim the ideal of free market capitalism, but they did proclaim ideals that eventually produce free market capitalism: the legitimacy of private property, geographical mobility for the sake of one’s service to God (the ideal of missions and one’s calling before God), personal responsibility, and voluntary charity to relieve individual cases of poverty. Within the churches, there have occasionally been defenders of compulsory State socialism — as distinguished from the voluntary socialism of certain vow-taking religious orders — but they have always been regarded as heretical by the churches’ leadership. The march into socialist ideology by the leadership of modern mainline churches has been accompanied by their march out of theological orthodoxy.(1)

“Liberty, Equality, Fraternity”

This famous slogan of the French Revolution embodies the Enlightenment’s depiction of Saderevolutionary ideal — an ideal of radical simplicity.(2) These three ideals can be found in the Bible, along with many others. To single out these three ideals as the foundations of social order is to adopt the fallacy of simplicity — the principle of the lowest common denominator.(3) This fallacy has always been the fundamental error of socialist economic theory: the idea that an economic plan simple enough for a committee to design and enforce will suffice to fit together the comprehensive wants and productive capacities of an entire society.(4)

Liberty under God and God’s law has been basic to the ideal of Western liberty. “The truth shall make you free” (John 8:32b) has been a guiding principle of Western thought from the beginning. Each man is responsible before God for his own thoughts and actions. Liberty is a corollary to this high degree of individual responsibility.

gustave courbetEquality as an ideal is found in Paul’s second letter to the church at Corinth. “For I mean not that other men be eased, and ye burdened: But by an equality, that now at this time your abundance may be a supply for their want, that their abundance also may be a supply for your want: that there may be equality” (II Cor. 8:13-14). The context of his remarks was his fund-raising for poor Christians in the Jerusalem church (Rom. 15:26; I Cor. 16:3). The Corinthian church had pledged these funds a year before (II Cor. 16:10-11). Paul was reminding them of their year-old pledge — a practice still common in Christian fund-raising. He was calling for voluntary sacrifice in order to meet the needs of a specific group of poor Christians. He was not laying down a judicial ideal for political economy.

Fraternity is an inescapable implication of the doctrine of the fatherhood of God. Paul told the Athenians that God created all things (Acts 17:24); therefore, He “hath made of one blood all nations of men for to dwell on all the face of the earth, and hath determined the times before appointed, and the bounds of their habitation” (Acts 17:26). But God has disinherited the sons of Adam. Entry into God’s holy family is available only through adoption by God, who has predestinated each redeemed person’s salvation before the foundation of the world. “According as he hath chosen us in him before the foundation of the world, that we should be holy and without blame before him in love; Having predestinated us unto the adoption of children by Jesus Christ to himself, according to the good pleasure of his will” (Eph. 1:4-5). The disinherited sons of Adam are outside the judicial boundaries of God’s adopted family. This theology of exclusion infuriates them.

The three-fold revolutionary ideal, which is at bottom deeply religious, is a substitute for the Bible’s multiple ideals. It is based on faith in the healing power of the predestinating State. All men must be adopted into the universal family of man. (This implies the need for a universal, unitary world State.) They must all become citizens, brothers, and comrades. Those who resist or repudiate this political adoption must either be killed or enslaved: the modern totalitarian’s version of the conquest of Canaan. This is the underlying theology of the guillotine and the Gulag Archipelago.

Socialism: Ideal vs. Reality

Liberty, equality, and fraternity have proven to be unattainable socialist ideals. In the name of liberty, socialist states have repeatedly crushed liberty through taxation, inflation, confiscation, and regulation, while simultaneously creating rigid hierarchies based on access to political power and privilege. In the name of equality, socialism creates new hierarchies based on access to office rather than access to money. The failed Soviet Russian experiment, like the tottering Red Chinese experiment, provides abundant evidence of political favoritism, especially for family members of Communist Party members. In the name of the abolition of private property, socialism creates new forms of control over property: second homes (dachas) for high Communist officials; special stores for high Communist officials who, along with members of criminal syndicates, alone possessed “hard” (Western) currency. As for fraternity, the various brotherhoods established by socialists have resembled the brotherhood of Cain and Abel. Stalin and Trotsky serve as representative examples.(5)

The promise of equality has proven to be the most powerful appeal of socialism. Part of this appeal has been based on jealousy: the desire to confiscate another person’s wealth in order to augment my wealth. A far stronger impulse has been envy: the desire to destroy another person’s wealth even though I do not profit from this destructive act.(6) It is not that socialist voters really expect politicians to legislate new tax codes that sharply reduce the tax burden of the poor and the middle class; it is that they want tax codes that punish the rich.

Equality before the law in a world of different resources, especially personal resources, leads to the inequality of economic results. Adopting an admittedly imperfect analogy from the sports world — a rhetorical strategy used by Paul on occasion(7) — if men cannot run a race at the same speed, then an even starting line, a straight runway,(8) and a simultaneous start will always lead to winners and losers: inequality of results. Socialism denies the legitimacy of the inequality of competitive economic results, so the socialist must invoke the coercive power of the State to stamp out all forms of inequality based on service to consumers. Inequality before the law becomes the socialist’s inevitable judicial standard.

Socialism transfers ownership from individuals, families, churches, and corporations to the State. It substitutes bureaucratic management for profit management.(9) It substitutes central planning by committees for entrepreneurial planning by risk-takers. It substitutes State sovereignty for consumer sovereignty.

In the name of the family of man, socialism wages war on the family, for the covenantal family possesses a separate judicial authority; it resists absorption into the State. Socialism wages war on the church for the same reason. Heavy taxation, special exemptions, subsidies for those who publicly conform, and bureaucratic regulation are the State’s main strategies of conquest in both of these wars.

The Early Church

Clement of Alexandria, in his late-second-century sermon on the rich young ruler, enjoined self-discipline, not poverty. Extreme poverty is bad, he said. “For it is impossible and inconceivable that those in want of the necessaries of life should not be harassed in mind, and hindered from better things in the endeavour to provide them somehow, and from some source.”(10) Therefore, he concluded, “And how much more beneficial the opposite case, for a man, through possessing a competency, both not himself to be in straits about money, and also to give assistance to those to whom it is requisite so to do! For if no one had anything, what room would be left among men for giving?”(11)

It is clear that his concern here was with individual Christians, not the State. Individuals should administer wealth. They are required by God to gain the skills necessary to become competent administrators of wealth. There is nothing morally wrong with great wealth. “Riches, then, which benefit also our neighbours, are not to be thrown away. For they are possessions, inasmuch as they are possessed, and goods, inasmuch as they are useful and provided by God for the use of men; and they lie to our hand, and are put under our power, as material and instruments which are for good use to those who know the instrument. If you use it skillfully, it is skillful; if you are deficient in skill, it is affected by your want of skill, being itself destitute of blame. Such an instrument is wealth. . . . That then which of itself has neither good nor evil, being blameless, ought not to be blamed; but that which has the power of using it well and ill, by reason of its possessing voluntary choice. And this is the mind and judgment of man, which has freedom in itself and self-determination in the treatment of what is assigned to it. So let no man destroy wealth, rather than the passions of the soul, which are incompatible with the better use of wealth. So that, becoming virtuous and good, he may be able to make a good use of these riches.”(12)

A similar attitude toward great wealth prevailed in the centuries that followed. In their detailed study of medieval political theory, the Carlyles wrote in 1927: “The earliest Fathers carry on these conceptions very much as we find them in the New Testament: on the one hand they do not seem to have any dogmatic theory of the community of Christian men’s goods; on the other hand they continue to insist that the Christian man is bound to use his property to relieve the wants of his fellow-man, and especially of his fellow-Christian.”(13) Honest labor was required of church members, charity was strongly recommended, and the ideal of voluntary poverty for the gospel’s sake was affirmed. But there was also faith in God’s external blessings for those who are obedient to Him. One such blessing is wealth. So, any public denunciation of wealth was generally qualified.(14) The church during its first three centuries did not advocate communism or State action to redistribute wealth.(15)

Then what about private property? Is it a commandment of God? The early church, like the medieval church, identified the origin of private property with the fall of man. (A secular version of this account was offered by Karl Marx, and before him, by Jean Jacques Rousseau. Marx viewed alienation — a kind of secular fall — as the origin of private property.(16) Rousseau viewed private property as the cause of man’s fall into the evil of civil society rather than its effect.(17)) This explanation became an important argument of the conservative churchmen against the radical equalitarians.(18) Both Cyprian and Chrysostom preached on common property as an ideal, using Acts 4:32 as their text.(19) But they did not argue that the State should enforce such a community of common ownership.

The major early church exponent of the egalitarian tradition was St. Ambrose in the late fourth century. On the one hand, he affirmed the traditional view of wealth: “But riches themselves are not blameable.”(20)On the other hand, he was an equalitarian. He viewed the origin of private property as part of the fall of man: usurpation. He argued that the poor are not responsible for their poverty. Charity is actually a form of restitution. But he proposed no coercive power for the creation of a wealth-redistribution program. As Arthur Lovejoy observed, not much ever came of Ambrose’s teaching in this regard. “The most significant fact concerning this side of the teaching of St. Ambrose is that so little came of it. The most powerful and most popular figure in the Latin Church through two critical decades, he played a large part in determining the direction which it was to take in theology, in its ecclesiastical polity, its liturgy, and its relations to the secular authority. But his preaching of a virtually equalitarian and communistic ideal of a Christian society had no effect commensurate with its earnestness and eloquence.”(21)

The Medieval Church

We think of medieval monasteries as being the incarnation of the anti-commercial spirit. Regarding private property, Benedict’s sixth-century manual (Rule) of monastic rules announced: “This vice especially ought to be utterly rooted out of the monastery”;(22) it is a “most wicked vice.”(23) Yet even here, the power of thrift, hard work, and careful management kept leading to the accumulation of institutional wealth. In the sale of the produce of the monasteries to the general public, Benedict was committed to one of the most fundamental aspects of modern capitalism: price competition. “And, as regards the price, let not the sin of avarice creep in; but let the goods always be sold a little cheaper than they are sold by people of the world, that in all things God may be glorified.”(24) The result was that the Benedictine monasteries accumulated great wealth over the centuries. Dom Cuthbert Butler writes of Benedict: “Whether he contemplated his monasteries acquiring great wealth, it is impossible to say; probably it did not enter his mind. But this in time did come about, and inevitably. The mere fact of a body of men working without personal remuneration, living frugally, and pooling their earnings, would of itself in time accumulate wealth. Then came the flood of gifts of all sorts that are constantly made to a permanent community. As a matter of fact, history attests that the great Benedictine abbeys in all lands were rich, and very rich.”(25) Within a century of Benedict’s Rule, some European monasteries were issuing their own coinage.(26) The Cistercians in the later Middle Ages became large-scale farmers and rural bankers.(27)They were great reclaimers of waste lands.(28) One estimate of their productivity is that during the thirteenth century, as much as one-sixth of the economic output in England was the result of their activities.(29)

The main exception seems to be the Franciscans, a late-medieval order. St. Francis had established the ideal of poverty in his Rule for the order. These poverty clauses were removed when the order received papal approbation in 1223 by Honorius III.(30) Also, the Franciscan order repeatedly bordered on the heretical. There was a long struggle for control within the order: Spirituals (heretical) vs. Conventuals.(31)Pope John XXII in the early fourteenth century brought the Spiritualists within the order under strict church discipline. He condemned the ideal of absolute poverty.(32) This is not surprising. It would have been unthinkable to the medieval church to promote either absolute poverty or communism. Private property was understood to be the result of the fall of man, but it is now a natural right — not opposed to nature but the result of nature.(33) The church owned far too much property for its theologians to have taken a totally hostile view of private property. This ownership accelerated throughout Europe after Charlemagne.(34) By the tenth century, as much as one-quarter of Europe’s land was owned by the church.(35) This percentage began to decline in the twelfth century.(36)

What about profit-seeking business? There has been a tendency throughout church history to characterize the merchant as a cheater and morally suspicious person. From the church fathers until the Protestant Reformation, the merchants have been persona non grata in the eyes of some (though not all)(37) theologians. (The canonists actually respected and protected the merchants.)(38) Theologians always recognized the importance of the merchant class in serving the needs of society. The merchant was regarded by some as a necessary evil in fallen society.(39) This somewhat hostile outlook was not universal, however. The late-medieval scholastics of the Spanish school of Salamanca were generally positive regarding business; their views were free-market oriented.(40) One careful historian of the medieval church’s views on property has concluded that “In business matters, civil law was often more harsh than canon law, a point that is often overlooked when considering the relevance and influence of the latter.”(41)

The poor were regarded as possessing a moral claim on the wealth of those who had a surplus of property. This surplus was always estimated in terms of the owner’s station in life.(42) This made it very difficult for the poor to enforce such a moral claim. The emphasis of the theologians was on the need for balance between the rights of private property and the needs of the community, especially the community of the saints. This was as true of the Reformation as it was of the earlier era.(43) But from the eleventh century forward, the individualism of Roman law steadily gained ground in the thinking of the theologians.(44)

From the late sixth century, beginning with the council of Tours in 567, the Frankish church recommended that laymen give a full tithe to the church. The duty of the Christian community — not the civil government — to assist the poor was recognized. The synod of Macon made this exhortation into a precept; as historian Walter Ullmann says, “everyone was compelled to pay the tenth into the chest of the bishop.”(45) The justification was relief of the poor: at least a quarter of the tithe, and as high as one-third — a proposal supported by Charlemagne.(46) But this was church law, not civil law. Ullmann is correct: “To this function, nay, this achievement of the early medieval bishops far too little attention is paid: it was they, not as monarchic governors of their dioceses, but in their corporate function as members of the councils, who saturated this society with Christian elements and thus brought about a unity of basic outlook which no sword, no royal measure, no legislation by kings could have attained in so short a span of time.”(47)

Heretical Movements

Prior to 1660, there were numerous heretical movements within European Christianity that proclaimed various forms of Christian socialism. Dominicans and conservative Franciscans were sent by the church to challenge Roman Catholic groups.(48) In a few cases, non-heretical groups proclaimed the socialist ideal. The most famous exception was the communist society in Paraguay run by Jesuits in the early seventeenth century. This society was directed by 150-300 local members of the Jesuit order. These Jesuits were not primarily Spaniards, but mainly Germans, Italians, and Scots. This society consisted of 150,000 to 200,000 inhabitants: mostly Indians, but with 12,000 black slaves. This communist experiment was constructed in part on the traditions of the socialist empire of the Incas.(49) The experiment came to an end in 1767-68, when the Spanish government drove the Jesuits out of the region.(50)

The best brief study of the heretical socialist movements of the late medieval and early modern periods is Igor Shafarevich’s book, The Socialist Phenomenon.(51) Shafarevich, a mathematician, was a prominent member of the Soviet Union’s anti-Communist protest movement of the 1970’s.(52) Shafarevich surveys the history of several of these heretical sects: Cathars, Free Spirits, Adamites, Taborites, and Anabaptists. Some were world-denying Manicheans and Gnostics; others were world-affirming pantheists. All were desirous of overcoming the Creator-creature distinction. He concludes: “All these individual theses can be reduced to one aim: overcoming the conjunction of God and the World, God and Man, which had been accomplished through Christ’s incarnation (the fundamental principle of Christianity, at least in its traditional interpretation).”(53) But how could the Bible’s Creator-creature distinction be overcome theologically? Through either gnosticism or pantheism: escape religion or power religion. He writes:

“There were two ways to achieve this: denial of the world or denial of God. The first path was taken by the Manicheans and the gnostic sects, whose teachings conceded the world to the domain of an evil God and recognized as the sole goal of life the liberation from matter (for those capable of it). The pantheistic sects, on the contrary, not only did not renounce the world, but proclaimed the ideal of the dominion over it (again, for a chosen few, while others, the “rude” folk, were included in the category of the world). In their teachings it is possible to find the prototype of the idea of “subjugating nature” which became so popular in subsequent periods. The dominion over the world was considered possible not through the carrying out of God’s will — but by denying God and by transformation of the “Free Spirits” themselves into gods. The social manifestation of this ideology can be seen in the extreme trends of the Taborite movement. Finally, the Anabaptists apparently tried to find a synthesis of these tendencies. In their “militant” phase, they preached the dominion of the elect over the world; moreover, the ideas of dominion completely overshadowed the Christian features of their world view (for example, Muntzer wrote that his teachings were equally comprehensible to Christians, Jews, Turks and heathens). In their “peaceful” phase, as can be seen in the example of the Moravian Brethren, withdrawal from the world was predominant: a condemnation of the world and a breaking of all ties with it.”

The ideas of chiliastic socialism constituted an organic part of this outlook. The demands to abolish private property, family, state and all hierarchies in the society of the time aimed to exclude the participants of the movement from the surrounding life. This had the effect of placing them in a hostile, antagonistic relationship with the “world.”(54)

Socialist ideology is imbued with the notion of a coming fundamental break, of the end and destruction of the old world and the beginning of a new order. This concept is interwoven with the idea of “imprisonment” and “liberation,” which, beginning with the Cathars, is understood as imprisonment of the soul in matter and as liberation in the other world. Later, the Amalricians and the Free Spirits saw the idea as spiritual liberation through the achievement of “godliness” in this world. And finally, the Taborites and the Anabaptists conceived of it as material liberation from the power of the “evil ones” and as the establishment of the dominion of the “elect.”(55)

The New Hierarchy

Also involved in these heretical movements was the creation of a unique organizational structure: a concentric structure, with “a narrow circle of leaders who are initiated into all aspects of the doctrine and a wide circle of sympathizers who are acquainted only with some of the aspects.”(56) This system re-established a centralized hierarchy, but in the name of initiation into the inner circle of free men.(57) The older magical humanistic ideal was steadily replaced (in public, anyway) by a secular humanistic ideal. “The leading role in the development of socialism passes to a new type of individual. The hermetic thinker and philosopher is replaced by the fervent and tireless publicist and organizer, an expert in the theory and practice of destruction. This strange and contradictory figure will reappear in subsequent historical epochs. He is a man of seemingly inexhaustible energy when successful, but a pitiful and terrified nonentity the moment his luck turns against him.”(58) It is not surprising that the two primary streams of Europe’s nineteenth-century socialist revolutionary movements — international socialism and national socialism — had their origins in occultism and journalism.(59)

From Revelation to Reason

The English Civil War and Interregnum of 1642-60 was the last occasion for the socialist heretical sects to gain power in Europe. The openly religious-ecclesiastical phase of socialist agitation ended in Europe with the restoration of Charles II to the throne in 1660. As Shafarevich notes, “The development of socialist ideas did not cease, of course. On the contrary, in the seventeenth and eighteenth centuries, socialist writings literally flooded Europe. But these ideas were produced by different circumstances and by men of a different mentality. The preacher and the wandering Apostle gave way to a publicist and philosopher. Religious exaltation and references to revelation were replaced by appeals to reason. The literature of socialism acquired a purely secular and rationalistic character. . . .”(60) This was equally true of the defenses of economic science. Appeals to Christian morality and biblical revelation were removed from the post-1660 literature of economics. It is this self-conscious removal that marks the origin of scientific economics.(61)

The restoration of Charles II to the throne led to the suppression of all independent Puritan sects, including the communists (Diggers and others). There could be no doubt in the minds of orthodox Anglicans: private property is central to society.(62) In the thinking of the religious leaders, the question of the State-imposed limits on private property is best left to the king and his Parliament. The question was too complex. “Outside the churches the opinion was rapidly growing that clergymen ought not to meddle with secular policy.”(63) This same attitude progressively prevailed in Puritan New England after 1676.(64)

The Advent of Christian Socialism: Nineteenth Century

In the first half of the nineteenth century, there were numerous English and American experiments in voluntary socialist communalism.(65) These communes were sometimes described by their founders as Christian, but their founders were more often Unitarians or openly heretical. A good example is Adin Ballou (1803-90), co-founder in 1841 of the Hopedale Community, a joint-stock Christian venture, who led the group from 1841 until 1852. He was the author of Practical Christian Socialism (1854) and editor of The Practical Christian. He was a universalist, a pacifist, and an abolitionist.(66)

Better candidates were the co-founders of nineteenth-century British Christian socialism, Rev. Frederick Denison Maurice, an anti-Unitarian, anti-Catholic theologian, King’s College historian, and a Church of England cleric, and his close friend, Rev. Charles Kingsley. They were a strange pair. Kingsley was a successful novelist (YeastAlton LockeWater Babies), a Darwinian evolutionist, and chaplain to Queen Victoria. He was vehemently opposed to Calvinism.(67) The orthodoxy of his theology can be judged by a letter that he wrote to Maurice in 1863 to describe his new discovery that “souls secrete their bodies, as snails do shells. . . .”(68) Maurice, in contrast, was devout, but his language indicated that he as a universalist. At best, he completely confused common grace with redemptive grace. “Every man is in Christ; the condemnation of every man is that he will not own the truth — he will not act as if it were true that except he were joined to Christ he could not think, breathe, live a single hour.” Every man, “as man, is the child of God. He does not need to become a child of God, he needs only to recognize that he already is as such.”(69) This confuses the two forms of sonship: disinherited (Adamic) and adoptive (Christian). Mauruce wrote to Kingsley in 1847 to criticize him for having inserted what Maurice regarded as “a sneer against the idea of a Divine Bridegroom. . . . I fully defend your right to be humorous, if by any words in your own mouth or any other you weakened people’s faith in this mystery, I should think you were inflicting a deep wound on humanity.”(70)

Maurice and Kingsley were socialists in the post-1848 era.(71) The failed socialist revolutions of 1848 were a major turning point in European thought and culture.(72) These simultaneous uprisings were important for the subsequent development of a confrontational Christian socialism.(73) Kingsley wrote to John Stuart Mill in 1869: “In five-and-twenty years my ruling idea has been that which my friend [Thomas H.] Huxley has set forth as common to him and Comte; that `the reconstruction of society on a scientific basis is not only possible, but the only political object much worth striving for.'”(74)

Beginning in the post-Civil War (1861-65) era in the U.S., the rise of the Social Gospel movement within Protestantism led to a fusion of liberal religion and socialism, or at least government intervention into the economy. The general morality of socialism was defended in the name of Christian morality.(75) The Social Gospel movement gathered momentum in the first third of the twentieth century, effectively challenged only by the rise of officially non-political neo-orthodoxy after the First World War and by neo-evangelicalism after the Second World War.(76) But both of these alternative movements have incorporated many of the Social Gospel’s ideas regarding “social justice,” i.e., State intervention. The leaders of both groups have repeatedly embraced political liberalism.(77) Twentieth-century political liberalism is addicted to humanism’s messianic dreams of salvation by civil law. This is the socialists’ dream, too.

