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What does a biblical approach to economics look like? Today David Bahnsen, the Managing Partner and Chief Investment Officer with The Bahnsen Group joins us to discuss how important a godly mindset is when it comes to our work, wages, and resources.
Episode Transcription
Note: This transcription may vary from the words used in the original episode for better readability.
Marlin Detweiler:
Hello again. I'm Marlin Detwiler, and you have joined us for Veritas Vox, the voice of classical Christian education. Today we have with us David Bahnsen. David reminded me and I had forgotten this, that he has written a couple of the articles that are in our Omnibus textbooks and so we're excited about that and reconnecting again. David, welcome.
David Bahnsen:
Well, it's one it's wonderful to be with you. Thank you so much for having me.
Marlin Detweiler:
Just as a starter, maybe you can introduce yourself with a little bit of background, your upbringing and family now, educational background and the career path that you've been on.
David Bahnsen:
Yeah. So in a nutshell, to try to capture almost 50 years in 60 seconds, I was raised by a Christian intellectual pastor, speaker, educator extraordinaire, one of the great apologists in Christian philosophy of the 20th century. And he also was my hero and best friend as my great father, a guy by the name of Dr. Greg Bahnsen. And he passed away when I was 20 years old.
He was in his forties but was the key influence on me growing up and gave me the passion for Christian education that I have to this day. He also begged me with everything he had inside of him, not to follow his footsteps in Christian academia. I worked in financial services and the world of wealth management throughout my career.
I currently split time on both coasts. My wife and I go back and forth every month between our home and our office in Newport Beach, California, and our home and our office here in New York City. We have three kids, one of which is a freshman in college. One is in high school, one is in middle school. And I've been married for over 22 years and very, very blessed, have have wonderful family and certainly are very blessed in my career and what I consider to be my calling.
Marlin Detweiler:
Well, as I understand it, your core business is an investment advisory firm with billions of dollars that's going to be under management. Is that primarily focused on stocks and bonds, equities and the stock market, or how would you describe your asset allocation?
David Bahnsen:
Yeah, it's a great question. You're you're right. We're just a tad short of $5 billion that we manage. And hopefully by the time we get done recording, we'll be over 5 billion. It's very close. And we are what's called a multi multi asset firm. And so we do a lot in the world of public equities, a little over two and a half billion dollars of the money we manage is in publicly traded dividend growth stocks, which is sort of what I've built my career around and what I am most passion by in capital markets.
But we do an awful lot in bonds and in real estate and in what's called private markets, private equity, private debt. So there isn't really an asset class that we won't utilize if it serves a purpose in finding a solution for a client.
Marlin Detweiler:
Excellent. Excellent. And you've written considerably several books. We're going to focus on two of them today. You've also been involved in many interviews and interactions, and it was wonderful in doing a little research for today to see some of those videos and that sort of thing. But one thing really stood out, and it was written by Jack Fowler writing for National Review. He called you the “apostle of free and virtuous markets, of prosperity and human flourishing.” That quote ring a bell to you?
David Bahnsen:
Oh, it does! And anything Jack says about me tends to be overly complimentary. Jack's a dear friend and wonderful guy. But yeah, I mean, I think that to the extent if I'm able to throughout my life and career, have my reputation attached to a defense of free enterprise that is rooted in moral philosophy, I'll be very happy. I do believe very much in capital markets.
I believe very much in the concept of a free society. But I insist on tethering that to a Christian worldview. And that's sort of the passion of my life.
Marlin Detweiler:
Yeah, that's what a great lead in there. Tell us in the topic of economics, which is an aspect that dominates a lot of your conversation. What is a biblical worldview in economics? What does that look like? And let me just say that it's my sense not as an economist, but as somebody who has studied the topic some and is a businessman. I think that even the term economics is frequently needing definition. So maybe even making sure that's part of your answer.
David Bahnsen:
Well, I agree. I think that it's very difficult to define something in a Christian context if we can't define it at all. And so vocabulary is underrated and underappreciated. And to be honest, I think those who have an agenda in the field of economics that goes against the Christian worldview have been very intentional and very effective. They've been tactically effective in controlling the vocabulary to to try to limit economics, to sort of the field of mathematics or to try to treat it as if it is some form of programmatic science as opposed to a social discipline, a moral discipline, and one that requires an intense understanding of what we call anthropology, the human person. What that does is not merely center around a dispute as to an approach one may want to take to economic theory it lends itself by sort of treating economics as an atomistic empiricist exercise. It lends itself to a high view of central planning that really smart people with computers can control the economy, because, after all, this is just a raw math or science with inputs and outputs.
