THE BIBLICAL CURSE OF INFLATION: Keywords: Price controls, Kamala Harris, Inflation, stagflation, corruption, decadence, bribery, Biblical Curse, Ezequiel, Isaiah, The Parables of Jesus, Biblical Economics.

 

The road to hell is paved with politicians' promises

THE BIBLICAL CURSE OF INFLATION

A meditation on the biblical economics of inflation by Xuan Quen Santos

 

Suffer sinful nation, a people whose guilt is great,

families of evildoers with children given to corruption!...

…See how my faithful city you have turned into a prostitute!

She once was full of justice; righteousness used to dwell in her…

Your money is now worthless just like you diluted your best wine with water.

Your rulers are corrupt partners of thieves; they love bribes and chase after gifts.

…I will purge away your dross and remove all impurities from your silver.

Isaiah (1:4, 21-23, 25)

 

There is no more distressing issue in households today than monetary inflation because of the widespread impoverishment that follows. Inflation is a market issue, but it is an attack that comes from outside. In biblical times and places, it often came from the palace-temple. Six centuries before our Christian era, the prophet Ezekiel (22:20-22) warns us of the consequences of monetary inflation. “As one who gathers silver and metal such as iron, lead and tin in the middle of the crucible, and kindles fire for it to melt; so, I will gather you in my fury and in my wrath and melt you. I will gather you and blow on you in the fire of my fury, and in the midst of it you will be melted. As silver is melted in the midst of the furnace, so you will be melted in the midst of it; and you will know that I the LORD have poured out my anger on you.”  The Prophet Ezekiel was neither a banker nor minister of public finance, but he obviously knew the origin and dire consequences of monetary inflation. Money used to be gold and silver. Its amount was increased by melting low-value metals into the coins initially made of gold and silver.  By increasing -inflating- the currency, the price of everything rose -inflated- in a similar proportion. Goods were not more valuable; money became less valuable. The Prophet knew how money could be debased, how inflation was produced. He understood the market, what today´s academics call economics.

Ezekiel warns about the horrors of inflation

 Inflation not only destroys wealth; it also destroys the moral structure that sustains the economic process, and with it the welfare of the people. Modern inflation sharpens what we already knew. It divides society into two large sectors: those who produce by working and the parasites who live off what others produce. The prophet was not writing a treatise on inflation. He used it as an example of the terrible punishment for those who lose faith and forget the teachings of The Law.           

The voluntary exchange of one thing for another by two people, both expecting to benefit, is a uniquely human act. It predates civilization and is so old we have ignored it when it is one of the great advances in our long journey through history. We don´t need economists to understand it. Production, trade, weights and measures, prices, money, taxes and tributes, wealth and poverty are present in the oldest legends from the beginning of history. Taken together, these topics are what happens in the market and what today we refer to as the economic process or the economy. The market is the heart of the cities and begins at a crossroads, by a natural border, on the banks of a river or on the coast of the sea. Wherever people congregate, commerce springs up.

The market appears as a background in many of the oldest writings. The book of Revelation (18) from almost two thousand years ago has this description of the market of a great city of that time:

An ancient market in the Middle East

  “… its merchandise: cargoes of gold, silver, precious stones, pearls, fine linen, purple, silk and scarlet; all kinds of aromatic woods and all objects of ivory and all objects made of precious woods, bronze, iron, and marble; and cinnamon, fragrant spices, frankincense, perfume, myrrh, wine, olive oil; and fine flour, wheat, beasts, sheep, horses, chariots, and slaves…”

It is obvious the author knew the market well, but his writing was not a treatise on economics. His interest was in calling attention to all that would be lost in the future through corruption, the prevalent loss of faith, and for not following the teachings of The Law.

The Bible, the Holy Scriptures of the Abrahamic tradition, which is the reference framework for the three most numerous religions in the world, is not an economic treatise. It is not possible to speak of biblical economics, just as it is not possible to speak of a treatise on biblical chemistry. But there is a fundamental difference between the formal object of economics and that of chemistry.

The formal object of study of economics is the behavior of the human person. That is also the essential theme of the Holy Scriptures. Therefore, they do have a lot in common to teach as far as our own focus concerns, just as the Bible has taught about justice, jurisprudence and legislation.

From the simple reading of the Bible, it is evident their authors, their scribes and their translators in ancient times were remarkably familiar with the market and its fundamental processes. Saint Matthew had been a tax collector and possibly a money changer. Saint Luke was a highly educated physician and herbalist. Saint Paul had been a high magistrate of the Temple who later dedicated his life to the conversion of the gentiles (the non-Jewish people) preaching in cities outside of Judea where there were no synagogues; he preached “in the plazas”, an obvious reference to the markets.