The Drifting Evangelicals

All socialist economic thought relies on a specific view of civil law, namely, that it is legitimate for the State to use its power to redistribute wealth from richer residents to poorer residents. This view is inescapably a denial of the requirements of Leviticus 19:15: “Ye shall do no unrighteousness in judgment: thou shalt not respect the person of the poor, nor honour the person of the mighty: but in righteousness shalt thou judge thy neighbour.”(78) Socialism comes in many varieties: utopian, Communist, Fabian, and Keynesian interventionist. In some periods of Western history, it has even come in the name of Jesus Christ. Prior to the nineteenth century, however, such claims were regarded by the church as heretical. No longer. There are several reasons for this, but the most important one is that few churches today are willing to define heresy formally, and fewer still are willing to impose the negative institutional sanction of excommunication against those who publicly uphold heresy. It is not merely that socialism is no longer identified as heretical; it is that almost no belief is defined as heretical.

Throughout the twentieth century, the evangelical churches have been progressively unwilling to make up their collective minds about much of anything. They have steadily abandoned the non-negotiable doctrines of the past. When the spokesmen of the church of Jesus Christ no longer believe that: (1) God created the earth in six 24-hour days, (2) that God sent a universal flood, or that (3) hell is a real place — we should not expect them to be able to decide in God’s name between the biblical legitimacy of competing economic ideologies. J. Gresham Machen identified the theological problem in 1923: modernism, a rival religion.(79) For doing so, and doing it so effectively, he was savagely attacked personally by his liberal critics and was thrown out of the Northern Presbyterian Church in 1936, though of course not for theological reasons, according to the hierarchy.(80) No one is thrown out of the modern Protestant ministry for theological reasons; only for bureaucratic reasons.

By the 1970’s, modernism was triumphant in the mainline denominations and was nearly triumphant in all but the smallest denominations.(81) One by one, decade by decade, evangelical seminaries drifted into theological liberalism and Barthianism.(82) By the 1970’s, the neo-evangelicals had become, in the perceptive phrase of Richard Quebedeaux, the worldly evangelicals.(83) Without an anchor — the ideal of an infallible Bible and its permanent and universal relevance to every society — there has to be drift away from orthodox Christianity. There is no neutrality in life.

Halfway House Theology

Neo-evangelical Protestantism is a halfway house theology, one adopted by budding theological liberals on their way out of orthodoxy, and by converts out of liberalism into orthodoxy, but mostly by the former.(84) Calvinist philosopher Ronald Nash should have known better when he wrote in 1963 that “The charges implying that evangelicals are perhaps half-hearted heretics, i.e., men who are beginning to drift away from the basic centralities of the Christian faith, are totally without support.”(85) On the contrary, far from being “crude misrepresentations” of the neo-evangelical position, as Nash termed the critics’ accusations,(86) these accusations have proven, year by year, decade by decade, to have been right on target. One by one, the neo-evangelical leaders and institutions of the late 1950’s and early 1960’s have steadily shown their true colors.(87) They have steadily sold-out the faith, and more to the point, have sold out the donors whose funds built the institutions that now pay the salaries of the neo-evangelicals. When, at a 1989 meeting of almost 400 of these neo-evangelical theologians, a voice vote confirming the existence of hell was called for, the motion failed.(88) The merest hint of “biblicism” has been enough to gag them.(89)

Nash subsequently “atoned” for these “sins of youth.” He spent the 1980’s in a valiant attempt to call the “outward-bound drifters” of the neo-evangelical movement back to conservatism — moral and theological — though without visible effect. His later work may have been beneficial in guiding a few of the “inward-bound drifters” from outside the movement toward the morally and economically productive shores of free market economics.(90) But his early negative response against the critics of neo-evangelicalism was typical of what goes on among academics: refusing to see what is happening under their noses until it is too late to do anything effective about it, they attack anyone who calls attention to the looming crisis. Then, when the disaster has become visible to almost everyone else, they either remain silent about their earlier skeptical position or else they go around saying to everyone who will listen — and few people will — “Golly, I wonder how this happened.”

Liberalism in Formerly Conservative Bastions

By 1980, if a denomination or ecclesiastical association had a seminary that was staffed by theologians rather than by pastors (meaning virtually all seminaries), the worldview of modernism probably had established at least a foothold in the denomination or convention.(91) Even Westminster Theological Seminary, the last bastion of academic Presbyterian Calvinism, has steadily drifted away from the free market opinions of its founder, Machen.(92) The tenets of theological liberalism and outright apostasy have almost universally penetrated the leadership of the modern church, undermining the leaders’ confidence in the reliability of the biblical narratives. This has left them philosophically and morally defenseless against the tenets of political liberalism, which have been imported into the church through the back door of the seminaries and officially Christian liberal arts colleges, all of them staffed by holders of advanced degrees from humanist universities and certified by apostate academic accrediting agencies.(93) Subordinating themselves judicially to liberal humanists in the various academic accrediting agencies, the once-conservative Christian academic institutions have steadily taken on both the institutional structure and the worldview of their accreditors.

By the 1970’s, American evangelical colleges had become heavily influenced by the liberal worldview.(94) By 1980, the leadership of the American churches had become anti-capitalist.(95) This hostility to the free market left church leaders vulnerable ideologically to the overnight collapse of the Communists’ economies in late 1989 — or more accurately, to the unexpected public admission by Communist leaders in Eastern (Central) Europe and the USSR that their economies were bankrupt, accompanied by a plea for tens of billions of additional dollars in unsecured loans and outright gifts.(96) The embarrassing setback suffered by their humanist peers and intellectual models inevitably afflicted the neo-evangelicals and the liberation theologians.

The Christian-Marxist Dialogue

The Social Gospel as an intellectual movement culminated in the 1960’s, a century after its creation, with the attempt of Christian intellectuals and Marxists to establish a new dialogue. This attempt began in earnest in 1965 with the Communist Party’s preliminary dialogues with Roman Catholic intellectuals and priests.(97) This was an obvious Party strategy by 1965, given the collapse of the conservative forces within Rome as a result of Vatican II’s four sessions (1962-65), especially in the final year.(98) By 1965, Pope Paul VI (Montini) had led the Roman Church into liberalism and had opened the doors to radicalism.(99) Simultaneously, avant-garde Protestants were going through the short-lived fad known as the death of God theology (1963-66).(100) Then came the works of Jürgen Moltmann, especially his Theology of Hope. The dialogue movement escalated in the late 1960’s. Its character is well illustrated by one of the self-professed Christians in this dialogue, Paul Oestreicher, who began his essay on “Dialogue in Hope” with this stirring analysis: “Anti-Communism, in its ideological form, is a social disease still prevalent in many parts of the so-called free world. When it has the cloak of the Christian crusader thrown around it, the disease becomes virulent.”(101) The Communists’ intentions were not the creation of a new fusion between Marxism and religion. Their goal was the capture of the minds of leading churchmen. The creation of this Christian-Marxist dialogue was high on the Communists’ list of priorities. Even Herbert Aptheker, the old war-horse of American Communism, got into the act, succeeding at long last in getting a mainstream publisher to issue his manifesto.(102)

The best symbol of the Party’s unilateral goal was the brief public career of Roger Garaudy, the French Marxist theoretician.(103) He was the most prominent European Communist spokesman of the Marxist-Christian dialogue. His book, From Anathema to Dialogue: A Marxist Challenge to the Christian Churches, published in France in 1965 and in the U.S. in 1966, may be said to have launched the dialogue movement. He announced in 1968: “Without us, Communists, I fear that your Christian love, marvelous though it is, will continue to be ineffective; without you, Christians, our struggle risks again confinement to a horizon without stars.”(104) He co-authored a book with a Jesuit philosopher, Quentin LauerA Christian Communist Dialogue (1968). But when the Soviet Union invaded Czechoslovakia in the summer of 1968, Garaudy opposed the action. He was then expelled from the French Communist Party. Only then, still a socialist, did he write about “the theoretical bankruptcy of the Soviet leaders,”(105) the “crime against Czechoslovakia” and the Soviets’ “official lies,”(106) and the “impotence” of the French Communist Party because “it continues to consider as the only valid socialist model one that would impose the leadership of the Soviet Union.”(107) But, by then, no one was paying much attention to him. (His expulsion was not even mentioned by one Lutheran student of Garaudy’s works, despite the fact that his book of praise appeared in 1974.)(108) His career as a professional Communist was finished, and so was his usefulness in the dialogue. He had disappeared from public view by 1975.

So much for Communist dialogue. From the beginning, it had been a dialogue between loyal Communists and disloyal Christians. Its importance was in laying the foundations of the liberation theology movement.(109)

Self-Imposed Blindness as a Way of Life

The Soviet economy by 1989 had visibly reached “meltdown.”(110) Eastern (Central) European Marxist economies had all been poverty-stricken and poverty-producing from the very beginning of Communist rule (the end of World War II), but the West’s media and academic community had steadfastly refused to acknowledge this fact. Communist rulers have always relied on terror as a means of political control over the citizenry,(111) even using psychology as a means of terror.(112) The Soviet judicial system was corrupt.(113) The Soviet Union’s economy was corrupt and always encouraged corruption.(114) Soviet society was based on extreme class divisions, with the favored few living lives of luxury and the vast majority of people in poverty.(115) The Soviet economy always was utterly irrational.(116) A few ex-Communists defected and revealed the truth.(117) So did people who had been put into Soviet concentration camps.(118) So did journalists who had been stationed there.(119) But until Solzhenitsyn’s Gulag Archipelago,” these reports were steadfastly ignored by a large majority of the most influential Western intellectuals.(120)

A few American economists told the truth over the years, but they were generally ignored.(121) All of this negative information had been accessible to American intellectuals from the beginning, but they self-consciously refused to believe it until the Soviets themselves admitted it in 1989. When Western intellectuals journeyed to Communist nations, they saw what they imagined to be wonderful sights, for they were political pilgrims.(122) No better description of these pilgrims has ever been penned than Malcolm Muggeridge’s, who was an increasingly disillusioned reporter for England’s liberal newspaper, The Manchester Guardian, in the 1930’s.

For resident foreign journalists in Moscow the arrival of the distinguished visitors was also a gala occasion, for a different reason. They provided us with our best — almost our only — comic relief. For instance, when we heard [George Bernard] Shaw, accompanied by Lady Astor (who was photographed cutting his hair), declare that he was delighted to find there was no food shortage in the USSR. Or [Harold] Laski (British liberal socialist, author, lecturer) singing the praises of Stalin’s new Soviet Constitution. . . . I have never forgotten these visitors, or ceased to marvel at them, at how they have gone on from strength to strength, continuing to lighten our darkness, and to guide, counsel and instruct us; on occasion, momentarily abashed, but always ready to pick themselves up, put on their cardboard helmets, mount Rosinante, and go galloping off on yet another foray on behalf of the down-trodden and oppressed. They are unquestionably one of the wonders of the age, and I shall treasure till I die as a blessed memory the spectacle of them travelling with radiant optimism through a famished countryside, wandering in happy bands about squalid, over-crowded towns, listening with unshakeable faith to the fatuous patter of carefully trained and indoctrinated guides, repeating like schoolchildren a multiplication table, the bogus statistics and mindless slogans endlessly intoned to them. There, I would think, an earnest office-holder in some local branch of the League of Nations Union, there a godly Quaker who once had tea with Gandhi, there an inveigher against the Means Test and the Blasphemy Laws, there a staunch upholder of free speech and human rights, there an indomitable preventer of cruelty to animals; there scarred and worthy veterans of a hundred battles for truth, freedom and justice — all, all chanting the praises of Stalin and his Dictatorship of the Proletariat. It was as though a vegetarian society had come out with a passionate plea for cannibalism, or Hitler had been nominated posthumously for the Nobel Peace Prize.(123)

This phenomenon did not end in the 1930’s. It went on to the last gasp of the Soviets’ economic deception. The long-term moral and intellectual bankruptcy of the West’s intellectual leaders was finally exposed in 1989 by the acknowledged economic bankruptcy and tyranny of the Marxist regimes that the West had accepted as a valid alternative to capitalism.(124) No better example of this intellectual self-deception can be found than the case of Paul Samuelson, economics professor (emeritus) at the Massachusetts Institute of Technology, the first American to win Nobel Prize in economics (1970), former Newsweek columnist, and the author of by far the most influential economics textbook of the post-war world (1948-present): three million copies, 31 foreign languages.(125) He announced in the 1989 edition of his textbook: “The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.”(126)

On January 1, 1990, Time Magazine featured a photo of Gorbachev on its cover, which announced: “Man of the Decade.” The managing editor gushed: “Instead of naming Mikhail Gorbachev Man of the Year for 1989, we decided to designate him Man of the Decade. The only precedent for such a departure from the Y word occurred at the end of 1949, when Winston Churchill was TIME’s Man of the Half-Century.” Gorbachev had been Time‘s Man of the Year in 1987. While this award is given as a “news judgment,” said the managing editor, the lengthy accompanying articles on Gorbachev gave the game away: the political genius of Mikhail Gorbachev. Michael Kramer announced confidently: “Whatever happens to Gorbachev and his risky experiment, he already qualifies as a political genius, if only because he radiates a sense of purpose, motion, decisiveness, and hope. . . .”(127) But Gorbachev never had a plan, as Kramer admitted in the opening paragraph, where he compared Gorbachev with President Franklin Roosevelt, who lacked any anti-Depression plan in 1933, but who was committed to government-directed social experimentation. Planless, Gorbachev lurched from one disastrous policy to another, 1985 to 1991: the Cernobyl nuclear power plant’s meltdown in 1986, a potential ecological disaster that he had been warned about in advance but failed to deal with; the Soviet military’s ignominious retreat from Afghanistan in February of 1989, which forever broke the Soviet Union’s mythology of military invincibility; his refusal to support the Central European Communist regimes, which led to their collapse in 1989; his bankrupting of the economy, whose bankruptcy he openly admitted in 1989; and his “genius” in gaining the absolute hatred of the Russian people of all persuasions. He was a headliner in 1989, all right: the world’s most famous loser of the decade.

From August 19-21, 1991, coup against Mikhail Gorbachev was attempted by a handful of military leaders. It failed when the ring leaders failed to arrest Boris Yeltsin, the head of the Russian Republic. When Gorbachev returned to Moscow after a brief imprisonment in his own gigantic dacha, he found that Yeltsin, his old rival, had captured the reins of authority during his absence. Within months, Yeltsin had replaced Gorbachev as the head of the USSR. Within a year, the Union of Soviet Socialist Republics was no more.(128) It had been replaced by a federation of independent states. From 1989 to 1992, the legitimacy of Marxist Communism disappeared in the West. Only a small but entrenched core of Western university professors — defenders of lost causes — kept the faith. In Russia, the old Marxist faith had faded years before, as Solzhenitsyn kept telling the West. It was buried with the failed coup.

President Reagan, who planned and oversaw the covert strategy that destroyed the Soviet Union,(129) never did make Time‘s “Man of the Year.”


The promotion of the idea of a Bible-mandated, State-imposed socialism or communism was confined to heretical religious and social movements until the late nineteenth century. The theological justifications for private property have varied, but the vast majority of Christian theologians who have written on the subject have regarded private property as a God-given social institution that is overwhelmingly beneficial to society in a sinful world.

European socialist movements after 1848 began to influence radicals inside the Roman Catholic Church, but the Church International never did adopt socialism as an ideal. It was only with the rise of Darwinism, and specifically the statist variety of Darwinism,(130) in the late nineteenth century that leaders within Protestant churches began to promote the idea of Christian socialism. It is worth noting that this period coincided with the refusal of the conservative churches to prosecute for heresy.(131)

The collapse of Soviet Communism in 1989-91 has set back Christian socialists and welfare State advocates. Without much warning, the legitimacy of socialism as an ideal collapsed. Only by substituting ecological and environmental concerns does socialism still appeal to voters.(132) This will have its effect inside the churches. Christian socialism has visibly become a lame-duck position. It did not survive a full a century in American Protestantism before it suffered a major setback because of events across the ocean where fashionable Western intellectual trends had long been set: in the Soviet Union.(133) Socialism as an ideal will eventually depart even from American theological seminaries — decades after the USSR abandoned it, I imagine. Seminary professors are too often the promoters of intellectual fads that liberal college professors abandoned decades before. Seminary professors are very slow learners, even among academicians.



