Tag Archives: Inequality

Why I Don’t Envy the Rich

Big house class envy

If you don’t subscribe to the idea that capitalism is the only moral economic system, an idea boldly proclaimed by Christians infatuated with Ayn Rand’s philosophy, and you dare mention inequality, you will probably be accused of class envy. Or, you will be labeled a socialist. It matters not to these ideologues that you reject socialism outright.

By almost any standard of measure, I am rich when compared to the vast majority of humans who have ever lived. And so are most Americans. So, when anyone accuses me of class envy, they must be referring to an envy of those richer than I am.

But I don’t envy people who have more wealth than me because the Bible gives me many reasons not to. I will mention only a few.

Perhaps the most obvious reason is the Bible’s prohibition of covetousness (Exodus 20:17). Riches can become an idol.

Seeking riches will often wear us out so that we have little time or energy to pursue God’s will (Proverbs 23:4,5). Wisdom bids us to spend our time wisely, storing up treasure in heaven instead of storing up treasure on earth (Matthew 6:19-21).

Why would any Christian envy those richer than themselves given the potential risk described in 1 Timothy 6:9-10?

People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

I don’t envy people who are richer than me because I already am tempted to depend on wealth rather than God for my security:

The wealth of the rich is their fortified city; they imagine it an unscalable wall (Proverbs 18:11).

I don’t envy the rich because, unless I have been rich toward God, any treasure stored on earth is useless on the night my life is demanded from me (Luke 12:13-21).

I don’t envy the rich because, often, the fortunes of the rich and the poor are reversed in eternity.

Looking at his disciples, he said:

Blessed are you who are poor, for yours is the kingdom of God.
Blessed are you who hunger now, for you will be satisfied.
Blessed are you who weep now, for you will laugh.
Blessed are you when people hate you, when they exclude you and insult you
and reject your name as evil, because of the Son of Man.

Rejoice in that day and leap for joy, because great is your reward in heaven. For that is how their ancestors treated the prophets.

But woe to you who are rich, for you have already received your comfort.

Woe to you who are well fed now, for you will go hungry.
Woe to you who laugh now, for you will mourn and weep.
Woe to you when everyone speaks well of you,
for that is how their ancestors treated the false prophets. Luke 6:20-26

Jesus provides convincing evidence of the power of wealth to turn hearts away from God. The beatitudes and woes are specific genres in the Greek and Jewish worlds. Beatitudes and woes function as congratulations and condolences in the present for certain outcomes in the future.1

Though it is possible with God for a rich man to enter the kingdom of God (Matthew 19:26), Jesus clearly states that wealth becomes an obstacle for many a rich man or woman (Matthew 19:21-25).

The rich don’t merit our envy, but some rich people deserve our pity.

Did you like this article? Check out my book, The Narrow Road: Loving God In a World Devoted to Money, on Amazon.


  1. Charles H. Talbert, Reading Luke, (New York: Crossroad, 1982), 69-70.

What Really Causes Inequality?

Inequality sign

Few topics invoke a maddening response like income and wealth inequality does. Just as Pavlov’s dogs salivated in response not only to food but also to stimuli (like lab coats and bells) associated with food, the mere mention of inequality causes many of us to salivate at the opportunity to make our ideological opponents look stupid or immoral.

Too many of us try to prove our self-proclaimed intellectual or moral superiority by describing our political adversaries either as jealous of the rich or as greedy. Both sides accuse the other of thievery.

It seems that underneath the anger lie the assumptions that the battle is about capitalism and socialism or about justice and fairness.

There really isn’t much discussion about inequality because both sides hijack the concept to argue their ideology.

Hear No Evil

When deeply held beliefs are threatened, our tendency is to conveniently ignore the arguments of those who disagree with us. Emboldened by our ideology, we give much consideration to the real evil we see in others but dismiss as imaginary the evil they see in us. We validate our arguments by focusing only on the facts that support our case while neglecting facts that undermine our worldview. And so, with civil discourse a thing of the past, we speak evil of others.

Inequality’s Lessons

Wealth and income inequality reveal the natural outcomes of human action, both good and evil.

Inequality validates the fact that we reap what we sow.

The more we work the more we produce. The better we work the more we produce per unit of time. Over time, skilled and diligent workers will attain more wealth than unskilled and lazy workers.

Inequality results from voluntary transfers of wealth.

If you produce something that large numbers of people want to buy at a price that gives you profit, you will attain much wealth as purchasers willingly give you their money to obtain your product. Even some monopolies involve voluntary wealth transfers. For example, you may have a monopoly because you have patented an invention. This is a monopoly we accept because it rewards innovation that benefits society and involves voluntary transactions. Likewise, we accept the monopoly that NBA and MLB players have because we want to watch the best athletes. The key point is that these wealth transfers are voluntary choices made with sufficient information.

