Religion & Liberty Online

The Economics of the Sacred: Politics as a Covenant Exercise

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Is our polity a social contract among self-interested individuals or a biblically informed covenant with virtue at its heart?

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The lie that religion has no bearing on politics has yielded the kind of politics we have now: managerial, sterile, and devoid of moral conviction. The idea that political office could be a covenantal trust or that economic policy might have covenantal implications would strike most technocrats as medieval sentimentality; yet, the biblical worldview insists that public life is precisely where covenants are lived or broken. To rule, therefore, is to bind oneself before God to the care of souls, and resources and legislation define the moral boundaries of this stewardship.

The Hebrew word berith (בְּרִית) ”covenant” appears almost 300 times in Scripture. It is the spine and overarching thread of biblical history. Every political order in the Old Testament was covenantal in form and moral in purpose. God’s covenants with Adam, Noah, Abraham, Moses, and David each involved not only ritual oaths but public structures: law, land, kingship, and economy. Michael Novak, in The Spirit of Democratic Capitalism, noted that

the idea of covenant is central to biblical religion and to the Western political tradition. A covenant is more than a contract or a compact; it is a solemn agreement, under God, binding individuals and communities to mutual responsibilities in the sight of a higher moral law. In the biblical sense, politics is a vocation, a calling to serve the common good under the sovereignty of God.

When Israel’s kings upheld justice, the land flourished; when they oppressed the poor or turned to idols, the nation collapsed due to moral decay. Deuteronomy is, in a very real sense, the original constitution of covenantal politics. It binds the people to God and to each other through moral socioeconomic laws: fair weights, just wages, honest contracts, debt remission, and limits on royal accumulation of wealth. Rabbi Jonathan Sacks, the public intellectual, reflected on this in To Heal a Fractured World:

In the Old Testament, the covenant is not only religious but political and economic. The Mosaic law provides, for the first time in history, a comprehensive code of social justice: protection for the poor, honesty in trade, debt relief, limitations on royal power, and the periodic redistribution of land. The law is more than a set of rules; it is a moral architecture for a just society.

The application in modern terms necessitates leaders not weaponizing the economy or manipulating markets and power for personal gain because the covenantal ruler governs within limits as both power and wealth are entrusted with divine accountability.

This stands in stark contrast to the radically secular idea of governance as a social contract. Hobbes and Rousseau imagined that political authority arises absolutely from consent of the governed, without a notion of divine command; the people delegate sovereignty to the state without covenant because there is no higher Judge to receive the oath. The contract endures only so long as it serves mutual interests, building governance on skepticism. Conversely, covenantal order rests on faith that God holds both ruler and ruled accountable for justice. 

Political office, in the biblical view, is vocation, closer to priesthood than administrator. When Samuel anointed Saul and later David, the act was liturgical. Oil, prayer, and prophetic blessing marked the transfer of authority. “You shall shepherd my people Israel” (2 Sam. 5:2). Old Testament scholar Walter Brueggemann writes in The Prophetic Imagination that “in Israel the king was not simply a political figure. He was anointed by God and held accountable before Him. Kingship was a trust, not a possession. The ruler governed not by right but by responsibility, and his authority was always conditional upon obedience to the covenant.”

Economics, too, was never divorced from theology. The Jubilee year, with its forgiveness of debts and return of land, was an economic policy grounded in divine mercy restoring the moral meaning of private property ownership. In fact, Israel’s prophets spoke as much about commerce as they did about worship. Biblical scholar N.T. Wright, in God and the Pandemic, noted,

The biblical vision of justice is rooted in the conviction that the earth is the Lord’s and all its fullness. Property, wealth, and power are trusts to be stewarded, not possessions to be exploited. The Jubilee legislation of Leviticus 25 is the clearest example: a radical act of economic restoration and social renewal, based on the principle that God alone is the true landowner.

