Freecycle Economics

The thief comes only to steal and kill and destroy. I came that they may have life and have it abundantly.” – John 10:10

My wife participates in a freecycle group in our city. When we come across things that we would otherwise discard, we post them online first to see if anybody wants them. One man’s junk is another man’s treasure. You would not believe the junk people drive over to my house to pick up.

From an economic standpoint, this is quite a useful service (a free one at that). Twenty years ago these things would’ve ended up in a landfill. Back in college we could just drop old furniture by the dumpster; often enough somebody would take it home before the garbage trucks came. That only worked for furniture though. Now we can, as a community, find extended use for all sorts of items. More efficient use of resources – that is a good thing. Instead of buying new toy bins, baby gates, baby shoes, or handbags; those resources can be diverted to other functions.

I point this out because it runs directly contrary to prevailing Keynesian economic thought – which tends to dominate our economic policy.

The Keynesians would say that freecycling is in fact a bad thing for the economy. Making use of “hand-me-down” items leads to “insufficient demand.” (The whole notion is nonsense, of course. Demand is infinite, resources are limited.) They will argue that freecycling is costing jobs in the manufacturing sector, by reducing the demand for new products.

Back during the great depression, economic policy wonks were greatly concerned about falling prices. (Severe credit deflation – not unlike what we’re experiencing, though perhaps a bit more severe … watch for the falling prices here too.) The notion was that falling prices would hurt producers and threaten the economy. Not sure if they ever asked the consumers how they felt about falling prices – which generally get a warm welcome. Anyway, the government went about destroying crops and livestock in order to keep prices elevated.

Does that make any sense? People were hungry, unable to find work, unable to feed families; and we were worried that prices might fall low enough for them to afford food. Good thing we didn’t make use of all of that excess produce – much better to destroy it than feed the needy.

We’re doing the same thing this time around, though perhaps not as blatant. The government spent a great deal of money last year to buy “clunkers” from the citizenry (as part of a new car purchase) and then destroyed the older cars. The cars were still serviceable, but were destroyed for the sake of economic progress. Of course, now people who want to buy a cheap used car are having trouble – they’ve all been destroyed. The last thing we want in hard economic times is for things to be more affordable.

(We did the same with tax credits for new home buyers – trying to prop up prices. Again, in a bad economy we should want things to become more affordable, not less.)

My point in all of this is not to rehash Austrian versus Keynesian economics. I’m actually aiming at something a bit more theological. The Lord declares in John 10:10 that “the thief comes only to steal and kill and destroy.” Destroying useful items, whether cars, or hogs and crops (as in the great depression), is, well, destructive.

I’ve said on a number of occasions that it doesn’t expressly bother me that there are progressives, or communists, or even Keynesians in this world. What I find confusing is the extent to which Christians have fallen prey to such philosophies. To that end, we ask the simple question: how many characteristics do your preferred policy choices have to share with “the thief” before you’ll abandon them?

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