  1. C. Gregg Singer, The Unholy Alliance(New Rochelle, New York: Arlington House, 1974); Edgar C. Bundy, Collectivism in the Churches (Wheaton, Illinois: Church League of America, 1957).
  2. James H. Billington, Fire in the Minds of Men: Origins of the Revolutionary Faith(New York: Basic Books, 1980), p. 4.
  3. R. J. Rushdoony, Foundations of Social Order: Studies in the Creeds and Councils of the Early Church(Fairfax, Virginia: Thoburn Press, [1968] 1978), ch. 9: “Constantinople II: The Fallacy of Simplicity.”
  4. Ibid., p. 97. Cf. F. A. Hayek, Individualism and Economic Order(University of Chicago Press, 1948), ch. 4: “The Use of Knowledge in Society.”
  5. The executioner hired to kill Trotsky at Stalin’s command used an ice axe. This surely was not accidental. The axe was the ancient Russian symbol of man’s dominion over nature. It was also used as a revolutionary image. James H. Billington, The Icon and the Axe: An Interpretive History of Russian Culture(New York: Vintage, 1966), pp. 26-28.
  6. Helmut Schoeck, Envy: A Theory of Social Behavior(New York: Harcourt, Brace & World, [1966] 1969), pp. 249-51.
  7. “Know ye not that they which run in a race run all, but one receiveth the prize? So run, that ye may obtain” (I Cor. 9:24). “Wherefore seeing we also are compassed about with so great a cloud of witnesses, let us lay aside every weight, and the sin which doth so easily beset us, and let us run with patience the race that is set before us” (Heb. 12:1).
  8. On a curved track, the runners do not run the same distance if the starting line is even. Those in the outer lanes must run farther. In such races, the starting line is staggered. Semi-socialists demand a staggered start in order to keep life’s economic race fair: economic inequality at the beginning. But only God knows how a staggered start should be arranged, since no one but God knows how far away the finish line is for each person. There are limits to analogies.
  9. Ludwig von Mises, Bureaucracy(Grove City, Pennsylvania: Libertarian Press, [1944] 1983).
  10. Clement, “Who Is the Rich Man That Shall Be Saved?” XII. The Ante-Nicene Fathers, II, Fathers of the Second Century. (reprint edition; Grand Rapids, Michigan: Eerdmans, 1979), p. 594.
  11. Ibid., XIII, p. 594.
  12. Ibid., XIV, p. 595.
  13. R. W. and A. J. Carlyle, A History of Medieval Political Theory in the West, 6 vols. (2nd ed.; Edinburgh: Blackwood, [1927] 1962), vol. I, The Second Century to the Ninth, p. 132.
  14. Cecil John Cadoux, The Early Church and the World(Edinburgh: Clark, 1925), pp. 195-97.
  15. Ibid., pp. 603-4.
  16. Marx wrote that “though private property appears to be the source, the cause of alienated labor, it is rather its consequence. . . .” Marx, “Estranged Labor,” The Economic and Philosophical Manuscripts of 1844, edited by Dirk J. Struik (New York: International Publishers, 1964), p. 117. Cf. Marx and Engels, Collected Works(New York: International Publishers, 1975), vol. 3, p. 279. See Gary North, Marx’s Religion of Revolution: Regeneration Through Chaos (Tyler, Texas: Institute for Christian Economics, [1968] 1989), pp. 169-70. This assumes, of course, that Marx regarded these documents as manuscripts, as distinguished from notes taken from others’ writings.
  17. Rousseau regarded “crimes, wars, and murders” as the result of civil society, which in turn came when “The first man who, having enclosed a piece of ground, be-thought of himself of saying `This is mine,’ and found people simple enough to believe him. . . .” Rousseau, “A Dissertation on the Origin and Foundation of the Inequality of Mankind” (1755), in The Social Contract and the Discourses, Everyman’s Library (New York: Dutton, [1913] 1966), p. 192. This famous passage introduces Part Two.
  18. Richard Schlatter, Private Property: The History of an Idea(New Brunswick, New Jersey: Rutgers University Press, 1951), p. 35.
  19. Ibid., p. 39.
  20. Letter LXIII, in A Select Library of Nicene and Post-Nicene Fathers, vol. X, St. Ambrose, p. 470.
  21. Arthur O. Lovejoy, “The Communism of St. Ambrose,” Journal of the History of Ideas, III (1942), pp. 467-68. This essay includes extracts from Ambrose’s writings.
  22. The Rule of St. Benedict, trans. Abbot Justin McCann (Westminster, Maryland: Newman Press, 1952), p. 85.
  23. Ibid., p. 87.
  24. Ibid., p. 129.
  25. Dom Cuthbert Butler, Benedictine Monachism(2nd ed.; London: Longman’s, Green, 1924), p. 155.
  26. J. Gilchrist, The Church and Economic Activity in the Middle Ages(New York: St. Martin’s, 1969), p. 41.
  27. Ibid., pp. 42-43.
  28. Coburn V. Graves, “The Economic Activities of the Cistercians in England (1128-1307),” Analecta Sacri Ordinis Cisterciensis, XIII (1957), p. 16.
  29. Ibid., p. 20.
  30. Friedrich Heer, The Medieval World, Europe, 1100-1350(New York: World, 1962), p. 183.
  31. Ibid., pp. 187-88.
  32. M. D. Lambert, Franciscan Poverty(London: SPCK, 1961), pp. 236-40.
  33. Bede Jarrett, Social Theories of the Middle Ages, 1200-1500(New York: Ungar, [1926] 1966), p. 129.
  34. David Herlihy, “Church Property on the European Continent, 701-1200,” Speculum, XXXVI (1961), p. 88.
  35. Ibid., p. 93.
  36. Ibid., p. 98.
  37. Gilchrist speaks of “the infinite variety of attitudes towards the merchants over the thousand years or so of the Middle Ages.” Gilchrist, Church and Economic Activity, p. 129.
  38. Idem.
  39. John W. Baldwin, “The Medieval Merchant Before the Bar of Canon Law,” Papers of the Michigan Academy of Science, Arts, and Letters, XLIV (1959), Pt. II, pp. 287-99.
  40. Bernard W. Dempsey, Interest and Usury(London: Dobson, [1943] 1948), pp. 131-210; Marjorie Grice-Hutchinson, The School of Salamanca: Readings in Spanish Monetary History, 1544-1605(Oxford: Clarendon Press, 1952); Murray N. Rothbard, “Late Medieval Origins of Free Market Economic Thought,” Journal of Christian Reconstruction, II (Summer 1975), pp. 62-75; Alejandro A. Chafuen, Christians for Freedom: Late-Scholastic Economics (San Francisco: Ignatius, 1986).
  41. Gilchrist, Church and Economic Activity, p. 28.
  42. Brian Tierney, Medieval Poor Law: A Sketch of Canonical Authority and Its Application in England(Berkeley: University of California Press, 1959), p. 37.
  43. See the essays in Christianity and Property, edited by Joseph Fletcher (Philadelphia: Westminster Press, 1947). See also H. G. Wood, “The Influence of the Reformation on Ideas Concerning Wealth and Property,” in Property: Its Duties and Rights(London: Macmillan, 1915), p. 156.
  44. Frederick Hastings Smith, “The Middle Ages,” Christianity and Property, p. 73.
  45. Walter Ullmann, “Public Welfare and Social Legislation in the Early Medieval Councils,” in Councils and Assemblies, edited by G. J. and Derek Baker (Cambridge: At the University Press, 1971), p. 9.
  46. Idem.
  47. Ibid., p. 4.
  48. Bede Jarrett, Medieval Socialism(London: Jacks, 1914), p. 30.
  49. Louis Baudin, A Socialist Empire: The Incas of Peru(Princeton, New Jersey: Van Nostrand, [1928] 1961).
  50. Igor Shafarevich, The Socialist Phenomenon(New York: Harper & Row, [1975] 1980), p. 144. A Hollywood movie, The Mission (1986), gave a distorted, highly favorable picture of this socialist experiment.
  51. The Institute for Christian Economics bought the last copies of this book from the publisher. It deserves to be reprinted.
  52. Igor Shafarevich, “Socialism in Our Past and Future,” in Alexander Solzhenitsyn (ed.), From Under the Rubble(Boston: Little, Brown, 1975), pp. 26-66.
  53. Shafarevich, Socialist Phenomenon, p. 76.
  54. Ibid., pp. 76-77.
  55. Ibid., p. 78.
  56. Ibid., pp. 78-79.
  57. Georg Simmel, “The Secret Society” (1908), in The Sociology of Georg Simmel, translated and edited by Kurt H. Wolff (New York: Free Press, 1950), pp. 349-51, 356-58, 366-76.
  58. Shafarevich, Socialist Phenomenon, p. 79.
  59. Billington, Fire in the Minds of Men, ch. 4: “The Occult Origins of Organization”; ch. 11: “The Magic Medium: Journalism.” The ICE bought the last copies of this book. It deserves to be reprinted.
  60. Shafarevich, Socialist Phenomenon, pp. 80-81. ICE bought the last copies of this book. It deserves to be reprinted.
  61. William Letwin, The Origins of Scientific Economics(Garden City, New York: Anchor, [1963] 1965), ch. 6. Published originally by MIT Press.
  62. Richard Schlatter, The Social Ideas of Religious Leaders, 1660-1688(London: Oxford University Press, 1940), p. 87.
  63. Ibid., p. 99. Cf. R. H. Tawney, Religion and the Rise of Capitalism: A Historical Study(New York: Mentor, [1926] 1954), pp. 159-63.
  64. Gary North, Puritan Economic Experiments(Tyler, Texas: Institute for Christian Economics, [1974] 1988), pp. 38-39. For a more detailed treatment, see North, “From Medieval Economics to Indecisive Pietism: Second-Generation Preaching in New England, 1661-1690,” Journal of Christian Reconstruction, VI (Summer 1979), pp. 165-72.
  65. Many of the utopian communities of the nineteenth century had their ideological roots in the work of the industrialist, trade unionist, philanthropist, and radical reformer Robert Owen (1771-1858), who in his later years became hostile to family and church. At the very end of his life, he became a spiritist, claiming to be in communication with the dead. His influence was very great in Christian (heretical) circles. Cf. E. R. A. Seligman, “Robert Owen and the Christian Socialists,” Political Science Quarterly, I, No. 2 (1886). A detailed account of his socialist ideas is J. F. C. Harrison, Quest for the New Moral World: Robert Owen and the Owenites in Britain and America(New York: Charles Scribner’s Sons, 1969).
  66. Henry J. Silverman (ed.), American Radical Thought: The Libertarian Tradition(Lexington, Massachusetts: Heath, 1970), p. 148.
  67. Charles Kingsley, Letters and Memories of his Life, II, p. 250; cited by Harry W. Laidler, A History of Socialist Thought(New York: Crowell, 1933), p. 654.
  68. Cited in William Irvine, Apes, Angels, and Victorians: The Story of Darwin, Huxley, and Evolution(New York: McGraw-Hill, 1955), p. 142.
  69. Cited by Talbot W. Chalmers, “The Inaugural Address of Professor Briggs,” Presbyterian and Reformed Review, II (1891), p. 31.
  70. Maurice to Kingsley, Dec. 10, 1847; The Life of Frederick Denison Maurice, edited by Frederick Maurice, 2 vols. (New York: Charles Scribner’s Sons, 1884), I, pp. 446-47.
  71. On their crucial influence in English socialism, see Laidler, History, pp. 652-62. Laidler was Executive Director of the League for Industrial Democracy. In 1910, Laidler became the first paid organizer of the Intercollegiate Socialist Society (ISS). The LID was the successor (1921) of the ISS, founded in 1905 by such luminaries as novelists Jack London and Upton Sinclair, lawyer Clarence Darrow (later of the Scopes “monkey trial” fame), and the elderly Thomas Wentworth Higgenson, one of the original Secret Six who had financed John Brown in the years before the Civil War. Cf. Otto J. Scott, The Secret Six: John Brown and the Abolitionist Movement(New York: Times Books, 1979). On the ISS, see Rose Martin, Fabian Freeway: High Road to Socialism in the U.S.A., 1884-1966 (Chicago: Heritage Foundation, 1966), ch. 13. On the LID, see ibid., pp. 190-93; chaps. 15, 16.
  72. On the European Revolutions of 1848, see Jean Sigmann, 1848: The Romantic and Democratic Revolutions in Europe(New York: Harper & Row, [1970] 1979); Theodore S. Hamerow,Restoration, Revolution, Reaction: Economics and Politics in Germany, 1815-1871 (Princeton, New Jersey: Princeton University Press, 1958), Part 2; Frank Eyck (ed.), The Revolutions of 1848-49(New York: Barnes & Noble, 1972); Geoffrey Bruun (ed.), Revolution and Reaction, 1848-1852: A Mid-Century Watershed (Princeton, New Jersey: Van Nostrand, 1958). Three primary source documents of great importance are Alexis de Tocqueville, Recollections (Garden City, New York: Doubleday, 1970); Karl Marx, “The Class Struggles in France, 1848 to 1850” (1850), in Karl Marx and Frederick Engels, Selected Works, 3 vols. (Moscow: Progress Publishers, [1969] 1977), I, pp. 206-99; Frederick Engels, “Revolution and Counter-Revolution in Germany” (1852), ibid., I, pp. 300-87. See Oscar J. Hammen, The Red ’48ers: Karl Marx and Friedrich Engels (New York: Charles Scribner’s Sons, 1969).
  73. Charles E. Raven, Christian Socialism, Eighteen Forty-Eight to Eighteen Fifty-Four(New York: Kelley, [1920] 1968).
  74. Cited by Walter E. Houghton, The Victorian Frame of Mind, 1830-1870(New Haven, Connecticut: Yale University Press, [1957] 1964), p. 35n.
  75. Charles Howard Hopkins, The Rise of the Social Gospel in American Protestantism, 1865-1915(New Haven, Connecticut: Yale University Press, 1940); cf. Singer, The Unholy Alliance. Singer’s study picks up where Hopkins’ leaves off. It traces the history of the Federal Council of Churches and its successor, the National Council of Churches.
  76. American Fundamentalism collapsed as a social and intellectual force immediately after the Scopes trial of 1925. George M. Marsden, Fundamentalism and American Culture: The Shaping of Twentieth Century Evangelicalism, 1870-1925(New York: Oxford University Press, 1980), ch. 21.
  77. The Christian Centuryand Christianity Today are the respective journalistic organs.
  78. See Chapter 14, above.
  79. J. Gresham Machen, Christianity and Liberalism(New York: Macmillan, 1923). Reprinted by William B. Eerdmans Co., Grand Rapids, Michigan.
  80. See Gary North, Rotten Wood: How the Liberals Captured the Presbyterian Church(Tyler, Texas: Institute for Christian Economics, 1994), Part 2. I want to dissent from George Marsden’s identification of Machen as “the foremost spokesperson for the fundamentalist coalition.” George M. Marsden, Understanding Fundamentalism and Evangelicalism (Grand Rapids, Michigan: Eerdmans, 1991), p. 182. Throughout his career, Machen remained a spokesman; the androgynous creatures known as “spokespersons” appeared on the scene quite late in the twentieth century, and then only in liberal circles, neo-evangelical circles, and liberal-certified, guilt-ridden, academic Reformed circles.
  81. The successful strategy of three dedicated conservative men to win back the 12-million member Southern Baptist Convention, a strategy begun in the mid-1970’s, is the one major exception to this process of infiltration. By 1991, the reconquest by the Bible-believers was virtually complete in the Convention and had begun tentatively in the Convention-sponsored seminaries and colleges. The “moderate” faction, as the press invariably refers to it — a hard core of theological liberals surrounded by a larger group of stand-patters and confrontation-avoiders — formed a new association in the spring of 1991. It then faced the most terrifying of all prospects in the world of theological liberalism: having to fund its own operations without the enormous financial contributions of the traditionally complacent conservatives.

The other exception has been inconclusive: the conservatives’ triumph in the Lutheran Church, Missouri Synod, in the early 1970’s. On the early successes of the conservative wing, see Kurt E. Marquart,Anatomy of an Explosion: A Theological Analysis of the Missouri Synod Conflict (Grand Rapids, Michigan: Baker Book House, 1977). The battle is still going on. The conservatives elected a representative to head the church by about a dozen votes out of a thousand cast at the General Synod of 1992. So far, he has refused to denounce the denomination’s liberals or thwart them publicly.