Inequality results from involuntary transfers of wealth.

The Bible clearly states that God brings judgment on those who steal by force or deception. Our government grants monopolies and rents to special interests, bails out banks, practices financial repression and champions our trade deficit—all of which result in involuntary transfers of wealth from the non-rich to the rich.

But this is where defenders of capitalism and the conservative cause sometimes go off the rails. It is not sufficient to blame unjust inequality on government intervention in the economy. We must also hold accountable those who benefit from those interventions and those who take advantage of lax government oversight of the markets to transfer wealth to themselves. We must not use the fact that voluntary (and moral) transfers of wealth are commonplace to absolve the sins of the rich and powerful.

Here’s the problem as I see it. Capitalists err when they think that immoral wealth transfers to the rich only occur because of government intervention in the markets (because of crony capitalism). So, in their minds, the rich who don’t have a direct connection with government officials are off the hook. Many capitalists have imagined a self-regulating, laissez-faire free market in which no one can get away with financial sins. Therefore government regulation, particularly in the financial markets, becomes an object of scorn instead of a protection sanctioned by God.

Socialists make an equally grave error. They incorrectly see the government not as a major cause of inequality, but as its solution. This leads to the ludicrous conclusion that wealth transfers from the rich will solve the problem of inequality their big-government policies caused in the first place.

Hiding in Plain Sight

Increasing inequality is a red flag. It warns us of impending danger. Increasing inequality, much like a dead canary on the floor of our economic mine, beckons us to heed its warning that our economy is poisoned. Sadly, we either ignore the dead canary or we misdiagnose the cause of death. Debt, theft and corruption poisoned the canary. It will poison our society if we don’t wake up. We need to call out those who have done this, irrespective of their ideology. We need to reverse course.

What Really Causes Inequality?

The Bible doesn’t hide the answer to this question, but boldly proclaims it for all to see. Sin causes inequality. Our greed and our laziness cause it. So do covetousness and theft. Oppression, indebtedness, and deception cause it. Defending transgressors with our ideology instead of defending the weak and needy they subdue cause it.

The Bible tells us how to deal with economic sin. It tells us to reject the “eat drink and be merry for tomorrow we die” attitude. It tells us to be rich toward God and acknowledge that he owns everything.

The Bible warns us to stop excusing our economic sins while vilifying others for theirs.

Will our society listen?

Feeling Repressed?

Do you feel repressed? No? Well, maybe you should.

Please let me explain. If you live in a nation that has a central bank (and who doesn’t?) then you are probably subjected to some form of financial repression.

Governments spend money on wars or the preparation for war and on social programs. Governments spend a lot of money. Trouble is, they don’t have any money. But you do. You have money because you worked and provided a tangible good or service for which someone else was willing to pay you.

Since the government has no money they get it from you through taxation or through borrowing. Governments issue bonds that people purchase and in return the government pays back the bondholders both principal and interest. So, where does the government get the money to pay back its creditors?

Tax increases are obvious and unpopular so governments usually pay back bondholders by selling yet more bonds. As long as the government can find buyers for its debt, then its leaders are lulled into thinking they need not raise taxes or cut spending.1  Instead, government debt is continuously increased. Eventually paying even the interest on all the debt becomes burdensome. 2

There are a few ways a government can reduce its debt. Economic growth and the increased taxes that accompany it is one way. A two-pronged approach of raising taxes and decreasing spending is the most obvious solution, but tax increases are opposed by one side as vehemently as spending decreases are by the other. Outright default or restructuring of debt is not an avenue that the U.S. is willing to go down at this point.

What if there was another way to pay off the debt? What if there was some sort of “hidden tax” that the government could levy to pay down its debt? There is. It’s called financial repression.

What Is Financial Repression?

Financial repression refers to methods used by governments and central banks to liquidate public and private debts and ease the burden of servicing those debts following periods of war or financial crisis.3  Governments promote monetary policies that favor debtors because they themselves are debtors.

Financial repression includes but is not limited to the following: capping interest rates banks can pay on savings deposits, interest rates for loans capped through the central bank’s target interest rate, and requiring pension funds to hold government debt.4  All of these actions direct funds to government that would normally flow elsewhere. It makes borrowing cheap for government.

But when the Federal Reserve talks about interest rates it doesn’t mention anything about trying to reduce government debt or financial repression. Instead, they base their monetary policy on “promoting maximum employment, stable prices, and moderate long-term interest rates.” They believe their mandate is best accomplished by monetary policy that has a 2% rate of inflation as its goal.5  Setting interest rates charged to banks near zero for the past seven years has been an attempt to stimulate the economy and increase employment.

