There was a post over at the SolaPanel the other day titled Jesus and the credit crunch #3” by Paul Grimmond.

I thought it raised some interesting issues, which I have a different view on, so I posted a lengthy comment yesterday but the Ministry of Information over there seems to either take >24 hrs to approve a comment or didn’t think it was worth approving. In any case, I thought it would be worth bringing the discussion up here because it is imo one of the *the* issues of our time that is generally very poorly understood.

Paul Grimmond’s argument runs something along the lines of:

- “The economy is treated to all intents an purposes as if it is God in our modern world.”
- Why do we expect the [free market] economy, which is based on greed and selfishness, to be benevolent and do good for all?
- “The central theological premise of the free market is something like this: as long as everyone acts selfishly, the ‘invisible hand’ (to borrow Adam Smith’s famous phrase) will ensure that everyone is better off. [...] Apparently if all six billion of us act selfishly, it will ensure that the right price is set for everything, and we will all be happy!”
- “We were all part of the greed that fuelled the failure we are experiencing.”
- Wouldn’t it be great if CEO’s could apologise for being part of the greed and ask for forgiveness
- Are we willing to admit that our greed is a part of the problem too? Maybe now is the time for Christians to be leading the way by expressing our own sorrow at our greed.

That’s a very quick summary. Head over to the SolaPanel post to read the full thing.

So Paul’s post sort of seemed like a conflation of a critique of free market capitalism on the one hand, as well as recent examples of greed in the other.

However, I’ll now segue into my response - I’ve heard this sort of hand-wringing over the greed of capitalism by Christians over the years, but I find them quite hard to stomach these days.

My main problem is that it *is* such an interesting issue in this day and age, but a critique of “capitalism = greed, greed = bad, capitalism = bad” doesn’t really cut it, imo.

Is it greed to want better health care, less poverty, less suffering, longer lives, greater comfort, better technology, etc?

Free market capitalism has, as far as I can see, done more to lift people out of poverty than anything else in the history of the world. It has done more to deliver us everything we enjoy today at an incredible pace - think back to how your grandparents grew up, and how the current generation of children will grow up. Only a couple of generations ago people grew up here often without shoes & with limited education opportunities (esp in rural areas), today our children have fantastic opportunities.

It is true that free market capitalism, as a product of man, can never transcend man’s own foibles - the belief in the benevolent invisible hand is pretty odd. Likewise it’s right to criticize the gross excesses of capitalism, such as that which we have seen recently, and of course the many others where man is still, unfortunately, man.

However, the excesses of capitalism should not be equated with capitalism itself.

When I hear Christians arguing along the lines that capitalism is greed, and greed is fundamentally wrong, therefore capitalism is bad, I think: fine, go find an alternative!

But you know what? All that crap we buy? I’d wager that such meaningless consumption has done more for those in less fortunate circumstances than anything else. It gives people jobs, supports their families, communities, and goes toward giving them all the good things we take for granted, and gives us something to enjoy at the end of it.

Rather than buying less, maybe we should buy more?

Rather than this sort of faux-self-flagellation, why don’t we thank God for the free market and all that it has given us?

Because the health care, education and general society we enjoy - the money that greases the gears of our churches, missionary support and aid? That’s pretty much all courtesy of the market.

We can’t have it both ways - either we go and live off the land, or live in a socialist country I guess, or we enjoy the fruits of capitalism & contribute to it’s progress and direction rather than wring our hands over greed.

The interesting question is - what’s the ethical thing to do? Giving people hand-outs isn’t a long term solution. Having the state redistribute the wealth doesn’t work. Living off the land is pretty darn tough.

So maybe it turns out that we hacked greed, and it kind of worked?

Maybe the best thing you can do for your fellow man is to buy more, consume more, and redistribute wealth that way - creating more jobs in the developed world (and locally), lifting hundreds of millions out of poverty, creating the science and technology to treat and cure disease, and improving our own standard of living in the process.

Yet the bible does speak very strongly against greed - how do we reconcile these things?

For me, I wonder why do we feel the need to repent of a system that has done so much good? Why can’t we be mindful of the problems, and enjoy what God has given us?

