The Dark History of American Capitalism and How the Bible Applies


[The following article is an excerpt from the book, Rescuing Religion from Republican Reason]

No system is better than corporate capitalism at creating incredibly wealthy individuals. This should come as no surprise. A system that maximizes financial rewards for success while minimizing financial losses from failure can’t help but broaden the gap between the rich and poor. Those rich enough to own corporations get richer, while those who aren’t stay poor. According to a study published in the book, Outliers, by Malcolm Gladwell, 46 of the 75 wealthiest people to have ever lived in the history of human civilization were (or are) U.S. citizens. This is a list that includes Cleopatra of ancient Egypt at #21 and Nicholas II of Russia at #3. John D. Rockefeller of Standard Oil tops the list at #1, and steel magnate Andrew Carnegie, born in Scotland, but a U.S. citizen as an adult, is #2. According to Gladwell, 14 of the 75 wealthiest people were Americans born between 1831 and 1840. All of these owned large, powerful corporations in the late 1800s and even the early 1900s, an era known as the Gilded Age, when pure capitalism was the American way.

So is the system that produced the richest people in human history the best?

Unfortunately, as pure corporate capitalism produced the wealthiest group of men to have ever lived, it also produced some of worst poverty in history at the same time. When a Cincinnati man was asked how he, his wife and three kids lived on $5 a week in the 1870s, he replied, “I don’t live. I am literally starving. We get meat once a week, and the rest of the week we have dry bread and black coffee.” This story differs little from what my great grandmother used to tell me about growing up in the 1920s in a small rural town about 40 miles northwest of Philadelphia, “When I was growing up, we only had meat twice a week, because that’s all we could afford.” These were the so-called “Roaring Twenties.” But for the working class, the 1920s were more about scratching and clawing for survival than they were about roaring good times. Even though, by this time, corporate capitalism had been producing the richest men in history for over 50 years, a large percentage of working class Americans suffered poverty unimaginable to any American today.

While life in the country was rough, life in the city was even worse for the working class. In New York’s Five Points section, as many as a dozen people would live in apartments as small as 100 square feet under roofs that often leaked. The streets were mired in garbage and sewers were open. The stench was unbearable to all who were unfortunate enough to visit. And life was unlivable for the neighborhoods impoverished tenants.

Meanwhile, at any given time between 1880 and 1920, about 20,000 breaker boys, ages 8-12, could be found inside coal mine entrances separating anthracite coal from shale 60 hours a week, just in the state of Pennsylvania alone! Meanwhile, little girls sorted threads and fabrics in textile mills. Why would parents send submit their children to lives of dank industrial misery while forsaking their childhoods?

Did parents hate their kids back then?


They were so poor that they had no choice but to put their kids to work. Unfortunately, the higher the number of children working for pathetically low wages, the higher the number of low wage workers there were in the workforce taking jobs from adults. This allowed employers to pay lower wages to adults as they competed for jobs, which in turn worsened their poverty and increased their need to send their children to work. This is what I call the Child Labor Trap. The government did not legally force the children into labor. They simply gave them the freedom to work while denying them any welfare assistance or minimum wage guarantees, so that they would have no choice but to work and sacrifice their childhoods to the service of the wealthy.

In capitalism, it’s considered righteousness, and even “good business,” to pay workers the minimum necessary to gain their employment. There’s no such thing as paying a worker too little if the pay is enough to fill the position. The goal of nearly every corporation is to maximize profits and pay them out to its owners in the form of dividends. Profit maximization consists of two components: maximizing revenues and minimizing costs. Employees are a cost to be minimized. During times of high unemployment, when workers compete for job openings, employers usually lower wages for workers, knowing that desperate job-seekers will settle for lower wages and current employees can’t leave for jobs elsewhere.

Even when profits are high, a “good” business executive lowers wages for workers, because adding to the owners’ wealth is more important than the well-being of employees and their families, which is of no concern to the corporation. This is what critics of pure corporate capitalism called “wage slavery.” In traditional slavery, a master had to feed, clothe, shelter, and preserve the health of his workers and their children since they were of financial value to him. But in corporate capitalist “wage slavery”, executives paid workers less than they and their families needed to live a healthy, dignified life. The working class, therefore, led lives not much better than those of slaves. Yes, they had the “liberty” to leave and choose another master, unlike actual slaves. However, the new master was often no better than the former.

Biblical opposition to “wage slavery” can be found on two fronts: the sin of underpaying workers and the righteousness of the workers’ keeping what they produce. Regarding underpayment of workers, Malachi 3:5 says, “Then I will draw near to you for judgment; and I will be a swift witness against the sorcerers and against the adulterers and against those who swear falsely, and against those who oppress the wage earner in his wages, the widow and the orphan, and those who turn aside the alien, and do not fear Me, says the Lord of hosts.”

How are “wage earners” oppressed in their wages?

It’s possible their promised wages were withheld, but businesses that practiced such things probably had trouble recruiting workers after a short time. It’s far more likely that these businesses oppressed their workers by paying them too little. (By the way, notice how adultery is mentioned in the same verse as oppression of workers in their wages. Both sins are equally evil.)

This passage indicates that God’s values differ from those of corporate capitalists. Maybe workers deserve more than being paid as little as the free market requires. Maybe they should be paid wages that reflect the value of the workers’ contribution to their employers’ success. Or maybe they should be paid enough to afford food, shelter, clothing and basic enjoyment of life, since they’re of great value, being created in God’s image. This is not to say businesses struggling to stay afloat are guilty of sin when they pay workers low wages. But when corporate executives and investors earn several hundred times as much as their employees, who are paid as little as necessary to fill the positions, they likely violate God’s message in this quote.

