BOB MASSIE

A Handbook on

Faith & Money

Yale divinity school

Contents

Money and the Individual

CULTIVATING THE GIFTS OF GRACE

I. LIVING INTENTIONALLY

II. THE PERILS OF DESIRE

III. SWAPPING FREEDOM

IV. GRATITUDE AS SURPRISE

V. WHAT WE DESERVE

VI. CULTIVATING THE FOUR GIFTS OF GRACE

A. CULTIVATING SIMPLICITY: LESS IS MORE

B. CULTIVATING BALANCE: CONTROL IS FREEDOM

C. CULTIVATING WISDOM: SLOWER IS SMARTER

D. CULTIVATING GENEROSITY: IN GIVING WE RECEIVE

VII. CONCLUSION: FROM INDIVIDUAL TO COMMUNITY

Money and the Community

MOVING FROM INTENTION TO STRUCTURE

I. FAMILY AND THE IDEAL COMMUNITY

II. MIXED MODELS OF OWNERSHIP AND EXCHANGE

III. THE BUILDING BLOCKS OF STRUCTURE

IV. THE STRUCTURE AND INTENTION OF THE CONVENTIONAL RELIGIOUS CONGREGATION

V. ALTERNATIVE MODELS FOR LOCAL ACTIVITY

VI. COMMUNITIES OF FAITH IN THE LOCAL ECONOMY: PROMOTING PROSPERITY

A. SUPPORTING SMALL BUSINESS

B. COOPERATIVE FORMS OF BUSINESS

VII. SEARCHING FOR THE INDIVIDUAL COMMUNAL EXPERIENCE

VIII. THE GIFT OF GRACE IN COMMUNITY

Money and the System

REDESIGNING THE WHOLE THROUGH THE PARTS

I. THE BIBLICAL VIEW OF A JUST SOCIETY

II. INVISIBILITY AND RESPONSIBILITY

III. THE TRANSFORMATION TO A NEW ECONOMY

IV. FOUR APPROACHES TO SYSTEM CHANGE

1. CHANGING THE MEASUREMENTS OF PROGRESS

2. INCREASING CORPORATE TRANSPARENCY AND ACCOUNTABILITY

3. USING INVESTOR POWER TO ADJUST THE OBJECTIVES OF BUSINESS

4. DEVELOPING HYBRID MECHANISMS OF OWNERSHIP AND CONTROL

V. FORERUNNERS OF A NEW ECONOMY: THE ROLE OF COMMUNITIES OF FAITH

CONCLUSION: GARDENS OF THE IMAGINATION

ACKNOWLEDGEMENTS

CHAPTER ONE

Money and the Individual

CULTIVATING THE GIFTS OF GRACE

I. LIVING INTENTIONALLY

From the moment we come to consciousness, we must learn to navigate the future. Time and history move in only one direction—relentlessly, unstoppably forward. We are created and surrounded by motion—from the atoms spinning in indiscernible space to the galaxies whirling in an infinite universe.

Into this river of moments we emerge as thinking creatures who must make choices every conscious second. As we move from one point in space to another, from one moment in time to its successor, we are setting a course from who we are now toward who we intend to be later. Our intentions form the compass that guides us, that allows us to set our course.

This handbook offers advice about a domain of our lives we must master if we are to navigate the waypoints of our travels—the domain of money. I am writing as someone who has already lived out most of his days on earth, who has thought about faith and money for decades, and yet who remains a student with much to learn, a traveler with unknown stretches of road ahead. I, like you, am trying to continue to gather wisdom even as I seek to share it.

This handbook explores two kinds of knowledge, practical and reflective. The practical information appears in sidebars, links, and bibliographical notes to provide the reader with some useful knowledge about the basics of money. I also lay out a core narrative that is less about what to do and more about how to think on three different scales—the individual, the communal, and the systemic.

As we are carried forward by the stream of life, we must gradually learn to choose where we want to go. By embracing our freedom and our ability to shape the future and to live intentionally, we can move from splashing and floundering in the river of time to acquiring the buoyancy of love, the security of grace, and the gift of peaceful attentiveness to the unknown.

Following a path of spiritual intention can be difficult. Sometimes we stumble into a single blinding moment of enlightenment after which everything is forever different, as happened to St. Paul and to the Buddha. For most of us, the path of spiritual intention requires cultivation, like the work of a gardener or farmer. When we cultivate our mind, body, and time, we are planting and tending something fragile and alive. On a farm, cultivation can be arrested by a great storm, by bankruptcy, by disease. On a spiritual level, cultivation can be undercut and destroyed by temptations that offer seemingly easier, greater, faster, and cheaper ways of obtaining what we think we want. And the most common and powerful of these temptations flows from that strange human invention—money.

Why does money have such power over us? Because it inflames desire. Desire arises from insecurity and incompleteness, which are existential states. Society—that is, people who want to sell things—promises us falsely that, with money, we can make that insecurity and incompleteness disappear.

Money obviously can help us secure the basic needs of life—food, shelter, clothing—the most elementary components of freedom. Without those basics we cannot be free. Indeed, the philosopher Amartya Sen argues that poverty is evil precisely because it dramatically shrinks and eliminates choices, leading to a form of slavery. The gaining of economic rights thus can be a form of liberation. Somewhere between the bondage of poverty and the squander of excess lies a realm of sufficiency, the realm of “enough.” Studies have shown that after a person has obtained adequate income to assure the basic building blocks of a life, more money does not necessarily bring additional happiness.[1] The sooner you come to terms with what “enough” might mean for you, the more likely you are to become and to remain happy.

How to Have Conversations about Finances without Shame

Because shame rarely motivates positive change, we need to set it aside when discussing money. Though talking about money can be hard, silence on the topic can be even more damaging, not only to our finances but to our relationships. In a marriage, for example, persistently mismatched financial goals or spending can lead to divorce.

The first question any financial adviser will ask a new client is the most basic: What do you want, both now and in the future? Clarifying one’s goals openly and honestly can lead to the creation of a practical plan and the elimination of the anxiety or shame that money so easily generates.

II. THE PERILS OF DESIRE

Wealth promises that we can live anywhere, eat anything, know anyone, and do anything. The objects of desire thus become limitless and money’s seeming ability to provide them appears practically divine. Money can seem more real, powerful, and visible than any other force—stronger than love and compassion, stronger even than God.

Within communities and families, money can also generate anxiety. At the age of twenty-two, when I first told my parents that I was thinking of entering the ministry in the Episcopal Church, their first reaction was pride and encouragement. In the nineteenth century my great-grandfather had chosen that path, and the notion that I might somehow follow in his footsteps seemed fitting and lovely. But within half an hour, their enthusiasm gave way to nervous questioning. “Are you sure,” they asked, “that you are willing to live on such a small amount of money for the rest of your life?”

Pros and Cons of
Borrowing Money

The pros and cons of borrowing will differ depending on where you borrow from, how much you borrow, and what the repayment plan is like, but here’s a list to get you started.

PROS:

• Provides immediate relief for financial issues, especially helpful in emergency situations.

• Enables larger purchases (such as property) that would be otherwise impossible, which may reap financial rewards in the future.

• Helps to build a credit history, making it easier to borrow in the future.

CONS:

• The responsibility of repaying loans can be highly stressful and can limit future choices.

• Interest rates can be unmanageable and draining if not fully understood, or if unforeseen circumstances arise.

• Collateral-backed loans put you at risk of losing your property if payments can’t be made.

• Failure to make payment can result in lawsuits, which can lead to wage garnishing.

Because money is also presumed to indicate our relative value in society, people often go to great lengths to keep their exact incomes and expenses secret. The author James D. Berkley, writing about the dynamics of money inside a church, describes a pastor who once started off the annual meeting of his church by saying, “In order to be fair, since at this meeting we will be discussing in public the pastors’ salaries, let’s just go around the room…and each of you tell everyone what you make annually. We will begin with the elders. George, what do you make?”

The question shocked the leaders into silence and embarrassment until the leaders realized—with relief —that the pastor was joking. An awkward, hidden truth had unexpectedly been brought to the surface because, as Berkley wrote, “money is often at the heart of who we are and what we hold as priorities.”[2]

Money is powerful not only because it attracts but also because it can confuse and frighten. Most people find it challenging enough to master the basic financial arrangements in their own lives. In the larger economy, the leaders of economics and finance have generated their own technical and seemingly fearsome language, and they insist that anyone who wishes to engage them must use their assumptions and terms. As a result, many citizens skip the business and finance pages in their newspaper or online.

We wrongly expect that children and young adults will somehow learn about the basics of money on the street. Many colleges require a swimming test to graduate but not a test in basic finance, without which we can also drown. To make matters worse, there are plenty of people who exploit this ignorance and confusion to lure people into costly mistakes.

Improve Your Financial Literacy

Financial literacy is something that everyone can develop. The most important step is simply setting aside a bit of time to begin or improve your financial understanding. Luckily, there are many free tools online and in your community to aid you. To get started, check out the federal government’s financial literacy course online, Morningstar’s online Investing Classroom, watch a TED talk on finance, or go to your local library, where financial literacy workshops are often offered.

If money is being mystified by society, then people who have chosen a life of faith have a special obligation to demystify it for themselves and for others. If money is distorting our personal or communal priorities, we need to draw on our traditions and restore our core priorities. Money is not a god to be exalted, but an employee who needs to be directed toward the greater mission of our common life. It is not a tyrant who intimidates us into submission, but a tool to be tamed and used on behalf of our deepest values and goals.

For some, money becomes so influential that we slide into worship of its power. We venerate it, we adore it, we love it—and in that misplaced love we hand over our identity and purpose to a thing. The scriptures of Judaism and Christianity affirm relentlessly that the originating force of life and love in the universe is God. If we attribute life-giving properties to something other than God—something artificial, something made by humanity—then we are placing a lie at the center of our moral and spiritual lives. The Bible refers to this as “idolatry.”

III. SWAPPING FREEDOM

To become someone who lives life with intention—who is both student and teacher, servant and leader—requires a combination of personal reflection and life experience. Many students preparing for ministry or activism, artists preparing to paint or dance, young people longing to be teachers or healers find that they must spend time in formal training and obtaining degrees. Completing such degrees can mean taking on debt, debt that will have to be repaid out of relatively low salaries. And for a great many people who don’t want—or know how—to think about money, this path into debt can become a deeply dangerous trap.[3]

Borrowing money can seem effortless. We charge the credit card, we sign a piece of paper and we suddenly have the cash to do what we want. Too often, however, we do not understand what we are signing. Every time we come close to borrowing money, we need to ask ourselves one blunt question: Am I trading freedom in the present for captivity in the future?

It may make sense to borrow if the money allows you to do things today that will lead you to have more money later, including enough to pay off the debt. This system works when the amount borrowed is low and the salaries from which the loan will be repaid are sufficient. But what happens when the loan is high, and the future income is low? Then we are asking students to take on a burden that could imprison them for decades to come.

Here we need to remember a bit of history. Before World War II, if you wanted to buy a consumer item you would put it on “lay away,” which meant the store took it off the rack and held it for you. You would make small payments until you had paid for it, and then they would release it. After World War II, the phrase “buy now, pay later” flooded advertising, and Americans slowly pivoted to taking possession of things they had not yet purchased. This led to the explosion of credit cards, which started as cards that allowed you to buy in one store, but quickly expanded to businesses across the country. Today purchasing on credit is easy as swiping a card, waving a smart phone, or, in the case of newer devices, simply speaking your desire into the air.

Consumerism makes purchasing easy and marketing then makes it seem necessary. At every turn we are told that we are less than we should be, that our deficiencies are obvious and embarrassing, and that we should spend our money to fix them. We forget that the temptation to want what others have is explicitly forbidden in the last of the Ten Commandments.

You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his manservant or maidservant, his ox or donkey, or anything that belongs to your neighbor.[4]

The Hebrew scriptures understood that wasting one’s life on envy was damaging to both individual and communal peace. Despite thousands of years of warning, today we have taken an old danger and raised it to new heights of destructiveness.

IV. GRATITUDE AS SURPRISE

So if we are constantly being prodded to compare ourselves to wealthier people, who will always have more, how can we find a way to happiness? How can shake off the distraction of envy in order to move back to our inner purpose?

To do this we must learn to cultivate gratitude, not as a sentiment that pops up unexpectedly, but as habit of mind that slowly permeates our lives and action.

What is gratitude? It is, in one lovely definition, “the readiness to show appreciation and to return kindness.”[5] Gratitude focuses on what we do have, not what we don’t. Gratitude shifts our inner dialogue from a fear of scarcity to a celebration of abundance. Gratitude induces humility, enables satisfaction, and moves us from “wanting to take” to “wanting to give.” Gratitude has been understood for centuries as a doorway to a life of faith, authenticity, and joy.

In divinity school I became close friends with an extraordinary Catholic priest and member of the faculty named Henri Nouwen. Henri was originally from Holland and came to the United States to study for a doctorate in psychology at Notre Dame. Eventually he started writing small books on the life of faith and within a decade had become the most widely read writer on Christian spirituality in the country, with a devoted readership in both the Protestant and Catholic traditions.

At Yale Divinity, Henri used to celebrate a daily service in a small stone room with a tall, curving ceiling located just below the main chapel. I often joined a dozen or so other students to soak in the peace and to hear Henri’s short, powerful reflections. One afternoon he spoke to us about the importance of gratitude.

Yes, we all thought, he’s right. Gratitude is important. We should definitely feel more of it.

“But how does one increase one’s gratitude?” Henri asked. Gratitude seems to be an involuntary reaction.