Money is the unit of measure of everything in the economy

It is also evident that when they refer to an economic topic, they are not dealing with the essence of that issue. They are using it educationally for a better understanding by their original audience and for today's readers. They must have assumed the listeners were also familiar with the market and its processes.

It has been said for centuries that a parable is an earthly story with a heavenly meaning. Throughout the Bible there are over a hundred clearly identifiable parables. More than thirty-three come from the voice of the Teacher of teachers. Furthermore, about thirty-five percent of his words are his parables. They illustrate deep theological truths that have been discussed since the beginning of our era. Half of them have an economic context.

The parables of the New Testament are simple stories, with characters that are familiar to us, and with circumstances with which we can easily identify. They remain valid after two thousand years have gone by. It should not surprise anyone that more than half of them have a market context that can be easily understood as it is a common experience people of all times have. Choosing it as a vehicle not only shows His familiarity with the market process but also illuminates His implicit moral assessment of the market actors and what they do.

I do not pretend to add anything to the transcendental interpretations of the message of the parables. I just want to show, with simple logic, that much of what is claimed to be deduced from them in material matters is unfounded if the economic context is understood.

If the records of what was preached in the original languages, whatever they may have been, and the multiple translations and interpretations that exist today, are completed with the economic context that we know today, the clarity of the messages increases. If the errors and prejudices raised by the interests created from the palace and the temple against the market process are put aside, the harmony between the market and The Law is indisputable.

One of the best-known parables is "The Prodigal Son" (Luke 15:11-32). Who else but a rich businessman could be the loving, kind and exemplary father who forgives the sinful and dissolute son? Had it been a powerful king, He would have pointed it out. If the character had been someone whose riches were ill-gotten, He would have never used it to represent himself. There is no condemnation of wealth. A poor father would no doubt have done the same as the rich one; welcome, forgive and love the lost son. The mention of wealth is the necessary hyperbole to show how unimportant material possessions are when compared to the transcendental and eternal.

Another immensely popular parable is "The Good Samaritan" (Luke 10:25-37). The two characters, the victim of the robbery on the road and the one who rescues, saves and heals the victim at his own expense with unexpected generosity, are clearly traveling merchants. The story tells us that the Jewish victim is left to fend for himself on the road, possibly left to die by two other characters who should have felt a moral obligation to help. Not only were they Jews too, but one was a priest and the other a magistrate. The one who helps is a foreigner from a neighboring tribe that Jews never accepted as equals, who is also a trader. He uses his resources without expecting anything in return. He has credit with the inn-keeper, who possibly already knows him because he is on his trade route and will return. The condemnation is to the religious minister and the public servant. There is nothing but praise for the non-Jew; he is the “neighbor”. The message is precursor to the opening of the Gospel to the gentiles. Only the religious and the political characters are alien to the activities of the market.

The parable of "The Two Debtors" (Luke 7:36-47) refers to a creditor who can only be a money merchant - moneychanger and banker - or a rich merchant who has lent money at interest. For centuries, the Christian patriarchs prohibited the activity of credit and classified it as a sin using the temple provisions on usury that the Jews had established only in the family-tribe sphere, not for society in general. Interest and credit were not explainable at that time as an important part of the market and prices, but neither was it prohibited. In the parable the banker forgives the two debtors. The money lender is the figure that the Teacher of teachers chose to represent himself. There is no censorship of the credit operation, and it would be unheard of for Him to be personified in the character most vituperated by the religious establishment if there really had been some moral reason. Moreover, the parable is the answer to a Pharisee in the temple, the symbol of prejudice against credit.

The Pearl of Great Price is not that important

Likewise, the mercantile context is the essence of the shortest parable that is known as "The Pearl of Great Price" (Matthew 13:45-46). It is obvious it refers to a jewelry merchant who liquidates everything he has in order to buy the most valuable pearl. The allegory refers to all the earthly possessions of the jeweler that are given in exchange for the heavenly kingdom. There is no condemnation of the jeweler, nor his riches, not even of the sumptuous jewel that is clearly pointed out as most desirable and valuable.

No other lesson from the parables is as clear and important as the "Parable of the Talents" for understanding the market (Matthew 25:14:30). It is likely it was repeated many times in the sermons of the Teacher of teachers. Not only are there two versions of it (Luke 19:12-27) with slightly different details, but there are seven other similar references to the basic allegory of the powerful character returning to demand accountability and results from his subordinates.

