The Poverty of Nations: A Sustainable Solution is an ambitious book. Wayne Grudem (theologian) and Barry Asmus (economist) claim to put forward a list of 78 traits which, if incorporated at a national level, will bring about a solution to poverty. The book is an economic and moral/biblical treatise aimed at stamping out poverty through the production of goods and the integration of morality into global economic practice. Here, I’ll analyze it from its two primary thrusts: economic and moral. Then, we’ll discuss some of the issues involved in a book of this scope.
It is worth noting up front that I have a BS in Social Studies and had numerous classes on economics and international economics at a college level. This doesn’t make me an expert, but I think it allows me to take a decently accurate look at economic theories.*
The first half of the book focuses on issues of economics on a national level. Specifically, they endorse the free market as a way to bring prosperity to all nations. Their argument is based upon historical observations about how nations have gotten out of poverty and become prosperous.
Thus, the authors argue that fair trade and open borders (with low or no tariffs and the like) will drive the market to balance itself out and also increase the overall prosperity of people from various nations. Moreover, it will provide a means by which lesser-developed countries can utilize their comparative advantages to produce things that other countries are willing to pay a higher price such that they do not need to produce them. Demand drives the market, and the freer a market, the more demand is able to do so. The reason it is beneficial to allow demand to drive the market is because it allows for people to genuinely respond to others wants and constantly produce newer, better goods in more efficient ways, thus increasing the wealth across the board.
I should note that, by necessity, this is merely the briefest overview of this section of the book. Those who read The Poverty of Nations are essentially getting a fully realized introduction to international economics. In fact, the economic portion of the book is quite strong in many ways (though some issues with the complexity are noted below).
Like the economics portion, this half of the book has much to commend it. Though basic, much of the instruction is vital and important to realize as necessary for economic success. For example, government curtailing of bribery is important for an economic system to become more successful. Another, more complex example would be the notion that tariffs decrease the productivity of international trade and artificially increase prices.
The problem with much of the focus on the moral background to the “Free Market” is that Grudem and Asmus seem to assume or assert more often than they provide evidence. It’s easy for someone like me from a relatively free market system who favors open markets to nod along to how a free market encourages integrity because of the repeated transactions between the same persons and the like, but then a statement like this is made:
When people are held responsible by the voluntary personal interactions of the free market, they are typically more responsible. (Kindle Loc. 3784)**
Statements like this are frequently made, but after reading along and perhaps agreeing largely, one is forced to wonder about things like: “Where is the empirical evidence to show that this is actually the case?”; “To whom or to what are people more responsible to?”; “How are we capable of making judgments like this across incredibly complex systems like the economic practice of states, regions, nations, and the world?” The particular statement made above offers no empirical support for its claim, nor do the authors explore the complexities of simply stating that “people… are typically more responsible” in a free market. This statement, and others like it, leave me scratching my head and asking for the evidence. Certainly it is possibly true or perhaps it is true, but why think it without anything more than an assertion?
Another difficulty with this section is that throughout, the specific examples given are taken to be the biblical approach to economics. Now, I think one could fairly say that the Bible condemns bribery, but what of more complex issues like whether it actually endorses a free market? One constant refrain in the book is the use of Genesis 1:28 (“fill the earth and subdue it”) to support various things, from use of natural resources (which are rather shockingly claimed to be essentially unlimited: “[I]t is highly unlikely that any resources will be used up in the foreseeable future… we keep discovering huge new reserves of resources and inventing more creative ways to access them” (6606-6617)–but of course where are the huge new reserves of forests? fresh water? etc.?) to drive people to invent and make new things (3405), to making products from the earth specifically (1169), to move beyond subsistence farming (4207), and more.
One is forced to wonder whether the verse actually means all these things or if, perhaps, the Bible is simply under-determined when it comes to economic policy. I do genuinely wonder whether the Bible is to be treated as an economics textbook, which it often seems to be in this book. Quotes like these are scattered throughout, often in seemingly random fashion in the economics portion. The question is whether this really may be seen as a systematic treatment of the Bible on economy, or whether it may perhaps instead be mining the text to try to support claims about economy which are not really found therein. Not that these are unbiblical points; merely that they perhaps are not the focus or intention of the texts.
The book seems to oversimplify on some aspects. It is common practice to use examples which allow an economist to shift just one aspect in order to demonstrate a theory.* That said, at times the examples used in The Poverty of Nations are often a bit too simplistic to believe. For example, at one point a thought experiment asks whether simply taking money from a group of wealthy elites would solve the existing issue of poverty. Although it seemed clear that simply attempting to redistribute wealth didn’t solve the problem, the proposed solution–the book’s solution–was to produce more goods. But it seems to me that if a number of elites were controlling the wealth in a country, just producing more goods would continue to line the pockets of those elite rather than specifically helping the poor.
Examples like this abound throughout the book, as simple solutions are offered to extremely complex issues. Economics is a wonderfully complex topic, but as the authors themselves note at the beginning, it is one which is hard to study due to the human factor in it. Despite the professed efforts to avoid such simplification (Kindle location 2115, for example), the book often does seem to suggest a one-size-fits-all approach to solving economic problems.