And I think a properly calibrated Christian worldview will insist upon looking at economics from a very creational understanding, understanding that human economics is the study of human action around the allocation of scarce resources. And so whether one believes in the Christian God or not, all human beings struggle with the reality of scarcity, that we do not have infinite supplies of the goods and services that would be useful in enhancing quality of life.
So dealing with the reality of scarcity is the burden of economics. But we don't just deal with the reality of scarcity in the way the animal kingdom does. We deal with the reality of scarcity as human beings who are both individual and work in communities, families, and nation-states, there are various forms of communal realities to the human person, and most of that is somewhat non-controversial. I don't know a reason why an unbeliever would feel a need to dispute anything I've said so far, but that's probably where things would cease to be in agreement because everything that is important to me is going to come down towhy thos e things are, why are we individuals, why are human beings different than the animal kingdom and how
they allocate scarcity and how are we to act If we say economics is the study of human action? I believe that it is incumbent upon Christians who are worldview-minded to answer those things with distinctly Christian understandings and perspectives. And that to me is my purpose in studying economics.
Marlin Detweiler:
Yeah, when you start looking at how much Jesus talked about money, how much he talked about relationships, the economy of the kingdom is something that very quickly leaves what might be a base-level intuition into somewhat of a contrarian sense of things, doesn't it? More blessed to give than to receive comes to mind as maybe exhibit A?
David Bahnsen:
Well, what I would say is that a fully informed understanding of economics has to take into account the whole counsel of God and that we advocate for people creating a better life for themselves materially and that that is a positive incentive that is encouraged in the Scripture at the same time that we advocate for care for our neighbor, at the same time we advocate for an understanding of philanthropy, of generosity, and that these things are not contradictory.
So when Adam Smith came around in the late 18th century and talked about the idea of self-interest, I believe that classical economics was born. And yet what he was describing is the way the world works, that in my pursuit of putting food on the table for my family and buying my children's shoes and perhaps even having a little bigger of a house and a nicer environment or quality of life, I am unable to do that apart from serving my neighbor. I cannot be paid without producing goods and services. So all aspirations one may have for consumption first have to come out of their ability to produce, to do production, and as a matter of fact, to bring an economic miracle to all this, I not only can't consume unless I first produce, I can't consume unless someone else produces. The fruit of someone else's labor represents the thing I will be consuming.
And so we create this virtuous cycle. But what I insist upon doing and describing classical economics this way and something I think that the total life and work of Adam Smith also captured was that he called it a theory of moral sentiments, but I believe it has to be attached to what I would call it enlightened self-interest, a fully informed understanding of the law of God, of his expectations on us.
And these are thousands of years old, these subjects, these controversies, these efforts and frankly, this tension. Aristotle wrestled with this. Saint Thomas Aquinas wrestled with it even early church fathers between Aristotle and Aquinas wrestled with it. Augustine comes to mind. But I think that now, in the modern era, there's no longer a debate over whether or not free markets work, whether or not they are an efficient way of generating more productive activity that leads to greater wealth creation.
We've all been living through this incredible enrichment of the last couple hundred years of post-Enlightenment post-Industrial Revolution now the digital revolution. The data points that speak to the higher quality of life we enjoy that came with a freer society and freer market. It's a division of labor, mutual cooperation. All these things are incontestable. What the burden upon Christians is, is to never abandon the idea that the free society must be a virtuous one, that without virtue, we lose our freedom. And without freedom, we lose our virtue.
Marlin Detweiler:
Have you had much interaction as you speak about the value of free society and the capitalism that tends to drive it in a way that we can, you and I can agree, is biblical. Have you had much interaction with those people who would take the approach that – let me think in an extreme category, but basically almost owning nothing, giving everything. And really the economic model of that in absolute terms does not produce for their neighbor in the same way. That seems obvious to me, but many people don't see it that way. How do you address them?