  1. The classic case is Fuller Theological Seminary. George Marsden, Reforming Fundamentalism: Fuller Seminary and the New Evangelicalism(Grand Rapids, Michigan: Eerdmans, 1987).
  2. Richard Quebedeaux, The Worldly Evangelicals(New York: Harper & Row, 1978).
  3. The most rigorous criticism of the neo-evangelical movement that I have read is Cornelius Van Til’s 75-page, single-spaced essay, “The New Evangelicalism” (1960?), which he released in an uncopyrighted, mimeographed form to his students.
  4. Ronald Nash, The New Evangelicalism(Grand Rapids, Michigan: Eerdmans, 1963), p. 155. It is not surprising that Eerdmans published this book, since Eerdmans was then drifting toward what it is today: the most prominent of the borderline publishing houses — neo-evanglical and neo-orthodox.
  5. Idem.
  6. The careers of Edward J. Carnell and Bernard Ramm are excellent examples of this process. So are InterVarsity Christian Fellowship and IV Press, Wheaton College, and Christianity Today. Cf. Gary North, “Drifting Along With Christianity Today,” Journal of Christian Reconstruction, II (Winter 1975-76).
  7. World(June 3, 1989), p. 9.
  8. A personal example: In 1983, I was invited by Robert Clouse to participate in a four-way symposium-debate on the Bible and economics. This symposium was published by InterVarsity Press in 1984:Wealth and Poverty: Four Christian Views of Economics, edited by Clouse. My essay led off the symposium, and I was my usual confrontational self in strongly criticizing each of the other three authors: a “down on the farm” communal socialist, a Keynesian, and an advocate of socialist central planning. These were intellectually bankrupt positions, both biblically and academically, and I said so as clearly as I could. This, of course, is not considered good form in American academia, although it is common in British academia. The next year, InterVarsity pulled the book off the market, despite the editor’s opinion that it had been selling reasonably well. He expressed surprise to me that it had been unceremoniously dumped at 25 cents per copy. (I had bought all of them.) He had edited several other such symposia for InterVarsity, and none of them had been pulled off the market while still in print, he wrote to me. But I would have been astounded had this one not been suppressed. Neo-evangelical intellectuals are not used to direct confrontation from scholars who believe that the Bible is infallible and still judicially binding today. Also, they do not want their more conservative followers to see just how far they have drifted away from the authority of the Bible, as revealed in its moral absolutes.
  9. Ronald Nash, Social Justice and the Christian Church(Milford, Michigan: Mott Media, 1983); Poverty and Wealth: The Christian Debate Over Capitalism (Westchester, Illinois: Crossway, 1986); and Nash (ed.), Liberation Theology (Milford, Michigan: Mott Media, 1984).
  10. “The IEA/ROPER Center Theology Faculty Survey,” This World, No. 1 (Summer 1982), pp. 28-108.
  11. For evidence of this drift, see the essays by Timothy Keller and John R. Muether in the Westminster faculty symposium, Theonomy: A Reformed Critique(Grand Rapids, Michigan: Zondervan Academie, 1990), edited by W. Robert Godfrey and William S. Barker. For critical responses, see Gary North, Westminster’s Confession: The Abandonment of Van Til’s Legacy (Tyler, Texas: Institute for Christian Economics, 1991); Greg L. Bahnsen, No Other Standard: Theonomy and Its Critics (Tyler, Texas: Institute for Christian Economics, 1991); and Theonomy: An Informed Response, edited by Gary North (Tyler, Texas: Institute for Christian Economics, 1991).
  12. The old rhetorical question — “Can’t a theological conservative be a political liberal?” — should be answered as follows: “Occasionally, we do hear of such people, since some people are intellectually schizophrenic.” Not many people can rationally favor the modern welfare State if they also firmly believe that Paul’s words were inspired by God when he wrote: “For even when we were with you, this we commanded you, that if any would not work, neither should he eat” (II Thess. 3:10). It is mainly Christian college professors and seminary professors who hold such contradictory views.
  13. For evidence of the theological drift toward liberalism within the major evangelical colleges, see James Davison Hunter, Evangelicalism: The Coming Generation(University of Chicago Press, 1987), pp. 165-80.
  14. “Religious Teachings on Economics,” This World, No. 2 (Winter/Spring 1982), pp. 7-69.
  15. Judy Shelton, The Coming Soviet Crash: Gorbachev’s Desperate Pursuit of Credit in Western Financial Markets(New York: Free Press, 1989).
  16. Santiago Alvarez, “Towards an Alliance of Communists and Catholics,” World Marxist Review, VIII (June 1965); Walter Hollitscer, “Dialogue Between Marxists and Catholics,” Ibid., VIII (August 1965); Kevin Devlin, “The Catholic-Communist `Dialogue’,’ Problems in Communism(May/June 1966); Charles Andras, “The Christian-Marxist Dialogue,” East Europe (March 1968).
  17. See Malachi Martin, The Jesuits: The Society of Jesus and the Betrayal of the Church(New York: Simon & Schuster Touchstone, 1988), Part III. On the immediate transformation of the American Jesuit order, see Garry Wills, Bare Ruined Choirs: Doubt, Prophecy and Radical Religion (Garden City, New York: Doubleday, 1972), ch. 10.
  18. Joaquin Saenz Arriaga, The New Post-Conciliar or Montinian Church(La Habra, California: Lucidi, [1971] 1985). The author was a Jesuit priest, holding doctorates in theology, canon law, and philosophy. For having written this book, he was excommunicated, although the translator says that this was done by a bishop without jurisdiction who did not call a tribunal to hear the case. The author died in 1976.
  19. Radical theologian Thomas Dean uses autobiography to trace the dialogue movement to the death of God school: Dean, Post-Theistic Thinking: The Marxist-Christian Dialogue in Radical Perspective(Philadelphia: Temple University Press, 1975), p. xi. Dean was co-editor (with John C. Raines) of Marxism and Radical Religion: Essays Toward a Revolutionary Humanism (Philadelphia: Temple University Press, 1970).
  20. Paul Oestreicher, “Introduction: Dialogue in Hope,” in Oestreicher (ed.), The Christian Marxist Dialogue: An International Symposium(New York: Macmillan, 1969), p. 1.
  21. Herbert Aptheker, The Urgency of Marxist-Christian Dialogue(New York: Harper & Row, 1970).
  22. Roger Garaudy, Karl Marx: The Evolution of His Thought(New York: International Publishers, [1964] 1967). International Publishers is the primary Communist publishing house in the U.S., which also publishes the Collected Works of Marx and Engels, a large set which was typeset in the now-defunct Soviet Union. Ironically, the Soviet Union collapsed in 1991 before the Communists could get all of Marx’s works translated into English and published.
  23. Le Monde(May 5-11, 1966). Cited by Zbigniew Brzezinski, Between Two Ages: America’s Role in the Technotronic Era (New York: Viking, 1970), p. 87n.
  24. Roger Garaudy, The Crisis in Communism: The Turning-Point of Socialism(New York: Grove Press, [1969] 1970), p. 253.
  25. Roger Garaudy, The Alternative Future: A Vision of Christian Marxism(New York: Simon & Schuster, [1972] 1974), p. 53.
  26. Ibid., p. 145.
  27. Russell B. Norris, God, Marx, and the Future: Dialogue With Roger Garaudy(Philadelphia: Fortress Press, 1974). The book is not a dialogue with Garaudy; it is an insufferably boring book that reads like a doctoral dissertation, and a mediocre one at that.
  28. On liberation theology, see Chapter 14, above, subsection: “The Theology of the Poor; or, Poor Theology.”
  29. Paul Craig Roberts and Karen LaFollette, Meltdown: Inside the Soviet Economy(Washington, D.C.: Cato Institute, 1991).
  30. Barrington Moore, Jr., Terror and Progress — USSR: Some Sources of Change and Stability in the Soviet Dictatorship(New York: Harper Torchbooks, 1954).
  31. Zhores Medvedev and Roy Medvedev, A Question of Madness(New York: Vintage, 1971); Sidney Rich and Peter Reddaway, Psychiatric Terror: How Soviet Psychiatry Is Used to Suppress Dissent (New York: Basic Books, 1977).
  32. Aleksandr Solzhenitsyn, The Gulag Archipelago: An Experiment in Literary Investigation, 3 vols. (New York: Harper & Row, 1974-78); Dina Kaminskaya, Final Judgment: My Life as a Soviet Defense Attorney(New York: Simon & Schuster, 1982).
  33. Konstantin Simis, USSR: The Corrupt Society — the Secret World of Soviet Capitalism(New York: Simon & Schuster, 1982).
  34. G. Warren Nutter, the Strange World of Ivan Ivanov(New York: Morrow, 1969); David K. Wills, KLASS: How Russians Really Live (New York: St. Martins, 1985); Michael Volensky,Nomenklatura: The Soviet Ruling Class (Garden City, New York: Doubleday, 1984).
  35. Leopold Tyrmand, The Rosa Luxemburg Contraceptives Cooperative: A Primer on Soviet Civilization(New York: Macmillan, 1972).
  36. Freda Utley, Lost Illusion(Philadelphia: Fireside Press, 1948); Wolfgang Leonard, Child of the Revolution (Chicago: Regnery, 1967) — German edition, 1955.
  37. A list of English-language titles by people who had been victims in Soviet concentration camps appears in Eugene Lyons, Worker’s Paradise Lost: Fifty Years of Soviet Communism: A Balance Sheet(New York: Funk & Wagnalls, 1967), pp. 333-34. This literature has continued to grow: Alexander Dolgun, Alexander Dolgun’s Story: An American in the Gulag(New York: Knopf, 1975); Vladimir Bukovsky, To Build a Castle — My Life as a Dissenter (New York: Viking Press, 1977); Victor Herman, Coming Out of The Ice: An Unexpected Life (2nd ed.; Oklahoma City: Freedom Press, 1984).Coming Out of the Ice is a movie based on this book.
  38. Eugene Lyons, Assignment in Utopia(Westport, Connecticut: Greenwood Press, [1937] 1971); Worker’s Paradise Lostop. cit. Lyons’ highly critical study of American Communism, The Red Decade, published in 1941 by Bobbs-Merrill, immediately went out of print and remained out of print until the conservative publishing firm Arlington House reprinted it in 1971.
  39. Solzhenitsyn won the Nobel Prize in Literature in 1970. This helped his later revelations penetrate the intellectuals’ consciousness.
  40. Paul Craig Roberts, Alienation and the Soviet Economy: Toward a General Theory of Marxian Alienation, Organizational Principles, and the Soviet Economy(Albuquerque: University of New Mexico Press, 1971). This is a minor university press, and the author was at the time a faculty member at the UNM. Cf. Marshall I. Goldman, USSR in Crisis: The Failure of an Economic System (New York: Norton, 1983).
  41. Paul Hollander, Political Pilgrims: Travels of Western Intellectuals to the Soviet Union, China, and Cuba, 1928-1978(New York: Oxford University Press, 1981). This is an old tradition: Sylvia R. Margulies, The Pilgrimage to Russia: The Soviet Union and the Treatment of Foreigners, 1924-1927 (Madison: University of Wisconsin Press, 1968).
  42. Malcolm Muggeridge, Chronicles of Wasted Time: Chronicle I: The Green Stick(New York: Morrow, 1973), pp. 243-45.
  43. Arch Puddington, Failed Utopias: Methods of Coercion in Communist Regimes(San Francisco: Institute for Contemporary Studies, 1988).
  44. Mark Skousen, Economics on Trial: Lies, Myths, and Realities(Homewood, Illinois: Business One Irwin, 1991), p. 47.
  45. Paul Samuelson and William Nordhaus, Economics(13th ed.; New York: McGraw-Hill, 1989), p. 837; cited in Skousen, ibid., p. 208.
  46. Michael Kramer, “The Gorbachev Touch,” Time(Jan. 1, 1990), p. 54.
  47. In 1992, Gorbachev became the director of his own non-profit, internationally financed research institute, the Gorbachev Foundation, whose U.S. headquarters have been located in the Presidio since 1993. The Presidio is a recently privatized U.S. military fortress located for over two centuries in San Francisco. So, the man who had headed the Soviet Union’s military empire was allowed in less than two years to set up shop in a former U.S. Army base. In 1993, he was appointed director of the Green Cross, a propaganda organization promoting world economic planning for the sake of the environment.
  48. Peter Schweitzer, Victory(New York: Atlantic Monthly Press, 1994).
  49. Gary North, The Dominion Covenant: Genesis(2nd ed.; Tyler, Texas: Institute for Christian Economics, 1987), pp. 297-318. Cf. Sidney Fine, Laissez Faire and the General Welfare State: A Study of Conflict in American Thought, 1865-1901 (Ann Arbor: University of Michigan Press 1956), ch. 8.
  50. The trial of Henry Preserved Smith in 1894 was the last successful prosecution of the Presbyterian Church U.S.A. (northern) of a heretic. Union Theological Seminary (New York) professor A. C. McGiffert resigned from the Presbyterian ministry in 1900 to prevent another successful trial.
  51. This was frankly admitted by the millionaire socialist-economist and best-selling textbook author Robert Heilbroner: “Reflections: After Communism,” The New Yorker(Sept. 10, 1990), pp. 99-100.
  52. A collapse of Western banking, a government-created and government-regulated oligopoly, could revive a non-Marxist version of socialism.                                                                                                                                                                                                                See more from Dr. Gary North at http://www.garynorth.com and http://www.teapartyeconomist.com
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Economic Lean Times to Continue for 2016?

Fearing Lean Times, U.S. Companies Tighten Purse Strings

boardwalkBy Caroline Valetkevitch and Marcus E. Howard


February 2016

NEW YORK (Reuters) – The capital spending slump that originated in the hard-hit energy sector appears to be spreading more widely across other U.S. industries.A

Companies cutting or flat-lining their capital expenditures in 2016 outpace those that say they will increase spending by a factor of more than two to one, according to a Reuters analysis.

Companies in industries as diverse – and relatively strong – as healthcare, consumer goods and restaurants are among those tightening their belts in yet another sign that economic growth in 2016 may be anemic.

american flagFor instance, McDonald’s Corp, which saw its stock jump 26.1 percent in 2015 and is trading at record levels now, said it would keep capex flat with 2015 at about $2 billion, the company’s lowest budget in more than five years.

Drugmaker Eli Lilly is holding its capex budget flat and Verizon Communications Inc said it plans to cut its budget from $17.8 billion, to between $17.2 and $17.7 billion.

“I think companies are going to be lean and mean and are going to keep the purse strings tight and only spend where absolutely necessary, because cash isn’t coming into them,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Companies typically invest more when they feel confident that the economy is improving, so a downturn in capital spending could portend further weakness ahead.

That corporate caution follows another expected decline in revenues in the fourth quarter and data showing U.S. economic growth braked sharply in the quarter.times square

To be sure, some well-heeled companies in healthy industries are bumping up their investments.

Medical technology company Stryker expects to have capital expenditures as high as $450 million in 2016, up from $270 million in 2015. Facebook plans capital expenditures between $4 billion and $4.5 billion this year, up from $2.5 billion.

But even growth in information technology spending – which has been strong in recent years – appears to be off its recent peaks, according to International Data Corp analyst Stephen Minton.

“U.S. companies will increase their spending, but not by the rate it has been over the last two years,” he said.

Hardware spending in 2016 for all U.S. companies is expected to grow 3 percent to about $133 billion. Telecommunications and financial services companies – typically among the biggest spenders on IT – are expected to have flat to little growth in spending, he said.

At least 43 companies plan to cut, or leave unchanged, their capital spending levels in 2016, while about 20 are increasing, according to a Reuters review of Standard & Poor’s 500 companies that have given explicit early guidance.

Not surprisingly, the collapse in capital spending by energy companies – which typically lead in capex – appears to be accelerating.

This year marks the second round of big cuts for energy companies, which have had to sharply scale back spending because of the drop in oil prices since mid-2014.

A slew of energy names have announced capex cuts for 2016 including Hess , Anadarko Petroleum , Halcon Resources Corp , Noble Energy Inc and Continental Resources Inc .

The broad slump in commodities prices has hit spending by materials companies, including DuPont , which is cutting capex from $1.4 billion to $1.1 billion, and industrials such as railroads Union Pacific and Norfolk Southern, both of which slashed capital spending plans for 2016.

Even airlines, which benefit from low energy prices, are being careful. Delta Air Lines, for example, said it would hold the line in 2016 at $3 billion in spending.

“That is really the optimum number that we can execute on,” said Richard Anderson, Delta chief executive.


Reporting by Caroline Valetkevitch and Marcus E. Howard; Additional reporting by Anna Driver in Houston, Nick Carey and Susan Kelly in Chicago, and Jeffrey Dastin in New York; Editing by Linda Stern and Nick Zieminski; Swetha Gopinath and Sruthi Ramakrishnan in Bengaluru.


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The Dangers of False Teaching: Jargon that Tears Down Truth

The Danger of False Teachingnebula

By John Macarthur

(2nd Timothy 2: 14-19)

Scripture clearly affirms that God is truth, that God speaks truth and that God cannot lie. God reveals Himself as truth and Satan therefore is revealed as the antithesis to God, lies. It was Satan’s evil intended and clever misrepresentation of truth to Eve that plunged the whole of the human race into sin. And the father of lies is working to destroy the saving sanctifying truth that God has given to us in His Word and in His Son.Gotland

The effects of false teaching have been devastating and damning. That is why the Bible calls them damnable, or destructive heresies which lead men to destruction. In Acts 20, the Apostle Paul for three years night and day with tears warned the believers in Ephesus and the leaders in Ephesus of those who would come from among them and from outside of them with lies. The church at Ephesus had a wonderful beginning but was the victim of false teaching, false prophets, false apostles and, if you will, false elders and pastors. They had bought into false doctrine and therefore were living-out an ungodly life style.

yukon delta alaskaToday, it’s all around us; in the cults, in the isms, the false religions, the lying teachers that are abounding in our society and whose teaching abounds because of the media capability of making it more widespread than it ever could have been in any past generation. Denials of the trinity, denials of the deity of Jesus Christ, denials of the inerrancy and authority of Scripture, denials of the salvation by grace alone through faith which God has provided, counterfeit gospels, false ideas of true spirituality, misrepresentations of the character, nature and work of God, misrepresentations of the character, nature and work of Christ, misrepresentations of the character, nature and work of the Holy Spirit abound. There are a myriad of people espousing all kinds of myths and lies in the name of God’s truth.Oregon

Paul, called on Timothy to be a faithful servant of the Lord to the Ephesian church; to rise above the influence of ungodliness, to rise above the influence of evil teaching, to rise above the influence of evil people, to sacrificially give his life to set that church right. And one of the major issues in setting it right was to make sure believer’s minds were clear on the Word of God — on the truth of God. And, in so doing, turn away from the insidious impact of false teaching.

And so (in verse 14) Paul begins this section by saying, “Remind them of these things.” What things? Well, he’s looking back with that statement, the things he’s just said in verses 1 to 13. Remind them of the responsibility to be teachers who pass things on to others. Remind them that they are soldiers who are to endure hardness. Remind them that they are athletes who are to run to win and make the necessary sacrifices to compete at the maximum level. Remind them that they are to be hard working farmers who plant and enjoy the result of the crop. Remind them, he says, that Jesus Christ is risen from the dead. Remind them in that sense of the preeminence of the Lord they serve. Remind them of the power of the Word of God which cannot be bound. Remind them of the purpose of the work, verse 10, that those who are the elect may obtain the salvation which is in Christ Jesus and with it eternal glory. Remind them of the reward which is theirs, indicated in verses 11 through 13 of chapter 2; if we endure we’ll reign with Him. Remind them, Timothy, of the positive call to duty. Remind them of the preeminence of the Lord they serve. Remind them of the power of the Word and the purpose of the work and the promise of reward.

So, if you want to encourage your people, remind them of the nobility of the cause they serve. Remind them of the loftiness of the gospel ministry. That’s the positive.

But the transition then takes us to the negative. Look at verse 14 again. “And solemnly command them…” Now we turn a corner. Not just continually reminding, and that’s a present tense verb, be continually all the time reminding them of the noble cause which they serve. But further command them, solemnly command them, diamarturomai is an intense verb, solemnly command them. The positive says here’s what to do. The negative says here’s The positive says here’s what to immerse yourself in. The negative says here’s what to avoid. And from verse 14 to 19 he tells them to avoid false teaching and gives them a handful of reasons why…why. First of all, because it ruins the hearers, “Solemnly charge them in the presence of God not to wrangle about words which is useless and leads to the ruin of the hearers.”

The first thing you want to realize about false teaching is it ruins those who listen to it. Let me go back for a moment to the word “solemnly charged.” Again it has the idea of a constant reminder and a constant command. Constantly reminding them of their positive duty and constantly warning them to stay away from false teaching. The warning is serious because of the use of the verb “diamarturomai,” it has to do with a solemn command. But it’s made even more serious by the next phrase, “Solemnly charge them in the presence of God.”

In other words, call them to duty with a sense of the presence of God, that is to say a healthy fear. This is intended to put fear in the heart. That kind of command with the presence of God is also given in chapter 5 verse 21 of 1st Timothy, “I solemnly charge you in the presence of God and of Christ Jesus and of His chosen angels to maintain these principles without bias.” That, too, is a solemn charge. Chapter 6 verse 13, “I charge you in the presence of God who gives life to all things and of Christ Jesus who testified the good confession before Pontius Pilate that you keep the commandment without stain or reproach.” Second Timothy chapter 4 verse 1, “I solemnly charge you in the presence of God and of Christ Jesus who is to judge the living and the dead, preach the Word.”

So while there are times when the presence of the Lord is meant to increase our sense of comfort, there are more times when it is meant to increase our sense of accountability. I stand in the presence of God. We are always in the presence of God. And it carries accountability before the Holy One who keeps the record of everything and judges righteously.

It’s amazing, you might think he’s was going to name some really, really vile wicked gross evil that we are to command people to withdraw from in the presence of God, but look what he says:

“Solemnly charge them in the presence of God not to wrangle about words.” The word here “logomachia” means to wage a war of words. But it has a larger context which you want to understand. It has to do with the typical characteristic of false teachers who use words to argue against the Word of God.

The point is there’s no common ground for such a war of words. You stand on the Word of God, they stand on a demonic Satanically inspired religion, that’s not common ground. So you never subject the Bible to a debate with a non‑believer with some supposedly erudite philosopher theologian who rejects its authority. Under the guise of an intellectual and open forum false teachers provide a place to every aberration imaginable and allow the jargon and the words that tear down truth. Now it’s good for people to discuss the Bible, to debate a certain interpretation of a biblical text, to use varying passages of Scripture to discuss the essence of a biblical doctrine, to talk about how to apply the Word of God to life, but what is to be avoided is a word battle that is not centered on the revelation of God but rather places the Word of God alongside or subject to human philosophy which is supposed to refine and explain it.

In C.S. Lewis’ Screwtape Letters, the first letter is written to Junior Demon Wormwood and it goes like this, “Your man…that is the Christian you’re trying to influence…has been accustomed every since he was a boy to have a dozen incompatible philosophies dancing about together inside his head. He doesn’t think of doctrines as primarily true or false, but as academic or practical. Jargon, not argument, is your best ally in keeping him from the church,” end quote.

The demonic world is completely spiritual and knows that if you can just fill up a person’s head with a bunch of terminology, a bunch of words, human reason, philosophy and false narratives; you can keep them muddled in a meaningless worldview. It goes on in colleges, in seminaries, in false religious systems, it’s being espoused by evangelists and preachers on television who don’t speak the truth…the barrage of verbiage coming at the church today is absolutely unbelievable.

If you don’t think an anti-biblical worldview has had an effect, then ask yourself how the church ever got to the place where it advocates abortion which it does in many quarters? Ask yourself how the church ever got to the place where it accepted theistic evolution and starts to deny the creative work of God as recorded in Genesis. Ask yourself how it is that the church has allowed women pastors, homosexuality, divorce for any reason. Ask how the church has allowed unholy leaders to rise to leadership, and proudly demonstrate their unholiness in advocating the rejection of much of God’s Word. Ask yourself how the church has bought into mysticism, humanism, false-pride, self‑esteem and the psychology of contemporary human thought. If you don’t think the jargon of the world has invaded us, you’re not looking very close.

Every false doctrine from false religions has invaded the church so now we have sort of a hybrid mysticism that we know as the Charismatic movement. And all such things in the church are the words of men developing false doctrines and traditions of men. People have asked me, “What does binding Satan mean?” I said I don’t know it’s not in the Bible. And I have been asked, “What does it mean to be slain in the Spirit?” I said, I have no idea — it’s not in the Bible. And, I read a book that said if you’re not slain in the Spirit at least three times a week you can’t get on with your spiritual life. Jargon…confusing talk that ultimately mitigates against the Word of God.

There are varying levels of its extreme impact, but whatever it was that was attacking the church in Ephesus, it was very serious. And no doubt it was some sort of insipient gnostic philosophical heresy that took a lot of high‑sounding religious words that undermined the plain, simple teaching of the Apostles.

These false teachings are in the church because the church is willing to listen to the world. A world that is critical of, and hostile to the church. And the church is willing to set the Bible alongside the reason of man and let the reason of man pump its jargon into the life of the church, so that the Bible becomes confusing in the minds of those who look at it. But Paul says it’s useless, it’s of no profit, it has no spiritual benefit. And worse than that it’s demonic, (1 Timothy 4:1), it’s the doctrines of demons which are spawned by seducing spirits through hypocritical lying teachers. And what does it do? What is the result of it? Look what he says. “This kind of stuff leads to the ruin of the hearers.”

The word “ruin” is catastrophe, that’s the Greek word, katastrephe. It means to overturn, subvert, upset or overthrow. False teaching has the effect that is opposite of edification. It doesn’t build up, it tears down. It doesn’t strengthen, it weakens. The tragic effect, beloved, of people who listen to false teaching is it ruins them.

What does that mean? What kind of ruin is he talking about? Well, he’s talking here about the people who are those who are in those systems that espouse false teaching. And it ruins them.  The word katastrephe is only used one other time in the New Testament. The other time is in 2 Peter 2:6 and it talks about God condemning the cities of Sodom and Gomorrah to katastrephe by reducing them to ashes. Katastrephe there means total devastation, the total destruction of Sodom and Gomorrah was a katastrephe. And he’s using the word here in the same sense, totally destroys the hearers. This is talking about damning their eternal souls…total destruction, total holocaust, total devastation. That’s why 2 Peter 2:1 calls these destructive heresies that bring swift destruction.

