Religion & Liberty Online

Dave Ramsey, Christian witness, and the morality of markets

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When the financial guru justified raising rents on his properties to “market rates,” even if it meant some tenants might have to hit the bricks, a lot of people asked what was more important to him: God or mammon. But was that fair?

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The tweet heard ’round the world last week involved a clip of Dave Ramsey arguing that a Christian landlord can, ethically, raise rents to market levels even if it means that the renter has to move out. The original tweeter just attached the simple phrase “incredible mental gymnastics from Dave Ramsey here.”

It went on from there, as many Christian tweeters suggested that this was “pure ideology,” that Ramsey’s version of Jesus would not have flipped any tables, and a whole lot about camels going (or not going) through the eyes of needles. In one of the cleverest responses—credit where credit’s due—the tweeter indicated that Ramsey was quoting from “the 2nd book of Thiefalonians.”

In fact, Ramsey’s answer was neither so bad as his detractors suggest, nor nearly as good as it could have been. (Quick note: I’m using this discussion to talk about Christians’ relationship to the market, not to talk about Dave Ramsey personally. I’m vaguely aware that there have been some recent dustups with regard to him and his organization, but I have not kept up with the news on that.)

Getting This Argument Right

To be totally fair to Ramsey, the very short clip making its way through Twitter did not capture what the full six-minute discussion did, including Ramsey’s encouragement to “treat others as you would like to be treated” as a “biblical mandate.” He tells a story about working with a lady who had cancer so that she didn’t have to move, and gives an example of delaying eviction because the renter has a new job that just hasn’t started yet. It seemed like the distinction he was really trying to make was between consciously helping someone in a genuinely tough situation and just feeling guilty about raising rents in general. It would be silly, he argued, for Christians simply to charge 75% of the market rate all the time, because they’d be failing to steward their resources well. He also didn’t seem to think (as many of his detractors assumed) that the question posed to him was about raising a rent on someone whose “displacement” would result in homelessness. He spoke explicitly about the scenario of raising a rent on a person who would just move to an apartment with a lower rent.

These comments were definitely the offending ones:

If I raise my rent to be market rent, that does not make me a bad Christian. I did not displace that person out of that house if they can no longer afford it. The marketplace did. The economy did. The ratio of the income that they earn to their housing expense displaced them. I didn’t cause any of that. And so you are not displacing them. You are taking too much credit for what is going on …

Oddly, what he’s saying here directly contradicts what he says both before and after these comments, where he makes it clear that he himself chooses to make exceptions to market prices when that is the right thing to do. “The market” is nothing more than the aggregate of a whole bunch of choices, but we are the ones who make the choices. I don’t personally cause this or that market rate to go up or down, but I’m perfectly free to choose what I charge and deal with the consequences.

Ramsey himself is in a particularly enviable position here, however, since he is quite wealthy. That means he’s able to take more of a hit to accommodate a renter who’s struggling. Unfortunately, old-fashioned ideas about rich owners and poor workers can give the impression that all landlords are in this position, but nothing could be further from the truth. When I rented the lower level of my house to my elder brother, I was living on a grad school fellowship of $13,000 a year and he was making six figures as a computer engineer. The vast majority of rental units in the U.S. are owned by individuals or “mom and pop” outfits, not corporations. Half of them manage their own properties, and it can cost $10,000 to get rid of a bad tenant. While many weighing in on this debate are thinking of renters who’ve lost their jobs due to COVID, one wonders whether they’re also thinking of small-time landlords who’ve lost all their income due to the “cancel rent” campaign. Here’s the story of a single mom who ended up homeless herself because she couldn’t collect the rent on her properties.

The bottom line is that for any true Christian, everything we own really belongs to God and must be used for His kingdom purposes. We steward our resources well when we buy and sell at market rates with honesty and integrity in the majority of cases, because that’s how we provide goods, services, and jobs for the most people in the most affordable way. But we are always open to creative solutions for tenants, employees, or others we come into contact with who are dealing with extenuating circumstances, and some of us may even be called to dedicate our whole career to such solutions. This can include business innovation focused on low-cost housing and other goods, nonprofit work to further such goals, or some mixture of the two. The “just give it away” philanthropic model, however, is both unsustainable and insulting to recipients, because it treats them as though they have nothing to offer. Better to create sustainable projects that develop neighbors’ skills, grant access to capital, and empower through connection to new networks. Some of Ramsey’s critics were absolutely correct in the claim that if more American Christians took this call seriously, economically depressed and destabilized neighborhoods could be transformed.

So Ramsey erred both in setting up an overly passive picture of the power of the individual in the market system and by underplaying how thoroughly one’s job, wealth, and life plans ought to be shaped by one’s commitment to the love of Christ and neighbor. As St. James says, if you’re going to set yourself up as a teacher, be prepared for the fact that “we who teach will be judged more strictly” (James 3:1). Public Christians like Ramsey owe it to their audience to embed their particular area of expertise into a holistic picture of the with-God life.

What’s Wrong with His Detractors

At the same time, many of Ramsey’s critics seemed to be slamming Ramsey for being a capitalist in the first place or for appealing to the concept of “the market” at all. As that great bastion of American culture, TMZ, so aptly put it in an article on the debacle:        

The question really seems to boil down to economic philosophy, and whether the nature of our capitalist DNA goes against Christian values in and of itself. With that said, we gotta ask … WWJD in this modern-day wealth of nations???

Commenters declared that being a landlord is by itself problematic for any Christian, that appealing to the market rate as a justification for what one charges is serving mammon instead of Christ, and one popular evangelical suggested that we readopt the Old Testament Hebrew limitations on charging interest in order to cause “a huge disruption to the economic system and values.”

Obviously, I can’t fully defend the idea that one can be a good Christian businessperson in a market economy in a brief post like this one. But it’s worth noting that many of the suggestions made to counter Ramsey seemed short on both basic economics and business experience. If charging the market rate is wrong, how much should one charge, and how does one decide? Would the poor be better off if only non-Christians were landlords? How does charging interest work in an agricultural society versus a service and information economy?

Are these commenters cognizant of the hazards of landlording, such as destroyed property, liability for criminal activity on one’s property, the difficulty of attracting reliable tenants, and unexpected maintenance costs? Why is it necessarily a bad thing to move from one apartment to a cheaper one or to economize by getting a roommate? If I’m chronically undercharging tenants that are perfectly able to pay, aren’t I less able to help someone who’s experiencing true need? And finally, if being a landlord is my source of income, would you also say that all Christians should work for less than market rate?

I fear that some of Ramsey’s detractors don’t appreciate the elegance of the price system and how it helps us allocate resources so efficiently that it can pull people right out of poverty. Black poverty in America was halved between 1948 and 1960, not because things were so much less racist over the course of those 12 years or because white Christians were really on top of their commitment to the poor. Rather, it happened because the economy was booming and a disadvantaged group boomed right along with it. The same can be true today if we liberate people to work, own, and build, first by removing obstacles to doing so, but also through the wise work of personal Christian presence in the lives of economically struggling people motivated by real love. There’s simply no substitute for that.

Rachel Ferguson

Rachel Ferguson, Ph.D., is a professor of business ethics, assistant dean of the College of Business, and director of the Free Enterprise Center at Concordia University Chicago. She is also a board member for LOVEtheLOU, a neighborhood stabilization ministry in North St. Louis; the Freedom Center of Missouri; and ReThink315. Her new book, co-written with historian Marcus Witcher, is Black Liberation Through the Marketplace: Hope, Heartbreak, and the Promise of America.