Tom Lehman is Professor of Economics at Indiana Wesleyan University.
Gillis Harp’s “Reconsidering the Liberal Captivity of American Evangelicalism,” Christian Scholar’s Review 41:1 (Fall 2011): 51-66, touching on traditionalist versus classical liberal themes in early American evangelicalism, is provocative, and as an economist I noted several areas of agreement. However, I also wish to express counterpoints critical of some of his assumptions and argument.
Harp appears spot on that much of historical American evangelicalism, beginning with the Puritans down through the evangelical strand of Whigs, finds its roots not in the classical liberal ideas of the Enlightenment, but in a sort of paternalistic Christian collectivism/communalism of which many modern Christians are unaware. I commend him for this emphasis. I’ve always contended that evangelicals, even modern evangelicals ignorant of this tradition, are individualist-capitalist in spirit but really collectivists or paternalists at heart. I think it is important for evangelicals to be reminded of this historical tradition and the American intellectual and philosophical roots of our heritage.
Where I disagree with Harp and question his assumptions, if I’m reading him correctly, is the implied argument he makes that this communalistic/paternalistic evangelical tradition or heritage is something that Christians should celebrate and return to. I do not share his enthusiasm. I believe Harp ignores the economic and even moral damage done by well-intended paternalist or collectivist economic policies championed by these historical evangelicals, and ignores a possible reason why this evangelical movement became irrelevant or largely ignored, as he admits, in the late nineteenth and early twentieth centuries. From the Puritans to the Whigs to the Progressives, paternalistic, protectionist, and collectivist economic policies have a poor track record and almost always did more harm than good.
The Puritan’s initial starvation experience at Plymouth Rock was a direct result of communal property and the common store system, also practiced at Jamestown with even more devastating results.1 The Puritan’s attack on “usury” (i.e., lending at interest rates arbitrarily deemed “too high”) stunted the development of commercial and consumer finance for years, creating shortages in loanable funds markets due to binding interest rate caps set at no higher than about ten percent annually.2 The Puritans were generally paternalistic, and far from individualists or supporters of free markets. For some Christians to argue otherwise is misinformed. Thus, I agree with Harp on this point, but am not nearly so eager to celebrate or admire this evangelical tradition as he seems to be.
The Whigs, in part, continued the paternalism of the Puritans and were economically quite backward, Henry Clay and Abraham Lincoln included. Their support for protectionist trade policies aggravated tensions between the North and the Southand led to less efficient resource use and a reduction in overall economic well-being.3 This is also true of their support for federal “internal improvement” projects (“jobbery,” in the lexicon of the day) like the Union and Pacific Railroads which were both poorly constructed and eventually went bankrupt, compared to more successful private transcontinentals.4 Additionally, the imposition of mid-nineteenth-century laws mandating shortened factory work days for children and some adults, about which Harp admiringly cites the work of Richard Oastler, merely served to remove income options for poor families of lesser means and few alternatives, reducing their standard of living while also erecting barriers to labor competition. It is well documented that most working class families of the time, with their own children working in factories, did not favor these paternalistic laws restricting or banning child labor.5
Why it would be good for evangelical Christians to celebrate their association with these historical paternalist or collectivist movements that flew directly in the face of the advances then being made in economic science seems odd to me. Indeed, it could plausibly be argued that the links to these “backward” movements clinging to old moralistic economic dogma led evangelicals to become less relevant by the twentieth century, paving the way for thinkers like William Graham Sumner to unseat them by embracing free markets and advances in economic science (and also advances in biological-evolutionary science). Had these evangelicals taken time to understand how economics was developing as a positive science, and to relax their normative biases and take a more nuanced view of events, they might have had better opportunities to influence the debate. Whatever remained of this paternalistic and protectionist evangelical movement at the turn of the last century probably died with the ideas of William Jennings Bryan. Anything left over was likely absorbed into the Progressive movement. The Progressives, then, emerged as the opposition to individualism and laissez faire, and the Progressives’ anti-market victory in this battle during the twentieth century has not been to the benefit of evangelicals or to society and social cooperation more generally. Much better that had Sumner’s view won the day, in spite of its more secular roots.