We sat there, befuddled. If Henri had called on me at that moment, I might have said something guilt-ridden and pious: We should feel grateful because we have more than others. But no one said anything. Henri liked to leave long spaces of silence.

Eventually he spoke. “The key to gratitude is to cultivate a sense of surprise. Surprise!” said Henri. We looked at each other. We had no idea what he was talking about.

“Let’s say I call you up and say that I am coming over soon and I am bringing you flowers,” he continued. “You might be happy at the thought. You also might build up expectations about when I will get there and how nice the flowers will be. Indeed, you might build up such a strong sense of what was going to happen that if I arrived with just three daisies you might even be disappointed!”

He allowed more silence as we reflected on the irony of this.

“But imagine instead that I call you to say that I am coming by. You look forward to my visit, but when you open the door, there I am standing with a single flower. Surprise! I have brought you a gift that you didn’t expect. You would be touched and happy…and grateful.”

His thought has stayed with me for more than thirty years, and it has taught me to resist taking things for granted. If we look upon what happens in our daily life as routine and uninteresting, then we will find it hard to be astonished by anything. “Gratitude is a sort of laughter of the heart that comes about after some surprising kindness,” David Brooks wrote in a column in The New York Times.[6] This “laughter of the heart” liberates us, if only briefly, from our litany of grievances and burdensome expectations and gives us a taste of real freedom. By cultivating gratitude, we suddenly become aware of the thousands of blessings and kindnesses that are nudging us gently every day, hoping to be noticed.

The Dalai Lama on Gratitude

“The roots of all goodness lie in the soil of appreciation for goodness.”

V. WHAT WE DESERVE

Another barrier to living with gratitude is the poison of entitlement.
In the column I just mentioned, David Brooks also writes that “gratitude happens when some kindness exceeds expectations, when it is undeserved.”

When we say that we deserve something, we believe that we have a right to it. We may have acquired that right by birth, by contract, by injustice, or by many other means.[7] When we believe that we deserve something, we believe that someone is under an obligation to provide us with what we desire.
We are claiming ownership of it even before we have received it.

This is not, by any means, always bad. The idea that we may deserve something can be a healthy reflection of our sense of self-worth. One of the most common forms of oppression, whether experienced in an abusive relationship or in a nation-state, is when the dictator strips individuals of their sense of value, crushes their expectations, and denies their genuine rights. We have all seen how easily and permanently our society can cripple whole communities by persuading them that they are worth nothing and thus must suffer through injustice without complaint.

But in our consumer culture, the idea that we deserve something can also be an instrument for manipulating us. We are told that because we are special we deserve the things we covet. Both criticism and flattery are artfully combined to induce us to buy things. And the best way to increase both our sense of inadequacy and our sense of entitlement is for marketers to get us to compare ourselves to those who have more.

We have all been subjected to these distortions of our inner lives for so long that we barely notice them anymore. In the 1980s I spent several years in low-paying activist jobs and as a junior minister in Manhattan. My wife and I had a free apartment, which was a huge advantage, but otherwise we had to live together on an annual salary of less than $9,000 a year. At the time, I worked as a chaplain at a school connected to the church, and we found it difficult to cover all our expenses, including our college and graduate school loans.

I mostly managed to avoid comparing myself to others until the fall of 1984, when I entered the doctoral program at Harvard Business School. I had applied because I wanted to understand how business really worked, and how the powerful institutions in our economy could be better aligned with our national aspirations to prosperity and justice. What I didn’t expect was how quickly the school’s powerful culture began to alter my sense of self-worth.

For example, I spent a year in a class with bright and friendly colleagues, and I could see that my skills were stronger than some, weaker than others. When the summer rolled around, many of my classmates took lucrative summer jobs, paying more over the summer than I had formerly earned in a year. I had for the most part become accustomed to ministry and its modest salaries, and I did not openly aspire to the salaries awarded to my classmates. But the demons of comparison and envy still worked on me, and I found myself saying, “I certainly don’t expect to make the same amount as they do, but really, objectively, I deserve at least half of their pay.” Suddenly I was comparing myself not to other people in the United States or the rest of the world, but to those who lived in a rarefied financial cosmos. I was unconsciously shifting my standard of comparison away from the simpler gauge I used in divinity school and toward the lavish system of rewards that was considered normal in business school.

In his teachings Jesus often told stories that revealed the limitations of our sense of comparative merit.[8] My favorite is the Parable of the Workers in the Vineyard, a story that infuriates almost everyone on first reading. To summarize, Jesus said that the kingdom of heaven was a like a landowner who went to the market at several different times during the day to hire unemployed day laborers. Every new group of workers that he hired considered themselves fortunate to have secured a job for the day. At the end of the day, he brings them all together and, beginning with the group that he hired first, pays them each a full day’s wage. The workers who had been hired first suddenly switched from job satisfaction to rage that their pay was inadequate. “These who were hired last worked only one hour,” they complained, “and you have made them equal to us who have borne the burden of the work and the heat of the day.”

Most people who hear this story for the first time believe these workers have a legitimate point. The system seems unfair. But we need to go deeper and ask: Why were the workers who were hired first suddenly angry? Initially they had been pleased to get the work, they had willingly agreed to the daily wage, and they had been paid the full amount. Now they were upset because they had shifted their frame of reference. They now expected—believed they deserved—more.

Consider this thought experiment about the parable. What would have happened if the workers had received their pay in an envelope that day and were instructed not to open it until they got home? When they finally learned of their compensation, the workers hired early would have been pleased to find the payment that had been promised to them. The workers hired late would have been ecstatic that the landowner had decided to be generous with them. Their reactions might be different, but no one would have been angry with anyone else. Jesus’s story demonstrates that our happiness is often determined not by what happens to us objectively but by how we view our situation comparatively.

Jesus told this story as part of his deeper critique of the moral stinginess that can creep into the lives of human beings—especially people of faith. He had observed that those who had the commendable desire to be holy often got caught up in the comparison game, feeling that somehow God’s mercy is limited and therefore must be parsed out in very different amounts depending on the worthiness of the recipient. This is, in some sense, a primitive Econ 101 version of God’s love: Because we have a scarce resource (divine love), those who behave better should get more of it. And those who have made mistakes in their lives should, “in all fairness,” receive less.

But Jesus’s message is the exact opposite. We do not live in a world of scarcity but of abundance. God’s love is unlimited; there is more than enough for everyone. To worry that God’s generosity and forgiveness toward one person somehow deplete the total supply is to use the pinched logic of markets to interpret and restrict the infinite graciousness of God. This theological understanding of the profusion of mercy can have major consequences in our daily lives as we gradually unlearn our fears of scarcity, reorient ourselves toward gratitude, and discover that, as long as we remain open to each other, we are surrounded by abundance.

VI. CULTIVATING THE FOUR GIFTS OF GRACE

According to the Gospel of Luke, when John the Baptist appeared in the wilderness and began preaching his fiery gospel of repentance, he did not mince words: “Every tree that fails to produce good fruit,” he warned, “is cut down and thrown on the fire!” His audience was both impressed and confused. “Then what are we to do?” they asked. They wanted to know how to turn John’s theology into practice.

Aristotle and other Greek philosophers made a highly useful distinction between different kinds of knowledge, a distinction that we should rediscover. They talked not only about abstract theory (theoria) and technical skill (techne)—both of which have made it into the English language—but also about a special form of practical wisdom. They called it phronesis, and unfortunately we have no easy English word to express it. It occupies the middle ground between theory and technique and involves, according to one definition, “not only the ability to decide how to achieve a certain end, but also the ability to reflect upon and determine which good ends are consistent with the aim of living well overall.”[9]

So when we ask ourselves how can we develop and sustain a life of faith in the midst of a market-dominated world, how can we infuse our daily actions with intention and purpose, we are asking for practical wisdom, for phronesis.

If you are going to live a life of faith and service, you must seek gradually to develop four qualities. They are not superpowers granted by a liberated genie or the bite of a radioactive spider. They are not clever answers to a complicated intellectual puzzle. They are more like muscles that we already possess and that can become stronger through intentional daily use. You already know what they are, and you are certainly practicing some of them every day. The trick is to learn—gradually, slowly, effectively—how to practice them with ever-increasing steadiness and devotion.

The four qualities are simplicity, balance, wisdom, and generosity.

These four are all gifts of grace—they come to us from the divine spirit as seeds that must carefully be nurtured, supported, and improved through our commitment and effort. In other words, they must be cultivated. If we have a patch of ground outside our homes, it might eventually be seeded by weeds, trees, and wandering grasses. But if we cultivate that piece of land ourselves, we can unite with nature in raising herbs and flowers, vegetables and fruits—all of which provide us with beauty, nutrition, and health. The same is true for the gifts of grace. They have already been seeded and, without much attention, they are trying to grow. But if we assist that growth, the patch inside ourselves is ready to bloom and flourish. Cultivation is not fast or flashy; it is hidden, modest, gentle, and slow. It is supported through the daily practice of contemplation, meditation, and prayer. And with a little faith and a little persistence, it can lead to a deep inner peace.

As each of the four gifts—simplicity, balance, wisdom, generosity—grows from seed to blossom, sapling to tree, from barren branches to hanging fruit, it leads us into greater freedom and inner calm even if—especially if—we are living on limited income and with difficult financial conditions.

A. CULTIVATING SIMPLICITY: LESS IS MORE

Simplicity has been discussed for thousands of years. It is the topic of tens of thousands of books. The principle of simplicity rests on the long-standing (yet still counterintuitive) lesson that you will be happier if your life is less complicated—particularly if you have fewer possessions.

This runs against the core doctrine of a consumer economy, which, when you really think about it, is an ugly idea: that our highest use as beings is to gorge ourselves on objects and experiences. The heart of this idea is destruction: Whether we are “consuming” huge portions of food or a fire is “consuming” a forest, the original object disappears, sacrificed to the need and desire of something else. Steadily we have evolved into domesticated locusts, trained to fly into stores and drag off things that we have been told we want.

To live a simple life, you still need the basics of living. If you live in an apartment, you need a bed, table, and chairs. The question is: What kind of physical possessions? And how many? In engineering there is concept called “mass balance” which tracks the flow of material objects and other mass through a system. For a system to be in balance, the amount of mass flowing in needs to be equal to the mass that is flowing out.

In my hometown in Massachusetts, people practice a form of mass balance by leaving usable items on the street with a sign announcing that they are free to anyone who happens by. We have both contributed to and benefited from this flow. Over the years I have found it liberating and enjoyable to rescue items from the curb, particularly furniture, and bring them into my home.

Our kitchen chairs, spray-painted with exuberant red and yellow swirls, came off a trash pile eight doors down; they have been in use in our home for fifteen years. Our sturdiest hardwood salad bowl came from a basement in New Haven, Connecticut, where I found it more than thirty years ago in a dark corner under a pile of debris. Around the same time, I bought a massive iron pan in an estate sale for $3.00 and eventually discovered it had been made in 1860. The pan, still in use, is now more than half the age of the United States.[10] We sleep in my grandparents’ bed. All these things get daily use, most of them will be used for the rest of my life, and each of them frees us from unnecessary purchases in the future.

There is one major difference, however, between my life when I was starting out as a theological student and my life today. At the beginning I had few possessions and I carefully acquired necessities for little or no money. But once I amassed a certain amount, I did not then learn how to reverse the process and discard things whenever I brought new things into the system. The mass balance was out of whack—and, despite my best efforts, my accumulations are far more than I would like!

In our home, because we have closets and a basement, we have the luxury of putting these things out of sight, which has now become a mausoleum of objects whose origins we don’t remember and of tools we don’t use. Down in the basement shadows one can find an analogue tape mixer, a used rowing machine that I bought for $200, catcher knee guards for when one of my sons thought he might want to be a little-league pitcher, bottles of wine that I purchased in South Africa in 1993 and saved carefully even when they went sour, pictures that my children drew—or that I drew!—in third grade, a box of tiny shingles to repair my daughter’s doll house, and hundreds of books about business, politics, finance, theology, and social justice written in the 1980s that I just can’t bear to part with. The irony is that I keep many of these things in a misguided attempt to be frugal—someday, I tell myself, I might need just that screw or tool or piece of paper. But I also find it hard to part with the physical relics of long-vanished struggles, achievements, sorrows, and joys.

The creation of physical simplicity in a home—also known as de-cluttering—has become the rage today. One could fill a bookcase with books advising how not to accumulate things like books. They all say the same thing: When considering anything for disposal, there are only two questions to ask. First, do I use it? And second, do I love it? If the answer to both of these questions is no, it should immediately be given away,

Cultivating the gift of simplicity is, well, simple. Analyze your own habits of ownership and your own practice of mass balance. And, right from the beginning of your adult life, learn to match the process of accumulation with a process of dispersal. Our faith traditions will offer support for this, because they remind us that when we own things, things own us. There is a reason that Jesus, the Buddha, and Gandhi did not have basements full of junk.

B. CULTIVATING BALANCE: CONTROL IS FREEDOM

When I moved into my dorm room at Yale Divinity School, I was only twenty-two years old and had no idea what to expect. Shortly after my arrival I noticed a small suite of rooms at the end of my hall. I stuck my head in and greeted the occupants, Dave and Rick, who were second-year students. They warmly welcomed me and jumped up to help me carry a few last objects into my room. While standing near the door, Rick examined my tiny collection of vinyl records—I only had about twenty of them—and he asked me, “So what kind of music do you listen to, Bob?”

It was clear that I didn’t listen to much, so I hedged. “Well, you know, the usual—rock and roll, jazz, folk music.” (This was a long time ago.)

He looked at me quizzically. I leapt into my confession.

