Wealth Creation Economic Paper
Michael Kusi.
University of Christocracy
February 11, 2023.
Archbishop Alexander.
??????????????????????????????????????????????The Importance of Wealth Creation
Wealth is the ability of a particular entity to have material possessions that can be leveraged to obtain various articles of life.[1] The Bible speaks of wealth as important and ties wealth to the omnipotent hand of God. One of those verses which expound on wealth in the Bible is Proverbs 10:22 which states, “The blessing of the?Lord makes a person rich, and he adds no sorrow with it.”[2] Solomon was said to be the wealthiest man who ever lived and he had an abundance of gold, silver and other forms of wealth. [3] People like Abraham and Job had tremendous wealth in terms of animals and other materials.
Firstly, this paper will describe economics and the various forms of economics, such as
microeconomics, macroeconomics, urban economics, and rural economics. Next, this paper will
deal with how traditional philosophers have grappled with wealth and economics. Finally, this
paper will deal with ways that both the government and the private sector generate wealth, such as through banking and taxation. The unemployment rate will also be evaluated for its effect on the economy.
Two of the forms of economics are microeconomics and macroeconomics.
Microeconomics is the aspect of economics that is focused on the particular person and
the household, and how they arrive at economic decisions which govern their personal lives.[4] It
evaluates how people react to shifts in pricing and the different changes in available resources.[5]
It is meant to evaluate the decision-making process of both ordinary people and wealthy
individuals. This is important because microeconomics deals with the wealth of the individual
Christocrat, and how the Christocrat could obtain wealth in order to spread the kingdom of God.
Macroeconomics is the part of economics that deals with the economics of nations and
larger entities.[6] It evaluates the components of the national economy like markets and
inflation. [7] It also encompasses aspects of the economy that affect the particular country at large.[8] Markets are vital to nations because markets facilitate wealth by helping companies
and people interact with each other. This aspect of economics is important to the Christocrat
because as Christocrats we are called to govern nations, and therefore we must know how vital
things like markets and inflation influence the world in which we live in. [9]
There are also urban and rural economics to consider when evaluating wealth. Urban economics deals with the economics of major and minor population centers and can entail such aspects of life as mass transit systems, roads, and airports.[10] ?An urban center can be considered to have a population greater than 2,500 people.[11] Rural economics encompasses the economics of more isolated and country-type settings.[12] ?A rural economy is one that is not tied to an urban center. Oftentimes, rural economies have less resources than an urban economy and struggle more with less wherewithal. Urban and Rural Economics are important because generating wealth depends on where a Christocrat finds himself, and generating wealth in the urban setting is different than generating wealth in the rural setting. [13] Certain Christocrats may live in an urban center such as New York City, and others may live in a rural place in East Africa.
Land, labor, capital and enterprise encompass vital parts of the economy's production. Land is part of the earth that is not inhabited by water.[14] In the Bible, God separated the earth from the sea in Genesis 1.[15] Land can have differing fruitfulness depending on where it is located. Certain lands are deserts and cannot be tilled for resources, and there are other lands with an abundance of natural resources such as gold, silver, coal and diamonds.
Labor is the requirement of toil needed to make goods and services within a given economic system.[16] Labor is important because one of the first tasks God gave to Adam was to labor in the garden. Labor was fruitful as long as Adam and Eve obeyed God, but when Adam and Eve rebelled against God, labor because arduous and difficult.?Labor can be evaluated as skilled and unskilled labor. Unskilled labor is like that of a laborer or janitor, and skilled labor is that of a lawyer, teacher or doctor. [17]
The definition of capital is the tangible asset that can be utilized to purchase.[18] Capital is important because as Christocrats we believe that in order to receive material wealth, there must be a component that is added because wealth isn’t cheap. We also believe that God has given Christocrats the power to receive wealth. Finally, the definition of enterprise is the capacity of a particular entity to combine land, labor and capital to produce wealth.[19]
Before the invention of money, there used to be a barter system. People would trade, for instance a certain amount of lambs for a certain amount of gold and silver.[20] However, the trade was not uniform but was agreed upon by both parties. Although people would use scales to weigh the gold and silver that they were bartering with, scales could be tinkered with to cheat people. Soon there was a recognition that there had to be a more uniform system of barter that would involve a fungible asset that was easy to carry and hard to destroy.
The people of Mesopotamia first created the shekel about 5,000 years which was the first currency, and the people of Lydia first created the first uniform coinage about 2,700 years ago. [21] ?Paper money was first created in China in the 11th century during the Song dynasty. [22] Most money is digital, with a small percentage of money being physical. [23] This is important to the Christocrat because we have a Credit Union in the South Bronx that deals with many financial transactions. Therefore, the credit union could meet the banking needs of the Christocrat when they set up a banking account.