Finally, Harp’s opening and closing references to Dave Ramsey’s support for banning check-cashing services caught my eye. To suggest, as Harp does, that some evangelicals thought Ramsey had become a “socialist” for supporting a payday loan ban is, to my mind, probably a bit of an exaggeration, though I admit to knowing none of the details. In any case, methinks Harp dost protest too much. The more important point is that, from both an economic and evangelical point of view, both Ramsey and Harp are wrong in their support for banning payday lending and “usury.” On the contrary, as I’ve written elsewhere,6 placing restraints on this form of market commerce, on the grounds of “usurious lending” or the potential for consumer debt traps, only limits the already highly con-strained economic options for the very people Ramsey and Harp ostensibly wish to protect.7 An absence of economic understanding even by educated Christians like Ramsey and Harp, leads to policy prescriptions that damage, rather than improve, the prospects of the lowest or poorest classes among us. I fail to envision how Christian traditions and morality are supported when we lay out all the limited options that low- or moderate-income consumers have, and then use force (born of paternalistic impulses) to eliminate or revoke the option they freely choose under cash-poor and credit-constrained circumstances. Both theory and evidence indicate these consumers are made worse (and certainly no better) by such well-intended but nonetheless harmful policies.8 Jesus reminds us to “count the costs” of our actions, and when it comes to economic policy, evangelicals all across the political spectrum could stand to become a bit more philosophically utilitarian (consequentialist) and less Kantian in their orientation.9
In summary, I agree with Harp that the Christian evangelical tradition has historically had more in common than is often recognized with traditionally paternalistic philosophies of communalism and collectivism in economics, and that the appeal that modern evangelicals make to the classical liberal tradition in economics might be at least partially misplaced. Whether this tradition has held American evangelicalism “captive” is probably debatable. However, contrary to Harp, I would warn modern evangelicals against becoming re-infatuated with this anti-market tradition, because the consequences of the paternalistic economic policies implied by this tradition have historically not been good for the supposed beneficiaries or to the broader societal reputation of evangelicals.
Cite this article
- Tom Bethel, The Noblest Triumph: Property and Prosperity Through the Ages (New York: St. Martin’s Press, 1998), 38. See also William Bradford, Of Plymouth Plantation, 1620-1647 (New York: Knopf, 2002), 116, and Thomas J. DiLorenzo, How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present (New York: Crown Forum, 2004), 57-62.
- Laurence M. Katz, Comment, “Usury Laws and the Corporate Exception,” Maryland Law Review 23 (1962), 52. See also Lendol Calder, Financing the American Dream: A Cultural His-tory of Consumer Credit (Princeton: Princeton University Press, 1999), and Christopher L. Peterson, Taming the Sharks: Towards a Cure for the High-Cost Credit Market (Akron, OH: The University of Akron Press, 2004), 77-79.
- Mark Thornton and Robert B. Ekelund, Jr., Tariffs, Blockades, and Inflation: The Economics of the Civil War (Wilmington, DE: Scholarly Resources Inc., 2004), 1-27.
- Burton W. Folsom, Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America (Herndon, VA: Young America’s Foundation, 1991), 17-39. DiLorenzo, 88-92; 112-121.
- Clark Nardinelli, Child Labor and the Industrial Revolution (Bloomington, IN: Indiana Uni-versity Press, 1990), 137-152. For a more global perspective on the economics of child labor, see also Eric V. Edmonds and Nina Pavcnik, “Child Labor and the Global Economy,” Journal of Economic Perspectives 19:1 (Winter 2005), 199-220.
- Tom Lehman, “Payday Lending and Public Policy: What Elected Officials Should Know,” Indiana Policy Review 18:2 (Spring 2007), 18-28. Tom Lehman, “In Defense of Payday Lend-ing.” The Free Market. (September 2003).
- For a fascinating discussion of the history of the economic and moral debates about interest rates and usury, particularly between Adam Smith and Jeremy Bentham, see Joseph Persky, “Retrospectives: From Usury to Interest,” Journal of Economic Perspectives 21:1 (Winter 2007), 227-236.
- John P. Caskey, “Payday Lending: New Research and the Big Question,” Federal Reserve Bank of Philadelphia, Working Paper no. 10-32 (October 2010). Donald P. Morgan and Michael R. Strain, “Payday Holiday: How Households Fare After Payday Credit Bans,” Federal Reserve Bank of New York Staff Reports, no. 309 (November 2007, revised February 2008). Donald P. Morgan, “Defining and Detecting Predatory Lending,” Federal Reserve Bank of New York Staff Reports, no. 273 (January 2007).
- Luke 14:28-30.