“Well, the truth is that I don’t own a stereo system. My roommate in college had an excellent one, and we lived together for four years, so I always just used his. Right now I don’t have the money to get my own, but I am hoping to get one by Thanksgiving.”

“Oh no, that’s ridiculous,” exclaimed Rick. “You should take mine.”

“What?” I asked. In that ancient era one’s stereo was a young person’s most prized possession.

“Dave has his, and we live in a small room, and we don’t need two. I was just going to put mine in the closet. You can borrow it for the next year or two or until you get your own.”

This was my abrupt introduction to the startlingly different attitude about belongings and time that existed at the Divinity School. People had their own clothes and schoolbooks and other possessions, but ownership was balanced with need; custody was balanced with use.

If we are to live lives of joy within a frame of modest income, then we must approach our spending with awareness and intention and with a mature understanding of the strengths and weaknesses of markets. Human beings have been swapping since the dawn of time to acquire goods that they could not produce themselves. Without any training, children swiftly figure out how to trade snacks and desserts in the elementary school lunchroom. With the invention of industrial production, it became possible to make so many goods that the supply began to exceed what consumers were willing or able to buy. The solution? To increase the feeling of need among American consumers so that they would purchase more. Slowly this seeped into our culture as part of our national purpose. “The American citizen’s first importance to his country is no longer that of citizen but that of consumer,” the pro-business Flint Journal in Michigan editorialized in 1924. “Consumption is the new necessity.”[11]

For people of faith this restlessness, this sense of incompletion and longing, is not just about keeping factories running or amassing objects; it is primarily a spiritual problem, prompted by our inner search for meaning and for God. Sixteen centuries ago St. Augustine wrote that inside each of us is a “God-shaped hole” that will leave us feeling empty until we invite God to become part of our lives. Our consumer culture tells us that there is no God-shaped hole, only a Cuisinart-shaped hole, or a Nike-shaped hole, or a deficit that can only be filled by fame, fortune, alcohol, and sex—all available for a price.

How do we stop this? By doing what we have not been trained to do: by balancing our use of money. In past generations, parents taught children, teachers taught students, and religious institutions taught their parishioners how to be thrifty, prudent, frugal, and foresighted. Families knew from observation and experience how quickly personal wealth could collapse in the face of waste and extravagance. The term “economical” used to mean getting exceptional value without spending too much money. Today too often such terms of frugality conjure up images of starchy, prudish, fun-hating religious fanatics. Products that used to be admired because of their simplicity and durability are often avoided as plain, cheap, and drab.

If money is a tool, then of course it should be used—wisely. And to do so, we need again to revive the notion and role of intention. Purchases—like all actions—need to be decided not by the impulse of the moment but by the larger question of what one is hoping to achieve in life. To do this, money must be thoughtfully divided and dedicated to different purposes, which is why, surprisingly enough, one of the greatest tools for both spiritual and financial freedom is the humble, ordinary, often misunderstood and frequently resented budget.

Most people hate budgets. Why? Because they seem to push us to make choices that we don’t want to make and to acknowledge limits that we do not want to admit. We all hate the idea of counting pennies as much as we hate counting calories. At first glance, creating a budget would seem to condemn us to a life of pain and restriction. But that’s an illusion. There’s a phrase in the Episcopal Book of Common Prayer that refers to our relationship with God as a relationship “in whose service is perfect freedom.” That seems like a contradiction—if one is in service to something, isn’t that the exact opposite of freedom? No—not if we have put ourselves in service of something greater than ourselves.

Budgets create peaceable boundaries and practical guidelines for the different ways we spend money. Many faith traditions, including Judaism and Christianity, contain the concept of “consecration”—the setting aside of something for sacred use. Just as we consecrate places set aside for worship, or we consecrate our time into periods of reflection and meditation, we can consecrate our money into categories with clear purpose. Budgets can help us be faithful to our intentions and divide what we have to meet many goals, both short- and long-term.

There are hundreds of books, online courses, and web sites on personal finance that can teach anyone how to analyze and organize their spending in a way that moves from chaos to calm. Some are more detailed and strict than others. Not everyone, however, has the personality or the fortitude for such tools. And that’s okay. The last thing one wants to do is to start writing down every expense and then quit after a few weeks because the whole effort is too complicated and depressing.

Eight years before she was elected to the United States Senate, Elizabeth Warren and her daughter Susan Warren Tyagi published one of the best books I know on personal finance, All Your Worth. Knowing that budgeting drives most people crazy, they suggest that it is not important to track every penny, but simply to divide one’s money into three categories: “Have to Have,” “Want to Have,” and “Savings.” The key is an overall balance between these categories. To achieve gradual financial liberation, they recommend that “have to have” spending be limited to 50 percent of one’s income, “want to have” expenses to 30 percent, and “savings” (which includes paying off debt) should be 20 percent. (I would have added an additional category for “give away” of 5 to 10 percent and then rebalanced the rest).

Those percentages may not be exactly right for everyone, but they are an excellent way to start. Just the process of sorting expenses into things that are obligatory (“have to have”) and those that are discretionary (“want to have”) is a hugely positive step. Like all spiritual challenges, it asks us to look candidly at our own desires and put them into alignment with our intentions.

In their book Warren and Tyagi show how people’s finances can fall apart if they concentrate too much on a single category. The authors also helpfully distinguish between investment debt—debt that you are taking on now because you will own something valuable at the end (like a house or a degree)—and consumption debt (like an expensive car or TV), which is stealing money from the future to buy something you want today.

The thoughtful creation of categories for how you spend your time and money is a fundamental part of the spiritual life. If ignored, it can create hidden, painful discrepancies and contradictions. If addressed, it can offer a step toward inner and outer freedom.

C. CULTIVATING WISDOM: SLOWER IS SMARTER

We have looked at avoiding the tyranny of money by cultivating simplicity and balance. But how does one cultivate wisdom? The heart of the answer is simple: one must slow down.

Wisdom stretches back into many ancient texts, including the Bible. Wisdom can be thought of as many things—knowledge, common sense, experience—but one of its most important characteristics is, according to Webster’s dictionary, “the ability to discern inner qualities and relationships.” Wisdom, in other words, is the gift of being able to see past the surface, the appearance, the illusion and dazzle of something.

We are all tempted to make judgments based on superficial impressions. A person with wisdom retains a bit of calm reserve and takes the time to see whether the deeper core of an idea, or proposal, or person lines up with the attractive surface. We tend to associate the quality of wisdom with older people—over their lifetime they are more likely to have learned from experience that “all that glitters is not gold.” They have likely been misled by appearance, only to learn later—sometimes painfully—that reality turned out to be different.

During his ministry Jesus worked diligently to shift his listeners away from their superficial perceptions to deeper truths grounded in the love of God. Taking the time to rest on the Sabbath was important, he argued, but not so important that it should prevent people from helping others.[12] Jews were different from Samaritans and Romans, but not so different that Samaritans and Romans were excluded from the mercy of God.[13] Tithing money or possessions to the temple was significant, but not as significant as pursuing works of justice and mercy.[14] Over and over again he sought to pull people away from the fascination with appearances and focus them on an underlying reality about human identity and community. When he failed, he expressed his frustration in bold terms. “You have ears, but you do not hear! You have eyes but you do not see!”[15] In other words, you lack insight into what is truly valuable.

The folk singer Noel Paul Stookey used to comment that “there are two ways to miss things. The first way is if the thing goes by too fast. The second way is if we go by too fast.”[16] Recently I experienced a vivid example of this when I was visiting an international art show in Venice. My wife and I strolled among the different national exhibits and eventually arrived at the French hall just as it began to rain heavily. We stopped inside and sat down to wait for the showers to pass.

The exhibit itself seemed to hold little interest; it consisted solely of a fifteen-foot tree anchored in a ten-foot-wide root ball in the center courtyard of the pavilion that was open to the sky. We sat down and chatted about the day, occasionally glancing at the boring tree, until one of us noticed with a shock that the tree was actually moving. Through some concealed mechanism of locomotion underneath the root ball, the tree was slowly gliding around the room at the nearly invisible rate of perhaps a foot a minute. Over the next forty minutes we watched it move from left to right, backward and forward in a magnificently graceful and almost imperceptible dance in the rain.

As we admired this strange and beautiful motion, many dozens of other visitors stuck their heads into the pavilion and took in the image of the apparently stationary tree. Because they were moving too quickly, they could not perceive the beauty of the tree’s elegant and poignant dance.

By slowing down we gain insight not only into the grace and beauty of each other and of each moment, but we also protect ourselves from those who are trying to push us to make snap decisions for their own benefit. Whether it is by hawking candy at the check-out counter or by applying high pressure at the car dealership, many sellers would prefer that you not think too much about your decision. One common trick: a seller uses social pressure to prevent a buyer from asking too many questions. Since no one wants to be seen as the stupid person in a group, an inquiry can be squashed if the seller implies that only foolish, inexperienced people have to ask basic questions. Gender stereotypes can also be tapped to prevent both men and women from exploring things that they do not understand.

People of faith or those in helping professions are additionally vulnerable to the subtle message from sellers that “if you were really a good person—minister, teacher, believer, environmentalist—you would not be challenging what I am telling you. See how nice I am being? I am becoming your friend. Your questions hurt my feelings and suggest that you don’t really trust me.”

But trusting someone does not mean abandoning logic; trust and exploration go together. According to the Russian proverb that my mother, Suzanne Massie, taught President Ronald Reagan in the mid-1980s, the key is to “trust but verify.”[17]

The most powerful lesson I learned at Harvard Business School was to ask questions without worrying about whether someone was going to think I was stupid. People with MBAs learn to ignore social pressure and to keep asking whatever questions are necessary until they fully understand a problem. They ask “Who? What? Why? How much?” over and over again. Their educational success gives them powerful self-confidence: “I know I am smart because I passed all the tests to come here, so if I do not understand something it is not because I am stupid, it is because it has not yet been explained to me adequately.” So they ask questions—often very basic questions—until they have learned everything they want to know.

Most people in divinity schools and training for spiritual leadership never receive such encouragement. Working with many colleagues in different organizations, I always encouraged people around me to resist the idea that “if I ask the wrong question, I will be seen as ignorant.” The motto I have recommended was “strive to be stupid.” And for people of faith who may have developed a deep and powerful vocabulary in one field—theology or social justice or education—but feel at sea when confronted with a financial or a legal document, the correct approach is not to shy away from complexity but to set one’s feet squarely on a pedestal of self-respect, slow down, and insist on getting all the answers until you have the information—and the insight—that you require.

D. CULTIVATING GENEROSITY: IN GIVING WE RECEIVE

If we want to break the control of money over our lives, we must practice giving things away. This is important because the act of giving contradicts the dominant narrative of our modern economy, which is that we must grasp what we have because everything is scarce. We live in a culture that subtly but relentlessly urges us to panic: “There isn’t enough of what you want in the world! And other people are getting more than you! Soon it may run out! So you must hang on tightly to what you have and fight for more!”

This instinct has become so deeply ingrained that is has turned into a sickness: Hoarding now afflicts at least 6 million people in America.[18] Today we even engage in a morbid form of voyeurism when we are invited to observe the horrific details of this behavior on television shows—paid for companies who want us to buy more stuff!

Careful nurturing of generosity enhances all of the other gifts of grace.

To be generous, we must live more simply, and if we live more simply, we can afford to be generous.

To be generous, we must balance what we earn with what we spend.

And to be generous we must be able to deflect the continuous bombardment of messages that promote anxiety, insatiability, and scarcity. The most common experience in life is not the scarcity of material things, but the abundance of beauty and joy.

In saying this, I do not mean to minimize the cruelty of genuine scarcity—when people are robbed of food and water, health care and education, housing and employment—which continues to damage hundreds of millions around the world. Such poverty is relentless and brutal, and we are called to fix it. To do so, however, we must stop framing our lives as though everything is scarce, which can lead to us feeling so trapped by worry that we feel paralyzed to assist those who have far less.

Indeed, the Bible points out a common and painful paradox—that often the more that people possess, the less inclined they are to be generous. The prophets all condemned the “hard-hearted” and “stiff-necked” nature of those who prided themselves on their wealth and superficial piety. Instead of viewing their riches as an unmerited gift from God that should be shared with those who have less, the wealthy of thousands of years ago often assumed that their good fortune was the result of their own virtue. Since their wealth was a sign of God’s approval, they had no obligation to think of anyone else. If people were poor, it was because they were being punished for their moral failings or because they did not try hard enough.[19] The poor deserved their poverty and the rich deserved their wealth.

This concept has survived for thousands of years and today has managed to weasel its way into the fundamental moral assumptions of modern capitalism. Those at the top of global society have enormous incentives to overlook the history, privileges, placement, violence, and dumb luck that allowed them to accumulate wealth. They prefer to explain their status as the result of their personal effort and merit. Once this explanation is imbedded in people’s moral codes, the same hard-hearted, stiff-necked—and supremely self-confident—attitudes naturally reappear.

We should not be surprised that the gifts of grace seem to offer us paradoxes. The most powerful collection of Jesus’s sayings is found in the Sermon on the Mount in Matthew and the Sermon on the Plain in Luke. In Luke, Jesus presents his followers with a series of seemingly impossible instructions.

Love your enemies,

do good to those who hate you,

bless those who curse you,

pray for those who mistreat you.

If someone slaps you on one cheek,

turn to them the other also.

If someone takes your coat,

do not withhold your shirt from them.

Give to everyone who asks you,

and if anyone takes what belongs to you,

do not demand it back.