The fundamental tenet driving economics is that of scarcity. There is a disparity between the resources that people need and the resources that are actually available for people to utilize.[24]
The resources that people want are infinite, but the resources that are actually there are finite. This sentiment is important for the Christocrat because we must recognize that we must husband resources, and that even though we have the earth's resources, we must be good stewards because the earth's resources are not endless.
Economics had been expounded upon since the times of the Sumerians in the Middle East. The ancient Sumerians lived in Mesopotamia. The ancient Sumerians propagated a market economy based on the shekel currency.[25] ?There was a temple economy headed by the priests and leaders of society and also a private economy of merchants.[26] The Sumerians utilized a novel writing system to denote financial transactions.[27] It was one of the first writing systems in the world. ?The Babylonians also created one of the first banking systems in the world.[28] Even in ancient times, the ability to gain and keep track of wealth was very important.
The Greeks were one of the first people to speak on economics.[29] The first known economist was Hesiod, who expounded at length on the fundamental tenet of the scarcity of resources.[30] The noted Xenophon who lived in Athens wrote the book Oeconomicus which is about household management. [31] It would be akin to modern-day Microeconomics and the day to day running of a household. It also speaks about the differences between rural and urban life and the importance of religion to the everyday person. This is important because wealth creation was thought of even in ancient times.
Aristotle was also a noted philosopher of economics. He is famous as the teacher of Alexander the Great, who was the ruler of Macedonia and Greece who eventually conquered much of the known world. Aristotle said that economics can be thought of in two components, the economics of the household and the economics of the state.[32] He also described the importance of having a market economy. [33] The economics of the household could be thought of as Microeconomics and the economics of the state could be thought of as Macroeconomics. This is important because as Christocrats, we must generate wealth both for our households and for society at large.
???????????Adam Smith was a noted economist who wrote one of the first modern economic books entitled The Wealth of Nations. In this book, he described the capitalist system that was an improvement over the mercantilist system of colonization.[34] In the mercantilist system, wealth was exploited and held. It taught that there was a limited supply of wealth and therefore wealth must be used for the good of the state and a few chosen people.
The mercantilist systems put tariffs on nations abroad that served to stifle free trade.[35] ?A tariff is a tax placed on goods as they are traded between countries.[36] Smith argued that free trade and a capitalist system was better. This is important to the Chrisocrat because recently, there have been arguments for high tariffs and stifling trade. And this sentiment of cutting off trade did not work in Adam Smith’s day, and it will not work now. The Christocrat must understand that there are certain economic theories that have been tried and found wanting, because they are not effective.
There was a struggle in economics between the ideas of Friedrich Hayek and John Maynard Keynes. Hayek was from Austria and had a more conservative view of economics. He would have an influence on conservative presidents like Ronald Reagan, George W. Bush and Donald Trump. [37] Keynes was from Great Britain and founded Keynesian economics. [38] He would have an effect on liberal presidents of the U.S like Franklin Roosevelt, Lyndon Johnson and Barack Obama.
Friedrich Hayek would later be a part of the Chicago School of Economics. Keynes argued that government spending and regulation was the key to a nation’s financial success. In contrast, ?Hayek argued ?that markets played a vital role in regulating wealth, and that this regulation was best if unregulated by the government at large. He also argued that if the central bank loosened money supply, then wealth would increase as a result. [39] As Christocrats we must be conversant with different economic philosophers and philosophies. This is important to the Christocrat because the Christocrat must recognize that there were people before him that have paved the way for economic growth and development.
There is also supply side economics which states that cutting taxes would stimulate the economy. Supply side economics is thought to be a conservative concept and was adopted by President Ronald Reagan in his economic doctrine called Reaganomics. This differs from Keynesian economics, which is more focused on the demand side.?It says that an increase in the supply of goods would correspond to an increase in the nation’s economy.[40] There is the Laffer Curve propagated by Arthur Laffer which states that there is a relationship between the amount of tax revenues and the tax rate of the country. It states that the optimal tax rate is one that is not too high so that tax revenues can be at its peak potential ,and that taxing more does not automatically mean that there is more tax revenue.
Taxation makes up a large part of government wealth. In America, the ability to receive income tax was governed by the 16th Amendment of the U.S Constitution. Taxes were cut during the Coolidge, Kennedy, Reagan, Bush and Trump economies. But cutting taxes produces a high deficit. Raising taxes reduces productivity. There are stories of people who did not want to work their way into a higher tax bracket because they would make less money. This impacts wealth because people are not being as productive as they could be, for the fear that their hard work would not pay off.
