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January 1982 · Vol. 11 No. 1 · pp. 19–25 

Understanding Profits from the Christian Perspective [Perspective I]

Arthur J. Block

Profit. The mere word evokes a variety of images, thoughts, emotions and attitudes which may need to be set aside so that we may honestly try to understand what it is. My attempt to understand it is but a momentary opening of the shutter, and I hope that the focus is Christian and will increase our understanding.

There is a body of opinion that considers profit a “rip-off” by capitalists, corporations and that new catch-all, the evil multi-nationals. People taking that position argue that profits come about at the expense of workers and the poor and disadvantaged in our society. Accumulation of wealth through profits is condemned as greed. International trade extends that greed in the exploitation of poor countries by the more developed ones.

Christian philosophers and writers have expressed that viewpoint over and over again. Even many Mennonite Brethren teachers, pastors, and students see profit as evidence of injustice towards the weak and the poor. They ask the question: How can a Christian participate in making profits and accumulate wealth in the face of poverty? And although that question is valid within intellectual discourse, it seems to me that it really begs the question. Indeed, it betrays a fundamental misunderstanding of the utility of profit for society.

Profit is a result in our society and not a cause. It is the result of innovation and marketing. It is the reward for the risk of uncertainty. Just as an athlete will not train day after day unless there is a chance of winning, so a business person will not risk losing unless there is also the possibility of gain.

But beyond the personal level, profit serves important and essential social functions. It alone provides the capital for more and better jobs. As Peter F. Drucker, the well-known twentieth century management guru said,

Profit pays for the economic satisfaction and services of a society, from health care to defense, from education to the opera. They all have to be paid for out of the surplus of {20} economic production, that is, out of the difference between the value produced by economic activity and its cost.

When we consider the exponential growth of the world population and multiply this growth by the natural quest for self-improvement and then again multiply the result by the new and growing information stimulus through print, radio, and television, we will begin to understand the growing demand for goods and services in the world. The disturbing indicator of this growing demand is world inflation. Little study is required to understand the increasing need for food, shelter, clothing—let alone water, sewer facilities, education, and production facilities—arising out of human need and aspirations.

Therefore profits, productivity, and distribution are vital considerations, for the world demand for goods and services is far outstripping supply. If the economic imbalance is left unanswered, serious instability will result. These imbalances cry out for correction. At this point economic solutions for the problem begin to diverge. Two main contending theories produce an endless variation on the theme of how best to solve the problem. The argument flows between central planning and the free market system, between nationalization and private enterprise, between egalitarianism and individualism, with an endless number of compromises.


I will not settle the argument, but a brief examination of the role of prices and profits in a free market system will widen our understanding.

Market Economics and Freedom

The West has been the most eloquent champion for the free market system. The argument is along these lines: free choice of economic decisions by consumers, workers, and investors will produce the most efficient and responsive economic results for the greatest number of people. Furthermore, economic free choice is important to political, cultural, and religious freedoms. Freedom is generic and pervasive. Consequently the free market system resists central planning, egalitarianism, nationalization, and all concentration of power, not only in the interest of economic efficiency but in the interest of freedom. Restrictions of economic freedom inevitably affect freedom of speech, culture, movement and religion.

At the other end of the economic spectrum, we have the central planning exponents. They argue that the free market system rewards the strong, oppresses the weak and is motivated by greed. Therefore in the interest of justice, they advocate severe restraints and controls on the action of individuals. And although that line of reasoning is widely {21} accepted, it misses the crucial point that power, like freedom, is pervasive. Power begets power and results in oppression. Particularly dangerous is the joining of political and economic power. Surely social, cultural, and religious freedoms will be easy victims in the face of such a tandem of power. Jacques Ellul, after describing a utopian socialist state says:

The price to be paid for [the abolition of private property] should make us stop and think; everything else is abolished with it. Gone is all initiative, all creativity, everything that is specific and distinguishing, every possibility of introducing even the slightest change.

The Free Market System

A philosopher who has had a great impact on our economic perception and actions was Adam Smith. He postulated that voluntary transactions between {22} buyers and sellers—a free market—could coordinate the activity of millions of people, each seeking his or her own interest, in such a way as to make everyone better off. He suggested that underlying such a system was a “hidden hand” which benefitted the general public.

