Why understanding Economics is more important than ever

A week ago, a lot of Americans received a jolt. After the election dust settled, they realized a majority of voters don’t want to lessen the role of government in their lives. If anything, they want to see government expand.

It was (and continues to be) the talk of the airwaves and Internet. As one radio host put it, in light of the election results, what we need is significant economic education. He is right – we do.

It is a pretty grave problem. The truth is that a majority of Americans in both political parties are radically ignorant of basic economics. In numerous ways, most people in the United States have been committed to some form of economic suicide for generations. They just don’t realize the extent of it.

This is one of the main reasons we created Economics for Everybody. The long-term implications of government intervention in the economy are extremely dangerous to all of us, especially to our religious freedoms. More and more people have a sinking feeling about this. But unless they take time to learn the basics of economics, nothing will change.

What is really at stake here?

If a majority of Americans are committed to the expansion of the welfare state, it will lead to increasing poverty for all. A basic economic principle is that whatever you subsidize you get more of.

If a dad offers to give money to his kids to clean up their rooms, he’ll get cleaner rooms. In the same way, if a government offers money to its citizens when they are unemployed, it will get more unemployment. Strange as it may seem, statistics consistently bear this out. And since the government offers money for all sorts of things it shouldn’t be offering money for, it’s no wonder we are where we are. We discuss this at length in ‘Lesson 10 – The Corporate and Welfare States of America.’

Next, if a majority of Americans are committed to government intervention in business through regulation, it will lead to a shrinking business sector. The basic economic principle here is that governments are unable to make accurate economic calculations.

The whole idea behind a planned economy is that central planners know better than producers and consumers what’s good for the economy. But such an idea assumes that a few people not only can comprehend, but actually direct the unique and ever-changing choices of limitless producers and consumers better than they can themselves.

It would be like a few people telling everyone else what they should buy at a grocery store. It’s functionally impossible to know all the discrete needs and desires of that many people, so the only way to attempt it is through general rules that restrict and direct consumption for all. At a business level, such a regulatory approach always ends in more and more businesses not being able to operate profitably and shutting down, ultimately resulting in the slow strangulation of an economy. We explain exactly how it happens in ‘Lesson 8 – The Basics of Government Intervention.’

Finally, if a majority of Americans don’t understand the relationship between economic freedom and religious freedom, they will inevitably lose both. The economic principle is that we are caught in a cosmic battle that has many economic aspects: God wants us to build up a godly civilization with our resources while Satan wants to prevent us from doing so.

In an economy based on Christian principles, there is economic freedom for people to use their land, labor and capital as they see fit. It is a matter of individual stewardship based on God-given ability and property. But in an economy based on atheistic principles, the government is a tool of Satan to control the lives of individuals so that they cannot steward their resources and time for God’s Kingdom. Think of the many socialist and communist economies that persecuted tens of millions of Christians.

The fact that there is a spiritual battle going on that has economic dimensions is lost on most people. But it is the reality of this, as well as the fact of sin in the world, that is so important economically.  History reveals this to us over and over again. We explain it in greater detail in ‘Lessons 6 & 7 – A Tale of Two Theologies.’

There is, of course, even more to economics. We try to explore as many basic principles as necessary in the twelve-lesson series. Our belief is that if people go through the entire Economics for Everybody curriculum, they will be in a much better place to understand what happened last Tuesday on Election Day. They will also understand what needs to happen in the future.