This weekend on Every Thought Captive for our Labor Day broadcast following on the heels of the Democratic and Republican conventions, Dr. Gary North was interviewed on Christian economics and stewardship. Why should Christians care about economics? What’s the big deal about the Federal Reserve? What will the legacy of Ron Paul be after the RNC? Click on on the embedded broadcast above to listen to this interview.
In this latest audio broadcast, I interview Dr. Gary North, the foremost living Christian economic expert of our generation, about his views on these questions. Holding a doctorate in the history of economics, Dr. North has authored over 60 books including Tools of Dominion and Political Polytheism. Dr. North also writes regularly for Tea Party Economist and LewRockwell.com. In this interview he speaks about Christian economics, the legacy of Congressman Ron Paul on the Republican Party, the Federal Reserve, inflation, and wise Christian stewardship practices. We invite you to listen to this audio interview with the embed above.
Does the mindset behind the creation of unions and the civil government’s manipulation of commerce reflect a Christian view of economics and stewardship? Below are some facts to consider on that question.
No Labor Day: Some good & bad about America’s labor system
Ever wonder why most folks take off from work on Labor Day? Doesn’t it seem like “Labor Day” would be the one day in the year that people would labor?
According to the U.S. Department of Labor, “[t]he first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.” U.S. Department of Labor, The History of Labor Day (2007). Not until 1894, however, did Congress make Labor Day a national holiday.
I’m not a fan of unions, which have a nack for increasing worker inefficiency, hiking prices, and creating arbitrary rules that hinder achievement. Here are some interesting facts relating to unions in the film industry:
- George Lucas received a fine from the Screen Actor’s Guild union for not having credits at the beginning of his movie The Empire Strikes Back. As anyone who is familiar with the Star Wars movies (and who isn’t?) knows, the films begin with scrolling text in outerspace introducing the story. The feel created by this effect would have been totally ruined by having credits at the beginning of the movie, but SAG didn’t care. Lucas was so outraged by the fine that he dropped out of the guild and has never returned.
- Peter Jackson was able to make The Lord of the Rings movies for a fraction of the price he would have paid in the United States because there are no film unions in New Zealand. He was also able to get more flexible labor hours from his crew due to the lack of unions.
- Laos, Nigeria became a booming movie-production town for Africa, releasing over 2,500 movies in 2004 alone. Nigeria employs some 200,000 film crew workers, none of which belong to a union. The films are popular with Africans and they are making money.1
Interestingly enough, American unions may literally be a God-send for up-and-coming Christian filmmakers eager to create a replacement industry. By offering flexible work hours, lower costs, and a positive team spirit, independent Christian filmmakers have the potential of out-producing Hollywood. This could also potentially be replicated in other industries where unions dominate. So perhaps we should be thankful for Labor Day and the American unions who brought it about after all.
Mission: Suicide – How America’s labor & trade policies have been on a path to kill our economy
Four years ago I wrote an article entitled Money: Made in China. Now that a recession has set in and China has become our largest creditor, the danger of America’s relationship with China has grown far more defined than it was when I initially wrote that article. As American businesses such as Google have retreated from China, the tension between the two countries bumped up a few notches.
China over the last several years has been implementing a policy called “indigenous innovation” whereby it is seeking to strengthen its own businesses and keep more of the profits for themselves.2 They’re doing this by purchasing more China-made products. Meanwhile, businesses operating in China and registered with AmCham (the American Chamber of Commerce) hold a strong lobby in Washington, and they have been arguing for more engagement with China. China’s commerce minister, Chen Deming, a few years ago warned that China “will not sit back” if the U.S. Treasury Department labels China a currency manipulator and trade sanctions follow.
Here’s the problem: American businesses operating in China as of 2010 accounted for more than 60 percent of China’s exports to the United States.3 Thus, if we decided to impose a tariff on China, we would be the ones who would suffer the most from it.
Gotcha, the Chinese may say. Chinese exporters only make 1.7 to 2 percent profit margins, so they have little to lose from a trade war.