Do to others as you would have them do to you…[20]

Jesus’s admonitions are powerful, moving, and difficult. His call to “give to everyone who asks of you” echoes through my mind every time I walk past a panhandler. In such situations my mind immediately seizes on a dozen reasons why I should not give money, reasons rooted in suspicion and judgment. I shouldn’t give them money because they will just use the money to buy drugs or alcohol, I think. I don’t want to enable their own self-destruction. But then it occurs to me that Jesus did not say, “Give to everyone who asks of you, unless you think they don’t deserve it.” Usually, when I am alone, I fish out a dollar. Sometimes, when I am walking with someone else, I hesitate. I don’t want my companion to think I am a dupe, I tell myself.

Giving is a practice that can heal and cleanse our greed. And Christian tradition makes clear that it is not just about giving when one has a lot of extra cash lying around. The story of the widow’s mite makes this clear.

Jesus looked up and saw the rich putting their gifts into the treasury; and he saw a poor widow put in two copper coins. And he said, “Truly I tell you, this poor widow has put in more than all of them; for they all contributed out of their abundance, but she out of her poverty put in all the living that she had.”[21]

Many years ago, before the collapse of the Soviet Union, I traveled to Russia with members of the Orthodox Church of America. Because I had difficulty walking, I often used a wheelchair. And because we were attending a special service at the Transfiguration Cathedral in Saint Petersburg, I put on my clerical color. I was sitting by myself in the wheelchair at the bottom of the steps of the cathedral while the leader of our group went to see whether there was a handicapped entrance. As I was staring up, examining the architecture of the building, a young housewife, dressed in simple and worn clothes, suddenly approached me, took my hand, and pressed a one-ruble piece into it. I looked up and tried to thank her and to explain that I really did not need her money, but she had already turned and dashed away. So I, an affluent American tourist, was left holding a donation from a modest Russian woman, who assumed that as a handicapped man of faith, I deserved her gift.

On that same trip we traveled to Novgorod to the home of a young mother whose child was also in a wheelchair. This time I slowly climbed the stairs to her apartment and we drank tea with her for about an hour, listening to her heart-breaking stories of trying to get medical care and schooling for her son, who was about ten. Even though he could not walk at all, she could not get a first-floor apartment, so that whenever she wanted to take him out, she had to carry him down three flights of stairs to the street, then climb back to her apartment to fetch his wheelchair.

At one point our conversation turned to the only beautiful thing in her apartment, a ceramic Russian tea set displayed inside a small wooden chest with glass doors. When our little group admired it, she suddenly rose from the couch, took out the centerpiece of the collection, a beautiful blue-and-white tea pot, and demanded that we accept it as a gift. We objected and protested and refused, and with each word of resistance her face fell more and more until it became clear that we were seriously hurting her feelings. She wrapped it in newspaper and we left with our gift, embarrassed that a woman with so little had chosen to give us her most precious physical possession.

I have never forgotten those two women, and their faces come back to me all the time when I am confronted with the choice of extending hospitality or giving something away. Their generosity taught me that our attachment to objects or to money can easily distort our humanity and poison our inner lives.

My father also taught me a powerful lesson when, as a teenager, I once smashed up his car. I called, filled with fear, and told him about the accident.

“How are you? Are you okay?” he asked with great intensity.

“Yes, Dad, I am fine,” I told him, “but you don’t seem to realize what I am telling you. I smashed up your car.”

His next words changed me forever.

“I don’t care about the car. It’s only a thing. I care about you.”

Our growing wisdom and insight tell us that the safety granted by money is weak and ephemeral. To be free from its dictates, we must cultivate the practice of giving whatever we can away.

VII. CONCLUSION: FROM INDIVIDUAL TO COMMUNITY

Throughout the Gospels, Jesus invites people to leave their previous lives behind and start on a new journey based on new values as his disciples. Only one person turns him down cold. As we hear in the Gospel of Mark, a “rich young ruler” approaches Jesus and asks him how to inherit eternal life. Jesus suggests a conventional path, that of following the Ten Commandments. The young man insists that he has done all these things; he wants to do more. Jesus replies, “One thing you lack: Go and sell all you possess and give to the poor, and you will have treasure in heaven; and come, follow me.”

Mark records that when the young man heard these words, “he was saddened, and he went away grieving, for he was one who owned much property.” His money blocked him from accepting an invitation to new life. This also illustrates Matthew 6:4:

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

As the result of these and other encounters, Jesus was acutely aware of the warping power of money. In the Sermon on the Mount in Matthew, Jesus warns about spiritual distraction:

Do not lay up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust consumes and where thieves do not break in and steal. For where your treasure is, there will your heart be also.[22]

The struggle between God and money is a struggle over values and intentions. It is waged every day, and with gentle but focused commitment it can be won. Four gifts—simplicity, balance, wisdom, and generosity—can provide the guidelines and practices with which to maintain our spiritual focus. An additional ally is community, and to this we now turn.

END NOTES

1. http://maristpoll.marist.edu/wpcontent/misc/Home%20instead/Mon
ey%2Matters_April%202012_FINAL.pdf; see also http://www.jstor.org/st
able/2667943?seq=1#page_scan_tab_contents.

2. James D. Berkley, The Dynamics of Church Finance (Grand Rapids,
Mich.: Baker Books, 2000), Chapter 1.

3. The most comprehensive review of the use of debt for social control is
found in David Graeber, Debt: The First 5,000 Years (Brooklyn, N.Y.: Melville
House, 2011).

4. Exodus 20:17.

5. http://www.oxforddictionaries.com/us/definition/american_english/gratitude.

6. http://www.nytimes.com/2015/07/28/opinion/david-brooks-the-structure
of-gratitude.html?_r=0.

7. Definition of deserve: “to do something or have or show qualities worthy
of (reward or punishment).” Synonyms: merit, earn, warrant, rate, justify,
be worthy of, be entitled to, have a right to, be qualified for.

8. Such as the prodigal son, the woman taken in adultery, the Pharisee and the tax collector.

9. See Aristotle, Nichomachean Ethics, and https://en.wikipedia.org/wiki/Phronesis.

10. “The Parable of the Iron Pan,” in the Patagonia Holiday 2013 catalogue.

11. John de Graaf and David Batker, What’s the Economy For, Anyway?
(New York: Bloomsbury Press, 2012).

12. Mark 2:27.

13. John 4:7-30.

14. Matthew 23:23.

15. Mark 8:14; Jesus is likely referencing Isaiah 6:10 and Jeremiah 5:21.

16. Noel Paul Stookey, “Paul and” album, 1971.

17. Suzanne Massie, Trust But Verify: Reagan, Russia, and Me (Bluehill, Me:
Hearttree Press, 2013).

18. https://iocdf.org/wp-content/uploads/2014/10/Hoarding-Fact-Sheet.pdf.

19. This is the core debate in the Book of Job, where Job’s friends unsuc- cessfully badger him to admit the horrible things he had done that would
have caused God to punish him so severely. Job insists on his innocence
to the end.

20. Luke 6:27-31.

21. Luke 21:1-4.

22. Matthew 6:21.

CHAPTER TWO

Money and the Community

MOVING FROM INTENTION TO STRUCTURE

The preceding chapter was about cultivating the gifts of grace so that we can live our deepest values and our relationship to God as individuals. But how do we create organizations that allow us to build those spiritual qualities—simplicity, balance, wisdom, and generosity—into our relationships with other people? The key is understanding not just what is but what could be. To quote author Marjorie Kelly, “structure is purpose expressed through design.”[1]

Conversely, if the structure of an institution is out of alignment with its intention or purpose, it can end up embodying a painful schizophrenia, in which its actions contradict its deepest values.

I witnessed a version of this at the age of twenty-six, shortly after I completed my studies at Yale Divinity School. In that busy period after my graduation in 1982, I was ordained, married, and hired into my first position as a minister. I had become the most junior member of a staff at a historic church in New York. Though it was attracting hundreds of young people to its weekend services and mid-week celebrations, the church itself was run by a tiny group of much older members.

I was young and naïve, and when I was invited to listen in on vestry meetings, I looked forward to seeing how my elders grappled with practical challenges of living a life of faith in turbulent times. I discovered that many of their practices were both ancient and puzzling. Like many non-profits, they self-selected their leaders, though they went through the motion of holding an annual vote by the congregation in which a single candidate was offered for each open seat. They also refused to release a budget of the church, something I found astonishing. Their argument was that they wanted to prompt members to reflect on the amount of money they should give to God, rather than get sidetracked by the details of particular programs—and whether they support them or not.

The most surprising discovery was that the church had a substantial endowment, money—tens of millions of dollars in modern terms—carefully protected from scrutiny. The vestry believed that these precious gifts set aside by generations of members had been given for the preservation of the delicate and historic building. This “edifice complex” is common for churches. The early money is spent building a glorious sanctuary that draws people together and testifies to the founders’ intent and mission. Over time the maintenance of the building draws more and more of the operating expenses away from the programs, so that the original mission slowly shifts from serving a particular community to preserving the building at all cost.

Know the Basics:
Endowment

Endowments are financial assets that are pooled donations to a non-profit. Some but not all endowments are given with a specified purpose for the funds.

For most endowments, the principal or original amount of the fund is to remain intact, while interest or investment returns can be spent for the intended purpose.

Finally, after multiple requests, I received a copy of the investments of this congregation. I was shocked. Among the long lists of companies from which the church was drawing money, I found weapons manufacturers, chemical companies known for their toxins, companies providing security equipment to the South African government, and many other questionable investments. I went to the leaders and asked them about whether making money from these investments was consistent with the values of the church. I was politely told that this was none of my business and that I should return to my seat at the back. Three or four more times I repeated my request and was again turned away. Since my two-year appointment was about to run out, they assumed that this pesky flea would soon be gone.

I tried one more tactic—one I knew might get me fired. As junior clergy, I was allowed to preach to the congregation every fifth Sunday. I learned that for my next sermon I had been assigned the text about the “rich young ruler” that I mention in the first chapter who refused to follow Jesus because he had so many great possessions. When the young man had departed, Jesus commented to his disciples that money was the powerful force to draw people away from a mission of justice and mercy.

And Jesus looked around and said to his disciples, “How hard it will be for those who have riches to enter the kingdom of God!” And the disciples were amazed at his words. But Jesus said to them again, “Children, how hard it is to enter the kingdom of God! It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.”[2]

On that particular Sunday, I read this passage from the pulpit and then told the listeners that a member of the congregation had raised a similar problem with me. She had told me that she was both rich and a strong believer. She eagerly wanted to deepen her life of faith. She came to church every Sunday. She sang all the hymns and participated in all the events. But she was reluctant to give up her many forms of wealth, including her stocks in questionable industries, her cash, her real estate holdings. She wanted to move forward with her faith. but she felt trapped by what she owned.

“And what is interesting,” I continued from the pulpit, “is that this woman is here today, in this congregation.”

The hundreds of people in front of me froze. They tried to peer around the room without moving their heads.

“What should we advise her?” I continued, “How could we help her on her path? This congregation has the opportunity to share our views with her.”

I paused. I had never seen such attentiveness on five hundred faces.

“You see, we can talk to her because her name is….”

I spoke the name of the church itself.

There was ripple of consternation in the pews.

“We are that woman,” I continued. “We are struggling to move forward in faith, and yet we are being held back by our assumptions, our possessions, our investments, and our reluctance to live all of our lives by the principles of the Gospel.”

When I finally stepped down from the pulpit, I glanced at the senior minister. His face was purple with rage. Well, there goes my job, I thought. During the rest of the service I stared at my feet and reviewed where else I could seek employment. During coffee hour I was alternatively shunned and embraced.

In the end I was not fired because about half the congregation made clear that they appreciated what I had said. A few months later my term expired. As far as I know, the church never addressed those core issues. Despite the sincerity of so many, it was not fully willing to integrate its convictions into its way of life.

Every organization has similar stories. Every organization carries within it a bundle of intentions and impacts. Every organization has its own approach to money, which can accelerate or impede change. In daily life, we usually only consider how a particular organization affects us as individuals. But most religious traditions, including Christianity, remind us that we also need to consider what the organization is doing for—or to—others. To build just and sustainable communities we must design our organizations with our most important values in mind. Again, “structure is purpose expressed through design.”

How Well Do You Know Your Local Community’s Values?

We can be quick to criticize our towns or neighborhoods and see the grass as greener elsewhere, but often we do not know our local community’s values all that well. Most communities are made up of dozens, even hundreds, of interlocking grassroots organizations—neighborhood associations, sports clubs, environmental and social campaigns, and, of course, communities of faith.

Today the Internet makes it easy to get a snapshot of any community, but we often forget to look. And don’t forget local government: Every day, local public officials are trying to figure out how to meet local needs and are looking for feedback. You will be amazed how easy it is in most cases to talk to people who make decisions and control money in your area. But you need to reach out to them!

I. FAMILY AND THE IDEAL COMMUNITY

Most people nurture an unspoken ideal about the life they would like to lead and the person they would like to be. These hidden aspirations change as new lessons and opportunities present themselves. We are born into particular situations, into families and communities with their own limitations and opportunities. As we mature, we must select the values and experiences that we wish to carry forward, and those we want to leave behind. This sifting through our received wisdom is vital to social renewal; every person and every generation must either reaffirm the patterns of their forebears, or embrace something new.

Similarly, most of us carry within us a blurry image of the kind of community in which we would most like to live. The half-visualized, half-understood communities of our daydreams have both physical and social characteristics. One person may prefer the relative solitude of rural life; another, the turbulent interactions of the city. One may desire to live with people who share a common vocabulary and values. Others may thrive on a kaleidoscopic diversity of identities and viewpoints.