David Bahnsen:
Well, I think that there is a growing interest in some sort of notion that romanticizes shared ownership. And has a lower value of private property. And I try to focus on private property as something that is in fact the great enhancer of our care for neighbor. That where there is private property, people tend to make better neighbors.
They tend to create better communities. And yet those areas in which there is shared ownership is where there is the least regard – that there is not the same value one would put on property that is owned by oneself, that is stewarded, and then it is part of a community and you think about a home you own and it is your house, you own the deed to it. You care what the backyard looks like. You care about the memories you make inside the home. But if your home sits in a neighborhood you care about, the park that you don't own, that is rather part of your shared community more than you would if you didn't own the home that is in the same neighborhood. It's given you a sense of buy-in and responsibility and accountability around the resources of the neighborhood.
Private property fundamentally is necessary to what we economists refer to as economic calculation. We cannot calculate the risk and reward of a different endeavor we may pursue upon if there isn't private property. But if you don't have economic calculation, then there will not be risk-taking. There will not be the endeavors that lead to the production of goods and services that enhance the quality of life that not only give meaning to our lives, that people find dignity in their labor, that their contribution to the production of those goods and services is the very thing God created mankind to do from the garden, the very thing we share, by the way, in God's own image himself, He as the ultimate worker and producer and innovator and creator. But when we take away the incentives for production – incentives that are greatly enhanced by things like private property, then we ultimately take away that quality of life and that opportunity for human flourishing that we're commanded to want for our neighbor.
Marlin Detweiler:
I was going to ask you as a follow-up question, why is understanding of economics so important for the Christian, but boy, I think you nailed it already. Let's move on to talking about a couple of your books. I've focused on two.
I don't know if this is your most popular book. My sense is that it's sold more than any of the others. So far, There's No Free Lunch. Is that your number one seller?
David Bahnsen:
There’s No Free Lunch is my best-selling book. Yes. And I guess it should be because it was the last book that came out. And with each book, I imagine the audience kind of increases a little.
Marlin Detweiler:
Good for you.
David Bahnsen:
I'm blessed to still be doing more and more TV and interviews and opportunities to kind of grow that brand and platform. But also I think There’s No Free Lunch had a broader audience. It was something that had an opportunity to reach out to a lot of people that I think have a sort of impulse, an instinct for free markets, but maybe have never really considered where that comes from.
We're in need of tethering that impulse for free markets to a little more foundational understanding. That's what I was intending to do with that book. And I didn't believe that we needed to reinvent the wheel. I believe the classical contributions over the years from great economic minds did a lot of that groundwork for us. And so I built the book around 250 quotes, some from contemporaries and some from long deceased economic classics that that helped make that case.
Marlin Detweiler:
Yeah, well, as the saying is quite familiar to probably any American that's been alive for more than 10 minutes but I think it bears unpacking by an economist, by someone with your background when we use that term, how do we use it? What do you mean by it?
David Bahnsen:
Yeah. So let me start with what I think a lot of people mean by that, which I think is actually overly simplistic and reductionist. A lot of people just simply mean there's no free lunch. Meaning if you want something, you got to work for it. Well, that's that's fair enough. But that's actually not what Milton Friedman meant when he coined the phrase, he didn't write a book called No Free Lunch, but he did use the phrase in the early 1970s. And there was an essay penned that is, I think, where it really became more of a household nomenclature. I did a lot of research on where the phrase first came from before Milton Friedman and the earliest recorded indication of someone using the phrase in an economic context was a newspaper writer in El Paso, Texas, in the late 1930s.
But essentially no free lunch refers to the number one law of economics, which is scarcity. In order to get something I want, I have to give up something I want. I can go into a Starbucks and I can get a grande coffee, or I can keep the $4 in my pocket. I can't do both. And so I'm willing to give up $5 for a coffee drink. And Starbucks is willing to give up a coffee drink for the $5. And in both cases there has to be a give and take and out of that reality of scarcity, there is no free lunch. You're not going to get both. But when you can find those activities to mutual cooperation, you get real wealth creation, you get real enhancement of quality of life. Why do we know it was a good deal for me to give Starbucks $5 and me to get a coffee? Because I did it and nobody forced me. They were willing to give me the coffee at that price and I was willing to give them the money. And the coffee meant more to me than holding the $5 in my pocket. And that's all economic activity is, is us living out the reality of there being no free lunch every day.