In 2 Peter 3:16 it says, “The untaught and unstable distort the Word of God as they do the rest of the Scriptures to their own destruction.” So it’s that kind of destruction. It’s the ruination of an eternal soul in an eternal hell. And the opposite would be to hear the Word of God and be saved. And so, beloved, we are called to realize that we have to stay away from false teaching because that stuff damns the eternal soul of the people who are under its influence. Tragic…just tragic.

There’s a second danger, not only does it ruin the hearers but secondly it shames the teachers. The key word is “ashamed.” Anybody who teaches anything other than that which is accurately reflective of the Word of truth ought to be ashamed, that’s the idea. That’s the key word. The dictionary describes shame as the painful feeling arising from the consciousness of having done something dishonorably.

To put it simply. Anyone who misrepresents, who misinterprets, who ignores or distracts from God’s Word by giving false teaching or confusing people with useless human reason has cause to be ashamed no matter how many degrees you have, or how many PhD.s or how erudite you think you are; if you violate the Word of God or misrepresent its glorious truth, you have every reason to stand before God in shame. And you should feel painfully the consciousness of having done something dishonorably, and that is mishandling God’s precious Word. So the issue here is that it shames the one who teaches it. So he says in verse 15, “Be diligent…” That’s the first principle.

First of all, be diligent. I know the Authorized version says “study” but that’s really not the word, the word spoudazo means to give diligence, to give maximum effort, to give persistent zeal, to do your best, to be eager. Simply put…make a maximum effort.

Secondly he says, “Be diligent, or make your maximum effort in order to present yourself to God.” Oh, this is a wonderful word…paristemi, it means to stand alongside…para means to be alongside. We talk about parachurch or anything that has to do with something alongside being in that way…parallel. This means you want to come alongside God.

The heart of the Apostle Paul was that he might please God. He did what he did for that purpose and that purpose alone. First Thessalonians 2:4 says “Just as we have been approved by God to be entrusted with the gospel, so we speak not as pleasing men but God who examines our hearts.” That’s the issue. The teacher who does stand before the Lord and hears, “Well done, good and faithful servant,” is one who made a maximum effort and whose focus of life was that some day he might stand along the side of God, be considered worthy because he was proven trustworthy.

The Apostle Paul says, “Look, you have a solemn command before a holy God in whose presence you are at all times to avoid any encroachment on Scripture that is useless from those whose teaching ruins the people they teach, and you also must realize that anyone who doesn’t handle the Word of truth with great accuracy has reason to stand before God and be…(what?)…ashamed.” That’s a serious thing. Better not trifle with God’s Word.

What is the Word of truth? It is used several other times in Scripture. In Ephesians 1:13 and James 1:18, it definitely refers to the gospel. It says there the gospel of…in Ephesians 1:13 it says, “The word of truth, the gospel of your salvation.” So the word of truth has to do with the gospel. In James 1:18 it says, “He’s begotten us with the word of truth,” again referring to the gospel by which we’re born again. But it goes beyond that because the word of truth is all of God’s revelation, John 17:17, Jesus said, “Thy Word is truth.” So he’s saying handle it all right, the gospel and everything else. When you think about handling the gospel right, you’ve got to acknowledge, that there is an awful lot of preaching today that doesn’t handle the gospel properly.

Thirdly, it leads to ungodliness, verse 16, “Avoid worldly and empty chatter, it will lead to further ungodliness…further ungodliness.” The “but” there refers to contrast…in contrast to handling carefully God’s truth, handle that, but avoid the rest. Don’t handle it at all, it is what he’s saying. And what is it that we’re to avoid? The word means to walk around…walk around it, shun it, keep clear of it, shift yourself to avoid it.

What will you avoid? Chatter, talk, more words, jargon, the dribble of human philosophy, man‑made religion. He calls it worldly, that’s profane unholy unsacred, bebelos means common, not set apart. Just the common earthy profane unholy, unsacred talk of men. And then he calls it empty. And that means it has no benefit. It yields no return. But I want you to know something, empty words soon become evil words because empty words are like a vacuum. Useless talk on useless matters becomes wicked talk. Words not of God are soon unholy words. False teachers claim to be advancing our thinking, expanding our minds, leading us to new truth. “They lead us to further ungodliness. They’re ultimately ungodly and they pull the people who hear them into more and more ungodliness with them. False prophets bring in these destructive heresies, Peter says in 1 Peter 2, and many will follow their sensuality.

Fourthly, (verse 17) he says it spreads like gangrene. Or it is contagious…it is contagious. It not only ruins the people who listen, shames the people who teach, leads to ungodliness among them but it has the power to spread like gangrene. Look at verse 17, “Their talk will spread like gangrene,” it says. Do you know how fast gangrene spreads? Very fast. The Greek word gangraina has to do with a spreading consuming disease, an insidious fast moving disease. Do you realize that gangrene can start with a small pin hole in the human body and engulf the whole body in a few moments of time with its poison, that in curing gangrene people are put into a pressure system to retard the speed of the gangrene in order that a penicillin injection can take effect? That’s how fast it goes.

It’s like a prairie fire with its malignancy. That’s why in Jude 23 it says when you get near anybody in a false system, snatch them like a branch from the burning and watch out that you don’t get your garment spotted by that stuff. It’s a malignancy, it eats up the neighboring tissue and spreads its corrupting doctrine to infect other people rapidly. It runs rampant. The people of the world though, love false teaching as opposed to the truth because it’s all a part of the system, the paradigm, the narrative, to which they belong.

Fifthly, it overturns the faith of some. Verse 17, it says, “Among them…these false teachers…are Hymenaeus and Philetus.” He names names here. He doesn’t pull any punches. Hymenaeus, by the way, was named in 1 Timothy 1:20 as one of the ring leaders, probably one of the false teaching pastors in Ephesus, whom Paul himself put out of the church.

Paul put him out, but apparently when he was put out of the church he set up shop down the street and he was still espousing his lies. And then he got a guy to go along with him by the name of Philetus and the two of them were communicating this demonic doctrine. And so he names them just so Timothy will know exactly who they are and he can tell the church to avoid them…Hymenaeus and Philetus, men who have gone astray from the truth. They’re like those in James 5:19 and 20 who have strayed from the truth.

They are apostates, dear friends, gone astray, deviated from, erred from, missed the mark of the truth. They’re like those who having once been enlightened and tasted the heavenly gift and seen the powers of the age to come and partaken of the power of the Holy Spirit have fallen away and it’s impossible for them to be renewed to repentance. They have apostatized. Hebrews 6.

They are those in Hebrews 10 who have trodden under foot the blood of the covenant, counted Christ’s blood an unholy thing, done despite to the Spirit of grace.

In other words, known the truth, rejected the truth, gone into terrible error, straying from the truth. And what was their particular aberration? It says in verse 17 that Hymenaeus and Philetus have gone astray from the truth, that is the revelation of God, by saying the resurrection has already taken place. Well then what in the world do they mean by that? Probably they had the idea that the resurrection was nothing more than some…some mystical experience that you experienced when you went from…from the unenlightened life to the enlightened life. They were probably buying into some kind of heresy, some kind of philosophical heresy that was pervasive in that time. We really don’t know the answer to that. Some think that they bought into the Greek philosophy which said the only after life is that a man should live in his children. In other words, there was only one continuing life and that is the life that continues in a child. Whether it was the philosophical sort of thing that says we live on in our children. Or, whether it was the gnostic kind of dualistic view that we’ll live on in spirit but not in body. But either way, they denied the resurrection.

Is that important? Yes it’s important, in 1 Corinthians 15 written seven or eight years before this, Paul says if there’s no resurrection then is Christ not risen? And if Christ is not risen, then we are not risen. And then we are miserable. And there’s no resurrection. In other words, you cut out the heart of the gospel. They were denying the gospel with their “resurrection is passed already” view. In denying the resurrection of the believer’s body to come, in denying the resurrection which was the hope of every believer, yet in the future they were denying the resurrection of Christ and its implications because he was the firstfruits of our resurrection, they were therefore denying the gospel, they were denying the hope of those who belonged to the Lord. This is a denial of the foundation of the Christian faith…denial of eternal life in a glorified body like Christ. They were denying Christianity at its heart.

The final thing I want to share with you, (number six), is that false teaching is dangerous because it characterizes those who don’t belong to the Lord. It has to be avoided because it characterizes the unsaved. And he backs into this issue in a wonderful way.

Notice verse 19…“Nevertheless…” oh, I love that word, it’s emphatic. “In spite of those ruined, in spite of those shamed, in spite of those ungodly, in spite of those corrupted by the gangrene of false doctrine, in spite of those whose immerging belief is upset because they have been trapped in false systems, in spite of that…that’s what it nevertheless means…in spite of that the firm foundation of God stands.” Boy, what a statement…what a statement.

What is the firm foundation of God? Beloved, it’s the church. It’s the redeemed. And the majority of commentators affirm this. It has to do with the redeemed. We are the true people of God who form the solid immovable foundation that false teachers can’t uproot. The false teachers will ruin some, they will shame some, they will lead some to ungodliness, they will corrupt some, they will overturn the faith of some, but not the elect of God. Do you see that? The firm foundation of God stands. We are a building not made with hands. We are the temple of the living God. We are the church which Christ will build and the gates of hell will not prevail against it. We are those who having had a good work begun in us, that work will be performed until the day of Jesus Christ, Philippians 16. We are those who can never be separated from the love of God in Christ. We are those of whom Jesus said, “All that the Father gives to Me will come to Me and I have lost none of them but shall raise them up at the last day,” John 6. This is a tremendous truth. First John 2 says, “You are strong in the Word and you have overcome the wicked one.” God called out a people for salvation, chosen before the world began for eternal glory and that people are intact when eternal glory begins. And so we are the foundation of God, namely His church, has His seal, a stamp of ownership, authenticity. He knows who we are, He holds us in His sovereign power. We are His for eternity. We are His forever. He knows who we are by sovereign choice. The first seal we have is we are elect. This is a seal affixed to God’s foundation. It guarantees permanence, it makes dissolution impossible. God put the seal on us, this is Mine. He put it on us in eternity. And that settles the matter forever.


This article is a condensed and edited version of John Macarthur’s “The Danger of False Teaching.”
















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“January 2016: Economy in Slump but S-l-o-w-l-y Growing?”

Does U.S. Railroad Recession Point To Economic Slump?times square


January 2016

“With Union Pacific, Canadian Pacific Railway and CSX reporting downbeat quarterly earnings recently, company executives and analysts say the rail sector is clearly in recession — and the industry may signal contraction in the broader economy as well.”

busyTop U.S. railroad operator Union Pacific (UNP) said freight revenue for coal plunged 31% in Q4, and industrial products slid 23%. Chemical freight revenue fell 7%, and agricultural products dropped 12%. Automotive revenue rose 1%. Intermodal — containers used by trains, trucks and ships that carry consumer goods, such as electronics — declined 14%, indicating weakness beyond the battered energy sector.cash

The railroad slump, along with sputtering U.S. manufacturing, signs of plateauing auto sales, weak exports due to the strong dollar, and slowing growth in China all signal to some that the U.S. may be heading toward full-blown recession.

‘Death by a Thousand Cuts’

“With Union Pacific earnings today we did another of the death by a thousand cuts,” Nomura railroad analyst Matt Troy told IBD. “Their message was consistent with what we have been hearing. It’s another indicator the U.S. economy is stagnating, and we are increasingly stepping toward another recession.” Union Pacific management also voiced caution that auto sales aren’t sustainable at record levels and predicted 2016 freight volumes will be slightly lower.

Retail spending has been weak too, though consumers appear to be shifting their dollars to services from goods, and Union Pacific’s drop in year-end volume was still nothing compared to what was seen in 2008 and 2009, the company said. “It’s hard to speak to whether there is recession,” CEO Lance Fritz said on a conference call. “Certainly our volume drop-off is dramatic.”

Union Pacific shares fell 3.6% to 71, the lowest since April 2013. Canadian Pacific (CP), which reported a 19% drop in revenue from crude shipments, rose 0.5%.

Seen In Previous Recessions

CSX (CSX) CEO Michael Ward was more downcast after the company also reported dismal quarterly results earlier this month. “You can almost think of it as a straight recession except for, say, markets like automotive and housing-related,” he said on a Jan. 13 call. “You’re seeing pressure on most of the markets.”

The American Association of Railroads trade group said that total U.S. rail traffic for the week ending Jan. 16 was down 8.2% compared to the same week a year earlier. Shipments of intermodal containers, which made up 52.1% of total traffic, eked out a 1.1% increase for the week. But oil and petroleum shipments fell 18.5% and accounted for just 2.5% of total shipments. Coal was 14.9% of the total, but that’s far below the roughly 21% figure in 2013.

Bank of America – Merrill Lynch railroad analyst Ken Hoexter said the magnitude of the recent rail volume decline has only been seen five other times since 1985 — and they all preceded or overlapped recessions. “Railroads and trucks are viewed as leading economic indicators,” he said. “They don’t make anything, they just move it. And clearly less is being moved.”

Other economic indicators have also flashed warning signs. The latest gauge of manufacturing activity from the Institute for Supply Management pointed to a steeper decline in December, as the index dropped to 48.2, the lowest since June 2009, from 48.6 in November. (Readings below 50 signal contraction.)

But some economists don’t see the economy heading for a recession. Scott Brown, chief economist for Raymond James, said Q4 GDP numbers will be out next week and will likely come in lower than he had expected earlier. His outlook for this year is also weaker than before. “But my best guess is things are OK,” he added. There are seasonal factors muddling the outlook, such as consumers usually paying down holiday debt in January and February, cutting into their spending, Brown noted.

Unseasonably warm weather from El Nino is also affecting the economy, particularly in the Northeast and Midwest, he said. Retailers in particular have warned of mounting unsold inventories of winter clothing. As a result, “we won’t know the direction until spring, when the underlying economy will reveal itself,” Brown said.

Tony Cherin, professor emeritus of finance at San Diego State University, said the economy isn’t “headed anywhere near” two consecutive quarters of shrinking GDP, the traditional threshold for a recession. “Our economy may not be growing at the pace some people would like, but it’s still growing,” he said.


JAMES DETAR | jim.detar@investors.com

Fed Faces Backlash As Retail Fizzles, Factories Fade

By JED GRAHAMwall street

It’s becoming clear that the Federal Reserve ran out of patience and pulled the trigger on the first rate hike in nearly a decade as the economy was growing at a lowly 1% pace. New data showed that retail sales fizzled in December and factories slowed further, leading economists to mark down Q4 growth estimates. The Q1 outlook isn’t a whole lot better.

With oil prices and global stock markets plunging, criticism of the December rate hike is mounting. “Consumers are still keeping their purse strings tight, producers are reducing activity further and inflation — what inflation? Remind me again of the Fed’s argument for liftoff last month,” wrote Lindsey Piegza, chief economist at Stifel Nicolaus.

busyRetail sales sank 0.1%, about as forecast. But they also fell 0.1% outside autos vs. views for an 0.3% gain. Economists cited heavy discounting, with consumers unwilling to pay full price even with job gains picking up and gas prices plunging. Electronics store sales fell 0.2% amid price cuts on Apple (AAPL) iPhone 6S by Best Buy (BBY) and others.

Sales at general merchandise stores sank 1%, with that news coming as Wal-Mart (WMT) said Friday that it would close 154 U.S. locations, mostly smaller stores, and 115 others around the globe. Amazon (AMZN) and other nonstore sales rose 0.3% vs. November and 7.1% vs. a year earlier, the best rise since October 2014. Food service and drinking places (0.8%), building material and garden stores (0.9%) and furniture stores (0.9%) had strong gains. December industrial production slid 0.4% after November’s 0.9% fall, Fed data showed. Output fell 0.1% for manufacturers, 0.8% for miners and 2% for utilities. Total output fell 1.8% vs. a year earlier, the worst in six years.

January hasn’t gotten off to a good start for factories either, amid the strong dollar and weak global demand. The New York Fed’s Empire State Manufacturing Index fell at the sharpest pace since the recession. The S&P 500 fell 2.2%, tumbling intraday to a 15-month low. Crude oil settled below $30 a barrel, a 12-year low.

“The market is saying, ‘You guys made the wrong policy move,’ ” Piegza said, noting a flattening of the yield curve as the 10-year Treasury rate has fallen back to about 2%. That’s not yet an inverted yield curve, a recession warning when short-term Treasuries have higher rates, but a hint that the Fed is risking “severe negative consequences” if it keeps tightening.

Financial markets have dialed back their expectations for the next Fed hike from March to July, notes Harm Bandholz, chief U.S. economist at UniCredit. Global markets have focused on oil prices amid economic weakness in China and moves by the Chinese central bank to ease the yuan-dollar peg. But it’s hard to divorce those moves from upward pressure on the dollar that’s accompanied hawkish Fed signals. Richard Koo, chief economist of the Nomura Research Institute, wrote that Fed policymakers’ talk of multiple rate hikes this year may be “at least partly responsible for the market turbulence.” The Fed decided to act before wage pressures or other evidence of brewing inflation arose, hoping very gradual moves would avoid the need for an abrupt, disruptive tightening later.

With its key lending rate stuck near zero, the Fed has less ammo to reverse a downturn. But premature tightening raises the risk that sub-par growth will continue, with the Fed neither able to raise rates nor cut them much if the economy falters, Piegza said.


JED GRAHAM | jed.graham@investors.com

ECB’s Draghi Signals More Easing; Jobless Claims Jump

freedom rallyBy JED GRAHAM

New claims for jobless benefits rose by 10,000 last week, as the four-week average of claims hit its highest level since April. A key U.S. factory gauge was negative, but less so. Meanwhile, although the European Central Bank made no policy moves, President Mario Draghi signaled that bolder moves could be coming next meeting amid deflation worries. That helped lift oil prices.

ECB’s Draghi Ready to Intervene

The European Central Bank left its key interest rates unchanged, as expected. But earth-linkafter the ECB meeting, President Mario Draghi said the downside risks the eurozone have increased and said inflation expectations have weakened. He suggested the ECB is ready to adjust policy in March, rather than in June as many had expected. He said there are “no limits” to how far the ECB might go.

The EU Commission’s consumer confidence guage fell 0.6 point in Jan. to -6.3, a 3-month low.

Oil Prices Retake $30 Despite Inventory Build

U.S. crude oil inventories for the week ending Jan. 15 rose by 4 million barrels to 486.5 million, the Energy Information Administration said Thursday. That was less than the 4.6 million barrel rise estimated by the American Petroleum Institute late Wednesday, but more than analysts expected. Despite this, oil prices rose from 12-year lows, helped by ECB stimulus signals. West Texas Intermediate crude oil rose 4.6% to $29.65 a barrel after briefly topping $30 a barrel.

Jobless Claims Keep Climbing

Initial jobless claims rose by 10,000 to 293,000 last week, the highest since July, the Labor Department said. The four-week average rose by 6,500 to 285,000, the highest in nine months. Continuing claims also rose by 29,000 to 2.21 million. The rise in claims to start the year signals that robust employment gains at the end of 2015 aren’t being sustained, though claims under 300,000 still remain historically quite low. Store closings from Macy’s (M) and Wal-Mart (WMT), the latter of which won’t begin to show up until next week’s report, signal a more cautious hiring climate.

Philadelphia Fed Business Outlook Falls

Mid-Atlantic regional factory activity declined once again in January, though at a slower rate, the Philadelphia Federal Reserve’s manufacturing business outlook survey showed. The index rose to -3,5 from -10.2. The new orders measure almost broke even while shipments did turn positive. But the employment gauge turned negative and the business outlook gauge fell to its lowest level since November 2012.

Home Price Gains Accelerate

December home prices rose 8.8% vs. a year earlier, the biggest gain in 22 months, according to Redfin, a real estate brokerage. Sales climbed 7.7% vs. a year earlier, a big jump from November’s 2.8% gain. The supply of homes fell to a 2015 low and were down 5.4% vs. a year earlier. The supply of homes fell to 3 months, down from November’s 4.1 months.

Consumers Less Comfortable

The Bloomberg Consumer Comfort Index fell 0.4 point in the week ended Jan. 17 to 44, ending a 6-week string of gains to a 13-week peak. Subgauges for personal finances, buying climate and economic outlook all dipped. But the economic outlook gauge for Jan. overall climbed to the highest since June.

Russia’s central bank called a meeting with private and state-run banks as the ruble plunged to long-term lows due to weaker oil prices.


