So far in this series, we have examined several possibilities for the distribution of limited resources. While face-to-face communities have the wherewithal to employ several criteria in allocating limited resources, larger aggregations of people do not. I’ve argued that market exchange is by far the most just and efficient means of allocating limited resources across mass society. (To reiterate, the operative word is “most.” I have not said that markets are some quasi-deity creating a perfect world of shalom, and I’ve spent several posts explaining why markets need regulation.) But there is yet one more issue we need to explore.
If the goal is to have people live in relative prosperity on a sustainable basis, then the title of this series, “Allocation of Limited Resources,” is off the mark. It presumes that there is a fixed set of goods somewhere, say light bulbs, and that our fundamental problem is figuring out how to distribute them. Both presumptions are wrong. It envisions only distribution and consumption. Someone, somewhere, makes light bulbs. If some folks have an insufficient supply of light bulbs, then why not make more light bulbs? What about production?
New Testament scholar Ben Witherington writes in Jesus and Money:
“Scholars of ancient economies often talk about the concept of limited good. In biblical culture there was both low productivity and no notable means of increasing productivity over time (as with, say, the help of modern fertilizers and modern irrigation techniques). Given these realities, ancient peoples tended to believe that the goods of life had been distributed, even distributed by God, and they could not be increased – they were decidedly “limited.” This in turn meant that if a person wanted something he or she did not have, they had to barter for it (or steal it). It was not a matter of finding some way to make “more,” in order to increase one’s income and spending power. Unlike these pressures, and given the fact that droughts were regular and the land’s fertility could become farmed-out and exhausted, many ancients expected frequent decreases in productivity, thus prosperity on a regular, cyclical basis.” (46)
Production was about human labor. One hour of labor by any healthy individual was understood to be as valuable as any other healthy individual’s. If you wanted more productivity, then you would need more people. Furthermore, you needed land since most labor was in agriculture, even in the sophisticated Roman Empire. There was a fixed amount of land and only a fixed amount of production you get from each parcel of land. Substantial, sustainable increases in production were unthinkable. The land and the population would support the workers and provide enough surplus that elites could siphon off the excess in support of urban affairs and military operations.
This was the state of the world until very recently. It is largely a closed-system, zero-sum game. Whatever advantage someone has is at the expense of someone else. Thus, economic justice for those in need is almost exclusively a question of distribution … the haves not sharing with the have-nots.
But over the past two or three centuries, we have learned something. Production can be radically altered. The keys are division of labor, technology, and trade.
Having each individual produce most of what they consume is a highly inefficient use of labor. No one is efficient at everything. When we add in the complexity of today’s goods … cell phones, pharmaceuticals, construction materials, etc. … there are only a few things we could make on our own at the same quality and price. Therefore, we each specialize in the things we do well. We accept payment from others for the services or goods we provide and then use that money to purchase the other things we are not as good at supplying. Because each individual is concentrating on the work in which they are the most productive, the whole society becomes more productive. That means more and better products per a fixed amount of time.
But when it comes to producing tangible goods, we see a dramatic transition from the past. By analogy, imagine two people on a continuum. First is a caveman with some rocks and knowledge of how to make a fire. The other end is a person standing before a Star Trek replicator, who merely voices what she wants, and the replicator arranges molecules to fulfill her request. The first move along the continuum was tools that directly augment human power … hammers, swords, plows, knives, etc. Animal power in the form of oxen or horses was also eventually employed. Some cultures learned to use water and wind to power some contraptions, but the applications were limited. These were significant improvements over historical standards but were still largely incremental advances, not exponential.
The great change came with the Industrial Revolution. Machines that could do the work of thousands of human beings came into being. Initially, many workers became servants to machines. But as industrialization advanced and public education expanded, manufacturing jobs have become increasingly more skilled, even as the percentage of the economy has shrunk. Service and information sector jobs have risen in their place. The combination of rising incomes for more skilled employees and a reduction in the real price of goods has led to a level of prosperity for the masses that was unimaginable for previous generations. The key has been the emergence of specialized labor, technology, and trade, as well as the social institutions and values that undergird them.
Too much allocation discussion is done by viewing people or societies as buckets of water where we take from some buckets and add to others to ensure they all have the same amount. A better analogy is to view each person or society as a plant. For our recorded history, we have had only sickly plants, but we never knew that until some plants began to thrive radically. The operative question is, what changed that enabled these plants to thrive? Many people ask what causes poverty. But this has it backward. Poverty has been the norm throughout history. Today we have widespread material prosperity in developed nations. That is the aberration. The question is, what causes prosperity?
The specialization of labor and the application of technology has radically altered productivity. Markets have played their role in productivity, but markets have also added something else to distribution that is so subtle we rarely appreciate it. Markets, the auction method of allocation, unlike the other means of allocation we mentioned early in this series (first come, first serve, equal treatment, cronyism, and open conflict), directly link consumption and production. Markets provide a real-time feedback loop that does not and cannot, exist without them. Markets provide unprecedented efficiency in the distribution of goods.
There is no question that there is a place for generosity and aid to others, whether we are talking about individuals or other nations. But unlike throughout history, this is no longer the pressing ethical question. The question is, what inhibits people and nations in poverty from being able to emerge from poverty? How can an ecosystem of sustainable prosperity be developed? These questions have profound theological and ethical implications that need to be wrestled with, but they cannot be addressed from within the ancient worldview of closed-system, zero-sum economics that so many theological specialists and Christian activists inhabit.
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