And it's when central planners try to buck that law of scarcity to pretend that there can be a free lunch, that there won't be a tradeoff. We don't mind tradeoffs. We live in a marginal reality. And when someone says that coffee will cost you $20, most people don't do it. But when people are willing to go buy it and when people are finding it available to them an incredible steak for only $20 they buy and buy and buy until the producer or seller says, “Hey, I need to raise my prices to $30 or $40” or whatever the clearing price may be. That's the activity in the marketplace, this human action that makes a market and markets are just what they are, humans interacting around our own instincts, our own preferences, our own taste, our own freedom, our own subjective values. And when a central planner comes in to say what a price needs to be or to say, you can both have this thing and not pay for it, that's when we dramatically distort markets and create a very negative effect.
Marlin Detweiler:
Yeah. I'm going to ask you to step into the mind of God here for a moment. Sorry about that. But it it is my firmly held belief and I suspect yours, that this is the way God made things to be. This is the way his creation is providentially intended to work. Why do you think that is?
David Bahnsen:
Oh, well, I believe that that God made us in his image with dignity. And that part of that image bearing reality from the garden. And I want to point out this is before sin entered the world that not only did we have certain realities of allocating scarcity that come with toil and other things after the fall, but that from the very created purpose of mankind, God made us to exercise our distinctly unique human characteristics of rationality, of reason, of creativity.
And he created the world with potential. But he asked us as his image bearers to go extract that potential. And this is an incredibly important economic but also a theological point. Many people, the most successful consumer product in world history, – say they use the iPhone day to day and they think that it's new. And there's certainly no doubt that some of the silicon technology that goes into what allows that iPhone to do all at once, what it does in one tiny little handheld device, that a lot of those ideas and innovations are new as a result of 21st and 20th century technologies. But there's nothing new in the raw materials. All that is new is human mindset, human ideas, human ingenuity combined with the raw material of God's created world. This is what God made us to do. And in a freer market system, we will come up with more glorious innovations that flow from the created spirit that God gave us to have dominion over the earth, cultivate it, to steward it.
And I think that us understanding this dynamic and then attaching to it some of the truly profound lessons about human nature that I think mirrors certain theological understandings and truths that are very important about the incarnational reality of Jesus. We live in both the material and spiritual realms. We are embodied creatures through our physical needs, but we have souls that will never die. We have an eternal destiny. We have a certain immaterial reality that speaks to emotions and dreams and hopes, that speaks to communion with God and our quest to be in relationship with Him. God created us as dignified human beings individually. We do not get our meaning because we are members of a certain church. We do not get our meaning because we are members of a certain nation-state.
We do not find our dignity and our membership in a collective. However, as individuals who have individual meaning and dignity, we also do not exist in an isolated context. We exist as members of families, as members of communities and in the marketplace, our individual dignity, our chasing, our hopes and dreams to be who we want to be. That reality exists all the while having to work in communion with vendors, suppliers, with investors, with customers, with employees.
It captures the individual and community, the one and the many reality of this experience and mirrors the very image of God, the Trinitarian reality of God and the Incarnational reality of God. And I think these theological truths brought home to economics is very, very important and beautiful, by the way.
Marlin Detweiler:
Absolutely. I couldn't agree more. And I think it is I hope that you will continue to press that message, because I can't imagine not appreciating that in light of where we find ourselves politically and sociologically in a very unusual and precarious place. And it's some of these things that are just really not practiced or understood well across the board right now and so important.
Well, that leads me to another book that you've written, which also I think is very timely, a book that I don't think is released yet. It's called Full Time Work and the Meaning of Life. When's it going to release?
David Bahnsen:
So the book will be actually shipping from Amazon, arriving to doorsteps by February 6th, which I might add, was the birthdate of the late, great Ronald Reagan. So it comes out just after the New Year, but it is all done, finished, edited and at the printer as we speak. So these days with supply chains, hardback books getting actually to their point of destination is still taking a little longer than it used to, but very excited for Full Time Work and the Meaning of Life to come out just in the early part of 2024.
Marlin Detweiler:
Okay, So early ‘24, let's call it January or so. I know those things can float and at some point very soon I'm sure there'll be a hard date that maybe it's already happened. But tell us.