Interpreting the parable in a modern and much shorter context, we can repeat the lesson as follows. A successful entrepreneur provides the necessary resources to three different managers of three of his businesses. Two of them invest and manage them well, generating good profits. The third one does not, and chooses not to face any business risks, not even to preserve the opportunity value of what was received in trust; thereby, he caused a real loss. The successful managers are rewarded and share the benefits of having multiplied the resources received. I am not going to try to describe a modern punishment comparable to the terrible punishment that the Evangelist cites for the bad administrator who did not produce a profit.

The Parable of The Talents
Entrepreneural Talent and Profits

It is absolutely clear the Preacher of preacher's fully understood the entrepreneurial function in the market as the transformation of less valuable resources into something better. There is no condemnation of profits, or criticism of the “odious lucrum" conceived by the scholastics of the Dark Ages. Moreover, profits are not only expected, but they are also demanded. In the original text, the bank and the interest appear as morally acceptable as a minimum viable alternative to invest the capital. Again, there they are -profits, the banker, credit and interest- in a positive light, in contrast to the terrible condemnation that many religious leaders continue to make of “the profit motive” and "usury". Usury originally meant only the “use” of money over time, that is, credit. Interest rates are nothing but the market prices that appear by the autonomous laws of the economic process at a given time and under given circumstances.

All the parables have multiple layers with different messages, all in harmony. I am not trying to go beyond showing that in many of them, a superficial layer is the market context in which they take place. That layer is important for better understanding the more transcendental ones that follow it. I declare my many deficiencies and faults to even try to penetrate those.

"The Parable of the Talents" has also shown a layer of great content revealed to us with the change in meaning that a single word has undergone since it was first preached. It is clear, and the second version confirms it, that the reference to talent is to a unit of money. In the version recorded in Luke 19, the reference is to “minas”, another monetary unit of much lesser value. This was understood by all who heard the gospel for many centuries.

The ancient balance, of money and for justice

Five hundred years before our era, when there were no coins but units of weight, people would have understood the reference to “talent” as the largest unit for weighing grain in the market. The price of that weight of grain gradually became the price of silver or gold for which it was sold. When the coins appeared under the Greek, Persian and Roman commerce, “talent” as a monetary unit was already established in the market. Talent: from the original Greek “tálanton” was initially the plate of the balanced scales where what was to be weighed was placed. But that change over time did not end there.

As the market forgot the minas and talents, shekels, drachmas, dinars and many more as monetary units, the “talent” of the Holy Scriptures took on a new dimension. Since then, talent is a special ability, (1 Corinthians 12:4-11) a gift received, the intellectual capacity that every person has, the facility to develop a new skill, ingenuity, intelligence and understanding. That is the meaning the word talent has today in all the languages in which it has been inserted.

The literal message today of "The Parable of the Talents" is the moral duty of those who have received valuable resources to put them to beneficial use and thus increase their value by producing benefits, gains or profits. For those who have already spent a day in the market, it is obvious that entrepreneurs make a profit only if their talents benefit others with whom they traded. They benefit their clients.

For entrepreneurs, the instruction that favorably sanctions their role in the economic process is clear. But it goes beyond. With the new meaning of “talent” as a gift received by each person, it is not only entrepreneurs to whom the essence of this lesson applies. It concerns all the people; all of us.

Each one of us must make the best possible use of the gifts received for the benefit of himself and of others. A moral imperative appears here that is nothing more than a principle that moves us to act according to reason and practical logic. To put it in simpler words, here is a commandment.

The Holy Scriptures contain passages describing extraordinary and wonderful events that cannot be explained by reason or science. However, in their narrative there are profound lessons. Regarding the topic that concerns us, which is the economic process, an obvious truth has remained hidden by our rational focus on the facts described and not on their symbolism. Let the previously described example of the meaning of "talent" serve as evidence that this hidden dimension exists.

There are many more essential economic elements that allow markets to function with efficiency and justice, such as the values of a generalized expectation of truth and honesty, and particularly, respect to other people’s property. The Law summarized in the commandments needs no elaboration in this respect. Another set of elements, albeit more mundane, are the units of measurement, such as weights, liquid volume and lengths. Deuteronomy 25:13-16 warns, “You shall not have in your bag differing weights, a heavy and a light. You shall not have in your house differing measures, a large and a small. You shall have a perfect and just weight, a perfect and just measure, that your days may be lengthened in the land which the LORD your God is giving you. For all who do such things, all who behave unrighteously, are an abomination to the LORD your God.”  Leviticus 19:35-36 adds, "You shall do no injustice in judgment, in measurement of length, weight, or volume. You shall have honest scales, honest weights, an honest ephah, and an honest hin.”  The Holy Scriptures recorded the oversight of the system of units of measurement as a responsibility of the Levite Magistrates of the Temple. Whoever intentionally uses false units is clearly lying, cheating and stealing.

