Thursday, July 18, 2013

Book Review: The Poverty of Nations

The following is an extended review of The Poverty of Nations: A Sustainable Solution (Crossway, 2013) by Wayne Grudem and Barry Asmus (hereafter referred to as TPN).  I received an advanced digital copy of this book through the NetGalley program.  TPN will be published August 31 and is available at Amazon.


The discipline of economics is in a state of confusion. This is no more apparent than when surveying the myriad solutions offered to alleviate poverty around the world.

Enter Wayne Grudem, a theologian, and Barry Asmus, an economist. This pair has undertaken to create a “sustainable solution to poverty in the poor nations of the world, a solution based on both economic history and the teachings of the Bible” (25). Written primarily to leaders of nations and lay persons, it is concerned with the laws and cultural principles that govern the economic arrangements of nations as a whole, rather than how local ministries or relief efforts should operate. With a major focus on the creation of goods and services, it advocates the free-market as the most efficient and morally superior method of increasing worldwide wealth. With its global perspective on poverty reduction, this is an ambitious book.

Grudem and Asmus claim that their contribution is “unique” inasmuch as it comes from both a Biblical and economic perspective. I suppose this is true insofar as I am unaware of a work of this caliber with such an interdisciplinary focus. On the other hand, many of their recommendations come from an old economic tradition and will be familiar to those who study or even merely follow politics. (Grudem and Asmus seem to acknowledge as much.) Many of the issues they discuss, such as whether multinational corporations pay unfair wages in poor countries, are not particularly in depth. As such, the value of this book is that it constitutes an introduction to the conservative perspective on international poverty.

One danger of books on economics is a lack of clarity. Here the book avoids serious pitfalls: the material is accessible and the writing generally clear—a refreshing change from other many other economic or theological works. Additionally, TPN has footnotes rather than endnotes, greatly enhancing the value of its citations.

Unlike some authors, Grudem and Asmus have done their homework—at least for the most part. They are conversant with many leading economists or other relevant scholars (Easterly, Collier, Novak, Ferguson, Acemoglu, Mauldin, Soto, etc.) and have sought to incorporate relevant historical evidence in their analysis. This has led to an impressive, if not daunting, list of seventy-eight specific causes of poverty.

The nuance is most welcome; indeed, it is necessary for a subject as complex as economics. Poverty is not reduced to a single cause—say, the laziness of individuals. The authors acknowledge, for instance, that structural corruption can allow leaders to act in ways that prevent individuals from escaping poverty.

However, sometimes it felt as if they were arguing with popular slogans or ideas rather than with leading liberal economists; the arguments against socialism felt anachronistic. What modern, currently living political leaders or economists are Grudem and Asmus critiquing? This was unclear to me, and the book risks shadowboxing with conservative caricatures or historical ghosts. This is additionally problematic given that the national leaders Grudem and Asmus would like to reach are likely to have more sophisticated views on economic matters than whatever passes for popular wisdom on a liberal blog or The Daily Show, and might not feel their position has been adequately addressed (or even that it has been addressed at all).

One of the great strengths of TPN is that it defines and explains core concepts in economic policy. Wealth and poverty are explored with reference to critical ideas such as GDP, per capital income, market value, commodity dumping, comparative advantage, composite price, what constitutes wealth creation and so on. Anyone who wants to make a lasting and serious comment on economic matters needs to understand these concepts and how they function as indicators of or factors in economic growth.

The Bible and Economics

TPN attempts to find support, perhaps even justification, for its free-market views in the pages of Scripture. To be frank, sometimes it felt as if Scripture was being tacked onto an economic philosophy. For example, Ephesians 4:28, 1 Thessalonians 4:11 and 2 Thessalonians 3:10 are invoked to imply that Paul “wanted [Christians] to continually create goods and services that were of value to other people” (61). It is difficult to see that in these texts. This is not to say that Paul would have been against this idea, but these passages seem to be dealing with work from a different angle, and I do not know if our Enlightenment understanding of goods and services is coterminous to Paul’s Jewish understanding of work.

One familiar argument is their use of the eighth commandment to justify the ownership of private property, as the law could not function without the assumption of ownership. This is true enough, although this kind of argument seems stuck in the concerns of the previous generation. Communism is all but dead; even ostensibly communist countries like China functionally operate under principles much closer to a free market than communist ones (China has introduced private property legislation). The danger to private property tends not to come from unsound economic policy, but the selfish actions of governments, many of which care not one whit about the Bible’s commandments.

Much of what we call economics we might otherwise call wisdom. For example, it is wise to learn from the failures of, say, sixteenth century Spain toward the accumulation of gold and apply those lessons to modern, oil-rich nations (80). Yet while wisdom is Biblical in one sense, it is inappropriate to loosely cite Scriptural passages in defense of free-market economics, especially when many of the leaders in the world who are not Christian do not take Scripture as a reliable source for economic policy. It often felt as if the Bible was being used to justify the cultural position of its authors, rather than being exposited to challenge and shape it.

This touches on the debate between Christian economists over whether Christians can offer anything substantially unique to the field of economics that cannot already be discerned through secular study. In some ways this book inadvertently vindicates the critics of a distinctively Christian economics, as its value lies primarily in its economic prescriptions rather than its Biblical injunctions.

Morals and the Free Market

Grudem and Asmus spend chapter six arguing that the free market contains the greatest moral advantages as compared with other economic systems. This chapter is one of the weakest in the book.

