Economics 101: Price-Fixing – The Law of God and Public Policy

Economics 101: Price-Fixing
The Law of God and Public Policy

God’s Law worked to keep prices stable.

“If a man dedicates to the LORD part of the land that is his possession, then the valuation shall be in proportion to its seed. A homer of barley seed shall be valued at fifty shekels of silver.” Leviticus 27:16

Price-fixing occurs when manufacturers or service providers collude to raise prices beyond what the free market will bear. Price-gouging is that practice whereby one who monopolizes a market drives the prices up simply because he can. Over the years, government has established a wide range of public policies to minimize these practices by making them criminal offenses, establishing watchdog agencies, or requiring various kinds of disclosure.

Price-fixing and price-gouging always work to the disadvantage of the consumer, which is why, in the Law of God, efforts were made to discourage arbitrary price-setting or price-fixing of any kind.

There was no attempt to “fix” prices in the economy of ancient Israel. However, the Law of God was designed to help ensure that prices would be fair and stable. Prices—as well as money—were fixed to grain, which was the staple of the Israelite economy. Grain was the “gold standard” of Israel’s economy, since grain, more than silver or gold, was needed for survival.

A certain measure of grain was worth so many shekels. The value of a shekel, in turn, was determined by how much grain it could purchase. To charge more for a “homer of barley” than what the Law prescribed—fifty shekels of silver—would have been folly, since no one would pay it—fairer prices being available almost everywhere—and the seller might be vulnerable to charges of attempted theft. If found guilty by local judges, a price-gouger might then be required to restore justice by giving the goods originally sought plus a percentage more. Price-fixers would be guilty of collusion and similarly held accountable before the Law of God for conspiracy against their neighbors.

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In the Gates is a devotional series on the Law of God by Rev. T. M. Moore, editor of the Worldview Church. He serves as dean of the Centurions Program of the Wilberforce Forum and principal of The Fellowship of Ailbe, a spiritual fellowship in the Celtic Christian tradition. He is the author or editor of twenty books, and has contributed chapters to four others. His essays, reviews, articles, papers, and poetry have appeared in dozens of national and international journals, and on a wide range of websites. His most recent books are The Ailbe Psalter and The Ground for Christian Ethics (Waxed Tablet).

Scripture quotations in this article are from The Holy Bible, English Standard Version, (c) copyright 2001, 2007 by Crossway Bibles, a division of Good News Publishers. Used by permission. All rights reserved.