KISS Principles: American Free Markets and Christianity

There seems to be a growing awakening within the American Judeo-Christian ministry that something is horribly wrong about motives and intentions of the radical leftists who are driving America away from its Judeo-Christian roots and into the darkness and abyss that is aggressive secularism. Talk about the America of the founding, and ‘founding principles’, and the spirit of the Declaration of Independence is on the rise. This is all to the good. Sadly, however, there always seems to be reluctance among Christian leaders to go all the way to a full-throated endorsement of the American free market system that goes hand-in-hand with those founding principles and the spirit of the Declaration.

Free markets, competition, and the rule of law spring from profoundly Christian concepts, and when honored and supported as ‘founding principles’ they have been proven to advance humanity beyond material constraints in virtually every aspect of human life. This advance beyond material constraints is itself what frees humanity to ponder more deeply the spiritual dimension, even essence, of life—which is exactly what Christianity should support.

Unfortunately, much of today’s ministry seems to voice a message along the lines that ‘yes, we are all created equal by one Creator, and we have from Him inalienable rights to life, liberty and the pursuit of happiness…….BUT…… ‘profit’ is a dirty word, and salaries are too high, and nobody ought to be buying or even wanting all these unnecessary material things.”

Let’s apply the KISS principle.

“Business” is the meeting of someone else’s need in a way that is so valuable to them that they will pay you for it, and pay you enough to encourage you to keep doing so.

“Profit” is that is that portion of what they pay you that encourages you to keep doing what you’re doing.

Meeting someone else’s need is profoundly Christian. The rest of business, including the concept of profit, isn’t evil—it is just the operation of applied common sense.

The Hamburger Example

I make the best hamburger ever. Friends and family rave every time I make them. They’ve never had anything that compares. So they tell me to start a business—to meet lots of people’s needs for food in the form of good hamburgers.

I rent a restaurant space; buy a grill and charcoal; buy meat, buns, condiments and my special ingredients. I can make a hamburger at a cost to me of $3.50. I sell it to you for $3.50. I can pay my bills for the cost of the hamburger, but there is nothing left for me to feed myself, buy clothes, get an apartment, buy a car, etc. There is no reason for me to keep working to supply hamburgers if there is no ‘profit’.

So I sell it to you for $4.50. Now I have a dollar ‘profit’, and that starts to encourage me to keep making and selling hamburgers. If I sell 100 hamburgers, I can have $100 for my own needs.

If word gets out and everyone wants my hamburgers, I can’t make more than 100 a week by myself, so my desire to supply great hamburgers as my ‘business’ has just created a job! I have to hire people to help me make them.

But I find out if I offer to pay my helpers $7.50 per hour, I don’t get very good help. They make too many mistakes; the hamburgers don’t come out right; the customers stop buying. So I need to get people who really care about making my hamburgers the way they are supposed to be made, but all of those kinds of people are employed elsewhere, making about $8.00 per hour. To convince them to come and work with me, I have to offer them $9.00 per hour.

Things are going great, but it turns out I am an evil, greedy bastard of the type caricatured by Hollywood, and I want even more profit. So I decide to charge you $13.50 for my hamburger. That’ll give me $10 in profit on every hamburger! I’ll be rolling in money!

Well, maybe for awhile. But in a free market operating under the rule of law, my greed is irrelevant; it is trumped by the free actions of others. Many of you won’t buy my hamburger for $13.50. It’s good, but not that good. So I won’t sell as many. And somebody else will make hamburgers and say they may not be quite as good as the one that costs $13.50, but they are good and they only cost $5.00. So I’ll sell even less as customers leave me to go buy the $5.00 hamburger. My ‘excessive profits’ can’t possibly last in a free market operating under the rule of law. (Now if I can bribe the government to shut down all the other hamburger makers for OSHA violations, or bribe the meat supplier to stop supplying the other hamburger makers, then maybe I can continue selling my $13.50 hamburger. But that’s the opposite of the rule of law).

Now let’s go back to my employees making $9.00 per hour. Should there be a hue and cry from the pulpit about the outrageous salary of $9.00 per hour when nobody needs or should want more than $7.50 per hour? Why? Nobody made me offer $9.00 per hour; I did it because I needed the best help possible to make my hamburgers. The people I hired earned the right to make more money because they are better and more reliable than the people available for less. In short, free market competition made me do all this, and the recipients of $9.00 per hour are the beneficiaries of this competition.

Let’s also look at my choices once my $13.50 hamburger is faced with competition. If the rule of law prevents me from dishonest methods of competition, my only choices are going to be to lower the price of my hamburger so you’ll start buying again, or improve it enough to convince you it’s still worth what I’m charging. Probably I’ll have to do a little of both—and I’ll end up trying to sell the hamburger for maybe $6.00 (still more than the competitor), but I’ll try to convince you my hamburger is worth the extra $1.00.

What’s the result of this competition to you, the consumer who needs food? Better hamburgers and more choices of hamburgers at different price points. You win in every way.

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These simple principles apply to every business. The numbers get larger in many industries because the cost of producing the product or service is much higher than a simple hamburger. The cost of producing oil—finding it, drilling for it, recovering it, shipping it, refining it, distributing it—is exponentially higher than producing hamburgers. But the principles are the same. Oil company ‘profits’ are what impel them to keep doing what they are doing. Oil company executives are paid what they are paid because oil companies must compete for the best talent possible in order to produce oil faster, better and cheaper than their competitors.

So let the free market work with full-throated support from Judeo-Christian leaders. Support also competition and the rule of law by which the bad apples are culled over time.

At any one snapshot moment in time, there will inevitably be ‘businesses’ who may seem to be making more ‘profit’ than seems reasonable to an observer, and there will be dishonest and otherwise immoral behavior on display from time to time. This has nothing to do with the free market system—the same behavior can be found in government, education, the military, and yes, the ministry. It has to do with the human condition, and the need for improvements in individual character (sometimes referred to in Judeo-Christian theology as working out salvation).

There seems always to be a dangerous tendency among Judeo-Christian authorities to see evil and get right to the doorstep of denouncing it, but then backing off into some notion that, well, maybe the evil has a valid point in some ways. No. Evil is evil. Socialism is evil. Greed and dishonesty is not a collectivist problem or an economic system problem. It is an individual problem. Address it at the individual level, and the system will be fine; it will thrive.

American free markets and Christianity should be 100% allies, not tentative, distrustful societal co-habitants.

Paul Gable

July 30, 2010