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Free «Invisible Hand and Creation of Wealth: Topic Responses» Essay Sample

The idea of the ‘invisible hand’ is deeply ingrained in most modern economists’ position on the desirable course of economic policies, as well as in the minds of those who try to understand the full complexity of economy as an objective phenomena. At the same time, the notion of individually based wealth creation is likewise deeply entrenched in modern economic consciousness. In this topic responses, I will try to present my own perspective on the respective issues, demonstrating that the nature of both ‘invisible hand’ and wealth creation process is far complicated than it is usually thought. The perspective being provided would be fully consistent with the Christian Scripture.

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The ‘Invisible Hand’ doctrine

Smith’s notion of ‘invisible hand’ in economics was directly intertwined with his idea of the spontaneous formation of moral rules, whereas the latter would form not in accordance with God’s direct interference in the mortals’ life but through their own free will (Samuels, Johnson, & Perry, 2011, p.32). Individuals are considered to be motivated by the wish to secure the others’ favor in order to pursue their goals, so that even charitable acts are viewed as deriving from the self-gratification motive. In this interpretation, even the most wicked and self-centered may be justified, as their self-interest contributes to the growth of the society’s total mass of riches.

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However, as it is known to everyone knowledgeable in the Sermon on the Mount, the Lord has taught His followers a rather different moral and economic doctrine. It is those “who hunger and thirst for righteousness”, “merciful” and “peacemakers” who are promised “the kingdom of heavens” (Matthew New International Bible 5:3-10). The Christian concept of economics is fundamentally inimical to harsh inequalities in the wealth’s distribution, which is often justified by the mere observable fact of wealth’s creation.

Smith himself accepted in The theory of moral sentiments that the principle of having more goods as humans’ ends was a “deception” imposed on humankind by nature (Smith, 1774, p.272). While this deception undoubtedly leads to further increases in industrial production, as affirmed by Smith (1774), this increase is invariably coupled with the growth in inequality, resource wars, etc. Therefore a truly Christian system of economics should take account of – and uphold – the principles different from that of the glorification of personal pursuit of riches at all costs.

 
 
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Wealth Creation

When viewing wealth creation through a lens of Christianity, it is important to take into account that our Lord and Savior viewed wealth not as an end in itself, but as a valuable asset to use for the betterment of our fellow humans. The following commandment is sure to be widely known: “do not store up for yourselves treasures on earth” (Matthew 6:19 King James Bible). In Luke (14:33), Jesus Christ and His disciples are depicted as sharing their goods in common, donating to the poor and leading a cooperative economic activity.

Thus, it may be concluded that the only form of wealth creation that is desirable in the eyes of God is the one connected with sharing. While the state of any other central planning body is clearly incapable of instituting and running effective sharing network due to informational and managerial constraints (Hayek, 1996), examples of Christian intentional communities in both the USA and abroad present a compelling argument in favor of the ability of a community of believers to efficiently run and control the wealth producing businesses (Sawyer, 2003).

In this way, it would be possible to avoid the inefficiencies associated with the state-based welfare systems and the conventional private charities. In addition, one would be able to satisfy the requirements presented by Jesus in the famous tale of the rich man seeking advice on salvation (Matthew 19:16-24 New International Version).

   

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