Curiosity about the way others live is a near-universal human attribute. Differences can be both attractive and threatening. The cultivation of the four gifts of grace makes such exploration easier.

To move around unencumbered, one should embrace simplicity.

To retain one’s own values while exploring and respecting those of others, one needs balance.

To observe the connection between people’s intentions and their actual behavior requires wisdom.

And to receive the hospitality of many strangers on a journey is to learn the power of generosity.

Through such explorations, people often begin to ask themselves deeper questions. “I have seen what is,” they might say, “now I want to know what could be.” It is this capacity for vision, for aspiration, that drives many people to create new organizations, explore new systems, or engage in new forms of service. This powerful desire—to learn how to design and implement a new future—is rarely articulated in clear terms. We are rarely asked to stop and describe the community we want to live in, the world we want to inhabit, and the public and private values that would transform aspirations into reality. Only when we have a clearer sense of such a community are we able to organize our individual gifts and ambitions toward the common goal.

For many people, the earliest and most profound experience of living in community comes through one’s family. A family is a close social unit, diverse in personality and age, bound by shared history, values, affection, and sometimes genetics. Families at their best represent security, nurture, and acceptance. As Robert Frost wrote, home is the refuge of last resort, the place “where, when you have to go there, they have to take you in.”[3]

Families look out for each other’s interests, share resources, and mitigate individual self-interest and greed. Even for people whose actual family experience was one of pain and dysfunction, there remains a longing for the idealized family. As a result, when thinking about the appeal of an attractive community, people instinctively apply the vocabulary of family.

One of the most attractive aspects of family interactions is that they are not driven by money. Money flows in and out of families by necessity, and money can sometimes encumber and distort familial relationships, but children do not pay parents for room, board, education, and safety; and parents do not pay children for affection and loyalty. Relationships do not rise or fall on the basis of market exchange. As a result, the family remains a primal and powerful example of a strong, desirable social unit that functions independently of money. This is another reason that “family” is often employed as a metaphor to give other organizations a moral legitimacy that may or may not be appropriate.

The use of family as a metaphor is common in Judaism and Christianity as well as other faith traditions. The relationship with the biblical God has been characterized for millennia as one of parent to child. Believers often refer to each other as “brothers and sisters.” Parables of the New Testament—such as that of the prodigal son—illustrate spiritual relationships through analogies to human families. In the Gospel of Matthew, Jesus suggests that people who share a spiritual commitment form a family more closely bound than those connected by blood.

While Jesus was still speaking to the people, behold, his mother and his brothers stood outside, asking to speak to him. But he replied to the man who told him, “Who is my mother, and who are my brothers?” And stretching out his hand toward his disciples, he said, “Here are my mother and my brothers! For whoever does the will of my Father in heaven is my brother, and sister, and mother.”[4]

Similarly, when Peter and the disciples worry that by following Jesus they will lose ties with their families, Jesus insists that they will experience not a loss but a gain, in both relationships and possessions, because the family of Christian believers is so vast and generous.

Jesus said, “Truly I say to you, there is no one who has left house or brothers or sisters or mother or father or children or farms, for My sake and for the gospel’s sake, but that he will receive a hundred times as much now in the present age, houses and brothers and sisters and mothers and children and farms, along with persecutions; and in the age to come, eternal life.”[5]

And finally, we learn from the Book of Acts that enthusiasm among new converts to Christianity was so powerful that it shattered traditional possessiveness about money and prompted communal sharing, much like a family.

…all who believed were together and had all things in common; and they sold their possessions and goods and distributed them to all, as any had need. And day by day, attending the temple together and breaking bread in their homes, they partook of food with glad and generous hearts, praising God and having favor with all the people. And the Lord added to their number day by day those who were being saved.[6]

The expectation that strangers—Jews! Samaritans! Romans! tax collectors!—could become members of the same family was a radical social statement in that time (and in ours). Those around Jesus who heard those words would have been shocked. But the words powerfully voiced a new intention to welcome people from all backgrounds, enabling the new institution of ekklesia—church—to draw converts rapidly from around the Mediterranean.

II. MIXED MODELS OF OWNERSHIP AND EXCHANGE

It is important to keep track of how the original design and structure might be evolving—possibly leaving the original intention unfulfilled. Institutional purpose can shift when an organization with one kind of structure tries to borrow the terminology from another in order to create an illusion of intimacy or effectiveness.

Money and Embarrassment

A recent study by Paul Kiel demonstrated the negative power of shame around money: Unbeknown to an entire St. Louis neighborhood, almost half its residents had their wages garnished to repay debt. Since they didn’t talk about it, they had no idea that this was a community-wide issue (even the mayor was having her wages reduced).

Embarrassment is also felt by the debt-free, including high earners. Bari Tessler Linden, a financial therapist, emphasizes the need to bring “awareness, forgiveness, alignment, and practical tools to the money conversation.”

Most important of all: We need to begin these money conversations in the first place. Too many communities of faith limit this discussion to stewardship—why you should give money to the church. What we need now in theological schools and in faith communities are courses in the practical theology of money.

The appeal of the family model of interaction and cooperation is so strong that we should not be surprised that many organizations—from the military to the academic institution, from the professional athletic team to the global corporation—try to cover themselves with borrowed moral appeal by using the language of family to describe their own entities. The ties of loyalty and mutual protection that arise between soldiers turn them into a “band of brothers.” Thousands of chief executives, seeking to inspire higher devotion from their employees, speak rapturously of their firm as a “family” whose bonds transcend the dull obligations of contracts and wages.[7] And as we have seen, people in training for leadership in faith communities often instinctively resist the more commercial language of exchange and prefer the language of family because it seems so much more humane.

However, it can be perilous to embrace the vocabulary and practices of family or other models uncritically for all human forms of interaction. For all their beauty and comfort, families can sometimes impede people, preventing them from growing and changing.

Along with family, we have another model for establishing relationships, creating organizations, using money, and exchanging goods—the model of the market. The “familial” model establishes deep connections on the basis of personal affection and loyalty. The “market” model establishes more narrow interactions, in which the focus might be on a single transaction between strangers or on dollars exchanged for hours worked, materials purchased, products sold, and funds invested.

People in faith traditions are often tempted to award all merit to the familial model and look askance at the market model. But we know from the way we live our lives that we actually value and employ both, depending on our understanding of and preference for certain forms of freedom. When I am buying a newspaper from you at a street stand, I don’t necessarily want to know your religious convictions, your sports allegiances, your political affiliations, or your sexual preferences, or have you know mine. I just want to exchange some dollars for a product with a minimum of encumbrance. Market exchange can thus enhance familiarity or anonymity, depending on one’s aims. For those who feel that our modern economy is cutting down on possibilities for genuine community, the anonymity offered by market transactions, particularly conducted at great distance such as over the Internet, is an example of the debilitating effect of capitalism.

The choice of models can strongly affect not just the purpose but also the organization’s uses of money. Familial models allow for less formal structures of payment and exchange, encourage the donation of time, and provide benefits that are not primarily financial. This looseness can seem appealing until one starts talking about employment. When someone hires a member of their actual family without ensuring that the person has the same qualifications as other applicants, this advantage is both unjust and demoralizing to other staffers.

Know the Basics: ROI

ROI stands for “Return On Investment” and is perhaps the most common ratio used to calculate profit (or loss). ROI is usually offered as a percent and simply indicates the amount of money gained or lost on the initial amount invested. For example, an investment of $5,000 that grows to $5,500 would generate an ROI of 10% (500/5,000).

III. THE BUILDING BLOCKS OF STRUCTURE

To understand the role of money in community—and to channel its use toward our true intentions—we must also understand the way intention solidifies into structure. In regular conversation we tend to simplify the structures around us in ways that limit our understanding of the present and of future possibilities. We talk about “public” vs. “private” enterprises, as though all forms of government, from a village to the federal government, were the same, or that all forms of business, from a corner store with a single proprietor to a global corporation with hundreds of thousands of employees and billions in revenue, were identical. This becomes even more confusing when we remember that some billion-dollar companies are referred to as “publicly held” firms because their stock is openly traded, whereas other equally huge entities are considered “privately owned firms.”

Similarly, following tax laws, we classify enterprises into two misleading categories; they are either “for profit” or “non-profit.” As we will discuss later, one of the characteristics of the early twenty-first century is the steady blurring of these categories into hybrid forms, in which for-profits own non-profits, non-profits own for-profits, and completely new entities such as the Benefit Corporation (or B Corp) are coming legally into being.

Stripped of their legal, political, and moral connotations, all organizations—whether firms or congregations -- require answers to three straightforward questions. They are:

1) Who “owns” the organization? In other words, if a dispute arises, who retains final responsibility for and control of the organization’s assets?

2) Who “controls” the organization? In most cases, when we own something we also control it. In the economic world this is not always true. Though shareholder control a corporation through the election of a board, board candidates are picked from a list of people preferred by the chief executive and only one candidate is offered for each vacancy.[8] This system also dominates most of our non-profit, philanthropic, and even religious boards, who are also self-selecting and self-perpetuating. This means sacrificing democratic participation for greater unity of purpose, which is often viewed as a higher priority for organizations with specific goals.

Know the Basics: What is the “Poverty Line?”

Poverty in the U.S. is determined by the U.S. Census Bureau and is derived from pre-tax monetary income (“non-cash benefits” like food stamps and Medicaid are excluded). The poverty line is set at “three times the cost of a minimum food diet in 1963, updated annually for inflation” (UW Institute for Research on Policy) and also takes into account the size of the family and the ages of its members. See the Census Bureau Web site for some examples of how they calculate the poverty line.

3) Who distributes the surplus—and how? A business, large or small, produces many outcomes, one of which is financial revenue. If revenues exceed expenses, then the organization has a surplus. This surplus goes by many names, such as net income, retained earnings, or even the much-maligned concept of profit.

For people in business and finance, the word “profit” is a neutral term: It simply describes the surplus that remains after all the expenses have been paid. For others it is a dangerous, even evil concept, not because the idea of a surplus is automatically wrong, but because of the evidence that the drive for profit can cause business leaders to neglect other vital outcomes, including wages, health and safety, and community and environmental impact.

How should the surplus be distributed? To whom? Based on what criteria? With what goal in mind? These are both practical and moral questions. For a firm there is a huge range of possibilities: The surplus could be distributed to workers and managers in increased wages, to customers in lower prices, to future investment in research and new technology, to philanthropy to support the community, or to shareholders as dividends to reward their investments.

In the twentieth century most people in business, finance, and economics argued that the sole purpose of business should be to increase financial returns to shareholders.[9] Today, however, that notion is relentlessly being challenged. For thirty years we have witnessed the increasing acceptance of the idea that businesses must be accountable to a broader range of “stakeholders.” Also, we are seeing more experimentation and success with egalitarian and democratic structures of decision-making.

To sum up, creating an organization raises a host of inevitable questions—often posed with great ideological intensity—that must be answered. Whether one is opening a restaurant, a philanthropy, a school, a congregation, or a small manufacturing plant, the same three questions must be addressed: who owns, who controls, and how is surplus distributed?

There are many ways to make decisions, but most of them can be ranked along a spectrum from a private decision by a single individual (top down) all the way to a group decision through consensus (bottom up)—a continuum from autocratic hierarchy to direct democracy. History shows that each approach improves some aspects of decision-making while undermining others. Strong hierarchies allow for rapid choice, but they often make mistakes because they have not drawn in enough information or agreement. Open-ended democracies that try to make all decisions through equal participation and consensus sometimes bog down in endless debate about process.

IV. THE STRUCTURE AND INTENTION OF THE CONVENTIONAL RELIGIOUS CONGREGATION

Let us look more closely at the structure—questions of ownership and control—of the traditional religious congregation. They vary from the tiniest, most informal unincorporated gathering to major centers that include sanctuaries for worship, schools, medical facilities, job training programs, and other social enterprises. We will focus on the most common congregational form—a local collection of a few hundred families. We can analyze the congregation swiftly through the three elements of organizational identity.

Ancient Religion’s Influence on the Market

Scholars of the Old Testament note how the temple and religion provided the context for the market and economic exchange. However, this religious framework and influence on the market was not unique to Judaism or Christianity. It is in fact traced to much earlier times.

In his essay “The Invention of Interest,” Marc Van De Mieroop explains the economic dimension in Babylonian cities: “In addition to an organizational staff and physical place for storage, the temple provided an ideological basis for the exchange of goods: the city god housed in the temple received the varied contributions from the institutional community and distributed goods in return.”

1) Mission and Ownership: What is the mission, the purpose, the intention of the local congregation? How well is it designed to achieve that? Innumerable opinions about this abound—even within a single congregation (and there are an estimated 350,000 religious congregations in the United States). People believe that a local church should be many things: a community of people who come together to support each other in their faith and in their humanity; a sanctuary reserved for the celebration of holiness; a physical building where people can meet and hold other common activities; the center of many activities designed to meet the material, social, and spiritual needs of its members; or an open community resource through which members often offer services and space to non-church members.

The physical assets are either owned by the congregation itself, as a separate, legally constituted organization, or by the larger denomination (such as the Episcopal or Roman Catholic churches).

2) Control: The day-to-day affairs of the churches (and other communities of faith) are often managed by a single leader in conjunction with an elected board of lay people. Most churches operate with a specific “polity,” the web of complex moral and legal obligations that govern the practices of the whole denomination. Other Christian traditions are governed by higher-order authorities.—bishops, district superintendents, or regional executives.