So why do I believe that Fed policy is, in fact, financial repression and not economic stimulus?


  • First, their policy is based on the erroneous belief that demand creates supply and the irrational fear that deflation is the worst thing that can happen to an economy. In short, I don’t believe their policies can accomplish their stated purpose.
  • Second, the fact is, paying interest on our nation’s debt has already reached the point of being burdensome. The only rate of interest we can really afford is 0%. Therefore it is imperative that interests rates be kept near zero.
  • Third, employing quantitative easing (QE) proves how desperate the government is to keep interest rates low. When the Fed buys government bonds from banks in large amounts, the interest rate on bonds naturally goes down. Therefore, the government doesn’t have to offer higher rates to attract buyers (creditors) so the interest burden on its debt is less than if interest rates were higher. The Fed creates the artificial demand for its own debt and keeps interest rates down by printing money! It is only incidental that the fed hopes the money will circulate causing the economy to grow yielding more taxes to reduce the debt.
Why Use the Term Financial Repression?

So, you may ask, why use the term financial repression? Who gets hurt when the government and central bank intervene in the marketplace in this manner?

  • If there is any inflation at all, anyone who saves will see the purchasing power of his savings erode. Retirees are especially vulnerable because they are usually not in a position to put their money into higher yield, higher risk investments such as stocks that have the potential for large losses.
  • People who live within their means are forced to subsidize spendthrifts. Not only do Fed policies reduce the debt of the government, they reduce the debt of private individuals and corporations as well which have reached record levels in the last decade. The Fed’s policies make it possible for borrowers to get their hands on money at a lower interest rate than they could in a free market. A lower interest rate is forced upon savers who, without such interference, would receive a higher rate of interest from banks competing for deposits. This is not wealth creation; this is yet another example of wealth transferred from one group to another.
  • The economy as a whole suffers when financial repression is employed. Inequality rises when capital flows into stocks, not solely based on value, but because other alternative places to park money yield no return thanks to the Federal Reserve. Then, of course, prices are bid up and a bubble forms.  The system is set up in favor of the rich who have access to the first use of capital.6 When the bubble pops, capital is wiped out having served little purpose in growing the economy.  Then, the Fed and the Treasury bail out the financial sector.
  • Unemployed workers are harmed when they can only find part-time work or work at a lower wage because capital has been funneled into non-productive asset bubbles instead of being used to build factories or start new businesses.
  • Proponents of current monetary policy would argue that low-interest rates allow more people to obtain a home mortgage. Aside from the fact that indebting yourself for most of your working life might not be a good idea, the Federal Reserve’s policies essentially remove an important option for many people – to wait until they have saved more money. People who want to buy a home are harmed as the government entices them to borrow by offering low interest rates and tax incentives, and by producing asset bubbles prompting people to buy before they would normally for fear of being priced out of the market. This is especially true during a period of stagnating wages that are also a direct result of the same Fed policies.

Financial repression punishes you for saving, rewards you for going into debt, increases inequality, provides a disincentive for elected officials to balance the national budget, is a deceptive way to fund government spending, and tends to replace unemployment with underemployment. It produces a boom-bust economic cycle and then is offered as additional medicine to cure the diseases it caused in the first place.

On second thought, if you are retired or you live within your means or you are a member of the future generation who will more than likely pay the highest price for the Fed’s misguided policies, then maybe you shouldn’t feel repressed. The term is too vague. Maybe you should feel like someone who has been forced to contribute to someone else’s prosperity and later forced to suffer the consequences of their financial folly when the economy crashes because borrowers’ short-term gains came at the expense of long-term investment in the economy.



  1. In the case of the wars in Iraq and Afghanistan, taxes were decreased and spending increased. Evidently it was believed that the tax cuts would increase tax revenues from individuals and corporations due to economic growth enough to offset the cost of the wars.  It didn’t turn out that way.
  2. Anyone with substantial credit card debt knows this. The difference between the credit card holder and the government is that the government can lower to zero the percentage interest rate it pays on the balance owed.
  3. “Financial Repression Redux”, Finance & Development, June 2011, Vol. 48, Carmen M. Reinhart, Jacob F. Kirkegaard, and M. Belen Sbrancia
  4. “The Liquidation of Government Debt” Carmen M. Reinhart, M. Belen Sbrancia, NBER Working Paper 16893
  5. “Statement on Longer-Run Goals and Monetary Policy Strategy”
  6. Read about the Cantillon Effect in my blog – Inequality, Part 3