--

They’re not rhetorical questions - let me know your thoughts! :)

(And for Dave L, yes, the whole trash-the-world-in-the-process thing is a bit of a problem ;)

There is some research I’ve read that suggests that “its the free market that is lifting the masses out of poverty” theory isn’t as entirely smooth as it looks on the surface.

ie India and China are hardly pure market economies.

Sounds interesting about the research, got link/elaboration? :)

On a related note, Neil aka OSO posted over on his blog about a group of Christians in the US praying for the economy… in Wall St… laying hands on the golden Wall St bull… heh!

Not to hand… and I have deadline to make. I’ll hunt for it over the weekend.

The real premise that needs examination is the idea of the free market.  I think you will find we live in a mixed economy, with varying levels of state intervention depending on circumstance.  As an example, I would refer you to contract law.

You probably don’t want a “free market”.  For a good exegesis read Engels on the condition of the working class, he was writing about such a system.  The British response was to introduce a range of legislative controls such as the factory acts.

Adam Smith works fine in open markets.  The theoretical conditions for such markets may not exist.  On top of that, there is a considerable literature around market failure, that is places where markets don’t work.

cheers

John

Yeah sure, I’m using the term “free market” fairly loosely - I’m not advocating the kind of unregulated ‘market fundamentalism’ that brought about the current problems, for instance, and accept there is and should be state involvement at some levels (and probably more involvement than those of a staunchly conservative view).

However it is concerning that the Christian critique of capitalism is generally so weak, and as is apparently the case on the SolaPanel, substantial criticism of the view expressed there (ie what I posted above) is, apparently, banned from public consumption! (Though I guess there’s the possibility it was not received, who knows.)

I think we as Christians really need to pick a side - are we for the market-based economy we enjoy, or are we against is because it is (allegedly) a function of greed?

If we’re against it, what are we for instead - socialism? Communism? Anarchy? Some kind of ‘new way’?

I had a quick google around for alternatives, and here’s an example of where the current debate is at - libertarian magazine Reason looks at eco-friendly suggestions of alternatives to capitalism made in New Scientist, which appeared just a couple of days ago. Now I’m certainly no libertarian (Bob Barr 2008!! hah), but if we want to engage meaningfully on the topic, these are the sorts of issues we should be dealing with, rather than expressing tokenistic, faux guilt.

Luke Stevens - 31 October 2008 06:41 PM

However it is concerning that the Christian critique of capitalism is generally so weak, and as is apparently the case on the SolaPanel, substantial criticism of the view expressed there (ie what I posted above) is, apparently, banned from public consumption!

Why would the Sola Panel ban your post on capitalism, let alone on anything that wasn’t defamatory? As Christians who claim to be secure in their knowledge of the truth, shouldn’t they welcome other perspectives, knowing that the truth will shine through?

This is a very interesting, timely and important topic. Some random thoughts:

* we would do better to focus on trying to understand the various examples that the bible gives us about how to handle wealth, than having a rather simplistic debate about whether capitalism is good or evil (or for that matter, whether socialism is good or evil).

* in terms of taking a biblical approach to this issue, the starting point should be what some people call “stewardship” - ie, what should we do with the things that God has given us, including our financial resources;

* there are biblical examples both of deploying wealth in a capitalist way (eg the parable of the talents), and of deploying wealth in a socialist way (eg the very first church in Acts).

* perhaps the unifying theme in the biblical accounts might be “how can I best use financial resources to love and serve God, to love and care for other members of the Christian community; and to proclaim the gospel (both expressly and holistically)?  Sometimes this will mean retaining and growing existing wealth - at other times, it will mean giving wealth away.

* greed is antithetical to service (which necessarily involves sacrifice).  We will only be able to make Godly use of wealth if we are not obsessed with holding onto it. 

* service also necessarily connotes doing something that “adds value” for someone else.  To the extent that capitalist markets are purely secondary markets (eg the stockmarket) it is difficult to see how devoting one’s time and resources to that market can be said to pass this test.

* accountability is critical - both capitalism (eg the so-called “masters of the universe") and socialism (eg “all animals are equal, but some are more equal than others") can become self-serving vehicles for personal aggrandisement if its participants are left unchecked.

* as disciples of Christ, we perhaps need to adopt an approach to these issues that is based on providing mutual support to each other, and “building each other up”. We are the body of Christ, after all, and each member has a part to play in that.