America was on the gold standard until the 1970s. In the gold standard it is a monetary economy that ties the value of the dollar to a certain fixed amount of gold.?The gold standard was very controversial in America’s history. There was a mantra from a presidential candidate named William Jennings Bryan called You shall not crucify mankind on a cross of gold.The thing about the gold standard is that it ties wealth to something that is tangible. Without it, money is just a concept. Without the gold standard money does not have that intrinsic value. Therefore there is the temptation to print money, because it is not tied to something like gold. This printing causes inflation and a downturn in the nation’s economy. ?Inflation takes away the purchasing power of a nation’s people.
There are two types of economies that govern nations, command economies and market economies. In a command economy, the government controls the economy and in a market economy, the economy is more decentralized and the people control the economy.[41] Command economies are most associated with Marxism, while Market economies are most associated with capitalism, even though they are not totally synonymous. [42] Market economies and capitalism both come from the idea of supply and demand.?A totally market economy is more laissez-faire while with a capitalist economy, certain aspects are regulated.
There are positive and negative aspects of both a command economy and a market economy. The positive aspect of a command economy is that all of the economic aspects are controlled by a government, while the negative aspects is that there is no room for the market to work and create wealth. The positive aspect of a market economy is that the market can create room for the nation, while the negative aspect of a market economy is deregulation that can lead to runaway bad business dealing.
There are also central banking systems to consider.The idea of a central bank came about because when left unregulated, banks would be subject to collapse during economic crisis. Most nations are now governed by a central bank. [43] There was the First Bank and Second Bank of the United States. It was created by Alexander Hamilton who was a Founding Father of the United States, and it was patterned after the Bank of England.[44] The Bank had 8 branches, one of each of the major industrial cities at the time.[45]
This First and Second Bank of the United States was able to issue bank notes that were currency. This admonition was because the state governments were not supposed to print and have their own currency, so a uniform system of currency was needed. This was so that wealth could be more easily managed. However, its charter was allowed to expire during the Jackson administration.
President Andrew Jackson hated the idea of a central banking system, and so he allowed the Second Bank of the United States to lapse.?However, This bank was also intended to operate as a commercial bank by giving commercial loans, which is different from the modern day mission of the Federal Reserve. This is important for the Christocrat to know so that the Christocrat can know the financial history of this nation which is vital to the world’s economy.
After the Panic of 1907 in the United States, there was a clamor for a central banking system.[46] J.P Morgan, who was a noted financier, helped to lend the U.S money to get out of a financial crisis. [47] The Federal Reserve System was created in 1914. ?The Securities and Exchange Commission was also created in 1933 after the Great Depression to regulate the financial system of the United States.[48] The World Bank and the International Monetary Fund.
Wealth can also be derived from trade. In the ancient days, there was an emphasis on trade. The Silk Road is a good example of this. It was a pathway that opened up China to trade with the rest of the known world. There are two types of trade, free trade and fair trade. Free trade is international trade that is allowed without tariffs or restrictions.[49] Fair trade is trade that is regulated by the government via tariffs and taxes.
???????????In conclusion, the knowledge of wealth is important for the Christocrat to have. With the knowledge of wealth the Christocrat can make decisions that positively affect both his household and his nation. The Bible says that in the end times knowledge shall greatly increase.
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[3] Holman Christian Standard Bible, 2 Chronicles 9:13-29. 2 Chronicles 9:13-29 GNT - King Solomon's Wealth - Every year - Bible Gateway
[5] Ibid.
[7] Ibid.
[8] ?Joseph E. Stiglitz, The proper role of government in the market economy: The case of the post-COVID recovery Journal of Government and Economics. ?2021 Spring; 1: 100004.
Published online 2021 May 14. The proper role of government in the market economy: The case of the post-COVID recovery - PMC (nih.gov)
[13] KIM PARKER ,?JULIANA MENASCE HOROWITZ ,?ANNA BROWN ,?RICHARD FRY ,?D’VERA COHN ?AND?RUTH IGIELNIK ?Similarities and differences between urban, suburban and rural communities in America | Pew Research Center
[15] Genesis 1:1.
[17] Ibid.
[27] Ibid.
[31] Xenophon’s Oeconomicus — What is Management about? | by ProfManagement | Age of Awareness | Medium
[33] Ibid.
[35] Ibid.
[38] What Is Keynesian Economics? - Back to Basics - Finance & Development, September 2014 (imf.org)
[39] Ibid.
[43] A History of Central Banking in the United States | Federal Reserve Bank of Minneapolis (minneapolisfed.org)
[44] Ibid.
[45] A History of Central Banking in the United States | Federal Reserve Bank of Minneapolis (minneapolisfed.org)