The Philosophy of the Free Market

The Philosophy of the Free Market

By R. J. Rushdoony

In discussing the philosophy of the free market, it is necessary first of all to distinguish it from capitalism. All too often, both capital and labor want subsidies, not freedom. They seek statist intervention into the free market on their behalf, as does the farmer, the artist, scientist, beauticians, and many, many others. Lieberman has given us an excellent report on how many occupations are now controlled by state licensing because the practitioners demand a closed shop for their work. {1}

Very few capitalists in the twentieth century favor the free market; they work, in fact, to hinder its freedom and gain statist protection.

Second, most of the capitalism of our time represents simply a concern for profits, whereas the free market represents a faith in the value of economic freedom. The free-market thinkers are no less concerned with profits, but they insist that the good life is a unity.

To isolate profits from the worldview of the free market means, in the long run, to destroy profits as well. Profits are but one aspect of a general advantage which accrues from economic freedom, and there is thus a substantial difference between the free market and the capitalism of an interventionist society.

Our concern here, however, is not the advantages of the free market, real as they are, but its undergirding faith and philosophy. The roots of the free market, too seldom appreciated, rest in the doctrine of God.

That the church and Christendom have too seldom appreciated this foundation is due to the continuing alien influence of Greek philosophy on Christian theology.

The most commonly used term for God in the Old Testament Hebrew is Adon, Adonai, Lord. In the New Testament, the most common term for Christ is in the Greek Kyrios, Lord. In both instances, Lord means sovereign, absolute property owner of man and the earth, and ruler. This word has a clearly economic as well as political and religious reference. We are plainly told that “the earth is the LORD’S [Yah-weh’s], and the fulness thereof; the world and they that dwell therein” (Ps. 24:1). As the Lord, God is the governor of all things, including the economic scene, and for another to control it is a transgression of God’s sovereign prerogative.

The necessity of government in some form is a presupposition common to every school of thought. The definitions of that government can and do vary in terms of the religious premises involved. The equation of government with the state is a false one, however popular in pagan antiquity and today. The state is merely one agency of government among many, and, in the biblical perspective, it is emphatically and totally under God.

The economic sphere, like all others, is never lawless. The question is, whose law governs the economic sphere? The biblical faith sees God as Lord over all things including economics. God’s law covers the economic sphere, and God’s created order furthers certain activities and penalizes others. This order brings inflation to its sure day of reckoning; it makes transgressions of economic order catastrophic in the end.

The government of the economic order is thus placed in God’s hands. God’s law requires certain things of men: false weights and measures are banned; there must be a rest and reward even for working animals; God’s moral order must be maintained. God’s law does not control activities other than to punish crimes of fraud, theft, and the like.

In this sense, the market is free from the state but bound by the law of God. Economic controls and government rest basically in God’s laws for the economic sphere. Supply and demand are not legislated by the state but constitute a form of given order in the nature of a God-created reality.

The Greek faith saw the ideas or forms for the structure and government of life as a part of man’s being. Hence, essential and ultimate government was seen as inherent and potential in man, and incarnated in the philosopher-kings. The impact of this Hellenic premise has long prevented Christians from realizing their theological and governmental potential, because they have trusted in their own Greek-conceived rationality and ideal rule rather than in freedom in God’s order and government.

In secularized version, this was realized to a degree in Deism and the Enlightenment. The thinkers of that era presupposed God’s order with God abstracted from it as an absentee landlord. Because of their mechanistic views of reality, they could assume that a God-created universe could continue working with God removed from it even as a watch, once wound up, goes on ticking for a long time after the watchmaker leaves. It was held that God had transferred His governmental powers to Nature, so that Nature was now the source of continual and omnipresent law rather than God.

The Enlightenment had two countertendencies. On the one hand, the philosopher-king faith of Plato had a profound influence, from the Renaissance on, and led to the divine right of kings and a mercantilist economy. On the other hand, the use of Nature to replace the God of Scripture meant an inherent law and order in the very nature of things. Hence, society’s need was seen as, not statist controls over the economy, but a free market for Nature to enforce her infallible laws on the economy.

The economic consequences of this faith were enormous. While it is true that no fully free market has ever existed, it is also true that this doctrine of the free market led to dramatic economic progress and development. However, even as this free-market development was under way, the rise of Darwinism undermined it. Nature was no longer the source of infallible law. Christians had said that Nature is fallen; Deism found it infallible (“Whatever is, is right”), but Darwin found it to be a product of chance, mindless, and having no law save survival. This view of the struggle for survival and the survival of the fittest, for a time influenced capitalism, but spelled death for the free market.

Two things had occurred with the triumph of Darwinism. First, with God and Nature both dismissed as viable sources of government, the economic sphere was now seen as lawless and very much in need of government. Second, because the universe was no longer the creation of God, nor the manifestation of a perfect Nature, the harmony of interests was replaced with the doctrine of the conflict of interests.

Because there was no governing, inherent, or imminent law in the economic sphere, or any other, the economy was a realm of brutal survivalism and lawlessness. It was thus in desperate need of government.

A telling example of the shift from a belief in the free market to state intervention was John Stuart Mill. Under the influence of Darwinism, he moved from a faith in natural liberty to an affirmation of statist intervention.

Because the older governments by God, and then by Nature, were seen as gone, men, feeling the necessity and inevitability of government, began, step by step, to introduce state intervention into the economic sphere. The state became the new God, and the new State of Nature. The omnicompetence of the state to govern was assumed as the state took over the functions of God and Nature; and socialism, embodying this faith, became an international force and a crusading missionary endeavor. In 1984, George Orwell depicted the end result of this new faith.

As the Christian faces this new idolatry of the state, he must do so only with a totally biblical faith in God as Lord over all. No false idols, including the state, are tolerable. Freedom is neither a natural nor a state grant or right, but a possibility only under God’s government. The weight of omnicompetent and omnipresent government must be removed from the state and restored to God.

It is not an accident that statist intervention into the economic sphere has been followed by intervention into the life of the church. Church and state conflict is dramatically on the increase in the United States. It is logical that this should be so. If the state is sovereign, then it is lord over all things within its realm. It is necessary, then, for it to exercise its supposedly benign oversight over the life of the church.

The framers of the Constitution of the United States refused to use the terms “sovereign” or “sovereignty” in that document. The words were seen as theological, not political. Now we have a sovereign federal government, affirmed to be sovereign by the federal Supreme Court, insisting on the universal jurisdiction of the state.

The battle for the free market is but one facet of a battle against idolatry, against the claims of a false god over us. There can be no compromise in this battle. Elijah’s challenge against this new Baal, the state, must be heard: “How long halt ye between two opinions? if the LORD be God, follow him: but if Baal, then follow him” (1 Kings 18:21). ***

1.  Jethro K. Lieberman, The Tyranny of the Experts: How Professionals are Closing the Open Society (New York, NY: Walker & Co., 1970).

Article from Journal of Christian Reconstruction, Vol. 10 No. 2.

This entry was posted in All-Encompassing Gospel, Church and State, Gov't/Theonomy, Theology/Philosophy, Worldview/Culture, Z-Uncategorized and tagged . Bookmark the permalink.

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