Nothing illustrates Smith’s theories more effectively than Milton Friedman’s story of the “Family Tree” of a pencil. The pencil begins his story with the fantastic statement that “not a single person knows how to make me.” He then tells about the logging of cedar trees in California and Oregon and all of the skills and equipment it takes to get the logs to the mill where they are converted to slats which are shipped to Pennsylvania. He even mentions the thousands of persons “who had a hand in every cup of coffee the loggers drink.”

And that only provides the wood. The lead, which is really graphite mined in Ceylon, underwent many processes before it became a slender column in the middle of the wood. The eraser is made of factice, a reaction product of sulfur chloride with rape seed oil from Indonesia—and a little bit of rubber to bind it together. After all of this, says the pencil, “Does anyone wish to challenge my earlier assertion that no single person on the face of this earth knows how to make me?”

None of the thousands involved in these processes did their jobs because they wanted a pencil. No central office oversaw the whole process. No military police made sure that orders were carried out. And even though some of the nations involved may be enemies, these differences did not stop their “cooperation” in producing the pencil.

Adam Smith’s flash of genius was his recognition that the prices that emerged from voluntary transactions between buyers and sellers could coordinate the activity of millions of people, each seeking his own interest, in such a way as to make everyone better off. It was a startling idea then, and it remains one today, that economic order can emerge as the unintended consequence of the actions of many people, each seeking his own interest.


An efficient economic system should produce the “right” product or service at the “right” time in the “right” quantity in the “right” place to meet demand. But there is more to it than that. The role of prices and profit is to throw out information to consumers, labor, and investors so that they can respond to demand. Demand will attract investment capital, investment will create capacity, capacity will attract labor, labor will produce goods and services, goods and services will meet demand, sale of goods and services are supposed to produce profit, and profit will provide new capital for further investment. Even Karl Marx acknowledged the need for creating surplus labor value so that a pool of social capital will stimulate economic growth. The adjectives may be different, but when the political connotations are removed the process is identical; surplus labor value equals profit. Surpluses are the basis for expanding goods and services.

In a free market system, prices and profit are the nervous system of the economy, conveying and interpreting millions of free choices by consumers, workers, and investors to each other. An efficient economic system is built on a dependable information network. No group of planners with the latest computers could anticipate or reflect the untold billions of decisions made by mankind with the same degree of responsiveness and reliability that prices and profits achieve within the free market system. It is government consent to monopolistic activity which often frustrates the flow of accurate information. The lowly pencil is but one of thousands of examples of a quiet, real-time, self-correcting, low-cost information system determining the efficient production of pencils—and that without coercion. Continental frustration of the open market system creates the inevitable black market with all its morally corrupting results.

Profit and Power

Furthermore, the free movement of prices and profit will significantly affect the power structures which surround us. The effective free choice by consumers, labor, and capital has brought the mighty railways to their knees, has moved textile plants from New England to the South, has changed production lines at General Motors. It can also raise {23} and lower wages, prices, and interest rates. All these free choices by consumers, labor, and capital through the mechanism of prices and profit and investment can and does effectively divide power centers. Only when government, by law, condones monopolistic activity can the correcting influence of free choice become ineffective. Though prices and profit are basically economic information signals for consumers, labor, and investors, they are also protectors against the evil of power concentration.

Profit and Productivity

The economic benefit of profitability through productivity will reverberate throughout the society. More employment, more goods and services, a greater tax base from resulting wages and profits will all result in the distribution of economic benefits. It is almost axiomatic and self-evident that only through increased economic productivity can real distribution be actualized. The farmers of North America have proven beyond a shadow of a doubt that high productivity enables the west to share its surplus with the rest of the world. Japan has not only helped itself by fine tuning its economy to high productivity but its products have been made available throughout the world at lower and lower prices, resulting in the widening of economic benefits to more and more people. Reduced profits mean reduction in productivity and therefore reduction in the availability of goods and services.

Those who decry profits, investment, and productivity cannot at the same time espouse the need for sharing. How can society increase its research capacity, education facilities, health services, and foreign aid unless we create surpluses through increased production? Reduced consumption may be helpful, but increased productivity has consistently thrown out a wider reverberation of economic benefits to humankind. Conservation and productivity are not enemies; on the contrary, they are two sides of the same coin.