Articles from Investor’s Business Daily. (investors.com)

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The Public Pension Crisis and Taxpayer Liability

expressionismScary Pension Math

By Steven Malanga

“After six years of a Bull Market, State and Local Governments owe at least $1 Trillion.”

January 2016

Since early 2009, Wall Street has enjoyed the third-longestMad Mag bull market in history. Catalyzed by super-low interest rates, the S&P 500 has risen more than 200 percent, helping inject life into portfolios that had suffered tough losses in the crash that had begun in late 2007. Among the beneficiaries were state and municipal pension funds, which the Great Recession had hit particularly hard, leaving many of the systems drowning in debt.

double rainbowYet, the real news about the bull market may be how little these giant retirement systems have recovered. In July, with stocks climbing to a six-year peak, the Pew Charitable Trusts reported that state and local pension debt nationally had shrunk little since 2009. “The gap between the pension benefits that state governments have promised workers and the funding to pay for them remains significant,” the report observed. The situation only worsened as news began leaking out last summer that pension funds had notched mediocre returns for the fiscal year ending June 30, taking on even more debt. Then the market deep-dived in August, and Fitch Ratings issued a stark warning that public-pension funding “has barely improved since pre-recession highs.” A big reason: millions of government workers keep racking up new pension credits every working day.

Public-pension officials are now starting to admit that they’ve underestimated how hard it is to bounce back from the kind of precipitous declines in assets that result from major market downturns like the one in 2008 or the dot-com crash at the turn of the millennium, which first put many pension plans in the red. Nearly $100 billion in extra state and local taxes pumped into pension systems over the last seven years has had only minimal impact on the debt problem because governments owe so much—somewhere between $1 trillion and $4 trillion, depending on how liabilities are calculated—that debt payments simply overwhelm taxpayers’ new contributions. Most of the pension reforms that states and cities have enacted, meantime, are failing to provide the savings that politicians had touted; courts have blocked other needed changes.

With many state and local budgets under intensifying pressure from retirement costs, politicians keep proposing more new taxes to bolster pensions. Absent some startling development—like an even bigger runaway bull market—this crisis will keep worsening, forcing far-reaching rewrites of state and municipal budgets for years to come.

States and localities began creating pension systems for their workers in the early twentieth century. For a time, they proceeded cautiously. New Jersey, for example, instituted a pension system for teachers in 1919, pledging that it would be “established on a scientific (actuarial) basis,” so as to avoid the fate of an earlier worker-funded system that had gone bankrupt. California approached the idea of a public employee-retirement system with similar prudence. A 1929 state commission studying the idea warned: “An unsound system is worse than none.” Initially, the new fund, established in 1932 as the California Public Employees’ Retirement System (CalPERS), aimed to replace about half the annual income of a worker retiring at 65, at a time when most retirees could expect to live just a few years longer. Because its goals were modest, California required the fund to limit its investments to secure government securities with a guaranteed return.

America’s post–World War II economic boom loosened these restraints. As public workers gained the right to form unions that lobbied and bargained for higher compensation, states started to introduce expensive new benefits. California added Social Security to worker retirements in 1961, for instance, and then supplemented pensions with automatic cost-of-living adjustments in 1968. In 1970, it lowered the retirement age to 60. To help pay for the largesse, the state, beginning in the 1960s, let CalPERS start speculating in real estate and stocks—riskier bets but with potentially higher returns than government securities. Over time, California raised the amount of assets that the pension fund could put into such investments. Other systems eventually followed suit. In 1999, South Carolina, facing pressure to capitalize on the 1990s market boom, became the last state to permit its retirement system to invest in stocks.

The new investing strategies brought substantial risk to pension funds—and to taxpayers. Back in 1970, the New York State Retirement System projected a modest 4.87 percent annual investment gain, a goal achievable simply by buying government-guaranteed bonds. That made sense in a state with a constitution that explicitly guarantees government pensions (a defined-benefit system, as it’s called), meaning that taxpayers are on the hook for any shortfall. But legislators discovered that they could pad pension benefits, without contributing much more up-front tax money, by allowing retirement funds to project much higher investment returns—and then invest more aggressively to try to achieve them. New York inflated its expectations for annual market gains to 7.5 percent in the early 1980s, and kicked them up again, to a heady 8.75 percent, by decade’s end. Public-worker pension benefits rose fast over the same period, hitting an average of 125 percent of an employee’s after-tax earnings during his final years employed. As a 1988 New York Times editorial complained, “The legislative habit of raising pensions is as hard to kick as cigarettes.”

These trends remade the financial architecture of many state and local pension funds. Whereas retirement plans once expected that more than half the money they’d need to pay benefits would come from government and worker contributions, states and municipalities increasingly came to rely on fat market returns. Since 1984, investment earnings have accounted for 62 percent of government retirement-fund revenues, according to a study by the National Association of State Retirement Administrators. Contributions by government employers (that is, taxpayers) constituted 26 percent of revenues, and contributions by workers just 12 percent.

The bull markets of the 1990s and mid-2000s helped foster the illusion that government could fund rich benefits at little cost to itself or to workers. From 1993 to 2007, annual contributions by state and local governments into pensions increased from $35 million to $73 million—a compound annual growth of slightly more than 5 percent—while worker contributions grew at a similar rate, from $16 million to $34 million. Thanks to robust investment gains, however, the assets of the funds exploded, rising from $910 billion annually to $3.3 trillion.

Rather than preserve this bounty, politicians used it as an excuse to hand out yet more new goodies to retired workers—and gave themselves holidays from contributions, to boot. Even as the 1990s bull market collapsed, New Jersey passed 13 separate benefit enhancements between 1999 and 2003, piling billions of dollars in new obligations on the pension system. In 2000, the well-funded South Carolina pension system lowered its teacher retirement age to 58 from 60, costing $1.8 billion in extra benefits. The state then approved a series of cost-of-living adjustments from 2001 through 2004 that added another $900 million in obligations. In 2000, just as the market was turning down, New York State and City also increased cost-of-living adjustments to pensions, adding $700 million a year to state pension costs and $400 million annually to city costs. Both state and city also began allowing workers with at least ten years of seniority to forgo payments into the system. Government unions and members of the board of CalPERS, the nation’s biggest pension fund, lobbied new California governor Gray Davis in 1999 to let workers “share” in the bounty from the 1990s market surge. The state legislature rushed to expand pension benefits, with some categories of workers receiving pensions equal to 90 percent of their final salary, plus annual cost-of-living adjustments—a scenario that helped California’s retirement system go from a surplus to $42 billion in the red by 2003. The notion of “sharing the bounty” helped cause an even bigger fiasco in San Diego, where the pension system imploded. Brought in to investigate, former Securities and Exchange Commission chairman Arthur Levitt blasted the common practice of considering strong investment returns as spare money to shower on workers. “Designating earnings in excess of 8 percent as ‘surplus&rsqo; made it look as if the City could grant additional benefits without providing a funding source for them. This impression was (and is) misleading,” Levitt concluded.

That politicians were willing to give away this money so quickly—and pension bureaucrats often went along without major objections—suggests that officials misunderstood the vulnerability of retirement systems based disproportionately on high investment returns. They should have known better. Recall what took place a decade and a half ago. After five consecutive years—from 1995 through 1999—when the S&P 500 advanced by at least 21 percent annually, the market, hit by the bursting of the dot-com bubble, registered three years of losses, leaving it 41 percent lower at the close of 2002 than at its peak two years earlier. The effects on pension funding were startling. Colorado’s funding level for its state-employee and local teacher-pension system dipped from 105 percent of assets on hand to just 75 percent by 2003; the state went from having zero unfunded pension debt to $9.9 billion in liabilities. Arizona’s state system, which boasted a hefty surplus in 2000, took longer to bleed red; but by 2006, it owed $4.6 billion. South Carolina, nearly fully funded in 2000, had accumulated some $5.6 billion in unfunded pension debt by 2004. Cities that managed their own pension systems fared poorly, too. Houston’s system, 91 percent funded at the close of the 1990s, had accumulated $1.8 billion in debt by 2003. Chicago’s municipal pension fund, 94 percent funded in 2000, slumped to 79 percent funded within just three years. In all, by 2003, government pensions were $233 billion in debt, according to Pew Research.

Governments have made little progress getting their funds back in the black since then, especially after the 2008 financial crisis hammered stocks again—even though investment gains averaged in the double digits for eight of the years since 2003, including increases in the S&P 500 of 29 percent (2003), 27 percent (2009), and 32 percent (2013). Yet pension debt has now swollen from $233 billion to an estimated $1 trillion (by conservative measures). All but a handful of state systems have higher unfunded liabilities today than in 2003. Using states’ own data, Pew estimated that the average funding in 2013 (the last year for which complete data are available) was just 71 percent, compared with 88 percent in 2003. Though states did register double-digit stock-market gains again in fiscal 2014 — which have yet to be reflected in their annual reports — the fiscal year that ended on June 30, 2015 brought below-average returns. And now pension funds must contend with the market slide that began last August.

All this points to a future in which government pension systems, having lost so much money, can’t climb fully back from market declines before another one hits—an investment version of one step forward, two steps backward, resulting in steeper and steeper underfunding, from which recovery will be increasingly difficult, if not impossible.

To understand the full magnitude of the pension crisis, focus first on the missing money, something many journalists covering budget issues don’t do. Public-pension systems often describe their status in terms of how much funding they have available to pay for future debts. But it’s the money that’s not there that’s most important. Right now, government pensions are missing, on average, 25 percent to 30 percent of the money that they’re supposed to have—a devastating situation for a system designed to pay most of its benefits from investment returns. The missing money isn’t at work in the market, so no matter what returns a fund’s managers achieve, the gain on nothing is always zero. After a major downturn like 2008—pension funds typically lost a quarter of their assets—retirement systems have a lot less money to invest. And that limits the size of any bounce-back gains. It’s basic math.

For public pensions, though, the math gets worse because workers are earning new benefits all the time, and those get piled on to the debt associated with market downturns. Consider the reckoning in Utah, one of the nation’s best-funded pension systems at the time of the last market crash. After the 2008 slump, the state’s assets plunged 22.3 percent, and critics, led by State Senator Dan Liljenquist, began lobbying for reforms. Then the system’s returns rallied the next year by 13 percent; reform opponents argued that investment gains would solve the underfunding problem. But a state-commissioned study showed that the 2009 recovery was barely enough to keep the pension system from going deeper into debt: the system had to earn 7.75 percent yearly just to pay for workers’ new pension credits, which consumed much of 2009’s market return. The remainder went to pay off the interest on the debt that the state had accumulated. Utah, the study concluded, would have to average double-digit investment returns annually for 20 years to recover from 2008 via the market alone. That sobering scenario prompted substantial changes to the system, including a law capping taxpayers’ liability for pensions at no more than 10 percent of worker salaries—12 percent for public-safety workers. “One year of bad returns blew a 30 percent hole in our pension system,” Liljenquist observed. That was especially disturbing in a state that had always “put in every penny we were supposed to,” he noted.

Too often, the public officials overseeing pension systems aren’t forthright about this inexorable dynamic, perhaps recognizing that taxpayers might get more serious about reform if they realized how tough recovery would be. Pension funds produced mediocre investment returns in the last fiscal year—averaging about 3.4 percent, according to Wilshire Consulting—well short of the median investment target of most plans, which is now 7.69 percent, meaning that plans took on considerable new debt. But that’s not the way some states described their results. The Maryland pension system released a statement in July noting that the pension fund had returned just 2.68 percent for the year, yet the state’s treasurer struck a cheery tone: “Over the last five years our average return has been closer to 9.4 percent, a much more relevant measure of the overall health of our investment portfolio”—neglecting to point out that Maryland’s system has less than 70 percent of the assets it needs to pay its workers, so that even an above-average investment gain is barely adequate. Maryland pension debt—$18.6 billion in 2009—now stands at about $21 billion, notwithstanding the multiyear investment gains that its officials trumpet.

Pension officials contend that they’re trying to address the pressure on investment results by requiring more contributions into their systems, mostly from taxpayers, whose annual contributions into pensions have more than doubled over the last decade, reaching $121 billion, according to the Census Bureau’s yearly survey of government finances. In South Carolina, for instance, taxpayer contributions to the five funds that make up the state’s retirement system increased over the decade to $1.14 billion, up from $640 million. In Arizona, they jumped from $318 million to $966 million, while in New York State they rose to $6 billion, up from $3 billion.

But total pension debt across the United States exploded by about $670 billion during these years. Many state and local pension systems owe so much that their debt is substantially greater than their government’s entire annual tax haul. Governments have thus resorted to crafting pension-repayment plans that stretch out 20 years, and sometimes even 40 years—in other words, paying off the debt from a single bad year like 2008 over a period of decades. Seventy-five percent of pension plans have amortization schemes longer than 20 years, and 44 percent stretch 30 years or more, a 2014 Society of Actuaries study found. These payback agreements violate a basic principle of pension accounting: that a retirement system should aim fully to fund a worker’s pension obligations beforehe retires. In many states and localities, actuarial tables show that the bulk of current workers will retire in less than 20 years, which means that governments will have to keep funding pensions after many current employees stop working. At the same time, governments will need to begin funding the new benefits earned by the retired workers’ replacements—a huge double burden on future taxpayers. And these long amortization plans make it exceedingly likely that pension funds will experience other major market drops before they’ve paid off the damage from the previous ones.

Pension funds create the greatest strain on budgets when the economy is weakest. Stock-market downturns, which deplete pension-fund assets, are usually followed by economic woes that squeeze government revenues, making it difficult for states to find additional pension funding. The July Pew report shows that only 20 states made their full annual required contribution into their retirement systems in 2013, up from just 17 states in 2012. The problem began when state tax revenues dropped by 8 percent, or $64 billion in 2009, to $710 billion, and then declined again the next year to $705 billion; they didn’t rebound to 2008 levels until 2012. Even by 2013, state tax revenues had reached only $847 billion, a meager 1.7 percent compounded annual increase since 2008. Meantime, states also had to deal with soaring Medicaid costs and rising health-care premiums for their workers, as well as higher welfare payments and fiscal strains on their unemployment systems as joblessness spiked. Many states’ greater pension contributions represented a big commitment that was painful to pay—but not nearly enough to satisfy voracious pension funds.

Pensions have also had trouble recovering because local reforms have proved inadequate or wind up gutted by courts. Both Connecticut governor Dannel Malloy and New Jersey governor Chris Christie declared victory in enacting pension savings in 2011, though critics warned, accurately, that their states’ pension systems would remain extremely costly. New Jersey’s pension payments, only $1 billion in 2012, must rise to $4 billion by 2018—in a state with only a $33 billion budget. Christie has since proposed a much more extensive, money-saving overhaul of Jersey’s retirement system, but he’ll have trouble getting it passed, after proclaiming that the state had solved its pension woes.

Connecticut’s situation is equally precarious. The state has seen pension payments, $900 million back in 2012, rise to $1.5 billion. That already-huge sum is expected to increase to $3 billion by early next decade and then to as much as $6 billion by 2030. Malloy has now proposed a controversial plan to split the system into two funds: one containing the pensions of new workers and carrying little debt; and the other with older workers’ pensions, which the state would pay for out of its annual budget on a pay-as-you-go basis. This would save the state $8 billion over the next decade but ensure the need for huge payments down the road as the unpaid debt piles up.

State courts or politicians failing to follow through have undermined reforms in other locales. An Illinois Supreme Court verdict invalidating extensive 2013 reforms will cost the state some $145 billion in tax revenues, which will have to be pumped into the pension system over 30 years, according to a study by the Civic Committee of Chicago. Earlier this year, the Oregon Supreme Court ruled that government workers in that state were guaranteed annual cost-of-living adjustments to their pensions, after the state tried to reduce them. The ruling will cost the state an additional $345 million a year. In some cases, too, politicians have abandoned reform efforts before they’d made any real progress on reducing pension debt. In Maryland, former governor Martin O’Malley pledged in 2011 to send $300 million a year in extra money into the pension system, but, looking to pay for worker raises in 2014, he cut that amount to just $100 million.

Defenders of the current system—including pension-fund administrators, union leaders, and some politicians—argue that, unlike companies with pension plans, governments don’t go out of business, so they’re justified in depending disproportionally on investment gains for their retirement systems. After all, they have an unlimited amount of time to make up any shortfalls. Over time, this notion became so sacrosanct that, in 2009, the Montana retirement plan even began warning actuarial firms, vying for the right to provide it with services, that if they used more fiscally conservative valuations, they shouldn’t even bother submitting bids. “Pensions & Investments,” an industry trade publication, reported that; “rumor has been around for at least a year that other public systems have been engaging in similar threats,” which the publication referred to as “intimidation.”

Such opposition, however, has finally begun to wilt—albeit slowly—as the scary pension math becomes unavoidable. Recognizing that they’ve overshot in their estimations, pension funds have been lowering projected future rates of return. They now predict annual average gains of 7.69 percent—still high, but down from 8 percent in 2008, and the lowest average rate of projected investment return since 1989.

Some industry leaders are pushing for even lower returns. In 2012, New York City’s retirement system, one of the nation’s largest, began a long-term process of cutting its projected returns from 8 percent to 7 percent, thanks to pressure from then-mayor Michael Bloomberg, a Wall Street veteran who called the city’s assumptions “indefensible.” In California, CalPERS has already reduced its projected investment-return rate to 7.5 percent; staff members have told the fund’s board that they want to reduce the return rate eventually to just 6.5 percent, so that they could cut investments in volatile stocks and pour more money into conservative instruments. The staffers realized that it was far harder to cushion assets invested in stocks from market dives than pension bureaucrats had previously acknowledged.

Even more telling, the CalPERS staffers seemed to accept a principle that private-pension funds have long acknowledged: once a pension fund gets too indebted, it may never recover. “CalPERS told city finance officials that if its investments drop below 50% of the amount owed for pensions, even with significant additional increases from taxpayers, catching up becomes nearly impossible,” the Los Angeles Times reported last August. Or as an investment manager recently told the New York Times, “It’s almost mathematically impossible to close the gap.” While the CalPERS pension fund itself is currently about 75 percent funded, at least using its own accounting standards (critics contend that its funding is actually lower), a growing number of public-pension funds are approaching the treacherous 50 percent level, and a few are already there, including the pension systems in Connecticut and Illinois. More cities, towns, and school districts—which have even less financial flexibility to deal with debt than states—have gotten there, too. Chicago’s police and fire pension funds, for example, are only about 35 percent funded. A recent study found that 25 municipalities throughout Pennsylvania, including Philadelphia and Scranton, are less than half funded.

An investment move toward less volatility will make fund finances more predictable and improve chances of avoiding another 2008-like pension-funding meltdown. Still, reducing risk does nothing to slash the $1 trillion or more in debt that pension funds have already saddled themselves with. Instead, by projecting lower gains, retirement systems will have to ask taxpayers to ante up even more to pay down their debt. How governments will afford this isn’t clear. New York City’s annual pension contributions have risen from $6.7 billion in 2010 to $8.7 billion in 2014, and will keep increasing for years as the city slowly cuts its rate of predicted investment return. CalPERS is already in the midst of a six-year plan to require California governments (city and county taxes) to boost contributions to the pension fund by 50 percent. Constrained budgets will get even further pinched.

Taxpayers should expect to suffer even more. Chicago mayor Rahm Emanuel recently proposed a $543 million property-tax increase to pay for pensions. Illinois’ Cook County, meanwhile, increased its sales tax 1 percent to raise half a billion dollars for its pension shortfall. The sales tax in Chicago—if one combines the county, city, and state levies—now stands at 10.25 percent, the nation’s highest. In Pennsylvania, where hundreds of school districts have seen teacher-pension costs skyrocket, 164 districts asked the state for permission last year to raise property taxes above Pennsylvania’s 2.1 percent cap. Each one cited higher pension costs as the primary reason. In 2014, West Virginia gave its cities the right to impose their own sales taxes to help pay down the pension bill. Other tax increases are in the works, as government unions and their allies lobby for more funds to bail out pensions. “Our Oregon,” a union-backed group, is sponsoring ballot proposals to hike taxes $2.6 billion to alleviate a state budget crunch driven by rising pension and health-care costs.

In California, unions are working on an initiative that would make Governor Jerry Brown’s temporary 2012 tax increases, passed via Proposition 30 and set to expire in 2018, permanent. About half the annual $6 billion from the Prop. 30 increase was supposed to go to school districts for more classroom spending, but the state’s teacher-pension fund has sharply increased required contributions from local districts. As those higher costs phase in, they’re consuming most of the Prop. 30 education money—one reason that the unions want the taxes to become permanent. Recently, a panel convened by Los Angeles schools superintendent Ramon Cortines claimed that the district could face bankruptcy once the Prop. 30 taxes expire, due to rising pension and health costs and shrinking enrollment.

