Lux Lucet

Elisha Prophesies the End of Samaria’s Siege by Nicolas Fontaine, 1625-1709.

The Bible has a monopoly on truth. This simple idea is basic to the entire Scripturalist enterprise. Yet while the idea itself is simple and ought to be taught and understood by every Christian, it’s one that often is denied.

Speaking for myself, many times I’ve fallen into the trap of thinking that the Bible is good for learning about God and salvation, but it’s not a textbook on economics, or politics or history. Revelation alone is the source of all knowledge, but my belief that Bible is not a textbook on fill-in-the-blank was a sinful denial of this premise.

I mention this by way of introduction to today’s post on Biblical economics. and for today’s lesson, I’d like to look at the siege of Samaria as related in 2 Kings 6:24-7:20.

The Siege of Samaria

Samaria was the capital of the Northern Kingdom and had come under attack by Ben-Hadad, king of Syria. Sieges in the ancient world were horrific events, and doubtless left survivors deeply scarred both physically and emotionally. For example, when the Assyrians were threatening to besiege Jerusalem, the commander of their army told Hezekiah’s representatives and all the people who were assembled on the city wall, “Has my master sent me to your master and to you to speak these words, and not to the men who sit on the wall, who will eat and drink their own waste [during the coming siege of Jerusalem] with you” (Isaiah 36:12). And this leaves unsaid the lack of sanitation, disease, stench and death that would all be part of the package deal.

Regarding the siege of Samaria, the Bible tells us, “And there was a great famine in Samaria; and indeed they [the Syrians] besieged it until a donkey’s head was sold for eighty shekels of silver, and one-fourth of a kab of dove droppings for five shekels of silver” (2 Kings 6:25).

There are a number of important economic ideas packed into this verse. Let’s take a look at them.

The Laws of Supply and Demand

Many of us, even if we have not formally studied economics, have heard of the laws of supply and demand. The idea behind them is fairly intuitive. The law of supply states that as the price of a good or service rises, more of it will tend to be supplied to the market. The law of demand tells us that as the price of something goes up, the public’s demand for it will tend to go down.

It is the interaction between the supply of a good or service and the demand for it that determines its market price.

Due to the siege, the supply of food to the city had been cut off, causing food prices to sharply rise. At the same time, the higher prices would have caused the demand for food to drop, allowing the city to conserve the little nourishment that was available.

This illustrates an important function of prices: they convey information about the relative abundance or scarcity of a thing. When the market is allowed to set prices without government interference, it serves as a very efficient method for guiding people to do what is in their best interest. This ability of the market to lead people to do what is in the best interests of society while at the same time pursuing their own self interest is what Scottish economist Adam Smith later would call the Invisible Hand.

Marginal Utility and Subjective Value

Perhaps the biggest question among economists in the 19th century related to the theory of value. “How is it,” they asked, “that diamonds, which have little practical use, can be so expensive, while water, a substance we all need to live, is so cheap?”

Various theories were put forth. The Marxists had what they called the labor theory of value, where the value of an item was determined by the amount of work it took to produce it. Others, following Aristotle and Thomas Aquinas believed that value was intrinsic in the object.

It was an Austrian economist by the name of Karl Menger who put forth the idea that value was determined by marginal utility and subjective value.

Subjective value states that a thing is valuable because people value it. In other words, value, like righteousness, is imputed, ascribed, or reckoned. It is not inherent in the thing itself.

Marginal utility says that the value a person ascribes to all like units of an item is identical to what he ascribes to the last unit he owns. To give an example, if someone has a million cans of food, he will ascribe the same value to all cans as he ascribes to his millionth can. This likely would not be very much.

On the other hand, if someone has only one can of food left, he will value it as he values his life, for it is the only thing that stands between him and starvation.

Taken together, the theories of marginal utility and subjective value determine the value people will ascribe to something.

Since there was very little food left in Samaria after the extended siege, people ascribed to it a very high value indeed.

Elasticity of Demand

The demand for some things is more sensitive to price than others.

For instance, if the price of a Caribbean cruise doubles, this likely will cause bookings to fall precipitously. Caribbean cruises are a luxury good. They’re nice, but we can get by without them.

