Inflation is a Moral Problem

An Expert Speaks – Herman Kahn, introduced by U.S. News and World Report (Dec. 2, 1974, p. 53), as “a noted analyst of world affairs” and “an authority on national trends” was being interviewed regarding his opinions on the state of the economy. Asked for suggestions to deal with the baffling problem of inRation, Mr. Kahn prescribed “first and foremost” “that the Government doesnt spend more than it has available. Any government that does so—except in very special circumstances—ought to be thought of as immoral. We’ve got to turn this whole fight against easy deficits and inflation into a moral issue, not just a matter of some economists’ or politicians’ calculations. The economists think it’s dumb to look at such things in terms of moral issues—as a matter of theology—but it‘s the only realistic way to balance the many pressures and inducements to lax behavior and unrealistic estimates.”

It is a bit surprising and gratifying to find a business consultant saying so bluntly what many of us have long sensed and felt should be said, that the whole current economic crisis with its runaway inflation is not just an economic problem, but one that really has a moral and religious origin. To say this is not to deny that there are all kinds of economic factors at work, but it recognizes that underneath them are moral and spiritual considerations that determine how people spend their money and manage their businesses—and their governments.

Pages from History – Some years ago in a university course, we had to study a number of books that attempted to analyze the French Revolution. Among them was Alfred Cobban‘s analysis of the financial crisis in the old monarchy which he saw helping to bring on the revolution (A History of Modern France, Vol. 1). The author pointed out that the nobility who had power in the old regime insisted that the successive finance ministers continue deficit financing rather than curtail expenses and raise taxes. This policy pushed the nation into bankruptcy, and in that chaotic situation the revolutionary leaders found their opportunity to seize control. This financial policy was, of course, a matter of economics, but it was not merely economics.

When people refuse to pay their bills or to tolerate equitable taxes, they reveal their moral degeneracy. And the chaos that overtakes them ought to be seen, by Christians, at least, as the kind of judgment that God brings, also in an economic way, on breaking His laws.

In more recent history it is likely that few people in this part of the world realize the role of currency inRation in the Nationalist collapse and the Communist takeover of mainland China. When we arrived there in 1947 (as CRC missionaries) one paid about $ 10,000 for a hamburger or hot dog. And those dollars had at one time been worth one third of ours. In our 6rst six months in the country, prices increased at an average rate of 46% per month and after that they rose even more rapidly. In the summer of 1948 we aid $3,000,000 for a silver teaspoon, for by that time the exchange rate had reached $12,000,000 Chinese to $1 U.S . How much this financial collapse contributed to the political takeover may be difficult to determine, but of its importance in influencing the course of events there can be little doubt.

When the money a government issues becomes worthless. how much confidence can its citizens have in its ability to deal with other matters? After all. the value of that money depends upon a government’s ability or willingness to keep its promises.

Our Present Crisis – As all of us are increasingly troubled by the economic crisis which is beginning to claim first place in our concern, must we not as Christians see and speak of it in moral and religious rather than only in economic terms?

Some time ago a Dutch political leader was cited in the Calvinist-Contact as observing how remarkably our present energy—and other natural resources—problems parallel the story of the Prodigal Son. Having “wasted his substance with riotous living” he presently “began to be in want!” We will have to face our responsibility to God who brings us to account for everything we do with what He has entrusted to us.

Our responsibility in the U.S. as the commonly acknowledged wealthiest country in the world is considerably greater than that of a Chinese government which had been bankrupted by twenty years of war. When we habitually live beyond our means, when we become so accustomed to deficits that we borrow with no intention of repaying, whether we do that as individuals or collectively as a country, can we expect to escape the economic punishments with which God repays theft and other misuse of His gifts?

Regarding our present problems in this light would dispel much of the confusion which today seems to have overcome many of our nation‘s political and economic leaders. It might also lead to some different decisions than many currently being made. The Lord still calls us to repentance and to return to Him both through His word and His government of the world, including its economics. As these economic judgments overtake us, are we going to listen to Him, mend our ways, and seek to move others and our nation to do the same?

Peter De Jong is pastor of the Christian Reformed Church of Dutton, Michigan.