Matthew 20:1-16: The Kingdom of Heaven clearly has a terrible business model

I am fairly confident that God is not an entrepreneur and most likely not an economist. Well the writers of Matthew definitely were not. That became more evident in Matthew 20: 1-16, or colloquially, The Parable of the Vineyard, which we read on our YAV retreat to Tingo Maria.

“For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. He agreed to pay them a denarius[a] for the day and sent them into his vineyard.

“About nine in the morning he went out and saw others standing in the marketplace doing nothing. He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ So they went.

“He went out again about noon and about three in the afternoon and did the same thing. About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’

 “‘Because no one has hired us,’ they answered.

“He said to them, ‘You also go and work in my vineyard.’

“When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’

“The workers who were hired about five in the afternoon came and each received a denarius. So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. When they received it, they began to grumble against the landowner. ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’

“But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’ “So the last will be first, and the first will be last.”

Now, I am not saying God and the writers of Matthew were not well-versed in economics. Each worker receives a “denarius,” which in our translation was a standard daily wage, fitting with the value of a “denarius” in the early Roman Empire. The passage plays on the notion of fair wages, the allocation of resources, a labor surplus, and a market failure.

I spent a lengthy amount of time exploring the economics of this passage, to see if there was any way to reconcile what the vineyard owner does with classical economics. In the end, I found two options: either the vineyard owner is a greedy monopsonist (think coal mine owners in Pennsylvania) within an abusive labor market or a wealthy individual looking to correct a market failure. For several reasons, both sentimental and logical, I go with the latter interpretation.

The latter interpretation reflects a message of justice, a reconciliation of human-made hierarchy, referred to here as “the last shall be first, and the first shall be last.” As Jed put it, this is a great equalizer. In this story, no one comes out behind or ahead of anyone else despite their previous economic or social standing. It fits better with how I view the bible. Of course, I do not rely solely on self-fulfilling prophecies.

Instead, I start by exploring the scene in this parable. We have a group of day laborers standing in a lot awaiting hire. I immediately picture undocumented migrants awaiting work in our modern society. Admittedly, I take that picture from media coverage, but conversations with those with a real connection tell me that there is truth to the caricature.

Several of these laborers are offered the opportunity to work for a fair, daily wage, on a vineyard. They immediately head along, excited at their prospect.

A bit later, the vineyard owner finds that others are still standing in the lot. Their explanation is relatively straight-forward, “No one has hired us.”

Another common experience among the undocumented within the United States. At orientation we one YAV alumni who explained that she helped facilitate a safe space for undocumented migrants to wait for employment opportunities. More often than not during recession times, work was not available.

The vineyard owner decides to hire these day laborers as well and promises the same deal. This process continues, each time reiterating that the laborers were as yet unemployed for the day.

Soon every worker is hired with the same contract terms. And admittedly poor business choice for the vineyard owner. Instead of pro-rating, the owner chooses to provide equal pay to each worker. The owner recognizes the randomness of this hiring process.

Every worker showed up that morning willing to work. They are looking to provide for themselves, their families, and/or other dependents. They are willing and able to provide their services in exchange for a wage. Some may be willing and able to provide at lower rates, while others at a higher rate, but they all would be willing to work for a denarius.

Meanwhile, there seem to be few business owners willing and able to hire workers. Possibly, they are looking to pay a minimal fraction of the daily wage, which none of the laborers are willing and able to take. So far, everything is operating rationally. Unfortunately, we have a labor surplus.

At the current wage, there are more folks willing and able to work than there are available jobs. Typically, this gets sorted out by lowering the wage to a point where some laborers exit the market and more businesses are willing and able to hire.

That wage would be below a denarius. As that is the standard daily wage, we would have the market failure of income inequality.

That is not the case, however. Instead, day-laborers stay unemployed. Perhaps the denarius was subtly enforced as a minimum wage and as a result, we get a price floor. A price floor that is above the market equilibrium. The result of price floors are labor surpluses.

Societal norms result in an inefficient market unless labor demand or supply shifts.

We see an interesting twist on all this. The vineyard owner steps in and is willing and able to hire every worker in the lot for the standard daily wage. The worker recognizes that some folks went unemployed that day, but they all had the intention to work.

The vineyard owner values that intention and is willing and able to hire all of them. The owner’s labor supply curve shifts to a point that places the market equilibrium at one denarius and eliminates the labor surplus.

In the Kingdom of Heaven, God values your intentionality and recognizes that you are not control of the entire system. In response, the parable prophesies that God will correct a system that fails to provide for all.

Admittedly, one could argue that the vineyard owner is abusing market power as the sole hiring business in the market. The vineyard owner might get far more out of the full-day workers than a denarius and only those final workers produced the equivalent of a denarius.

Of course, that does not fit with the narrative. Plus, a greed-driven owner would choose to pro-rate over paying out equally.

Of course, that’s not exactly a ground-breaking conclusion. God equalizes the world. I find value in arriving at this point via a new route, and how this story lines up with traditional classical economics. There may be some holes here and there, I’m still ironing out some bits, but I like where I landed with this one.

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