Capitalism, The Bible and a Wealth Tax

 The Bible in American Politics

Today, many Americans take what they claim are biblical positions on important, political questions. Some claim to be Christian Nationalists (which is a little like claiming to be a atheistic pope), while others take allegedly biblical positions on specific issues like abortion or sexual identity. So, it may be worthwhile to ask what the biblical tradition has to say about one of the key elements of our society, which is the capitalist organization of our economy or as some prefer to call it, the “free enterprise” system.

A Central Idea in American Capitalism

One of the central ideas of American capitalism is that the owners of a productive resource are entitled to all of the profits from the productive use of the resource. The owner of a farm is entitled to sell or consume all of whatever the farm produces, and the owner of a factory is entitled to the profit from the sale of the factory’s products without restriction.  As we see it, an owner’s right to the products of a resource that he/she owns is absolute, and ownership does not impose any social responsibility. A farmer or factory owner may choose to help needy members of his/her community, but he/she is not required to do so.

The Biblical Approach

The Bible rejects the idea that ownership of a resource imposes no social responsibility. The Bible says clearly that owners are required to share the products of the resources they own with those who are not owners. Ownership resides ultimately with the community, and the community has an interest in the welfare of all of its members. So, The Bible says in Leviticus Chapter 19:

When you reap the harvest of your land, you shall not reap all the way to the edges of your field or gather the gleanings of your harvest. You shall not pick your vineyard bare or gather the fallen fruit of your vineyard; you shall leave them for the poor and the stranger.

Sharing the products of your land is not voluntary. It is required as a condition of ownership. The Bible is not hostile to profit. The owner of a resource is allowed to profit from it, but his/her right to profit is not absolute. It comes with a responsibility to contribute to the welfare of the whole community.  

Humane Capitalism and Democracy

Capitalism as a system for allocating resources and motivating productive activity is compatible with either the current American view or the biblical view, but the biblical view is more humane and in addition, promotes social stability. Capitalism left to itself appears to lead to an ever-increasing concentration of wealth in a small, wealthy upper class. Capitalism does not necessarily lead to the immiseration of the working class as Karl Marx predicted because capitalism drives technological improvements that increase the total wealth of a society. However, capitalism does appear to drive increasing concentration of wealth in a small upper class. 

The economist Charles Picketty has proposed that the increasing concentration of wealth  may be expressed as a function of the relationship between the rate of growth of the economy and the rate of return to capital investment. As long as the rate of return to capital investment is greater than the rate of growth of the economy, capital's share of the national income will continue to increase, and the distribution of wealth will become ever more inequitable. This is an inherent feature of the capitalist system, and its consequences can be avoided only through deliberate societal intervention. He suggests a small wealth tax as a useful way to prevent the increasing concentration of wealth.

Such a wealth tax may be seen as a modern form of The Bible's commandment to leave some of the harvest for the poor. It recognizes that the ownership of wealth (or as we say "capital") comes with a responsibility to share it equitably and that a society has an interest in promoting social justice.  A capitalist system cannot demand that wealth be shared equally among all members of a society. However, a capitalist system can and should demand that the amount of inequality be limited.

We can see today some of the political results of our society's failure to limit the growth of inequality in the distribution of wealth. Working class people see that the system is rigged against them and that neither party addresses their concerns effectively. We have become so deeply divided politically that our government is almost incapable of democratic action, and that has led to the emergence of authoritarian presidents who try to bypass Congress and to govern through executive orders. This appears to validate Martin Wolf's contention that capitalism is compatible with democracy only if the capitalism delivers a decent level of living for most people If we really want to preserve our democracy, we should pay attention to the biblical view that the owners of wealth have a responsibility to share it.