What is the first principle of economics? Some economists will claim that it’s supply and demand, while others insist that it’s scarcity or the division of labor. The first principle of economics is “thou shalt not steal.”
The word economics is derived from two Greek words: oikos, meaning “house,” and nomos, meaning “law.” Combined we get “rules or laws of the house.”
Economics is ethical before it is practical. This follows the older definition of the word “economy” found in Noah Webster’s 1828 American Dictionary of the English Language: “Economy—Primarily, the management, regulation and government of a family or the concerns of a household.” The use of “political economy” as a definition does not appear until the eighth and ninth entries, and yet it’s the primary definition today.
Almost all modern definitions of economics, like contemporary definitions of “government,” assume that the State, civil government, is the starting point in understanding economic theory and practice. To grasp these, so the argument goes, the role the State plays in economic decision making in the allocation of scarce resources must first be considered. For many, this is a reasonable and moral starting point when resources are scarce and people have needs.
On the other side of the economic spectrum, classical liberals, libertarians, anarcho-capitalists, and even some conservatives contend that the means of production should be privately owned, economic decisions also should be made privately with goods and services exchanged in a free market with little or no positive (active) state intervention. The role of civil government in economic matters should be minimal, being limited to the protection of individual rights and property.
Modern economic theory presupposes that markets need to be regulated so there will be a “just” accounting for everyone. If there is inflation (an increase in the money supply resulting in higher prices), interest rates are raised and existing and future assets are diluted in value. If the economy is sluggish, governments will increase the supply of money to stimulate growth. If one segment of society is being left behind economically, taxes will be raised and income redistributed to smooth out the inequities in the name of “social justice.”
The advocates of a free market and those who declare for a managed market claim to promote “justice” with their policies. There is little argument over wanting to establish a just market place, the question is, how do we account for justice? What is its source? Mutual consent? Public opinion? Enlightened self-interest?
Those involved in economic transactions believe and hope for an agreed upon set of rules (laws) that apply to all equally, especially since “we live in an imperfect universe.” Like reason and justice, how do we account for the validity of these rules?
The Bible begins with two uncontested presuppositions: First, God exists, and, second, He is the Creator of “the heavens and the earth” (Gen. 1:1). A third presupposition logically follows from the first two: “The earth is the LORD’s and all it contains” (Ps. 24:1; see 1 Cor. 10:26). Not only the land, but the stuff of creation also belongs to God: “For every beast of the forest is Mine, the cattle on a thousand hills” (Ps. 50:10).
Private (personal) property rights are based on the fact that God is the prior owner who delegates a derivative ownership to His creation…
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