Which is the most important unit of measurement in any market?

It was also the responsibility of the authorities of the palace-temple system of antiquity. This unit affects all buyers and all sellers; it covers all the services and goods produced, exchanged, saved and consumed in a country. It affects all current transactions as well as all contracts to be completed in the future. It is also the carrier of all the information that the economy needs to function. It serves to protect the wealth of all citizens and to transfer it to the next generation. I am referring to the monetary systems and all their fractional units. The authorities of the palace-temple were not only custodians and judges of money; they were its producers. In the case of the ancient Israelites, they not only kept the treasure, but also minted the “official” money that was the only authorized for all religious obligations: taxes, offerings, sacrifices. Inevitably, this monopoly led to abuse. The very same officers in charge of the “purity” of the metal used in the coins, the very same police and judges in charge of punishing counterfeiters, thieves and debtors, committed the crime identified by Isaiah and Ezekiel: They debased the money by melting the pure silver, gold or copper coins and adding lesser value metals (impurities or dross). When they milled the new impure coins, they had produced more coins! Unsuspecting people accepted them and used them. Soon, all the prices in the market were rising! Later generations identified this disaster with the word inflation. What is inflated is the number of coins introduced in the market, but we only suspect it as we see it in price inflation. Eventually, people figure out what is happening despite the mysterious explanations that the palace-temple magistrates declare. Chaos and poverty follow.

Isaiah receives the warnings from above

Is it clear now why the Prophets were critical? The government made money worthless just like crooked vendors diluting the best wine with water. The rulers were corrupt and acted like thieves. The entire economic system collapsed.

Price controls bring rationing - 1978

The hypocrisy of price controls

After four years of the Biden-Harris “Great Inflation”, the Harris-Walz radical socialist ticket has made public its economic policy proposals: persecuting businesses for price-gouging and establishing price caps. These gimmicks are better known as “price controls”. Forty centuries of price controls have not been sufficient lessons about their ineffectiveness, nor about the more damaging consequences they bring. They are nothing more than a hypocritical lie politicians have used to avoid their responsibility in having caused inflation in the first place. They do not work, and the remedy is worse than the disease.

Confessions of failure - Price controls do not work

Price controls may have been justified during the non-market economies of war times. In peace times, they were imposed by the Nixon and Carter administrations which cost them their mandates. Harris-Walz would do well to study the official reports of the times, or the memoirs of those that did learn the lesson after their failure. Price controls not only distort the value of the information contained in the prices, which leads to large errors, but also leads to an immediate decrease in the production of wealth and even the closure of numerous businesses. The literature and theory about it leave no doubt. There are two books that remain the best sources on the absurdity of price controls since antiquity. The first was published in 1974 under the name “Must History Repeat Itself?” Its author, Antony Fisher (1915-1988) was a successful British businessman who devoted a large part of his fortune to creating economic research centers and promoting the market economy. This includes the Economic Affairs Institute, EAI, of London, which was instrumental in the economic policies adopted by Prime Minister Margaret Thatcher. The second is a publication of The Heritage Foundation titled "Forty Centuries of Wage & Price Controls: How Not to Fight Inflation” by Robert Schuettinger and Eamonn Butler (1979).

 

Rationing ends in waste and in anger

Confessions of a Price-Controller

 

Chapter 19 of the Heritage Foundation report is titled “The Economic Effects of Wage and Price Controls”. It has a critical review of the conclusions of the book “Confessions of a Price Controller” (1974) by C. Jackson Grayson, Jr., who was Chairman of the Price Commission under Phase II of the Nixon Stabilization Policy. His confessions begin with this remark: “As a result of my sixteen months as a price controller, I can list seven ways that controls interfere negatively with the market system and hasten its metamorphosis into a centralized economy.”  I will limit myself to listing his titles. Common sense does not require much elaboration.

 

·        Controls lead to distortions in the market system.

·        Controls penalize those who wish to claim non-inflationary wage or price increases.

·        Controls negate the profit principle.

·        Controls can be used for non-economic motives.

·        Controls engender comfortable attitudes.

·        The regulatory body becomes more important than the market.

·        Controls draw attention away from the real causes of inflation.

 

Real women get angry when the food is scarce and too expensive

One final thought. We were fooled once with Obama; we were fooled again with Biden. Are we going to be fooled again with Harris? It is up to you.