Regarding the workers’ right to what they produce, 2 Timothy 2:6 says, “The hard-working farmer ought to be the first to receive his share of the crops.” Conservatives have used this verse to oppose taxation, but that’s not what it’s about. It was written in the Roman Empire where land owners hired farmers to work their land. The owners had first rights to the produce, leaving very little to those who farmed the land. Paul makes the common sense point that workers, not land owners, have first rights to what their work produces. The pure capitalist belief is the opposite: the owner of the capital (land, equipment, etc. used to produce goods and services) has full rights to what the workers produce with the capital; owning capital is to be rewarded, while hard work is not.

Thanks to these anti-biblical approaches to business, pure corporate capitalism has proven to be a system of huge winners and impoverished losers. In it, every person, theoretically, has an opportunity for great wealth. But in its purest form, which is free from regulations and redistribution of wealth, only a small percentage of the population can achieve economic prosperity at the same time; meanwhile, the masses wallow in poverty. The winners reap extraordinary riches, while the losers struggle to survive. That’s why pure capitalism is, essentially, a jackpot economy—the winners win big, but are few in number.

To the contrary, God’s system for ancient Israel minimized disparity of wealth. As the Israelites settled their nation, 12 of the 13 tribes received land upon which they could grow food and build homes. They would pass this land on to their descendants who would build and farm on it when they reached adulthood. A young man didn’t have to wait until his parents died in order to have land to farm and live on. Over 90 percent of the population had what they needed to survive. All they had to do was work the land. Each of the 12 tribes gave a tenth of their produce and earnings to the 13th tribe, the Levites, because they had no share of land on which they could grow food. Their job was to perform acts of ministry, not to farm. Widows who were unable to remarry, orphans, and resident immigrants also lacked land on which they could support themselves, so God required the 12 tribes to support them, too, as we see in Deuteronomy 14:28-29, “Every third year you shall bring out the tithe of your produce for that year, and store it within your towns; the Levites, because they have no allotment or inheritance with you, as well as the resident aliens, the orphans, and the widows in your towns, may come and eat their fill so that the word of God may bless you in all the work that you undertake [NRSV].”

God even minimized disparity by limiting the accumulation of property in ancient Israel. Leviticus 25:10 says, “You shall thus consecrate the fiftieth year and proclaim a release through the land to all its inhabitants. It shall be a jubilee for you, and each of you shall return to his own property, and each of you shall return to his family.” The Bible explains that land prices were to be based on the numbers of crop growing years remaining until the Year of Jubilee when the land must be returned, “for it is a certain number of harvests that are being sold to you (verse 16).” In the fiftieth year, all land was given back to the original owners or their descendants; and all debts were forgiven, so those who had been enslaved to pay debts were free to start anew. In the Year of Jubilee, the economy reset, and disparity of wealth was kept in check.

First century Christians in the Roman Empire found themselves in a different economic system, created by men rather than by God. Still, in addressing them, the Apostle Paul champions minimal disparity of wealth in 2 Corinthians 8:13-15 where he says, “I do not mean that there should be relief for others and pressure on you, but it is a question of a fair balance between your present abundance and their need, so that their abundance may be for your need, in order that there may be a fair balance. As it is written, ‘The one who had much did not have too much, and the one who had little did not have too little [NRSV].’” I’ll be the first to admit that this quote addressed churches, not governments. Nonetheless, it gives us the general sense that everyone should have enough and not too much. This is not communism, in which everyone owns the same; neither is it pure corporate capitalism, in which the disparity of wealth is amplified.

Speaking of communism, some Christians over the past century have asked if Jesus is a communist. They’ve most frequently cited Acts 4:32…34, which says, “The whole group of those who believed were of one heart and soul, and no one claimed private ownership of any possessions, but everything they owned was held in common… There was not a needy person among them, for as many as owned land or houses sold them and brought the proceeds of what was sold. They laid it at the Apostles’ feet, and it was distributed to each as they had need [NRSV].”

This scene horrifies American Christians who see pure capitalism as gospel, because we have in these verses the early Christian equivalent of a commune, and a commune-inspired economic system is communism.

Should we practice communism in an effort to emulate the early Christians?

Not necessarily.

First, let’s look beyond modern economic systems and examine the principles involved. The intent of these actions was to ensure that “there was not a needy person among them.” This has always been God’s desire. Their solution was that everyone in the community would give up what they had in order for this intent to become reality. Today, our society in America is wealthy enough that we don’t have to give up everything to help those around us. However, the argument that we should have to give up nothing to help others is difficult to justify in light of this passage.

Some will argue that this communal act of sharing is not mandated by God’s Law, but is voluntary. This argument is correct. However, notice how “the whole group” fully participated in this system, and that the writer, Luke, seems impressed and eager to report the Christians’ radical other-centeredness. It begs the questions: Would we Christians today even be willing to consider taking part in such a selfless way of life? If joining the church meant sharing all we owned, would we join? Or would we argue for our right to individually possess property and condemn such a communal existence as evil Marxism? If we were to do the latter, it would mean our possessions and the principles of capitalism are more important to us than God, and that we might not even be Christians. As Jesus said in Matthew 6:24, “No one can serve two masters; for a slave will either hate the one and love the other, or be devoted to the one and despise the other. You cannot serve God and wealth [NRSV].”