David Bahnsen:
February 6th is the date.
Marlin Detweiler:
I completely blanked on that. Thank you. Tell us about the message of the book. I read something. I don't have it written down in what I'm looking at in my notes. But there was something that was very, I thought, very pointed, a bit contrarian and resonated very much with me.
David Bahnsen:
In terms of the purpose of the book, the purpose of the message of the book itself?
Marlin Detweiler:
What is it? What problem are you trying to fix or what? What are you trying to impress on the reader that is not always intuitively understood?
David Bahnsen:
Yeah, there's no question that I hope the book has a profoundly important message to an unbelieving audience as well. But truth be told, I will be very, very happy if the primary readership of the audience of the book, the big impact comes even to believers, in this sense, I think it is very rare that even a Christian has a fully developed, self-aware, comprehensive understanding of the importance of work. Spiritually, economically, personally, and ontologically. I quote Dorothy Sayers throughout the book quite a bit.
Marlin Detweiler:
That's great.
David Bahnsen:
Oh quite a bit. Yes. I believe that Christians have been programmed to believe that work is a great thing for that utilitarian purposes it can fill that by working you'll end up getting a paycheck from which you can support a school or a church or a mission fund that by working, you'll be able to support your family. And that ministry you may be able to do is the most important thing that can come out of your work endeavor. But it tends to ignore the intrinsic value of the work itself.
I think that and right now we live in a time where almost everybody is aware that there is a heightened feeling of alienation, of isolation, of loneliness, of despair in the society. We see it empirically with increased drug and alcohol abuse, of suicide, of just tragic issues. And I think that even the world is aware that one of the problems that's contributing to that is a declining view of family, declining connectivity in communities, social bonds that are broken down.
But I look to the necessity of faith, family, friends and work as the sort of four pronged recipe for a truly happy, meaningful life. And only one of those four seems to be uniformly disdained. And it's work. We view work as sort of a source of the problem instead of a source of the solution.
I think people find meaning in their work and that that is how God created it to be, that God created us to work six days a week, that He worked six days a week, that “avohdad.” The word, the Hebrew word used hundreds of times in the Scripture literally means to work and worship there is a clear exegetical imperative that speaks to work as being the encapsulation of the human experience and that our families are great blessings to us and that the opportunity to worship in community what we call church is a great blessing, but that the thing we're here on earth to do is to steward the creation of God, to cultivate it, to grow it.
Marlin Detweiler:
You mentioned earlier, too, that something was a pre-fall endeavor. Work is a pre-fall endeavor.
David Bahnsen:
Well, that's right. And I think that our work being thought of as part of the curse is something that I try to unpack exegetically in the book that work was instituted and ordained and blessed before the curse and that if people understood the curse from the fall as meaning that work was a curse, then I guess that would mean children are a curse as well.
Since then of course, all the Genesis passage we referred to speaks of is the pains of childbirth, just like the toil from our labor, but not children themselves and not the work itself. So there will be thorns and thistles that come about with our work. There is an anxiety there. There are things that were not part of the original created design as a result of sin entering the world. But what is a part of the pain in design? Is God making us in His image and God himself being a worker, and that us finding great meaning. And from Dorothy Sayers to, by the way, Pope John Paul the second who has a fantastic cyclical on work and I think a holistically historical Christian understanding of things.
God cares about our work because God cares about the worker. Yeah, and this was the subjective understanding of work that we are the subject of work as the worker and there is an object – those who we work for. God cares about both of these parts of the process, and we can never say one's work is irrelevant unless you want to say the worker is irrelevant.
But I believe that God cares about all the workers and I do not believe he created 51% of creation to work and contribute and exercise dominion and have dignity of the other 49% to benefit from the work of the workers. Not everyone is going to invent Microsoft! Every worker matters to God and every human being is created with this capacity for contributing to God's kingdom in that way. And that's the subject of the book. Sorry for going on so long.
Marlin Detweiler:
So yeah, no, that's wonderful. I look forward to reading it and it is such an important topic and really well connected with what we do at Veritas. David, this has been wonderful to have you on. Thank you so much. Folks, you've been with us at Veritas Vox, the voice of classical Christian education. Thank you for joining us.