I don’t know that the creed is “selfishness” but to “look after” oneself.

Is it greed to want better health care, less poverty, less suffering, longer lives, greater comfort, better technology, etc?

No, because these are communal goods. It is greed to invest in unethical mega-Corporations that might get us 5% more profit than another corporation that behaves more ethically. It is greed to vote for Governments in league with XYZ lobby group that controls them, at the expense of the poor and the environment. It is greed to indulge in continual Global Warming scepticism because “addressing it might hurt the economy”.

Free market capitalism has, as far as I can see, done more to lift people out of poverty than anything else in the history of the world. It has done more to deliver us everything we enjoy today at an incredible pace - think back to how your grandparents grew up, and how the current generation of children will grow up. Only a couple of generations ago people grew up here often without shoes & with limited education opportunities (esp in rural areas), today our children have fantastic opportunities.

Let’s not get into Correlation = Causation here Luke… this paragraph is a little “Post Hoc Ergo Propter Hoc”. Whatever economic arrangements we have had over the last 200 years, let’s not forget:
* improved medical understanding to address health issues and improve the general productivity and lifespan of the population
* the increase in technology to do more work
* the increasing role of cheap fuels to power that work
* the move from wood to coal which rapidly expanded world trade through steamships
* the move from coal to oil and gas for ever more transport and electricity
* too many other advances to list

The technology and energy djinni has been released, and it deserves its claim on our prosperity.

When I hear Christians arguing along the lines that capitalism is greed, and greed is fundamentally wrong, therefore capitalism is bad, I think: fine, go find an alternative!

Exactly! It is just a ‘tool’ of economic relationships. Hayek argued that socialism could not receive and control the flow of economic information quickly enough to adapt the workplace to the daily ebb and flow of business and opportunity. A “free market” seems to allow individuals and businesses to react to this flow of “information” much faster than a planned economy. Great 10-15 minute podcast on Hayek here, well worth downloading.

Yet Jeremy’s and John CS’s points about China and India and “mixed markets” are also well worth noting.

Massive economic growth can also occur in other economic systems although… isn’t China’s system a hybrid between the “free market” and Dictatorial State power rather than a hybrid between the “free market” and Democratic State power, the way we have in the West? Only the style of government seems to be different now. In a world where Western Democracies subsidize big oil and King Coal to the tune of hundreds of billions of dollars a year, I don’t know where the West gets off pointing to Chinese government market intervention. ;-)

So, generally speaking, I’m with you and am a “free market” kind of guy.  However, the following concerns abide:

* Multinationals are only concerned with maximizing profit for their shareholders, and are now more powerful than most governments.
* Even the Economist magazine is starting to discuss the need for a “multinational democracy” and international governance systems to check the power of Multinationals.  Multinationals now play governments off against each other for “race to the bottom” tax benefits, which is part of the reason king coal gets so much money.
* Corporate treatment of the poor and release of toxic materials, Co2, and mountains of plastic into the environment hardly represent something Christians can support.

David Ball has defined something that’s been bugging me for ages! The “Secondary markets” that actually act more like a Casino than producing anything of value. A case in point may be the futures market! However, I’m beginning to see the whole stock market operation as a completely unnecessary system that could be handed over to governments. (Governments could fund various free market capital expansions and enterprises according to merit, and generate some more profits themselves!)

My call? At times a larger “free market” can be a good thing, generating money for governments to tax to provide a “safety net” for the poor and health systems. However, in times of international emergency concerted “big government” intervention may be necessary. Ladies and Gentlemen, I give you Global Warming, Peak Oil, Peak Metals, Peak Fisheries, Peak soils, Peak Water, Peak Biodiversity, Peak Forestry, Peak Everything.

What happened? You can’t leave this thread with me having the last word! I was just getting interested, and despite my last post I’m not here to turn this into a peak everything disaster thread… I was just commenting on how the “political economy wing” I sit on can actually change depending on where the times.

Come on… forget discussing mere matters like the Reformation and Moderation for a moment, this thread had potential! ;-)

However much one rails against the ‘evils’ of “capitalism” - my one observation is that it has more going for it than “poverty” ;)

This is truly disgusting!

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out. The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million. The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

Sanders Research Associates.