Taxpayers and reform-minded politicians should demand greater cost savings before pension systems wind up so indebted that the cost of bailing them out eviscerates other government services. Among the biggest priorities should be eliminating the open-ended liability that defined-benefit pension plans generate by promising workers rich, guaranteed benefits based on their final salaries, which taxpayers must finance when the market fails. Utah, to take one salutary example, has created a new defined-contribution plan, in which the state would contribute the equivalent of 10 percent of worker salaries every year into individual pension accounts, and workers would receive a pot of money when they retired, based on the contributions plus investment returns. If, instead, workers choose to remain in Utah’s defined-benefit plan, the state now makes them, not taxpayers, responsible for contributions exceeding 10 percent of salaries. Other states, like Rhode Island, have created hybrid plans with modest defined benefits, topped by 401(k)-style private-pension accounts. About 7 percent of government workers with pensions now enroll in these hybrid systems, which reduce taxpayer risk.

Taxpayers should also demand substantial changes to the way that states and cities dish out benefits and determine the crucial parameters that govern pension systems, including actuarial standards. Pension-system bureaucrats and board members should be banned from lobbying for higher benefits for workers, as the CalPERS board has done in California. The pension-system overseers’ job is to manage the system effectively and protect worker assets, not engage in advocacy. As much as possible, too, taxpayers should seek to take key decisions out of the hands of politicians, who’ve too often proved willing to use pensions to purchase votes from workers. The Society of Actuaries has proposed that government pensions set projected rates of return based on a combination of long-term forecasts of market performance. In a 2014 study, the society determined that, using such a formula, the average projected rate of return of funds would be 6.4 percent—well below current estimates.

The biggest impediment to serious reform has been the notion that a few good years of investment returns, combined with some additional contributions, will solve most pension underfunding. This simply isn’t true, and taxpayers need to recognize it now. If they don’t, they could wake up soon to find their governments swamped with massive debt—and themselves holding the bill.


Steven Malanga is the senior editor of City Journal, a senior fellow at the Manhattan Institute, and the author of Shakedown: The Continuing Conspiracy Against the American Taxpayer.

Article from city-journal.org


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Celebrating Dr.Martin Luther King, Jr. and Religious Freedom

MLK1Martin Luther King, Jr. Believed in Theocracy

by Gary DeMar

If you want to attack Christian conservatives who believe that Christians have an obligation to impact the world, even the world of politics, you will hear hysterical cries from “the Left” on how such a view is theocratic. According to the secular left, Christianity and politics in America mix as well as Islam and politics mix in Iran, Iraq, and Afghanistan.MLK3

[Somehow] Liberals can never be accused of being theocratic because their worldview is unquestionably right. All competing worldviews must be measured against the standard of Liberalism. There is an exception, however. The Black community has been able to use “theocratic language” without being described as theocratic.

In celebration of Martin Luther King Jr.’s birthday, [a decade ago] The Atlanta Journal-Constitution (AJC) offered a half-page editorial on how “King’s message still resonates.”1 Consider the following:

“As those who seek a better life continue flocking to our shores, King’s philosophy—rooted in his abiding Christian faith—offers a more encompassing spiritual view than that advanced by xenophobes and others who would vainly cloak themselves in a mantle of self-righteousness.”

MLK2King’s “abiding Christian faith” is acceptable to the leftist elitists because they get to define what it means to them. The editors of the AJC would never apply a Bible-believing minister’s “abiding Christian faith” to abortion. That would be imposing morality on others in an area that does not fit the “Progressive” (Liberal) agenda. Such a declaration would be theocratic.MLK4

In a college address, King said, “God is not interested merely in the freedom of black men and brown and yellow men, but God is interested in the freedom of the whole human race and the creation of a society where all men will live together as brothers, and every man will respect the dignity and the worth of human personality.” How can the editors of the AJC write this when a number of them care nothing for the worth of the human personality of unborn children? What hypocrisy! King died in 1968, five years before the Roe v. Wade decision. I wonder what he would have thought of the decision knowing that a disproportionate number of black babies have been aborted in the name of “civil rights”? Black Genocide is its given name.2

In his famous “Letter from a Birmingham Jail,” written during his imprisonment in 1963, King wrote: “The church was not merely a thermometer that recorded the ideas and principles of popular opinion; it was a thermostat that transformed the mores of society.”

You can easily imagine the editorial that would have been written if James Dobson had said the same thing as King at any of the three Justice Sundays that have been held around the nation; (i.e.), “Apparently Dr. Dobson has not read the Constitution. . . . Doesn’t he know that there is a separation between Church and State? . . . He’s calling for a theocracy…” (yada-yada-yada).

Dr. Martin Luther King Jr., believed that it was OK to impose God’s view of morality on society. Given the modern definition of theocracy, this makes him a theocrat. Liberals nod their heads in agreement like mindless “Bobble-Head dolls” when they quote him without ever noting their own hypocrisy.

Here are some other quotes by Dr. Martin Luther King, Jr.:

“I still believe that standing up for the truth of God is the greatest thing in the world. This is the end of life. The end of life is not to be happy. The end of life is not to achieve pleasure and avoid pain. The end of life is to do the will of God, come what may.”3

“We will win our freedom because the sacred heritage of our nation and the eternal will of God are embodied in our echoing demands.”4

“Seems that I can hear God saying that it’s time to rise up now and make it clear that the evils of the universe must be removed. And that God isn’t going to do all of it by himself. The church that overlooks this is a dangerously irrelevant church.”5

“The church must also become increasingly active in social action outside its doors. . . . It must exert its influence in the area of economic justice. As guardian of the moral and spiritual life of a community the church cannot look with indifference upon these glaring evils.”6

“If one is truly devoted to the religion of Jesus he will seek to rid the earth of social evils. The gospel is social as well as personal.”7

“As Christians we owe our ultimate allegiance to God and His will, rather than to man and his folkways.”8

“Any religion which professes to be concerned about the souls of men and is not concerned about the social and economic conditions that scar the soul, is a spiritually moribund religion only waiting for the day to be buried.”9

Put these same words by Dr. Martin Luther King in the mouth of a Tea Party member today and the Left will scream “intolerance,” “keep religion out of politics,” and “you can’t impose your morality on others.”

The civil rights movement of the 1960s was influenced by those who brought morality to bear on issues related to race and equality. “For the first time in history, a single Protestant-Orthodox, Roman Catholic, and Jewish testimony was presented to Congress in support of legislation. Congress became aware that the religious community was aroused in a startling way. The participation of the religious groups in the March on Washington was another bit of evidence. Over 40,000 white church people participated in the March.”10 With just a few changes, this description of the 1964 March on Washington could easily describe the activities of the often vilified “religious right” and their efforts to influence legislation. The similarities are not lost on Stephen L. Carter, William Nelson Cromwell Professor of Law at Yale University and one of the nation’s leading experts on constitutional law:

Religious organizations were among the strongest supporters of the Civil Rights Act of 1964, which outlawed discrimination in employment and public accommodations. They testified in support of it. They made public appeals for it. And, once again, only the segregation[ist]s complained. Senator Richard Russell of Georgia charged that those who made religious arguments in favor of the legislation did not understand “the proper place of religious leaders in our national life,” adding that the religions should not “make a moral question of a political issue.” Indeed, there is little about the civil rights movement, other than the vital distinction in the ends that it sought, that makes it very different from the right‑wing religious movements of the present day.11

Civil rights legislation was passed in the early 1960s because the “moral question” was pressed by religious leaders. “When it was finally passed, friend and foe alike credited the passage of the bill to the persistent power of the church.”12 Hubert H. Humphrey, the leader of the struggle in the Senate for passage, along with other veteran fighters for civil rights legislation, “insisted that the churches’ efforts had made the difference which had been lacking in other struggles for such bills.13

“Cowardice asks the question, is it safe? Expediency asks the question, is it politic? Vanity asks the question, is it popular? But, conscience asks the question, is it right? And there comes a time when we must take a position that is neither safe, nor politic, nor popular, but one must take it because it is right.”  (Dr. Martin Luther King, Jr.)             Now is that time. Enough said.



[1] “In ’06, King’s message still resonates,” The Atlanta Journal-Constitution (January 16, 2006), A14.
[2] http://www.blackgenocide.org

[3] From a sermon preached in November 1956. Quoted by William J. Bennett, from the Foreword to Ralph Reed’s Politically Incorrect: The Emerging “Faith Factor” in American Politics (Dallas, TX: Word, 1994), xiii.

[4] Quoted in Taylor Branch, Parting the Waters: America in the King Years, 1954B63 (New York: Simon and Schuster, 1988), 743.

[5] Quoted in Branch, Parting the Waters, 696.

[6] King, Stride Toward Freedom, 208.

[7] Martin Luther King, Jr., Stride Toward Freedom (San Francisco: Harper & Row, 1986), 117.

[8] King, Stride Toward Freedom, 117.

[9] King, Stride Toward Freedom, 91.

[10] Robert W. Spike, The Freedom Revolution and the Churches (New York: Association Press, 1965), 106.

[11] Stephen L. Carter, The Culture of Disbelief: How American Law and Politics Trivialize Religious Devotion (New York: Basic Books, 1993), 228.

[12] Spike, The Freedom Revolution and the Churches, 108.

[13] Spike, The Freedom Revolution and the Churches, 108.


Article from americanvision.org.

This article from American Vision is a combination of two articles (1) “Martin Luther King, Jr., Believed in Theocracy;” and (2) “Driving the Left and Right Crazy.”



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Reviewing Christianity in Nineteenth Century American Law

 Christianity in Nineteenth Century American Law

Oregon“The Christian Life of the American Republic”

By Steven Samson, Ph.D.

The religious underpinnings of American political and legal institutions have been duly noted by legal scholars, historians, judges, politicians, and clergymen alike. Church polities provided models not only for colonial civil governments but also for the present constitutional system. R. Kemp Morton summarized some of these influences from a Presbyterian standpoint:

Presbyterians had a more republican system; each congregation was independent of every other congregation in its purely local affairs, but the presbyteries and synods of pre-Revolutionary times exhibited a pattern for a union in a central organization without any loss of fundamental rights. It was from this church structure that the formula co-ordinating the large and the small states into one union came. The College of Cardinals of the Catholic Church formed the pattern for the Electoral College for electing the President and the Vice-President. The persistent pursuit of religious freedom by these and other dissenting sects had taught their votaries the philosophy of both religious and civil liberty.[1]evening cross

Other writers have detected Congregationalist, Baptist, Episcopalian, and Jewish contributions to the constitutional framework.[2]

Christianity as Common Law

Justice Joseph Story and Chancellor James Kent were among many sitting judges during the nineteenth century who cited the maxim that “Christianity is part of the common law.” As early as 1764, Thomas Jefferson attributed the phrase to a misinterpretation made by Sir Henry Finch in 1613 that had subsequently been perpetuated by Matthew Hale and William Blackstone. But Justice Story disputed Jefferson’s contention that it was a “judicial forgery” and quoted the opinion of Chief Justice Prisot of the Court of Common Pleas, which established the precedent in 1458:

As to those laws, which those of holy church have in ancient scripture, it behooves us to give them credence, for this is common law, upon which all manner of laws are founded; and thus, sir, we are obliged to take notice of their law of holy church; and it seems they are obliged to take notice of our law.[3]10 commandments...

James McClellan has noted, moreover, that Justice Story was not satisfied simply to base his contention on a single precedent but attempted to prove that the maxim was a general principle of common law. The Presbyterian theologian, Charles Hodge, argued that the moral law of the Bible represents a higher law: “Whatever Protestant Christianity forbids, the law of the land (within its sphere, i.e., within the sphere in which civil authority may appropriately act) forbids.”[4] By implication, then, anything contrary to the principles of “ancient scripture” would violate the common law and the Constitution.[5]

Mark DeWolfe Howe suggests that Thomas Jefferson “had always been uncomfortably aware of the closeness of the affiliation between Christianity and the common law” and “saw the transmitting of the maxim from English to American shores as the transplanting of the seeds of establishment.”[6] The idea that the common law established Christianity remained an important political issue because of the persistence of church establishments in several states. In fact, at the time the Constitution was adopted, five states still maintained formal denominational establishments while others like Massachusetts adopted Protestantism or showed preference to Christianity. Only Virginia and Rhode Island guaranteed full religious liberty.[7] In all, nine of the thirteen colonies effectively established Protestantism; all favored Christianity in some manner.[8] Justice Story, a Unitarian, abhorred ecclesiastical establishments but believed Christianity to be the foundation of social order in America. Concerning the First Amendment, he wrote:

Probably at the time of the adoption of the constitution, and of the amendment to it…, the general, if not the universal, sentiment in America was, that Christianity ought to receive encouragement from the state, so far as was not incompatible with the private rights of conscience and the freedom of religious worship. An attempt to level all religions, and to make it a matter of state policy to hold all in utter indifference, would have created universal disapprobation, if not universal indignation. It yet remains a problem to be solved in human affairs, whether any free government can be permanent where the public worship of God, and the support of religion, constitute no part of the policy or duty of the state in any assignable shape.[9]

He agreed with the sentiment that religion should be encouraged by the state but not through compulsion and not by showing sectarian preferences:

The real object of the amendment was, not to countenance, much less to advance Mahometanism, or Judaism, or infidelity, by prostrating Christianity; but to exclude all rivalry among Christian sects, and to prevent any national ecclesiastical establishment, which should give to an hierarchy the exclusive patronage of the national government.[10]

Story concluded that, because liberty of conscience is protected and power over religion is left to the state governments, “the Protestant, the Calvinist and the Arminian, the Jew and the Infidel, may sit down at the common table of the national councils, without any inquisition into their faith, or mode of worship.”[11]

Justice Story did not try to make a distinction between the establishment and free exercise clauses. His interpretation, moreover, was echoed by other commentators, such as James Bayard and William Rawle, both of whom noted the evils growing out of the union of church and state. Both also believed religious liberty enabled religion to flourish in greater purity and vigor.[12] Chancellor James Kent of New York indicated that he found no real difference between the federal and state constitutions with regard to religious liberty, except in seven states that still retained religious tests at the time he wrote. He regarded religious liberty as an absolute right and believed it went hand in hand with civil liberty.[13] Nevertheless, during the 1821 convention to revise the state constitution, he joined with Vice President Daniel Tompkins, Chief Justice Spencer of the New York Supreme Court, and Rufus King in defending the recognition of Christianity as part of the common law and helped turn aside a proposed amendment that “no particular religion shall ever be declared or adjudged to be the law of the land.”[14]

Near the end of the nineteenth century, Thomas M. Cooley, who publicly opposed Sunday closing laws, strongly reaffirmed the same judicial precepts held by Justice Story and Chancellor Kent:

By establishment of religion is meant the setting up or recognition of a state church, or at least the conferring upon one church of special favors and advantages which are denied to others. It was never intended by the Constitution that the government should be prohibited from recognizing religion, or that religious worship should never be provided for in cases where a proper recognition of Divine Providence in the working of government might seem to require it, and where it might be done without drawing any invidious distinctions between different religious beliefs, organizations, or sects. The Christian religion was always recognized in the administration of the common law; and so far as that law continues to be the law of the land, the fundamental principles of that must continue to be recognized in the same cases and to the same extent as formerly.[15]

In a letter to Robert Baird, Henry Wheaton, who then served as an ambassador to the court of Berlin, described a few of the ways Christianity continued to be recognized, encouraged, and protected back home. His examples included laws governing sabbaths, church property, blasphemy, oath taking, and marriage, all of which helped illustrate his point that the church was not viewed as a rival or enemy of the state but as a “co-worker in the religious and moral instruction of the people.”[16]

State Courts

The extent to which early American law actually incorporated the common law of England is disputed. But Blackstone’s commentaries on the common law, which asserted that “Christianity” is part of the law of the land, exercised a profound influence on the generation that fought the War for Independence. Edmund Burke testified to their acceptance as the popular standard when he remarked: “I hear that they have sold nearly as many of Blackstone’s Commentaries in America as in England.”[17] Although Blackstone’s analysis of offenses against God and religion assumed the existence of an Anglican establishment, he emphasized that revelation is the source of all valid laws and obligations:

This law of nature being coeval with mankind, and dictated by God himself, is of course superior in obligations to any other. It is binding over all the globe, in all countries, and at all times: no human laws are of any validity, if contrary to this; and such of them as are valid derive all their force, and all their authority, mediately or immediately, from this original.[18]

This belief, that American common law incorporated higher law generally and Christianity specifically, persisted well into the present century. For example, the first volume of American Ruling Cases (1912) cited a New York decision upholding a Sunday closing law as a governing precedent. In  Lindenmuller v. People; 33 Barb. (N.Y.) 548 (1861), the New York Supreme Court based its decision, in part, on the incorporation of English common law:

The common law, as it was in force on the 20th day of April, 1777, subject to such alterations as have been made, from time to time, by the legislature, and except such parts of it as are repugnant to the constitution, is, and ever has been, a part of the law of the state (33 Barb. 548,561; 1 A.R.C. 457).

As in similar cases elsewhere, the Court took care to qualify its acknowledgement of Christianity as part of the common law so as not to imply any ecclesiastical establishment, which would make Christianity a civil or political institution. It declared that even though Christianity is not the legal religion of the state, “this is not inconsistent with the idea that it is, and ever has been, the religion of the people.”

As in England, the maxim was most frequently cited in blasphemy cases. In  Updegraph v. The Commonwealth, 11, S.&R. 384, 401 (1824), the Pennsylvania Supreme Court quoted Lord Mansfield:

There never was a single instance, from the Saxon times down to our own, in which a man was punished for erroneous opinions. For atheism, blasphemy, and reviling the Christian religion, there have been instances of prosecution at the common law; but bare nonconformity is no sin by the common law, and all pains and penalties for nonconformity to the established rites and modes are repealed by the acts of toleration, and dissenters exempted from ecclesiastical censures. What bloodshed and confusion have been occasioned, from the reign of Henry IV, when the first penal statutes were enacted, down to the revolution, by laws made to force conscience. There is certainly nothing more unreasonable, nor inconsistent with the rights of human nature, more contrary to the spirit and precepts of the Christian religion, more iniquitous and unjust, more impolitic, than persecution against natural religion, revealed religion and sound policy.[19]

The court indicated that the only interest of temporal courts is to prevent disturbances of the public peace “likely to proceed from the removal of religious and moral restraints; this is the ground of punishment for blasphemous and criminal publications; and without any view to spiritual correction of the offender” (11S. & R. 394, 404). At 405, it added:

Chief Justice Swift, in his System of Laws, 2 Vol. 825, has some very just reasoning on the subject. He observes, “To prohibit the open, public, and explicit denial of the popular religion of a country, is a necessary measure to preserve the tranquility of a government. Of this, no person in a Christian country can complain; for, admitting him to be an infidel, he must acknowledge that no benefit can be derived from the subversion of a religion which enforces the purest morality.”

In the Supreme Court of New York it was solemnly determined, that Christianity was part of the law of the land, and that to revile the Holy Scriptures was an indictable offence. The case assumes, says Chief Justice Kent, that we are a Christian people, and the morality of the country is deeply engrafted on Christianity. Nor are we bound by any expression in the constitution, as some have strangely supposed, not to punish at all, or to punish indiscriminately the like attack upon Mahomet or the Grand Lama. (The People v. Ruggles, 8 Johnston, 290).

Although the Supreme Court of Delaware also upheld a blasphemy conviction in States v. Chandler, 2 Harrington 553 (1837), Chief Justice J.M. Clayton similarly made it clear that it was due to a lack of jurisdiction over spiritual offenses, not to a minimizing of their seriousness, that the common law did not punish the violation of every precept of Christianity:

When human justice is rightly administered according to our common law and our constitution, it refuses all jurisdiction over crimes against God, unless they are by necessary consequence crimes against civil society, and known and defined as such by the law of man. It assumes that for sin against our Creator, vengeance is his and he will repay (2 Harrington 553, 571).