In that sense, injustice in the marketplace was idolatry in practice. Hence, when nations forget the sacred character of politics and economics, they begin to worship their own systems. Legislation becomes omniscient, governments omnipotent, and citizens mere cogs. We start to speak of “the economy” as if it were a theoretical structure rather than a moral arrangement of cooperation. Adam Smith, though often misused by secular economists, understood this. In The Theory of Moral Sentiments, he wrote that “the chief part of human happiness arises from the consciousness of being beloved.” The issue is that modern democracies, having exorcised God from their institutions, still crave the structure of covenant, so they invent secular substitutes like constitutions, ethics, and charters that mimic divine law without divine accountability. In his 2002 work On Two Wings, Michael Novak critiqued this practice:

The social contract, as conceived by Hobbes or Rousseau, is a pale imitation of the biblical covenant. It is an agreement among self-interested individuals, enforced by the state, and lacking any transcendent moral reference. The covenant, by contrast, is a sacred bond, grounded in faith and oriented toward justice and the common good.

The Founding Fathers understood this and included covenantal overtones in the Preamble to the American Constitution: “to secure the blessings of liberty to ourselves and our posterity.” Steeped in biblical literacy, they knew that blessings are gifts that presuppose a Giver, and that freedom without virtue collapses into license. John Adams warned that the Constitution “was made only for a moral and religious people.” He was describing a covenantal republic sustained by shared moral vision.

In that light, even economic policy cannot be morally neutral. Every budget is a moral document and every tax code reveals a theology of justice. When a state subsidizes vice or penalizes productivity, it is making a liturgical statement about what it worships. When it protects life, property, and honest exchange, it mirrors divinely established order. The natural and Christian principle of subsidiarity is covenantal at its root. As David L. Schindler has noted in his Heart of the World, Center of the Church:

Subsidiarity is rooted in the biblical and Christian understanding that authority is distributed, not concentrated. Families, local communities, and intermediary institutions are the natural building blocks of society. The centralization of power in the modern state destroys the covenantal texture of social life.

Here, authority descends, not ascends. God delegates power to families, churches, and communities well before He entrusts it to kings, and a just economy empowers these mediating institutions, rather than centralizing them with bureaucracy.

John Paul II’s Centesimus Annus captured this balance: “The modern business economy has positive aspects. It is capable of producing wealth and should be seen as a resource. But it must be circumscribed within a strong juridical framework which places it at the service of human freedom in its totality.” The pope was reminding us that the market, like the state, is a covenantal instrument and that economic liberty detached from moral law becomes counterfeit freedom because it creates commerce without telos.

In scripture, leaders are judged by fidelity: David was called “a man after God’s own heart” despite grievous moral failure, because he repented. Saul, efficient but not contrite, was rejected. Even the prophets functioned as lawyers who brought covenant lawsuits to Israel, chiding rulers and subjects that the moral order must supersede pragmatic or political gain. Abraham Heschel, the Polish Jewish theologian, noted in The Prophets, that “the prophet’s role was to serve as the conscience of the nation, reminding rulers and people alike that their first allegiance was to God’s covenant and justice. … The health of the nation depended on its willingness to heed the voice of the prophets.” Nathan’s confrontation with David (“You are the man!”) was therefore an exercise in divine political oversight.

Secular modernity still craves covenantal legitimacy while denying the Covenant Giver. Politicians take oaths “so help me God” but treat them as mere ceremony, and economists speak of “confidence” and “trust” as if they were commodities. Yet despite that, modern citizens demand justice without virtue and prosperity without sacrifice, and bemoan that the result has been moral inflation that no longer purchases binding social capital.

I wish to make clear here: to recover covenantal politics is not to impose theocracy. It is to remember that liberty and virtue are interdependent. Covenant binds power to purpose, freedom to responsibility, wealth to stewardship, and man to divine accountability. It makes politics an act of service and economics an act of worship. The biblical answer remains simple: “Righteousness exalts a nation, but sin is a reproach to any people” (Prov. 14:34). Covenant sustains the republic.

At its heart, the economics of the sacred teaches that what we do with power and wealth reveals whom we worship. The ancient Israelites inscribed this truth in their polity; the founding fathers echoed it in their documents; and the Church continues to proclaim it to every age that mistakes freedom for self-rule. Politics, rightly ordered, is a covenant exercise. Economics and social governance, rightly conceived, are its liturgy. All three belong to the worship of the living God, and all will one day answer to Him.

Marcus Peter

Dr. Marcus Peter is director of theology for Ave Maria Radio, radio host of the daily international EWTN drive-time program Ave Maria in the Afternoon, TV host of Unveiling the Covenants, and other EWTN TV shows in production. In addition, he is a prolific author, biblical theologian, culture commentator, and international speaker. Follow his work at marcusbpeter.com.