3) Distribution of Surplus: Within congregations, people voluntarily exchange money, goods, and services, and their contributions are redistributed back into the congregation and community as needed. The congregation thus resembles, in many ways, a non-monetized family that has been created not by the accident of birth but by the voluntary association of members.

The congregation’s money is usually managed by a combination of the pastor, a financial officer or a finance committee, and the vestry and is subjected to a complex ranking of priorities in a budget. This is one reason that Jim Wallis of Sojourners magazine has often said that “a budget is a moral document.” Just as a budget represents one form of “balance” for an individual, as we saw in Chapter One, it also represents the distilled outcome of a complex negotiation about goals for a congregation. In the end, as an act of transparency and accountability the budget is shared with the larger congregation.

One frequent and morally dangerous mistake happens when the church leaders separate the management of the religious values of the church from that of its finances. Many pastors, having received little or no financial training in seminary, turn to members of the congregation who have financial expertise to help with the decision-making. This group might include a treasurer, a finance committee, an investment committee made up of members of the congregation who manage money professionally, and an outside banker and asset manager.

This structure can create deep contradictions in the decisions of the church, decisions that often stray into hypocrisy. The financial committees, despite their desire to serve the church and its spiritual values, often end up managing the congregation’s business and investments as though they were no different from any other institution in society.
When that happens, the church’s opportunity to become a witness to innovative economic relationships—new initiatives in socially responsible investment, new forms of society and justice—is jeopardized or lost.

Taking on Debt: Tuition and Living Expenses

Divinity schools work to help students avoid educational debt by keeping tuition as low as possible and providing financial aid. Nearly half of all divinity students do not incur educational debt during their enrollment.

However, debt is also incurred academic studies for rent, transportation, food, books, and other living expenses. This debt may seem manageable at first because of educational loans, but the burden is just as real as tuition debt and adds up quickly, especially in expensive urban areas like New Haven and Boston.

Paying such debts back with the relatively low salaries of clergy or public service work is a major challenge for some students. Whether or not you are able to incur this debt—or to offset it with work during your theological education—should be a serious consideration before borrowing to complete your program.

V. ALTERNATIVE MODELS FOR LOCAL ACTIVITY

The problem—so common among every sort of organization, especially religious ones—is when the leaders stop asking themselves whether their structure is truly designed to implement their mission and values. As a result, they fail to offer a bold witness to the relevance of the principles of faith across all domains of life, including finance. Instead, they compartmentalize their institution’s values into different boxes of behavior. By following the well-worn and the conventional, they risk failing to be what society so desperately needs: an oasis of inspiration and integrity, an institution that could live and prosper according to a different set of values than those that govern the economy and culture of the time. Nevertheless, this hope remains. Although formal religious membership has dropped among millennials, the desire to find communities and workplaces that align their values and behavior has only grown.

Trustees and organizational leaders who want to cut off any discussion of the alignment of mission and practice will often shout “fiduciary duty!” as though this were some kind of paralyzing Hogwarts spell with the power to shut down all additional conversation. This sometimes works because the concept sounds scary and complex, when in reality it is extremely simple. To be a fiduciary means that trustees need to ask themselves whether they are acting on behalf of beneficiaries of the money and whether they are behaving in a prudent and rational manner. And how does one figure that out? With a very strange and tautological tool: by imagining what another completely fictitious prudent person would do, and then doing that! Contrary to the implication of most people who cite this rule, every decision has many possible outcomes. Figuring out the “right” thing to do is a matter of deep reflection and discussion. “The invocation of fiduciary duty should be the beginning of a conversation, not the end of it,” U.S. Supreme Court Justice Felix Frankfurter once said.

Know the Basics: Diversification

When investing, it is important not to put all of your eggs in a single basket.

Diversification is the financial term for a strategy that places investments into varying types of industries and securities to balance the risks through asset allocation.

Investments that offer higher returns tend to be riskier, so a diversified portfolio seeks to balance risk and return in a manner that you, as an investor, are willing to accept.

Tens of thousands of religious organizations assume it is appropriate to make money through investments in any sort of company because the returns from those investments would be used for the philanthropic and spiritual work of the church. But as we have seen, this leads to institutional schizophrenia, in which the left hand of an organization is pursuing a goal contradictory to that of the right.

The good news—and something that should be taught in every theological school, every law school, every business school, and every community—is that diverse forms of investment and new varieties of economic models are rapidly increasing in the United States and around the world. We have seen the dramatic expansion of “social enterprises,” in which social objectives are pursued using traditional for-profit management skills. We have observed the creation of the “B Corporation,” by which an organization or business is legally permitted to go beyond benefits to the shareholders, and include the interests of employees, communities, and other parties. We are seeing the proliferation of hybrid forms of business, in which for-profit businesses own non-profits, or the reverse—a non-profit foundation that owns (and derives income from) a for-profit firm. One of the largest companies in the world, the German publisher Bertelsmann, follows this model, and uses the profits of the corporation to fund the activities of the foundation.

Finding Your Local CSA

Just Food and Local Harvest are two tremendous resources to help you find a local CSA. In the face of the success of the CSA model, more people are exploring whether community financing can work for other elements of the local economy.

In response to the blistering power of globalization, many communities are experimenting with more localist systems of production and exchange that keep both the dollars and products circulating within a smaller community. Though this may not produce the absolutely lowest possible price for a product, such systems can pay huge dividends in quality, stability, transparency, and communal benefit. One example of localist practice is the remarkable resurgence of local farms and farmers’ markets that bring higher-quality food into both rural and urban communities at much lower transportation costs. The close proximity of such farms has encouraged the development of new funding mechanisms—such as Community Supported Agriculture (CSAs)—which free farmers from having to borrow money from a bank to buy seeds and supplies. Community-supported funding also transfers some of the grower’s risk from the farmer to the consumer: If some of the crops are not as abundant that year, then the consumer gets a smaller share.

In addition, there are already hundreds of organizations and publications throughout the U.S. working to introduce a more human dimension into local and regional economies. Credit unions were invented in the nineteenth century in Europe and brought to the U.S. at the beginning of the twentieth. Credit unions offer members the chance not only to deposit money and to secure cheaper loans, but also to vote for the board of directors. Every member, regardless of the size of the deposit, gets one vote. This is starkly different from the typical limited liability corporation, where every share is worth one vote, and where management controls the election of board members. Credit unions expanded steadily over the last generation; by now, more than 102.3 million Americans have organized into credit unions.[10]

Another strong movement is the rise of new mechanisms for pooling local capital. For decades, small businesses and other organizations have found it difficult to raise money to launch or expand their ventures because most banks dislike making small loans. A $100,000 business loan at 3 percent a year only brings in $3,000 to a bank in the short term, which is not much (in their view) to pay for the time of the loan officer, the attorney, and the researcher who will have to gather and review the necessary credit information.

Federal and state governments have also created barriers to raising money among average citizens. These restrictions were originally created to protect average citizens from securities fraud, pyramid schemes, and get-rich-quick investment rip-offs that swindlers have used for centuries to steal money. To reduce these crimes, the government said that only “accredited investors” could make investments directly in companies (as opposed to buying shares on the open market). An “accredited investor” has to have a net worth of more than $2 million in investments, not counting the value of his or her house—a standard that only a tiny percent of Americans can meet. The thinking was that if you had that much money, you were financially sophisticated and could afford to lose a few hundred thousand dollars without being driven into bankruptcy.

Know the Basics: Retirement and the 401(k)

For some of you, retirement may seem to lie in the distant future, but with advance planning that future may be significantly more secure and enjoyable.

A 401(k) is a retirement plan sponsored by your employer; some employers even match your contributions. Plans vary. For example, there is a difference between a Roth 401(k) and a traditional 401(k). Contributions to a traditional 401(k) are not taxed when you invest, but are taxed upon withdrawal. A Roth 401(k) reverses this: the money you invest has already been taxed and will not be taxed at the time of withdrawal.

Depending on your age and the amount you will be investing, one of these might be more sensible than the other. (Usually the Roth IRA makes sense for people earlier in their careers, but one must ask!)

The problem, as Michael Shuman points out in his lucid guide Local Dollars, Local Sense, is that people are not legally allowed to invest in small businesses in their own towns. For example, I have been going to the same cleaner’s for twenty years. I know the two brothers who run it and trust them both. Yet if they came to me and asked me to invest $5,000 in their business so that they could buy new equipment that would use less toxic chemicals, I would not be allowed to invest in their firm!

Fortunately, all of this is changing, though slowly. In April 2012 President Obama signed the “Jumpstart Our Business Start-ups” (JOBS) Act requiring the Securities and Exchange Commission to loosen the regulations to make it possible for small investors to contribute to small and local businesses. It also endorsed the popular concept of crowd-funding, which is the pooling of small donations or investments through the Internet. Unfortunately, the SEC has still not issued the new regulations that will permit the intentions of the JOBS act to be fulfilled—but when they do, the new available pool of capital for small enterprises and businesses could transform local communities.

Why are these innovations relevant to the person of faith, the future religious leader, and the communities of belief throughout the country? Because they offer new mechanisms to align our moral and spiritual values with our economic lives. To return to the language of Chapter One, we are seeing the proliferation of mechanisms that are reestablishing money not as a tyrant but as a tool to meet social and moral goals.

Often communities of faith will sing and speak on Sunday about their desire for a different kind of community, one in which prosperity is shared and justice prevails, but then they step back into their daily jobs and a world that dances to an entirely different tune. Few faith communities see themselves as economic drivers in their own right—that is, organizations whose values can readily guide their behavior, from purchasing to investing to hiring, and whose actions have the potential to create new forms of economic organization and activity within communities.

One traditional exception to this has been within the different branches of African-American Protestantism. Because African Americans spent generations being denied the benefits of full participation in the regular economy, their congregations often became thriving centers not only for worship but also for education and training, job creation, and community investment.

VI. COMMUNITIES OF FAITH IN THE LOCAL ECONOMY: PROMOTING PROSPERITY

Many faith leaders feel that they have their hands full with the conventional responsibilities of a religious organization—leading worship, recruiting new participants, educating members, and organizing programs. Over time, this emphasis can unfortunately turn a congregation’s focus inward, away from the outside world. In our era communities of faith must give equal emphasis to their outward effects, especially those beyond the traditional mechanisms of mission work and relief services. They must engage directly in the mechanisms of prosperity that exist—or could exist—within the larger community.

A. SUPPORTING SMALL BUSINESS

One impediment that reduces the impact of faith communities on local prosperity is a concealed suspicion among some at church: Some suspect that because systems of exchange can lead to morally dubious outcomes, all businesses that handle money and rely on exchange are somehow suspect as well. Too many theological students—and clergy—know virtually nothing about how a business is created and managed, and as a result they often slip into unfair stereotypes and judgments about what motivates a small-business person.

Is Shopping Local More
Expensive?

Often the desire to support local businesses, live frugally and avoid debt all seem at odds. For example, shopping at the farmers markets is often more expensive, calorie for calorie, than shopping at the chain grocery store.

However, if you consider the unseen environmental and social justice costs of planting, harvesting, processing, packaging, and transporting of those nationally distributed foods—which might not be reflected in the price but which are still imposed on everyone else?—shopping at those chains is often more costly in the long run.

If your values align with those of the farmers market, CSA, and local economy, it is well worth figuring out a way to budget for some local spending.

The local capitalism of small businesses is radically different from the large-scale global capitalism practiced by colossal multinational companies. Some people in faith communities do not understand how much creativity and courage it can take to launch a small venture, how difficult it can be to identify a desire for a particular good or service, how exhausting it is to raise the money to meet that desire, how to create an establishment, hire a staff, and select prices that will reimburse the costs, be acceptable to consumers, and make a small return on the investment. They also do not appreciate that no matter how hard one works, there is always the possibility that another institution—particularly a large national chain—can come in and undercut not only their prices but destroy years of work overnight.

Instead of treating small businesses with indifference or disdain, faith communities should recognize that such entities are vital to local prosperity. If one thinks of a dollar as a vote, then every dollar a person or an institution spends is a vote for a certain model of economic life. Purchasing something at a big national chain means endorsing that chain’s hiring practices, sourcing, pricing, and profit-making. The dollar spent at a national chain flies at the speed of light from your bank account through your credit card to a financial center thousands of miles away. Purchasing from a local business means that the money stays longer in circulation in your community. It means you are supporting your neighbors—both owners and employees—and enabling them to keep both the jobs and their dollars local. How might Christian theology be different if we pondered more deeply the background of Jesus of Nazareth, who before launching his minister of preaching and healing reportedly made his livelihood as a local carpenter? Can we imagine him negotiating prices with those who sold him wood or bought his tables and chairs? Can we see him tracking his expenses and counting his revenue?

The importance of small business to the independence, stability, dignity, and prosperity of their owners—and therefore to the community — is so great that faith communities, in aligning their spiritual values with their public behavior, need to pay much closer attention to that relationship. For those who may not understand how small business can affect a neighborhood, one can turn to books like Judy Wicks’ Good Morning, Beautiful Business, which describes how her decision to open a small café on a condemned block in Philadelphia led to a revitalization of the whole neighborhood.

There are also powerful national organizations like the Association of Enterprise Opportunity, which is helping empower mostly inner-city African-American entrepreneurs to obtain the capital to launch or expand their micro-businesses in the inner city. There are groups like the Business Alliance for Living Local Economies (BALLE) and the American Independent Business Association (AMIBA) that seek to strengthen the American economy through “buy local” and other small business support efforts. On the other hand, there are organizations that pretend to serve small business—such as the National Federation of Independent Business, the National Association of Manufacturers, and the U.S. Chamber of Commerce—but use hundreds of millions of dollars collected from small- and medium-size business to fight labor laws, climate protection, health care expansion, and other social legislation, an agenda that mostly serves the interests of big companies.