The identification of Christianity with the common law was rejected by the Ohio Supreme Court – but, the reasons it gives are instructive. The three cases that follow suggest it was influenced, at least in part, by a solicitude for religion. In Bloom v. Richards, 2 Ohio St. 387, 390 (1853), Chief Justice Allen Thurman affirmed the validity of a Sunday contract despite a statute prohibiting Sunday labor and remarked that “neither Christianity, nor any other system of religion, is a part of the law of this State.” Even so, his reasoning was not inconsistent with that of the Pennsylvania and New York opinions:

We have no union of church and State, nor has our government ever been vested with authority to enforce any religious observance, simply because it is religious. Of course, it is no objection, but, on the contrary, is a high recommendation, to a legislative enactment, based upon justice or public policy, that it is found to coincide with the precepts of a true religion; but the fact is nevertheless true, that the power to make the law rests in the legislative control over things temporal and not over things spiritual. Thus the statute upon which the defendant relies, prohibiting common labor on the Sabbath, could not stand for a moment as a law of this State, if its sole foundation was the Christian duty of keeping that day holy, and its sole motive to enforce the observance of that duty. For no power over things merely spiritual, has ever been delegated to the government…(2 Ohio St. 387, 391).[20]

The Court cited Specht v. Commonwealth, 8 Barr 312 (1848), in which the Pennsylvania Supreme Court states at 323 that, despite the fixing of Sunday as the day of rest, the statute in question “is still, essentially, but a civil regulation made for the government of man as a member of civil society….” It also determined that those states which forbade secular business on Sunday did so through additional statutory provisions. Later, In McGatrick v. Wason, 4 Ohio St. 566 (1855), a case involving a freight loading accident on a Sunday, the Court held that the shipping of freight fit into the exempt category of “works of necessity or charity” and sustained a judgment for the injured dockworker against his employer.

In — Board of Education of Cincinnati v. Minor; 23 Ohio St. 211 (1872), the Ohio Supreme Court upheld — although it did not require — a prohibition on religious instruction by the Cincinnati Board of Education. In a lengthy opinion, Judge John Welch commented that “Legal Christianity is a solecism, a contradiction of terms” (23 Ohio St. 211, 248). He continued:

If Christianity is a law of the state, like every other law, it must have a sanction. Adequate penalties must be provided to enforce obedience to all its requirements and precepts. No one seriously contends for any such doctrine in this country, or, I might almost say, in this age of the world. The only foundation — rather, the only excuse — for the proposition, that Christianity is part of the law of this country, is the fact that it is a Christian country, and that its constitutions and laws are made by a Christian people. And is not the very fact that those laws do not attempt to enforce Christianity, or to place it upon exceptional or vantage ground, itself a strong evidence that they are the laws of a Christian people, and that their religion is the best and purest of religions? It is strong evidence that their religion is indeed a religion “without partiality,” and therefore a religion without “hypocrisy” (23 Ohio St. 211, 249).[21]

Such cases as these, which involved blasphemy, Sunday laws, Bible reading in schools, and other clearly religious issues, are illustrative of the depth and detail of the judicial acquaintance with Christian precepts. At the same time, however, each of these cases raised difficult constitutional issues that challenged the ingenuity and logic of the judges. Many of these and later cases mark the trail by which constitutional innovations were introduced. Sunday laws, for example, were usually defended as public health measures and upheld by the courts as a legitimate exercise of the police power. Similarly, in Donahoe v. Richards, 38 Me. 376 (1854), the Supreme Court of Maine cited the maxim “salus populi suprema lex” — the health of the people is the supreme law — in defense of a compulsory Bible reading law that allowed the exclusion of the Douay version from the classroom.

There is considerable reason to believe such legislation was tendered in good faith. But in many of these and similar cases, the opposite side of the issue was also argued from a clearly Christian commitment. Theological differences were often reflected by differences of constitutional interpretation. Indeed, the designation “constitutional hermeneutics” was used at the time by Francis Lieber and other commentators, giving the debate a theological cast. Theology was still regarded as first among the sciences. Moreover, judicial articulations of an explicitly Christian perspective on constitutional law transcended narrowly religious issues, challenging the current view that equates secular issues with religious neutrality or irreligion. A case in point is the imaginative blending of legal scholarship and Biblical illustration in several opinions by Samuel E. Perkins, who sat on the bench of the Supreme Court of Indiana from 1846 until 1865, when a Republican slate of judges swept out all the incumbents, then returned in 1877 and served until his death in 1879.

One of the finest examples of Judge Perkins’ judicial writing is his opinion in Herman v. The State, 8 Ind. 490 (1855): A case involving a state law prohibiting the manufacture and sale of liquor, except by the state for use as a medicine or for sacramental purposes. The case was brought before the Court on a habeas corpus obtained by a prisoner who had been arrested and detained for selling liquor. In ruling the law unconstitutional, Judge Perkins noted that “it is not competent for the government to take the business from the people and monopolize it.” Quoting Thomas Say, the political economist, he attacked the law as “an invasion upon the faculties of industry possessed by individuals….” He then traced the history of prohibition and its association with governments that were paternal and absolute in character: “which had no written constitutions limiting their powers….”[22]

Such governments as those described, could adopt the maxim quoted by counsel, that the safety of the people is the supreme law, and act upon it; and being severally the sole judges of what their safety, in the countries governed, respectively required, could prescribe what the people should eat and drink, what political, moral and religious creeds they should believe in, and punish heresy by burning at the stake, all for the public good. Even in Great Britain, esteemed to have the most liberal constitution in the Eastern continent, Magna Charta is not of sufficient potency to restrain the action of Parliament, as the judiciary do not, as a settled rule, bring laws to the test of its provisions. Laws are there overthrown only occasionally by judicial construction. But here, we have written constitutions which are the supreme law, which our legislators are sworn to support, within whose restrictions they must limit their action for the public welfare, and whose barriers they cannot overleap under any pretext of supposed safety of the people; for along with our written constitutions, we have a judiciary whose duty it is, as the only means of securing to the people safety from legislative aggression, to annul all legislative action without the pale of those instruments. This duty of the judicial department in this country, was demonstrated by Chief Justice Marshall in Marbury v. Madison, I Cranch, 137, and has since been recognized as settled American law. The maxim above quoted, therefore, as applied to legislative power, is here without meaning (8 Ind. 490, 494-495).

Later in the opinion, Perkins celebrated the benefits of wine and strong drink, quoting the Bible in their defense, then concluded:

It thus appears, if the inspired psalmist is entitled to credit, that man was made to laugh as well as weep, and that these stimulating beverages were created by the Almighty expressed to promote his social hilarity and enjoyment. And for this purpose has the world ever used them, they have ever given, in the language of another passage of scripture, strong drink to him that was weary and wine to those of heavy heart. The first miracle wrought by our Savior, that at Cana of Galilee, the place where he dwelt in his youth, and where he met his followers, after his resurrection, was to supply this article to increase the festivities of a joyous occasion; that he used it himself is evident from the fact that he was called by his enemies a winebibber; and paid it the distinguished honor of being the eternal memorial of his death and man’s redemption (8 Ind. 490, 502).

Perkins concluded his rebuttal by dismissing the public health argument for prohibition in some of his saltiest language:

It is based on the principle that a man shall not use at all for enjoyment what his neighbor may abuse, a doctrine that would, if enforced by law in general practice annihilate society, make eunuchs of all men, or drive them into the cells of the monks, and bring the human race to an end, or continue it under the direction of licensed county agents.

Such, however, is not the principle upon which the almighty governs the world. He made man a free agent, and to give him opportunity to exercise his will, to be virtuous or vicious as he should choose, he placed evil as well as good before him he put the apple into the garden of Eden, and left upon man the responsibility of his choice, made it a moral question, and left it so. He enacted as to that, a moral, not a physical prohibition. He could have easily enacted a physical prohibitory law by declaring the fatal apple a nuisance and removing it. He did not. His purpose was otherwise, and he has since declared that the tares and wheat shall grow together to the end of the world. Man cannot, by prohibitory law, be robbed of his free agency (8 Ind. 490, 503-504).

A remarkable feature of the state judiciary during this period was its frequently spirited independence of judgment. In two other cases, the Indiana Supreme Court struck down congressional legislation it regarded as lying outside the constitutional jurisdiction of the federal government. In Griffin v. Wilcox, 21 Ind. 370 (1863), the unanimous Court ruled unconstitutional an act of Congress that indemnified federal officers who arrested civilians for selling liquor to soldiers and held that neither President nor Congress could suspend a writ of habeas corpus issued by a state court. For the purposes of this case, Judge Perkins conceded the government’s right to exercise martial law, but only temporarily and locally in cases of necessity — “where the civil law is expelled” — and as limited by the constitution. Judge James M. Hanna wrote a forceful concurring opinion that conceded even less ground to the federal law. In Warren v. Paul, 22 Ind. 276 (1864), a case involving a stamp tax on state legal documents, Judge Perkins commented that Congress “has not a right, by direct or indirect means, to annihilate the functions of the State government” by taxing them.

Two legal tender cases are also worthy of note, especially in the way they reflect the character of the Court’s reasoning. In Reynolds v. The Bank, 18 Ind. 467 (1862), Judge Perkins dwelt at some length on the absence of either a constitutional or commercial basis for declaring bills of credit to be legal tender, but then held that doubts about the constitutionality of the law must be resolved in its favor until the Supreme Court of the United States ruled otherwise. Judge Hanna dissented, arguing “that by the constitution the right is not vested in Congress to make a paper named a legal tender in payment of private debts” (18 Ind. 467, 475). Two years later, Judge Perkins spoke for a unanimous Court in Thayer v. Hedges, 22 Ind. 282 (1864), a case involving a promissory note in which the same legal tender law was at issue. Reverting to the Articles of Confederation, he cataloged the subjects covered by the term “general welfare” and then traced the later development of the constitutional separation of powers between the general government and the states. He cited common commercial practice, political economists, and even Biblical history as evidence of the unconstitutionality of the law: “Coin was the sacred currency as well as profane, of the ancient world. Historically considered, we find that the Almighty, and His Prophets and Apostles, were for a specie basis; that gold and silver were the theme of their constant eulogy” (22 Ind. 282, 304).[23]

As these cases illustrate, it was not uncommon for state courts in the nineteenth century to give special recognition to religious considerations and even appeal to commonly accepted religious considerations as a basis for judgment. This was just as true of secular cases as outwardly religious ones. Indeed, the Bible was regarded as a major sourcebook of constitutional theory and practice. The same courts that strongly asserted the value of religious liberty for all apparently did not perceive any contradiction when they acknowledged the special place of Christianity and the Bible in the life of the republic.


[1] R. Kemp Morton, God in the Constitution (Nashville: Cokebury Press, 1933), pp. 82-83.

[2] See William W. Sweet, The Story of Religion in America (New York: Harper & Brothers, 1939), pp. 250-73. A thoughtful statement of the nature of the Christian influence on the American constitutional system may be found in the introduction to Verna M. Hall, comp., The Christian History of the American Revolution: Consider and Ponder (San Francisco: Foundation for the American Christian Education, 1976), p. xxiv.

[3] James McClellan, Joseph Story and the American Constitution: A Study in Political and Legal Thought, (Norman: University of Oklahoma Press, 1973), p. 122. Thomas Jefferson developed his views at some length in a letter to Dr. Thomas Cooper dated 10 February 1814; Thomas Jefferson, The Writings of Thomas Jefferson, vol. 14 (Washington: The Thomas Jefferson Memorial Association, 1904), pp. 85-97. For a detailed critique of Jefferson’s complaint, see the opinion of Chief Justice J.M. Clayton of the Delaware Supreme Court in The State v. Chandler, 2 Harrington 553 (1837), which includes the following passages at 561-62: “We know, not withstanding Mr. Jefferson’s defiance, that even Finch himself had quoted 8 H. 8, “Ley de Dieu est ley de terre”, the law of God is the law of the land, Doc. & Stud. lib 1, c. 6, Plowed. 265, to sustain his position that the holy scripture is of sovereign authority, and to show the extent and meaning of the maxim.” Perry Miller discovered many complexions to the controversy over whether Christianity was part of the common law. In fact, it might be best characterized as a falling out among Christians over the implications of the statement: that is, what it meant in regard to the extablishment of free exercise of religion. See Perry Miller, The Life of the Mind in America: From the Revolution to the Civil War, (New York: Harcourt, Brace & World, 1965), pp. 186-206.

[4] Hall, American Revolution, p. 156.

[5] Edward S. Corwin, The “Higher Law” Background of American Constitutional Law, (Ithaca, N.Y.: Cornell University Press, 1955), pp. 88-89 and note.

[6] Mark DeWolfe Howe, The Garden and the Wilderness: Religion and Government in American Constitutional History (Chicago: The University of Chicago Press, 1965), pp. 27, 28.

[7] Leo Pfeffer, Church, State, and Freedom, revised ed. (Boston: Beacon Press, 1967) p. 118-19; Sanford H. Cobb, The Rise of Religious Liberty in America: A History, (New York: The Macmillan Company, 1902; Burt Franklin, 1970), p. 507.

[8] James McClellan, “The Making of the Establishment Clause”, in A Blueprint for Judicial Reform, ed. Patrick B. McGuigan and Randall R. Rader (Washington, D.C.: Free Congress Reseaech and Education Foundation, 1981), p. 307.

[9] Joseph Story, Commentaries on the Constitution of the United States; With a Preliminary Review of the Constitutional History of the Colonies and States, Before the Adoption of the Constitution, vol. 3 (Boston: Hilliard, Gray, and Company, 1833; reprint ed., New York: Da Capo Press, 1970), pp. 726-27. Evidence to support Story’s thesis may be gleaned, for example, from Nathan O. Hatch, The Sacred Cause of Liberty: Republican Thought and the Millennium in Revolutionary New England (New Haven: Yale University Press, 1977), p. 168: “As intellectual heirs of a tradition with had entwined republicanism and Christian theism, New Englanders in the last two decades of the century were unable to perceive religion as free from matters of civil government. From ancient history they were convinced that ‘the state cannot stand without religion’ and from their own experience that ‘Rational Freedom cannot be preserved without the aid of Christianity.'”

[10] Story, Commentaries, p. 728.

[11] Ibid., p. 731.

[12] B.F. Morris, Christian Life and Character of the Civil Institutions of the United States, Developed in the Official and Historical Annals of the Republic, (Philadelphia: George W. Childs, 1864), pp. 259-62.

[13] James Kent, Commentaries on American Law, ed., O.W. Homes, Jr., 12th ed, vol. 2 (Boston: Little Brown, and Company, 1873), pp. 34-35 (45). Francis Lieber, Miscellaneous Writings, vol. 2: Contributions to Political Science (Philadelphia: J.B. Lippincott and Company, 1880), pp. 74-80.

[14] Morris, Christian Life, pp. 656-59.

[15] Thomas M. Cooley, The General Principles of Constitutional Law in the United States of America, ed. Andrew C. McLaughlin, 3rd ed. (Boston: Little, Brown, and Company, 1898), pp. 224-25.

[16] Robert Baird, Religion in the United States of America (Glasgow: Blackie and Son, 1844; reprint ed., New York: Arno Press, 1969) p. 282.

[17] John Wingate Thorton, The Pulpit of the American Revolution: or, The Political Sermons of the Period of 1776. (Boston: Gould and Lincoln, 1860), xxvii.

[18] William Blackstone, Commentary on the Laws of England, vol. 1 (Philadelphia: Robert Bell, 1771), p. 41. See Daniel J. Boorstin, The Mysterious Science of the Law, (Gloucester, Mass.: Peter Smith, 1973), p. 3.

[19] The text of Lord Mansfield’s speech in Chamberlain of London v. Evans, 2 Burn’s Eccles. Law, 218, which was delivered in the House of Lords in 1767, was publshed in The Palladium of Conscience; or, the Foundation of Religious Liberty, Displayed, Asserted, and Established, Agreeable to its True and Genuine Principles, Above the Reach of All Petty Tyrants, Who Attempt to Lord it Over the Human Mind. (Philadephia: Robert Bell, 1773; New York: Da Capo Press, 1974), pp. 139-55. Lord Mansfield’s speech was also cited on the opposite side of the issue in a Commonwealth v. Kneeland, 20 pick. 206. 235-36 (1838), a Massachusetts blasphemy case. Another important blasphemy case of the period was State v. Chandler, 2 Herrington 553 (1837), cited in the text below.

[20] Simlilarly, the Supreme Court of California struck down a Sunday law in Ex parte Newman, 9 Cal. 502 (1858), because it was clearly designed as a benefit to relgion and not as a civil rule. But Judge Stephen Field’s dissent in this case eventually prevailed in Ex parte Andrews, 18 Cal. 679 (1861), when the Court upheld a similar law on the grounds that it protected “the moral as well as the physical welfare of the State.”

[21] A few of the presuppositions of what the Court called “Christian republicanism” are clearly expressed in this opinion. Referring to article 8, section 3 of the Ohio Constitution of 1802, which was drawn directly from the Northwest Ordinance of 1787, the Court stated at 248-49: “The declaration is, not that government is essential to good religion, but that religion is essential to good government. Both propositions are true, but they are true in quite different senses. Good government is essential to religion for the purpose declared elsewhere in the same section of the constitution, for the protection of mere protection. But religion, morality, and knowledge are essential to government, in the sense that they have the instrumentalities for producing and perfecting a good form of government. On the other hand, no government is all-adaopted for producing, perfecting, or propogating a good religion. Religion, in its widest and best sense, has most if not all, the instrumentalities for producing the best form of government. Religion is the parent, and not the offspring, of good government. Its kingdom is to be first shought, and good government is one of those things which will be added thereto. True religion is the sun which gives to government all its true lights, while the latter merely acts upon religion by reflection.” The Court reiterated this principle at 253: “Government is an organization for particular purposes. It is not almighty, and we are not to look to it for everything. The great bulk of human affairs and human interests is left free by any free government to individual enterprise and individual action. Religion is eminently one of these interests, lying outside the true and legitimate province of government.”

[22] By 1855, the issue of liquor had become hopelessly tangled in the status politics of which Ann Douglas wrote. Indeed, American relgious politics has long shown a penchant for symbolic crusades and quick fixes. Substantive programs of social reconstruction so often fail to materialize or become dispirited for want of Biblical charity. The good intentions of those whose faith would move mountains need not be doubted to recongnize that the wellsprings of human kindness often run dry when the weightier matters of the law are lost in a frenzy of minor doctrinal differences. As Edward Gaffney has remarked: “And who cannot recall the religious enthusiasm of the Womens’ Christian Temparance Union, who gave that cardinal virtue such a bad name, or their spiritual ancestors, the members of the National Temperance Union, who blessed this nation with the “Noble Experiment’ of Prohibition, without perhaps intending its regrettable concomitants, organized crime and unlwful governmental electronic sureveillance.” Edward McGlynn Gaffney, Jr., “Biblical Religion and American Politics: Some Historical and Theological Reflections”, The Journal of Law and Religion, 1 (Summer 1983); pp. 177-78.

[23] George Bancroft, A Plea for the Constitution of the United States, Wounded in the House of its Guardians (New York: Harper & Brothers, 1886; Sewanee, Tenn.: Spencer Judd, 1982), argued — like Daniel Webster and Joseph Story had before him — that unbacked paper currency was unconstitutional. See Webster’s speech, “A Redeemable Paper Curency”, delivered on the floor of the Senate, 22 February 1834. Edward P. Whipple, Great Speeches and Orations of Daniel Webster, (Boston: Little, Brown & Col., 1879), pp. 362-66. The immediate catalyst of Bancroft’s appeal was the Supreme Court’s decision in Julliard v. Greeman, 110 U.S. 421 (1884), upholding — as a power belonging to sovereignty — the issuance of government notes as legal tender in the payment of private debts. Only Justice Stephen Field dissented. An earlier case, Knox v. Lee,, 12 Wall. 603 (1870), justified the wartime Legal Tender Acts of 1862-1863 as emergency measures. Charles Warren later discussed the legal tender controversy at considerable length and commented that the Julliard decision was “the most sweeping opinion as to the extent of Congressional power which had ever theretofore been rendered….” Charles Warren, The Supreme Court in the United States History, vol. 2, revised ed., (Boston: Little, Brown and Company, 1938), p. 652. See also Carl Brent Swisher, Stephen J. Field: Craftsman of the Law, (Chicago: University of Chicago Press, 1930; Phoenix Books, 1969), pp. 166-204; Ferdinand Lundberg, Cracks in the Consitution (Secaucus, N.J.: Lyle Stuart, Inc. 1980) p. 231.


Steven Samson, Ph. D. (Political Science: University of Oregon) is a visiting professor at Hope College, Holland, Michigan, where he has been teaching political theory and constitutional law.

Copyright © by Covenant Community Church of Orange County 1991

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