The Bible doesn’t tend to be a common source today for discussions on economics, least of all central banking, but as a Christian, I wanted to see what it might have to say. There’s no verse that says “thou shall not have central banks or fiat money”, but I would argue that the Bible is sympathetic to maintaining sound money, and certainly compatible.
A commonly repeated theme throughout the Old Testament, is the importance of “just weights and measures”, such as
“The Lord abhors dishonest scales, but accurate weights are his delight”. (Prov 11:1)
“Do not use dishonest standards when measuring length, weight or quantity. Use honest scales and honest weights, an honest ephah and an honest hin. I am the Lord your God, who brought you out of Egypt.” –(Lev 19:35-36)
How do these affect our view of money? Money is a store of value, and hence as money loses its value through continued inflation, you are being cheated out of your previous earnings. This is similar to merchants who would use false weights in order to buy lower and sell higher. This a common theme over at Freedom at Bethsaida.
But perhaps money is different to other weights and measures? Does the Bible have any verses more specifically about money?
In the first chapter of Isaiah, there is a prophecy against Judah and Jerusalem for their continued rebellion against God.
21 See how the faithful city
has become a prostitute!
She once was full of justice;
righteousness used to dwell in her—
but now murderers!
22 Your silver has become dross,
your choice wine is diluted with water.
23 Your rulers are rebels,
partners with thieves;
they all love bribes
and chase after gifts.
They do not defend the cause of the fatherless;
the widow’s case does not come before them.
Amongst the condemnations of murder, theft and corruption, is verse 21 – describing silver becoming dross, a base metal. The second half of the verse regarding wine suggests this is a deliberate act, rather than some unfortunate economic event outside the Israelites control. This is a process that has occurred throughout history, where the state reduces the silver or gold content of the coins, and replaces it with base metal. Today, the same process takes place with the printing press and electronic money creation. All dilute the value of the currency.
It is worth noting that this passage includes another one of the OT’s themes – that of the need to defend the fatherless and the widow. The poor are those most hurt by inflation, and the rich those who benefit the most. Asset prices (eg real estate) rise, banks receive the new money first, and by the time any new money reaches the general population, prices have risen (So-called Cantillon effect). Those on fixed incomes, such as pensioners, are especially hurt by this process. If we want to aid those most vulnerable and needy in society, dealing with inflation is essential.
For more detailed reading on the Biblical view of money, please see the excellent Honest Money by Gary North (epub/pdf), or alternatively The Church and the Market by Tom Woods, though sadly this isn’t available for free.