The Rochdale Principles

According to the National Cooperative Business Association (NCBA), the modern version of the Rochdale Principles includes :

• Voluntary and Open Membership: Cooperatives are voluntary organizations, open to all people who are able to use its services and willing to accept the responsibilities of membership, and without gender, social, racial, political or religious discrimination.

• Democratic Member Control:
Cooperatives are democratic organizations controlled by their members—those who buy the goods or use the services of the cooperative—who actively participate in setting policies and making decisions.

• Members’ Economic Participation: Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.

We are also seeing the fortunate rise of new business organizations, such as the American Sustainable Business Council, which are advocating on Capitol Hill for more ways to mesh prosperity and sustainability. The organization Ceres has also pulled together more than 300 major U.S. corporations and five of the nation’s top banks to recognize their interest in the long-term well-being of society and call for aggressive action to reduce carbon emissions and slow down climate change.

B. COOPERATIVE FORMS OF BUSINESS

The idea of collectives, or cooperatives, or mutual aid societies—which bring people with common problems and interests together, pooling their resources—has existed since the colonial period. One of the earliest mutual aid societies was created in 1735 in Charleston, South Carolina, a generation before the Revolution. Benjamin Franklin created the Philadelphia Contributionship, a mutual insurance company, in 1752, and it is still in operation today.[11]

By the nineteenth century, mutual aid societies and cooperatives served multiple needs—to bring together consumers, producers, or farmers; to gather up deposits, make loans, or distribute risk through insurance; and to counterbalance the financial and monopoly power of much larger organizations or the government itself. In 1844, two dozen weavers in Rochdale, England, facing the pressure of lower wages due to mechanization, launched the first consumer cooperative, the Rochdale Society of Equitable Pioneers, which created a store that offered goods at lower cost and paid a regular dividend to participants. Rochdale gave deeper structure and purpose to the cooperative movement by articulating key principles of inclusion, democracy, and mutual support.

Cooperatives and mutual aid societies continued to grow in response to the famine and economic depression of the 1840s and beyond. Within a generation the cooperative model had been introduced to farming, banking, dairy products, vocational training, and many other parts of the local economy. By the end of the nineteenth century, cooperatives began tackling the monopoly power of railroads, suppliers, and shippers, primarily through the “Order of the Patrons of Husbandry,” also known as “the Grange.” Some cooperative organizations, such as the Farmers’ Alliance and the Society of Equity, became even more political and aligned themselves with the growing Progressive Movement. By 1916, a large national organization—the Cooperative League of the United States of America (CLUSA)—had been formed. Credit unions expanded rapidly in the 1920s. Business interests tried to have cooperatives banned as monopolies under the Sherman Anti-Trust Act. When the Great Depression struck, the government of Franklin D. Roosevelt intensified support for federal credit unions, rural electrification, and other methods for putting control of capital into more local and regional hands.

For African Americans, the cooperative form provided the chance to push back against the devastating force of structural racism. In 1865, when white workers in the port of Baltimore demanded that all blacks be fired from the shipyards and then attacked black stevedores and caulkers, the African American workers responded by forming the Chesapeake Marine Railway and Dry Dock Company. They raised $40,000 at $5 a share, bought a piece of land on the harbor, and began paying dividends by the sixth year. For nearly twenty years this black-owned cooperative created stable jobs at decent wages, until changes in the industry and pressures from white businesses forced it to close.[12]

In the early twentieth century, W.E.B. Du Bois began including cooperatives—producer, transportation, consumer, and credit—as part of his strategy for closing the racial gap in America, noting the existence of 154 such organizations in 1907. Writing a decade later in The Crisis magazine, he declared, “the good results of co-operation among colored people do not lie alone in the return of savings.…Colored people are furnishing their own with work and money for services received and the recipients are handing the money back for redistribution to the original colored sources.”[13]

The Rochdale Principles
(continued)

• Autonomy and Independence: If the cooperative enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.

• Education, Training, and Information: Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the organization’s development. Members also inform the general public about the nature and benefits of cooperatives.

• Cooperation Among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.

• Concern for the Community: While focusing on member needs, cooperatives work for the sustainable development of communities through policies and programs accepted by the members .

Many of the great leaders of the emerging civil rights movement—A. Philip Randolph, Ella J. Baker, Fannie Lou Hamer, and others—also worked to support cooperatives as part of the strategy for increasing economic strength in the African American community. Their commitment was not without controversy, since some worried that endorsing cooperatives might smack of communism, which would only add to the hatred and prejudice African Americans already faced. Yet the benefits of different forms of cooperatives—whether pooling wealth, achieving savings, creating jobs, improving wages, or sharing profits—were strong enough to propel many communities to attempt to create them. Their supporters also recognized that the very process of establishing and running a cooperative would give African American members training in financial management and democratic practice at the very moment that they were being denied those opportunities almost everywhere else.

The hope of creating prosperity, equality, and solidarity through the pooling and redirection of financial resources was also developing in other parts of the world. One of the most extraordinary modern stories of economic transformation began in February 1941, when a young priest arrived in the town of Mondragon in the Basque region of Spain to take up his position as assistant curate. The previous priest had been shot by the forces of Francisco Franco. A former journalist who had himself barely escaped the firing squad, Father José María Arizmendiarrieta seemed an unlikely leader. Having lost an eye in a childhood accident, he read slowly and spoke poorly. Surveying his new community, which had been plunged into economic despair, he decided to create a plan for economic development that might lift the whole community.[14] He quickly became known for his determination, captured in well-known phrases like “no complaints, just action” and “there is always more to be done.”[15]

He started with education, opening a small technical college in 1943. More than a decade later, he asked five of his former students to start the first cooperatives. Soon they had created a system in which the profits from one company would help them open another. Broad decisions were made by a Cooperative Congress of 650 members chosen through an annual election in which each voter was entitled to one vote. Through the coordination of a governing council, surplus was redistributed back to the owners, reinvested in existing businesses, or employed as capital to start new ones. In the event of an economic downturn, the structure also allowed wages to be rebalanced among different companies within the Mondragon Corporation.[16]

Today Mondragon is the largest company in the Basque region and the tenth largest in Spain. It employs more than 71,000 people and earns more than 11 billion euros a year. It operates 289 companies, of which 110 are cooperatives, divided into four areas: finance, retail, industry, and knowledge. Mondragon also has its own bank and its own university, with 3,500 students.[17] The pay of Mondragon’s chief executive is formally pegged at six times the base worker’s salary. As a result of these and other unexpected practices, Mondragon helped the Basque region to survive a brutal Spanish recession with less pain.[18] When the Spanish national unemployment rate was 25 percent, the Basque region’s rate was only 15 percent.

Over the last three decades the explosion of globalization, the revolutionary impact of technology, the perceived loss of solidarity, and deepening inequality have prompted many Americans to seek new, experimental forms of community. Some of the efforts to create community have been not so much to devise new patterns as to revive older ones. The Freelancers Union, created in 1995 by Sara Horowitz, has brought together more than 200,000 freelance workers in New York (and beyond) to provide services that they otherwise wouldn’t have. This proud “federation of the unaffiliated,” as Horowitz likes to call it, offers job training, features its own health insurance company, and gives its members a sense of unity and support that would otherwise be absent from freelance careers characterized by temporariness or anonymity. With the Freelancers Union, Horowitz is attempting to create a “New Mutualism,” a revival of a once-vital nineteenth-century form of union activism that faded when unions moved to an industrial model of collective bargining.

5 Good Sharing Economy Websites

http://www.shareable.net/

http://meshing.it/

https://yerdle.com/

http://www.collaborativeconsumption.com/

http://www.thepeoplewhoshare.com/

Another profound transition of the last fifteen years has been the rise of “collaborative consumption” or the “sharing economy.” For a generation, as awareness of the ecological and social impact of unchecked economic growth has grown, leaders of the movement for sustainability have been calling on consumers to “dematerialize” their consumption.

In 1994, one of the most visionary business leaders in America, Ray Anderson, argued that current forms of business production were destroying the planet and that the system needed to shift. People didn’t actually want to own things, he argued—they just wanted to have use of them. For his firm, Interface, a leading Georgia-based manufacturer of industrial carpets, the implications were radical. He labored to move his business away from selling industrial carpet—i.e., manufacturing and distributing as much of the product as possible—to renting carpet. When you sell something, you just want to push as much of the product out the door and you don’t care whether the product has a short life and quickly ends up in landfill. When you rent something, on the other hand, you want to make sure that your product lasts as long as possible so that you can increase the amount of money you make. This led Anderson and his team to design a system of modular, replaceable tiles of carpet so that those small sections of carpet in high-use areas could be replaced without tearing up the entire surface in, for instance, a massive skyscraper or airport. This represented a profound change of thinking. Customers realized that they didn’t necessarily need to own a large industrial carpet as long as a company was willing to provide the carpet services at a similar level of quality for a lower price.

The advocates of dematerialization—the effort to use less to achieve the same outcomes—urged people to find ways to reduce their consumption, save money, and lower their environmental impact by moving away from individual ownership into systems whereby resources could be shared. Early on, this proved difficult to explain and to implement. The technology for sharing was primitive, and the cultural preference for owning still dominated. But in the last ten years, with the millennial generation rising up with new consumption patterns, and with the creation of mechanisms for sharing and tracking immense amounts of information, we have seen the emergence of the peer or sharing economy.

As Zipcar inventor Robin Chase says, the sharing economy is made possible when excess capacity meets a platform—usually an Internet app—that can allow the distribution of online capacity to others. People who have goods or services that are not being used can offer to rent or share them with people who desire them. The normal anxiety about interacting with strangers is reduced through the introduction of computerized reputation systems. With organizations and Web sites like Shareable.net leading the way, young people’s desire to save money during the Great Recession and contribute to an ecologically saner economy has led to experimentation with sharing in a kaleidoscope of fields. People are learning to share bikes, homes, cars, meals, tools, educational resources, music, and information. They derive many kinds of value from the exchange—not just money. The question of ownership is deliberately blurred. Laws and regulations at all levels thus need adjustment, a movement led by Janelle Orsi at the Sustainable Economies Law Center in Oakland.

VII. SEARCHING FOR THE INDIVIDUAL COMMUNAL EXPERIENCE

People have been living together for thousands of years in small communities whose purpose is to increase safety, establish mechanisms for mutual support, save money, and enrich daily life. For most of history, the ties that bound such tribes and clans were familial. Gradually humans created “intentional communities,” in which common life was not driven by shared genetics but by shared values, understandings, and practices. The Essene community of Qumran, in the desert beside the Dead Sea, maintained an isolated but vibrant community built on worship, cleanliness, and scholarship; together they produced the detailed Hebrew manuscripts known as the Dead Sea Scrolls. Different branches of Buddhism built huge temples and thriving communities all across Southeast Asia. Christian monasteries and convents of pre-Renaissance Europe channeled the industriousness, frugality, and deep scholarship of medieval monks into wealthy and powerful economic centers.

Right Relationship

We often seem to lose track of the rich thought and practices over centuries to establish “right relationship” with the world, with other people, and with things. No one tradition has an exclusive claim on the concept of right relationship; many offer us ways that can aid all of us in our attempts to find it.

For example, Buddhism teaches right relationship through the Eightfold Path; Taoism teaches that the way (Tao) is to live in harmony with the world and be authentic to oneself. Christianity points to the Golden Rule and the Ten Commandments as foundational guideposts.

Interest in intentional, peaceful, equitable communities continues to grow. The nature and commitments of the shared “intention” have changed, but the underlying aspiration endures.

One hub in the United States is the Fellowship for Intentional Community (FIC), which “nurtures cooperation among communitarians and friends.” According to its literature, the FIC “provides publications, referrals, support services, and sharing opportunities for a wide range of intentional communities, cohousing groups, eco-villages, community networks, support organizations, and people seeking a home in community.” Its most recent online directory lists more than 2,234 intentional communities, mostly in the U.S. but also some in Europe.[19]

Such intentional communities are particularly important at a time when millennials—Americans born between 1980 and 2000—have in many cases been less inclined than their predecessors to affiliate with conventional religion. Though people in this generation care about meaning and commitment as much or more than any other in the last 100 years, many resist the idea of participating in institutions that have a traditional and integrated body of beliefs. Potential participants often judge faith communities by an institution’s willingness to honor the individual’s present-moment spiritual questions and circumstances. We all have a natural longing for community, and we want to be part of communities in which we share values and practices, but we simultaneously fear that by joining communities we will limit our freedom and individuality. This is a particular paradox for some young millennials who want to find a community in which their beliefs and intentions are shared but dislike institutions that present a creed as a criterion of inclusion. Could it be that our trained hyper-individualism as consumers—“I’ll have a triple soy grande with cane sugar and three drops of hazelnut syrup”—has gradually seeped into our expectations about God and faith? We generally want to know how religious institutions will meet our existing needs, and we may become impatient with elements of their tradition that endured for centuries but may not immediately seem relevant or appropriate by modern lights. This tension has prompted people to search restlessly for those communities where they might fit in, or to create new communities using creative new forms of affiliation. One study done in 2015, called How We Gather, conducted by two Harvard Divinity School students, notes that the rise of the Internet has produced its own contradictions, whereby “an American millennial feels more comfortable setting up a Kiva loan to a farmer in Kenya than bringing chicken soup to a neighbor.”[20] “As traditional religious institutions struggle to attract young people,” they write, “millennials are looking elsewhere with increasing urgency. And in some cases they are creating what they don’t find.”