Meanwhile, the CEO of Japanese Airlines has taken a paycut to just $90 thousand a year and queues up with all his co-workers at the office eatery for lunch.

THIS is where Wall street capitalism is wrong. I hate the way Stock-Markets are driven by unstable psychological phenomena. If I ran the world, corporations would come to ME — the guuvern-ment — to borrow money for capital expansion and fund raising — and would have to pass various sustainability clauses before doing so. Then any money paid out as profits would also go to the government as dividends and the government would be able to create a more stable marketplace.

It’s not communism, but it would moderate the rate at which markets boom and bust. And I would not be paying $3 million dollar bonuses to public servants that had caused some sort of financial crash! They’d be under an enquiry, and possibly fired.

Dave Lankshear - 06 November 2008 11:43 AM

This is truly disgusting!

Dave, I would call it obscene !

Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million.

That’s actually POUNDS Sterling they’re talking about - not mere dollars. So that makes these payments worth about AU$ 6,757,000 even MORE obscene - and unjustified in most peoples’ sight. Absolute craziness.

“Obscene”, “Disgusting”, “Craziness”.

Maybe - as long as you guys are consistent - can we expect to see similar outrage at the sums of money earned by movie stars, sportsmen, musicians, lotto winners, gamblers?

I am ill at ease with such rewards myself, but when these is a choice between a society in which such rewards are possible, and one in which they are forbidden - people seem to be much happier and more prosperous in the former, rather than tbe latter.

Alan Dungey - 06 November 2008 03:24 PM

“Obscene", “Disgusting”, “Craziness”.

Maybe - as long as you guys are consistent - can we expect to see similar outrage at the sums of money earned by movie starts, sportsmen, musicians, lotto winners, gamblers.

I am ill at ease with such rewards myself, but when these is a choice between a society in which such rewards are possible, and one in which they are forbidden - people seem to be much happier and more prosperous in the former, rather than tbe latter.

Hi Alan,

I too am aghast at how much ‘super’ sports and movie stars and others earn - no matter how big their egos and talents are . But that is another story - for another time.

But that is not the context of Dave’s quote :

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out. The struggling Wall Street bank has set aside £7 billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million. The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

Let’s look closely at this scenario in detail :

1. Goldman Sachs are receiving a “£6.1billion lifeline”

2.

The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses,

3.

Each of the firm’s 443 partners is on course to pocket an average Christmas bonus of more than £3million.

4. 443 x UK £ 3,000,000 POUNDS = UK £ 1,329,000,000 POUNDS.

5. So Goldman Sachs receives a £6.1 billion lifeline -
but then gives THEMSELVES £ 1.329 billion of that money in bonuses !!

That’s what is “Obscene”, “Disgusting” and “Craziness” to me.

I believe in capitalism. But NOT in this FRAUDULENT use of publically provided funds. The bailout, surely, is aimed at NEED - not GREED.

Cheers Comrade, Kevin

Dave Lankshear - 05 November 2008 09:52 AM

What happened? You can’t leave this thread with me having the last word! I was just getting interested, and despite my last post I’m not here to turn this into a peak everything disaster thread… I was just commenting on how the “political economy wing” I sit on can actually change depending on where the times.

Well Dave, to be honest I thought you had peaked…

What’s worse than a bad joke? A bad joke delivered 10 days late :P

Anyway there was, well what I hoped would be an interesting piece on capitalism in today’s SMH: Capitalism: bruised but still champion, by Dr Oliver Hartwich, a research fellow at the Centre for Independent Studies.

Unfortunately it’s a very uneven, largely incoherent piece that tries to turn the current moves by governments to bail out/nationalise failing financial institutions as a big stick to beat the crazy leftists who have all appeared, those same leftists who were awfully conservative a couple of years back. This would kind of make sense if it wasn’t for, you know, the whole failing part.

So Hartwich is left arguing that the problem is governments in the UK and US became too big, regulated too little, and then became secret leftists, whereas what we need is smaller government that regulates more while embracing true, absolute economic freedom, which I guess would mean regulating less because the market when truly free can solve all economic problems, as you can’t be ‘part-free.’

Yeah, I didn’t think it made much sense either. But apparently we got it right in Australia. Except we still regulate… wait, what?

I guess it’s a tough time to be a conservative ideologue.