That said, at other times the authors do a great job of speaking directly to the complexities of the issue. For example, their discussion of colonialism was marvelous and ably pointed out both the potential benefits and cons of those endeavors on our present world situation. It was a great way to survey a complex issue without trying to identify any one factor. Portions of the book like this make the places where it is simplistic stand out even more, however.
A final issue is that of audience: Asmus and Grudem claim the book is primarily written for leaders of impoverished nations, which–apart from coming off as a bit imperialistic–doesn’t actually seem to be the likely readership. The authors note others as possible audience, but I wonder whether we may end up with several people walking around with this as their only interaction with economic theory and assuming they are able to fix the world’s problems through this oft-simplified economics instruction.
The Poverty of Nations: A Sustainable Solution is at times brilliant, but at others frustrating. It is well-worth a read for Christians interested in economics and attempting to strike at the core of poverty through effective legislation and whole-nation solutions. It does provide a very useful introduction to international economics, and gives some very good ways forward for those wishing to engage on this topic. However, readers should go in with some caution: the simplification at times means that readers should not take this as the final word on this topic, nor should they assume by reading the book they are suddenly equipped to run national-level economic programs.
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Sunday Quote!- A biblical answer to economic woes?– I discuss a quote from a section of The Poverty of Nations and whether it is true that the Bible may contain specific economic practice.
Wayne Grudem and Barry Asmus, The Poverty of Nations: A Sustainable Solution (Wheaton, IL: Crossway, 2013).
*I was a Social Studies major in college and so took a number of economics classes. I am making no claim to be an expert, but rather educated laity in this area.
**All references are to kindle locations.
Disclaimer: I received a review copy of the book through Crossway. I was not obligated by the publisher to give any specific type of feedback whatsoever.
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Thanks for this intelligent review. From what I have gathered from reviews it is deficient both in economics and theology. Are markets useful? Doh! Of course. Was the deregulation resulting from the repeal of Glass Steagall beneficial? Don’t be silly! Then there is what looks like truly awful exegesis. The prohibition on favouring rich or poor in lawsuits is extended into a claim that any programs to help the poor are unbiblical. An absurd claim that sidelines a radical redistribution like the Jubilee law on the grounds the Bible doesn’t specify penalties for breaches.
If anyone is capable of believing that a judge of Israel would be entitled on those grounds to dismiss a claim by a person seeking the recovery of their legal inheritance under the law of Jubilee their prophet is Ayn Rand not Amos or Isaiah.
The problem is, as I noted here, that talking about national and international level economics is really difficult, and it was by necessity distilled. Specific examples were also rarely discussed, again I suspect this was due to trying to make it as accessible as possible.
But yes, the exegesis is at many points problematic, and as I pointed out the same verse would often be used to support several different notions.
I appreciate your review; it’s thoughtfully crafted. Too bad that some parts came off simplistic, despite the author’s acknowledgements of complexity elsewhere. I haven’t read the book, but want to chime in as holder of a BA in economics and international relations for what it is worth.
You critiqued, saying, “But it seems to me that if a number of elites were controlling the wealth in a country, just producing more goods would continue to line the pockets of those elite rather than specifically helping the poor.”
I would suggest as clarification that the idea of elites controlling wealth is quite nebulous. If complete control over all wealth were the case, I think your example would be nearly tautological. But I would say if people in the economy had sufficient access to capital in all its forms (including social capital), it is certainly possible that a mere increase in output of goods would permit the able poor to climb out of poverty.
The ultimate caveat of ceteris paribus plays heavy in economic examples. Ultimately, I’m not sure if you’ve conveyed an instance of oversimplification sufficiently; given space constraints, I will take your judgment still at face value. Best regards brother.
The example, and I wish I’d written down the Kindle Location, was specifically just that the elites somehow controlled the wealth and thus simply increasing the production of goods would mean more wealth for everyone. You’re right that this is a nebulous concept, but that’s exactly the problem I think exists in the book in places; it just tends to oversimplify.
Thanks for stopping by and giving your thoughtful comment!
The note on personal responsibility piqued my interest; have you read Emil Brunner’s Man in Revolt? In it, he argues that perhaps the worst part of original sin was mankind reneging on its responsibility to tend creation, as a gardner/namer/etc. What makes us Imago Dei is to be creators like God is a creator, but that necessarily comes with responsibility. Now, how the mechanics of responsibility work (e.g. I’d say consumerism is very bad for responsibility) can be discussed ad nauseam; would you agree that increasing responsibility is very important for supporting non-totalitarian states, encouraging human thriving, etc.?
I like your review. I found the idea of the market being a moral corrective (as it were) to be somewhat dubious; I tend to believe we need to focus more on social agents (group virtue) than social arrangements (societal structures).
I agree that the intended audience is problematic. It seems to play off the belief that if we just change hearts and minds at the local level, this will somehow change international policy. But I’m fairly certain this view of cultural change is false.
I wrote a review of this work a year ago (not a shameless plug; I just thought you’d be interested in another perspective): http://triablogue.blogspot.com/2013/07/book-review-poverty-of-nations.html
Thanks for your own insightful review! I quite enjoyed it. I think we pretty much were thinking along the same lines. I’m glad to see that I wasn’t completely off in some of my own thoughts, as you expressed some things I didn’t bring up in this review.
Thanks for stopping by.