What constitutes morality varies from nation to nation, so it is not clear that this appeal will successfully translate in an international context. Additionally, claims that the free market system provides the best incentives for the development of virtue seem exaggerated, at best, or naïve, at worst. For example, Grudem and Asmus argue that the free market promotes more truth-telling than any other system. Given the enormous amounts of deception in the American market, especially in areas such as marketing or finance, this hardly seems like an advantage worth commending as morally superior!

Additionally, their appeal to the free market as the best solution to environmental problems assumes people will act in the long-term interest. Yet what is to prevent one generation from plundering the local environment for their own gain?

In another example, Grudem and Asmus argue that the free market promotes social cohesion. This is not so clear. Some of the most popular technology that has been invented, developed, produced and marketed in the United States—the mobile device—has led to a serious breakdown of relationships. Even secular sociologists have warned about these trends (cf. Sherry Turkle’s Together Alone). This is anecdotal, but one of the chief complaints I have heard from refugees who come to this country is how lacking the community is in the United States, and these people often come from countries run by brutal dictators.

Most importantly, their distinction between greed and self-interest seems weak. The idea that markets are the best, even if inadequate, corrective to greed does not account for how people who idolize greed tend to be those who dominate industries. Consider the hours required of the modern CEO and the negative effects this has on his family life (if he can even have a family), to say nothing of serving his local church or community.

It hardly seems useful to talk about the moral superiority of the free market when true behavioral change—the kind that makes for sacrificial, selfless living—arises from the kind of community Jesus promotes in John 17. The Church in Acts lived under an oppressive dictatorship, yet they gave more generously than most American Christians today, who are comparatively far richer.

Influences and Perspective

TPN is informed by the work of Corbett and Fikkert’s When Helping Hurts, which strongly warns against the ills of a paternalism wherein those helping others approach the situation as a parent over the needy rather than partner with the “poor” in mutually giving relationships. This is refreshing. It also signals a change in the thinking of Christians on relief efforts.

It is also heavily informed by David Landes’s The Wealth and Poverty of Nations, which in turn is derived from the classic (and highly disputed) work of Max Weber, who argued that the ethic of Protestantism led to the economic prosperity of the West. In addition to other familiar appeals and conservatives sources, such as to the Laffer Curve or The Heritage Foundation, economic liberals are unlikely to find this work convincing.

Changing the World

Many of the recommendations in this book will be familiar to political conservatives. Given that it comments on many issues, this work is best suited as an introduction rather than an in depth discussion. In some ways, I suspect this undermines their desire to speak to national leaders in two critical ways. First, many national leaders are already trained in or familiar with economics; it will take more than an introductory level book to change their minds. Second, few lay persons are likely in any position to change economic policy in either the West or poorer nations. The average American voter has surprisingly little influence on foreign policy arrangements and the actions of foreign governments, and the American Evangelicals who read this book are increasingly irrelevant in the major cultural institutions that actually do shape international policy. How much more so for American missionaries in countries ruled by brutal dictators or unelected oligarchies!

Rick Warren closes his foreword to TPN by exhorting its readers to: “Study it! Reread it and make notes, then put it into practice and teach it to others” (20). Not only is the book described as a new classic that should be “recommended reading” for every major Christian educational institution, local pastor and relief organization, but the book “could change the world” (Ibid.). Grudem and Asmus are no less fervent, as they tell national leaders that “there is a solution to poverty that really works. It has been proven again and again in world history. And it is supported by the moral teachings of the Bible. If this solution is put into place, we are confident it will lift entire nations out of poverty” (32).

The driving assumption, all but explicitly stated in Rick Warren’s foreword and otherwise claimed in the introduction (“preaching and teaching can eventually change a culture,” 32), seems to be that if enough people spread the ideas of the book, those ideas will become policy in other nations. As much as this would be nice, culture does not change through the popularity of an idea or even though how many pastors believe and preach it. This is a democratic, individualistic approach to change, but I don’t think it has any real historical backing, and it certainly overestimates the cultural capital of conservative Christianity. Additionally, having Rick Warren write the foreword automatically alienates a significant number of the people Grudem and Asmus believe would most benefit from reading this book.

Final Verdict

I would recommend this book with some caveats. Its value lies chiefly as a popularization of conservative economic philosophy. Its theological arguments are less impressive, and here I would hesitate to commend the book as an example of sound exegesis. The arguments are too loose and there is a risk it will serve as a negative example of Scripture use for impressionable lay persons, especially with the endorsement from Warren. I suspect the book would have been more successful without the Biblical arguments.

Attempts to end poverty are not new. I remember a talk at NYU several years ago by Columbia professor and economist Jeffrey Sachs, who was promoting his (then) new book, The End of Poverty. With opening remarks by U2’s Bono, the event was charged with anticipation and hope. Sachs went on to make a presentation that would have inspired even the most languid liberal. Yet what has come of that effort today?

The only material difference I see between Sachs and Grudem and Asmus is which portion of the white, American, Enlightenment-indebted economic tradition they embrace. Moral sentiments draped over economic philosophies will never change the world. And what Bono was to Sachs, Warren is to Grudem and Asmus: a celebrity endorsement.

In their introduction, Grudem and Asmus state that what they are recommending is hardly new (20). And in sense they are right: like so many books claiming to have solutions to enormously complex, intractable problems, it will make a splash and fall by the wayside.

I am reminded of something wise someone once said:

“You will always have the poor among you.”


  1. Best damn thing ive read on tribalogue.

    1. Clearly time to put me out to pasture!