And the same time there arose no small stir about that way. For a certain man named Demetrius, a silversmith, which made silver shrines for Diana, brought no small gain unto the craftsmen; Whom he called together with the workmen of like occupation, and said, Sirs, ye know that by this craft we have our wealth. Moreover ye see and hear, that not alone at Ephesus, but almost throughout all Asia, this Paul hath persuaded and turned away much people, saying that they be no gods, which are made with hands: So that not only this our craft is in danger to be set at nought; but also that the temple of the great goddess Diana should be despised, and her magnificence should be destroyed, whom all Asia and the world worshippeth. And when they heard these sayings, they were full of wrath, and cried out, saying, Great is Diana of the Ephesians (Acts 19:23-28).
The Apostle Paul unquestionably preached that idols are not gods. Unquestionably, the silversmiths at Ephesus were at risk of suffering reduced demand for their output. The message that Paul brought challenged people’s faith in the power of the idols produced by Ephesian silversmiths. This loss of faith would have reduced demand for all idols. The silversmiths at Ephesus responded by fomenting a riot.
The local Roman bureaucrat spoke to the crowd. He did not invoke the familiar cry of the potential loss of employment as a result of reduced consumer demand. Instead, he called on the crowd to calm down.
And when the townclerk had appeased the people, he said, Ye men of Ephesus, what man is there that knoweth not how that the city of the Ephesians is a worshipper of the great goddess Diana, and of the image which fell down from Jupiter? Seeing then that these things cannot be spoken against, ye ought to be quiet, and to do nothing rashly. For ye have brought hither these men, which are neither robbers of churches, nor yet blasphemers of your goddess. Wherefore if Demetrius, and the craftsmen which are with him, have a matter against any man, the law is open, and there are deputies: let them implead one another. But if ye inquire any thing concerning other matters, it shall be determined in a lawful assembly. For we are in danger to be called in question for this day’s uproar, there being no cause whereby we may give an account of this concourse. And when he had thus spoken, he dismissed the assembly (vv. 35-41).
He instructed them to bring any charges against Paul to the court. He invoked the rule of law. He had in mind Roman law, but the same principle of law had long been the standard in Mosaic Israel: “One law shall be to him that is homeborn, and unto the stranger that sojourneth among you” (Exodus 12:49).
The judicial principle of the rule of law means that the civil government must not create special-interest legislation that favors one industry over another. If an industry begins to suffer a decline in demand because of changing beliefs or changing tastes among the masses of buyers, the state is not to intervene to defend it. The official did not call on Paul to cease preaching, nor did he offer a direct subsidy to silversmiths involved in manufacturing idols.
It would be better for customers and taxpayers today if the modern state adopted the same hands-off principle.
1. Owners
There were owners of silver who had developed a steady income by selling idols. They owned tools used in their trade. They also possessed certain skills related to their craft, which included knowledge of the markets for idols. There were also secondary owners: people who owned silver, people who rented space to the tradesmen, and people associated with transport.
Then there were people who owned money. They were potential buyers of idols of Diana. They possessed the most marketable commodity: money.
2. Window
There was a market for these idols. This means that there were frequent sales. It was a predictable market, within limits. But Paul’s preaching was perceived by one silversmith as a threat to the entire guild of idol-makers. He worried about unemployment because of this shift in consumer demand. He was not sure what could be done, and so he led a chant: “Great is Diana of the Ephesians.” What effect that would have on the market was unclear. If potential buyers decided not to buy, what could the guild do about it? Customers were in control of their money. On its own authority, the guild had only this tactic: better preaching. A brief riot would solve nothing.
It was clear that the members of the guild would henceforth invest less in future production unless public opinion changed. Looking to the future, demand was likely to fall. Customers would bring negative sanctions against the guild. Lower sales would reduce market prices for the idols: greater supply than demand. These price signals would convey accurate information: falling demand. The economically rational response would be to reduce output. There would be layoffs in the industry. At least one guild member understood this.
3. Stone
The Roman state at this time did not move to call a halt to Paul’s preaching. It would in AD 64.
In modern times, the guild would send its full-time team of lobbyists to Congress. These specialists in persuasion would invoke that most effective of all calls for economic intervention to save a contracting industry: reduced jobs. If the demand for any consumer good falls, and the industry is facing lower demand and lower profits, the industry warns voters that its demise would be a disaster for the job market. “Think of the jobs that will be lost if the government does not intervene immediately.” Hazlitt began the chapter with these words:
The lobbies of Congress are crowded with representatives of the X industry. The X industry is sick. The X industry is dying. It must be saved. It can be saved only by a tariff, by higher prices, or by a subsidy. If it is allowed to die, workers will be thrown on the streets. Their landlords, grocers, butchers, clothing stores, and local motion picture theaters will lose business, and depression will spread in ever-widening circles. But if the X industry, by prompt action of Congress, is saved–ah then! it will buy equipment from other industries; more men will be employed; they will give more business to the butchers, bakers, and neon-light makers, and then it is prosperity that will spread in ever-widening circles.
This strikes fear into the heart of any politician. Unemployed workers are far more likely to vote for his opponent in the next election. But the bureaucrat in Ephesus did not have to worry about that threat. Ephesians did not vote.
So, the politicians toss a stone through the window. It might be a restriction on competing industries. It might be a direct subsidy. But politicians do this in good faith: to save an industry that is “under attack.”
Who is attacking it? Consumers. They are buying a rival’s product. Or they are buying something else entirely.
