Work and Its Rewards

The bad economic news has experts stumped. New home sales have dropped; commercial real estate rates are flat; and businesses have scaled back investment plans. Yet interest rates are the lowest they've been in years. And President Clinton's entire economic policy was based on the premise that lower interest rates would boost buying and investments—spurring economic growth. So what went wrong? As a New York Times headline puts it, "Where's the Boom?" The answer is two words: fear and uncertainty. People are worried about the economic fall-out of the administration's new policies. They won't commit themselves to any major expenses until they see the effects of things like the new health care plan. The dynamic at work here concerns a fundamental right: the right to private property. In the economic arena, property is defined broadly: It means anything you can exchange in the marketplace. Not just commodities to sell or money to invest but also things like education and ideas; even time and energy. The right to property means the right to exchange any of your assets in the marketplace for something else you value more. Its operative meaning is that reward is related to effort—that people who are willing to work hard, to invest their time and money, have a right to the returns on their labor. A free economy is one where this right is respected: where individuals enjoy freedom, within the law, to make their own decisions about what to offer in the marketplace, and what terms they will accept in exchange. Where individuals decide what work they will do based on what rewards they expect in return. But in a controlled economy, such as socialism, the government makes these decisions. That's why socialist economies are crumbling all across the globe: When rewards are not related to work—when they are set by a centralized authority instead—initiative is undercut. But it doesn't take full-blown socialism to undercut initiative. We're seeing it happen right here. Our own government is nibbling away at property rights bit by bit—by imposing costly regulations and heavy taxes that cut into the rewards of labor. This explains why there's no boom—why even low interest rates aren't enticing people to buy and invest. In the current political climate, we cannot be sure what new regulations and taxes are coming down the pike. As a result, we cannot make wise decisions about where to allocate our assets. The returns on work and investment have become uncertain. This situation is fundamentally unjust. As Calvin Beisner points out in Prosperity and Poverty, the Bible affirms the right to property—most clearly in the Eighth Commandment, which forbids stealing. We all have a right to the fruits of our labor, and anyone who takes those fruits away without our consent commits an injustice—whether it's a thief, an employer who underpays his workers, or a government that imposes excessive taxes and regulations. If we really want to see a boom, we need to relearn the economic lessons taught in the Bible. To respect work and property. And to practice economic justice.

11/1/93