On the other hand, some things are harder to do without. For instance, what if the price of heating oil doubles? People probably will find ways to reduce how much they use. They could lower the thermostat in winter and wear and extra sweater.

But because heating oil is a staple good for people who live in cold climates rather than a luxury, the demand for it probably would not fall was much as the demand for Caribbean cruises, even if oil went way up in price.

Economists describe price sensitivity of demand for items with the terms elastic and inelastic. The demand for Caribbean cruises, because it drops significantly when prices rise, is said to be elastic, whereas the demand for heating oil is inelastic.

When demand for an item is inelastic such as is the case for food, the suppliers have an advantage over the buyers. Highly inelastic of demand is a factor that can push up the price of a good or service

Elasticity of Supply

This is similar to elasticity of demand, and measures the sensitivity the quantity supplied to a change in price. If a good has a high elasticity of supply, the quantity brought to market will go up a lot as prices rise, and decrease significantly when prices fall.

In the case of the siege of Samaria, the food supply was artificially inelastic as a result of the Syrian blockade. This means that any rise if the price of food would have little or no effect on the amount brought to the Samaritan market.

Substitution

Substitution is another principle of economics that can be deduced from the Bible’s account of the siege of Samaria.

Substitution is something that we’ve all done, probably without thinking much about it.

Take for example what happens when the price of gas goes up. If it gets too expensive to fill up the car, instead of driving we may elect to take the bus to work. Or instead of traveling out of town to visit aunt Millie, maybe we’ll settle for a phone call or sending an email.

The residents of Samaria engaged in substitution as well. We can see this illustrated in the 2 Kings 6:25 by the fact that people are willing to eat disgusting items such as donkey’s heads and bird droppings. Doubtless, they would have preferred something tastier, but they substituted as best they could.

Sound Money

When the Samaritans were able to find food to buy, they did it with sound money. The price of a donkey’s head was 80 shekels of silver, and that of a kab of dove droppings was five shekels.

In the ancient world and up until very recently, money was almost universally considered to be a standardized weight of a given commodity, usually silver and gold.

That this was the case in ancient Israel can be seen from the very name of their monetary unit, the shekel, which term is derived from the Hebrew verb shaqal, to weigh.

The Bible’s close identification of money with the weight of a commodity also can be seen by the fact that in Hebrew the word for “money” and “silver” is the same, keseph.

A monetary system based on a weight of silver or gold helped facilitate commerce, because it made cheating difficult.

But that’s not how things work in today’s brave new monetary world. Instead of a monetary system based on honest weights and measures, we have a system of central-bank-issued paper fiat currency enforced by legal tender laws.

Unlike gold and silver, the supply of which is constrained by the need to dig it up out of the ground and refine it, paper money can be created in nearly infinite quantities at virtually no cost.

In 1792, the US Congress passed the Coinage Act which defined the dollar, “as both a weight of 371.25 grains of pure silver and/or a weight of 24.75 grains of pure gold (Ron Paul and Lewis Lehrman, The Case for Gold).

Today, no one knows what a dollar is. It is undefined.

But while this state of affairs is intellectually dishonest, it does confer certain benefits to some people. Paper currency allows the government to inflate the money supply and use the fraudulently created, essentially counterfeit currency to spend beyond it means.

It also allows certain well-connected entities such as elite Wall Street financial firms to borrow money at next to nothing and use those funds to enrich themselves by using it to acquire real hard assets and by speculating in the financial markets.

But what is a benefit to the government and certain elite private entities impoverishes ordinary citizens, who are kept in the dark as to the reason why their financial situation keeps deteriorating year by year. .

The current world financial system is a is far inferior to the system of payment used in Samaria. Instead of being based on honest weights and measures, it is a debt-based, central-bank-controlled paper currency ponzi scheme. God hates it. And he will judge both those who run it and those who intellectually defend it.

Conclusion

In this post, we’ve seen how, in a very short space, Scripture implies many of the basic principles of modern economics, and did so thousands of years before these notions were articulated by contemporary academic theorists.

The Bible has a monopoly on truth. It is the textbook on economics, not to mention all other intellectual disciplines.