After considering the subject more thoroughly, and reading several excellent books on the subject, I am not sure whether I would oppose free trade as much as I have in the past. In reading the excellent book Modern Times by Paul Johnson, for example, I found that he made a strong critique of American trade practices over the last hundred years. He points out that the economic problems America has faced over the last several decades have had more to do with increased labor regulation (tie-in to Labor Day) and interference with the money supply through the Federal Reserve than with opening up of free trade. Of course, that could also be because Mr. Johnson is British and he knows how intertwined Britain and America’s financial systems have been over the last century. At one point in the book, speaking about American trade policy in the era from 1914-1930, he wrote:
America’s rulers, in effect, rejected the rational laissez-faire choice of free trade and hard money and took the soft political option of protective tariffs and inflation. The domestic industries protected by the tariff, the export industries subsidized by the uneconomic loans and of course the investment bankers who floated the bonds all benefited. The losers were the population as a whole, who were denied the competitive prices produced by cheap imports, suffered from the resulting inflation, and were the universal victims of the ultimate dégringolade.4 5
Beginning in 1988, the United States entered into a series of tree trade agreements, starting first with its neighbors Canada and Mexico. President George H.W. Bush signed NAFTA (North American Free Trade Agreement) in 1992. Since the 1970’s we have become progressively more open in our trade specifically with Communist China. Businesses have been lobbying for open trade as a means of some escape from the oppressive business regulation.
Ultimately, it’s the small businesses that have suffered the most from the regulation. The larger businesses can afford to build alternative operations in foreign countries and stay afloat. The small businesses don’t have that option because they cannot afford it. They can only cutback and wait to get squashed by the competition. It’s no secret that many big businesses even lobby for more regulation of commerce for this very reason. They know that such regulation helps them stay ahead of the small businesses. It secures their dominance of a market. Thus, regulation has even become a smoke-and-mirrors mechanism for government subsidization and government-made monopolies.
If we look into the Scriptures, we observe that the picture of civil government involvement in economics is very minimalistic. The government ensures that people don’t steal from each other and that if they damage someone else’s person or property, they are required to restore the victim. Guarding from theft would entail outlawing any form of inflation to the nation’s money. But the civil government’s involvement in trying to control the economy, by policies such as tampering with labor, does not extend beyond this in the Bible. There is certainly no concept presented in Scripture of the government trying to “manage” the economy or “create jobs.” That notion came from Marxism and Darwinianism. If the government could “create jobs,” then they would be very wicked not to do it for everyone. In attempting to take-over labor, the government of America is attempting to play god.
One thing has also become increasingly embedded into my mind from just a practical standpoint: the combination of high business regulation that America has adopted when combined with free trade is a formula for suicide. We cannot regulate our businesses out the nose as we do (with everything from minimum wage laws, quotas, withdrawals, health and safety building requirements, taxes, and now health insurance requirements—not to mention the costs that unions add to the mix) and expect those business to keep up with companies doing the same thing without all the regulation in countries such as China and India.
American businesses have and will continue to move their operations (and thus their jobs) across the Pacific. In the end, it is not the wealthy who lose due to the regulation, as statists such as President Obama would have us believe. Rather, it is the middle class that hurt the most—the middle class that are losing their jobs to the cheaper Chinese. If you’ve read Steve Jobs’ biography released about a year ago, then you know just how many jobs Apple has exported to China over this very problem.
Any businesses so heavily regulated as our nation’s businesses have little choice other than to move their operations to Indo-Asia just to stay afloat. Thus, America, once the industrial leader that defeated Hitler by out-producing Germany in WWII, 65 years later manufactures precious little of its own goods. America no longer produces much that adds value to our own economy other than intellectual property (software, movies, patents, etc.). Once the Chinese and Indians become capable of producing intellectual property as well or better than we do, how will we keep our nation’s economy afloat?
This is not Mission: Difficult.
This is not Mission: Impossible.
This is Mission: Suicide.
If we are to maintain free trade with China and other countries, we must de-regulate business. We must return to God’s prescribed purpose toward’s the economy. More stopping theft and less playing god.
- Isaac Botkin, Outside Hollywood 213 (Vision Forum, 2007).(↩)
- Andrew Browne and Loretta Chao, U.S. firms feel shut out in China (Wall Street Journal, March 22, 2010).(↩)
- John Pomfret, China’s commerce minister: U.S. has the most to lose in a trade war (Washington Post, March 22, 2010).(↩)
- Paul Johnson, Modern Times 234 (HarperCollins, 2001).(↩)
- Rothbard, op. cit., 128-30.(↩)