If we accept the necessity of profits in a healthy economy, how can we understand them within a Christian framework? For the answer, one must go to Scripture. Time after time it reveals guidelines about economic order which are normative for Christians.

Biblical Principles

God’s sovereignty is the primary matrix for a Christian perspective on economics. He is both Creator and Sustainer of the universe and we have been assigned the task of custodian and manager during our sojourn {24} on earth. Within the framework of creation, God has given us both the creativeness and the drive to subdue the earth to our material benefit and enjoyment. However, this assignment is within the envelope of God’s ultimate sovereignty. Therefore, any perspective of economics—profit, prices, capital, production—must fall within God’s word (the Bible) for the Christian.

The Old Testament institutions of the sabbatical year, the year of the Jubilee, and the leaving of the concerns of the field are not practical today, but their purposes are as relevant as motherhood. They brought about redistribution of wealth and economic benefits; they divided power concentration; they renewed freedom; they placed an economic net under the needy.

God called his people to seek after justice in weights and measures, in human relations, in contractual commitments, in keeping the law, in exercising the law, in protecting the poor and weak, in telling the truth, and to our environment. The circumstances have changed and complexity has increased, but the importance of justice has not changed a whit.

A new order emerges when we consider economics as part of the call of Jesus to love the enemy, to reward evil with good, to treat others as we want them to treat us. When we add the recognition that it is more blessed to give than to receive and that “you are to be perfect,” we realize that we have been called to a totally impossible, upside-down order. In fact, Jesus confirmed the inability of our natural mind to comprehend the meaning of this new order. It is the law of love; and it requires God’s grace entering the human experience. It is an impossible grid, an impossible frame of reference, a Divine dimension which only faith can span. A little scratching reveals the flaw of selfishness in our motivations even in our finest moments. The transcending, transforming, transmuting energy of the Divine work of grace in the Christian’s life remains a mystery. Acknowledgement of God’s grace is the window through which a Christian perspective of economics can emerge. The more we experience and comprehend the power of God’s grace, the more we are compelled to seek after justice.

Jesus confirmed the purpose of the old order, but he now touches the innermost recesses of our motivations and sharpens our focus on priorities:

  • Seek first the Kingdom of God.
  • You cannot serve God and money.
  • What shall it profit a man if he gain the whole world and lose his own soul?
  • It will be easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of God. {25}

Jesus placed spiritual values far above the material. He left no doubt as to where the Christian’s first allegiance belongs. He warned about the captivating danger of wealth and power. These are priorities which are at the core of a Christian perspective on economics.

The Drama of Economics

Consequently, the Christian finds himself in a high drama. Can we pursue productivity and yet proclaim freedom for consumers, labor, and competitors? Can we exercise economic power and still acknowledge the sovereignty of God? Can we pursue profits and still share with our neighbors? Can we accumulate wealth and seek after justice simultaneously? The dilemma of the divine call to perfection and our mortal imperfection come into sharp focus on the stage of our economic activity. Even Jesus recognized this when he repeatedly placed his teaching parables in an economic framework. Prices, profit, and capital are amoral symbols in this economic drama and serve as conduits of information giving direction to economic activity. It is in the use we make of these symbols that we express our ethics and morality.

Incredibly, God has chosen us to be his ambassadors of love. Joseph and Daniel are fitting examples of men at center stage of economic and political power who served as instruments of God’s blessing even outside the safe enclave of his chosen people. Their allegiance to God, their sense of justice, their concern for economic welfare, and their personal morality were severely tested within the then existing power grid. God chose to bless these men within the drama of life. So Christians today should not, need not, withdraw from their surroundings. Only through involvement can Christians be the salt of the earth, light in the darkness, peacemakers within strife, and replace hate with love. We are cast within the drama of economics by the Creator himself to express God’s grace and love to humankind—to be a Divine Mutation.

Arthur J. Block is President of Block Brothers Industries, Limited, Vancouver, British Columbia, and serves on the Board of Directors of Mennonite Brethren Biblical Seminary, Fresno, California.

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