Know the Basics:
What Is a Mortgage?

A mortgage is an agreement with a lender who provides a large loan that enables someone to purchase a home whose price is otherwise outside of her financial means. Mortgages traditionally exist for long periods—ten to thirty years—and are paid off in monthly installments.

The longer the loan, the smaller the payment but the more the borrower eventually pays in interest. The collateral for the loan is often the purchased home itself. The individual’s possession of the house is dependent on her making the monthly payments; otherwise the lender can repossess the house or other object mortgaged.

VIII. THE GIFT OF GRACE IN COMMUNITY

In an era of diversity, radical independence, and individualized spirituality, it can be harder than in the past to create a community that is sufficiently inclusive and stable enough to make large change in the world. Yet the benefit of coming together can be seen in dozens of ways. When faith communities pool money and make decisions about what to purchase, where to invest, and how to support enterprises around them, they can demonstrate how communities can operate beyond market values and how they can impact others in the neighborhood or region around them.

As we have noted, congregations have long played a powerful economic role in the lives of their local communities. When members or residents have lacked housing, food, and jobs, faith communities have worked to provide them. They have built not only sanctuaries but schools and hospitals. They have provided scholarships for those who are beginning their lives and retirement homes for those who are nearing the end. They have created systems of exchange based on compassion and generosity, offering a different view of humanity from that of most market economies. Instead of the logic of the market, which hammers home the fear of scarcity, the faith community can create a sense of mutual support and thus mutual abundance, reducing the anxiety of daily life.

Most of all, they provide a place where all the gifts of grace can be taught and nurtured.

- Mutual support can make it easier for everyone to live a simpler life.

- A community of faith also bring together people from many
different backgrounds and skills and strike a right division of
labor, which frees the individual from the burdensome expectation
that he or she has to be the master of everything. This way, the
community as a whole can find balance.

- We also know that when we are seeking the answer to a problem,
we often achieve much greater insight when we can turn to people
with different perspectives and degrees of wisdom. This is the core
rationale for all forms of group decision-making, from vestries to
oards to democratic assemblies—that the wisdom of the whole is
greater than the sum of individual viewpoints, and that the exchange
of ideas can lead to better outcomes.

- And finally, it is within the community of faith that we can both
practice and experience generosity. In order to be generous, we have
to believe that we have enough.

And for us to believe that we have enough, we must believe that we
are safe, that if we fall, there would be someone who would reach
out and catch us. This is the theological and practical promise of the
loving communities in which we can find embrace.

END NOTES

1. Marjorie Kelly, Owning Our Future: The Emerging Ownership Revotion (San Francisco: Berrett-Koehler, 2012), p. 29.

2. Mark 10:25; Matthew 19:24.

3. Robert Frost, “The Death of the Hired Man.”

4. Matthew 12:46-50.

5. Mark 10:29; see also Matthew 19:29, Luke 18:29.

6. Acts 2:44-47.

7. For example, Enterprise Rent-A-Car suggests that because the company is privately owned by a single family, the whole company is infused with the values of a family.

8. This problem of the separation of ownership and control has been debated
intensely for more than a hundred years. The debate during the Great Depression led to the publication in 1932 of one of the most critical and influential books on the structure of capitalism, The Modern Corporation and Private Property by Adolph Berle and Gardiner Means.

9. See, for example, University of Chicago economist Milton Friedman’s famous 1970 article in The New York Times Sunday Magazine, “The Social Responsibility of Business is to Increase Its Profits” (Sept. 13, 1970).

10. See http://www.cuna.org/Research-And-Strategy/Credit-Union-Da ta-And-Statistics/ - especially 2Q 2015 results.

11. http://www.contributionship.com.

12. Jessica Gordon Nemhard, “Cooperative Ownership in the Struggle for African American Economic Empowerment,” Humanity and Society,
Vol. 28, No. 3, August 2004, p. 6.

13. Nemhard, “Cooperative Ownership,” p. 7.

14. https://en.wikipedia.org/wiki/José_Mar%C3%ADa_Arizmendiarrieta.

15. http://1worker1vote.org/celebrating-mondragon-founder-centennial/.

16. http://www.economist.com/node/13381546.

17. http://www.mondragon-corporation.com/eng/co-operative-experience/faqs/.

18. http://www.bbc.com/news/world-europe-19213425.

19. http://www.ic.org/directory/recently-updated/.

20. “How We Gather,” Angie Thurston and Casper Te Kuile, Harvard Divinity School, 2015.

CHAPTER THREE

Money and the System

REDESIGNING THE WHOLE THROUGH THE PARTS

I. THE BIBLICAL VIEW OF A JUST SOCIETY

A personal commitment to a life of faith sets us on a path not only to individual growth, but also to institutional redesign and eventually to system change—though this is not always easy to see.

When I was in college I started a course in political theory whose purpose I initially misunderstood. I thought the class was about political tactics—how you win elections, how you develop policies, how you pass laws. One day I was sitting with a friend talking about a paper I was writing about the tactical maneuvers of diplomats for small advantages and gains when she stopped me cold.

“I am worried that you just don’t get it,” she said. “Political theory is not about small steps; it’s about imagining how the entire system works. So, for example, if you believe that equality should be the most important value of a society, what would that mean for the design of schools? The payment of taxes? The structure of salaries? The role of local government?”

I remained confused, so she pulled out her notes and reminded me that our professor, Sheldon Wolin, had told us on the first day that the word “theory” comes from the Greek word for vision. He said that we would be looking at a number of political systems, each as a whole. What are its goals? What are its values? How do the pieces fit together? He wanted us to move past our inherited conventions and imagine how different assumptions might give rise to different practices and structures. I found this thrilling. Did human beings really have the freedom to affirm their deepest values and build new ways of living together?

Isaiah and MLK

Martin Luther King, Jr.’s famous I Have a Dream speech provides an excellent example of how scripture directly influenced his vision of a better future. Compare Isaiah 40:3-5 with the following quote from I Have a Dream (bottom):

ISAIAH:

“A voice cries in the wilderness

Prepare the way of the Lord;make straight in the desert a highway for our God. Every valley shall be lifted up, and every mountain and hill be made low; the uneven ground shall become level, and the rough places a plain. And the glory of the Lord shall be revealed, and all flesh shall see it together, for the mouth of the Lord has spoken.”

DR. MARTIN LUTHER KING, JR. :

“I have a dream that one day every valley shall be exalted, Every hill and mountain shall be made low, The rough places will be made plain, And the crooked places will be made straight, And the glory of the Lord shall be revealed, And all flesh shall see it together.”

The answer, we know from history, is yes. Over thousands of years, as the result of nearly continuous struggle, we have, as a species, altered both our values and the institutions that embody them. Deeply ingrained prejudices among us have slowly—too slowly—given way to a more profound appreciation of our common humanity. We still have a long way to go, but that evolution has been deep and evident.

All religious scriptures give us a window into the kind of world that would exist if the beliefs and values of that faith were built into the structure of society. Some are more explicit than others; some are more palatable to modern sensibilities. We must remember that every vital community of faith does more than cultivate a sense of individual purpose. And they go beyond drawing blueprints for small communities and organizations. They also lay out a dream about the design of the good society itself.

For the great Hebrew prophets, the good society was one in which all faithful people abided by the laws of God. In their scripture they found a clear moral logic, expressed in God’s own voice. “The land is mine,” we read in Leviticus 27, “and you reside in my land as foreigners and strangers.” This identity had far-reaching implications. Having come to the land as foreigners themselves, the people of Israel should treat other foreigners and strangers with hospitality and kindness. Having entered the land poor and having been enriched by God’s generosity, they should make the protection of the land and of the poor their central goal.

The failure of the elites of ancient Israel to follow these simple rules drove the prophets into a fury of grief and rage. Their words still ring with power today. In their writings God did not speak about abstractions like “income inequality”; the real problem was outright theft. “Am I still to forget your ill-gotten treasure?...Shall I acquit someone with dishonest scales and a bag of false weights?” asks the prophet Micah. “Your rich people are violent and your inhabitants are liars.” The prophet Amos slams the rich for their gluttony: “You lie on beds of ivory and lounge on your couches. You dine on choice lambs and fattened calves.…You drink wine by the bowlful and use the finest lotions.…Therefore you will be among the first to go into exile.”

The prophet Isaiah mocks the attempt of the wealthy to conceal their greed and failure behind empty exhibits of piety like prayer and animal sacrifice. “On your day of fasting you do as you please,” he writes sharply, “and exploit all your workers.” He scoffed at their superficial concept of fasting: Is it just “a single day for people to humble themselves?” Is it only for bowing one’s head like a reed and for lying in sackcloth and ashes? Is this what you call a fast, a day acceptable to the Lord?

Instead, as he proclaims in the thundering voice of God,

Is this not the fast that I choose?

To loose the chains of injustice and untie the cords of the work

To set the oppressed free and to break every yoke?

Is it not to share your food with the hungry

And to provide the poor wanderer with shelter?

When you see the naked, to clothe them

And not to turn away from your own flesh and blood?[1]

The books and letters of the New Testament reinforce these themes. Even before Jesus is born, his mother Mary, as recorded in the Gospel of Luke, announces that through the birth of Jesus God is fulfilling a promise to the poor. During his ministry and preaching Jesus insists that an increase in privilege carried an increase in obligation: “Every one to whom much is given, of him will much be required; and of him to whom people commit much they will demand the more.”[2] He tells multiple stories and parables about how wealth, instead of creating spiritual freedom, often disables a person’s capacity for compassion.[3] His stories frequently use the image of money to provoke his listeners to think about what people really value, such as in the lost coin, the widow’s mite, and the parable of the talents. His vision of the good society appears throughout his preaching, particularly the Sermon on the Mount, in which he calls on human beings to abandon false gods and to create a new world of inclusion guided by the very gifts of grace we have highlighted—simplicity,[4] balance,[5] wisdom,[6] and generosity.[7]

Though much of modern spirituality is based on the practices of individuals, the theological traditions of Judaism and Christianity also carry strong demands on what individual faith means for society. Each person is called to commit to God personally, but that personal commitment must then be expressed by moving outward toward others to create justice and compassion in the wider world. In the parable of the rich man and Lazarus, in which a wealthy man ignores a man named Lazarus starving at his gate, the rich man could have been practicing yoga and meditating all day long and it would not have mattered to Jesus. If his spiritual practice, no matter how virtuous in intent, blocked his ability to see and assist Lazarus, he had failed.

Know the Basics:
Compound Interest

Compound interest is a relatively simple concept. When you invest money and get a return, you put the return on top of the original money and then, the next year, you get a return on both the original money and the first year’s return. With every passing year, you get paid not only for interest on the principal investment, but also on the interest accumulated every year after that.

This makes your money grow at an ever increasing rate with each compounding period.

As Jesus said, “Where your treasure is, there will your heart be also.” In other words, to be spiritually whole we must find a treasure—a principle—that can guide our direction at all scales of our existence. Without a longed-for destination for ourselves, money will by default become our only guide. Without goals and outcomes for our communities that transcend financial calculation, our common life will be governed by the logic of profit and market exchange.

But even if we commit to individual and communal action, how can we possibly have an impact on an immense, intertwined global economy? How can we offer some counterbalance to the vast governments and multinational corporations that determine so much of what happens on an international scale? Wouldn’t it be best to withdraw into little islands of isolation where we try to seal ourselves off from the values and impacts of global capitalism?

There will indeed always be a need for small communities that profess an alternative set of values, places where people can withdraw and observe particular values in action, and come away inspired. But it is not enough for people who long for social justice and political sanity simply to retreat into such pockets of semi-purity that are scratching out a hidden life on the margins. Instead, building on the rich and uncompromising traditions of the prophets, we must raise up a different vision for the larger economy. We have a fundamental responsibility—and opportunity—to make our economy more just and sustainable. This is an immense, life-long challenge that can only be addressed through the full range of human talent and commitment. But it is not impossible.

One has to start by learning at least the basic language of money and finance—and the strange contradictions it conceals. All structures of power—religious, political, economic, scientific—develop particular vocabularies for the expression of their specialized ideas. This understandable tendency is often exploited by insiders to increase their own power. Specialized languages can become boundaries between those who are said to be “qualified” to participate in a discussion, and those who are not.[8] Those on the inside claim that only those who are familiar with the technical language (and who typically have absorbed the core values that such language implies) should be heard.
Words thus become walls between specialists and everyday people. This is a danger to democracy.

The dominance of technical language serves to stifle questions and criticism from outsiders. I know of theological students who admit they stumble when they read business news and do not understand the implications of what they are reading. Business and financial language has become the lingua franca of modern life, and woe be to the person who does not know the meaning of net present value, carried interest, marginal utility, price-earnings ratio, value added tax, or other financial terms. A person might ask a simple question about whether it is right for a church to hold shares in a weapons manufacturer and then get hit with mystifying terms like modern portfolio theory, fiduciary duty, asset classes, passive indexes, and commingled funds. Many of these ideas are much simpler than they sound, and can be explained in a few sentences—but they rarely are. As a result, many people of faith do not understand what is being discussed—and thus cannot judge these economic ideas and impacts on their lives and values.

II. INVISIBILITY AND RESPONSIBILITY

Even if one begins to master the technical terminology, many people find the concept of a global economy simply too large even to imagine. We are talking about the combined behavior of 7 billion people who are awake 16 hours a day—100 billion hours of activity every single day, 36.5 trillion hours a year! All this restless awareness, movement, energy, hunger, and creativity floods into billions of projects that range from growing rice to weaving clothes, from trading fish to forging steel, from building hospitals to buying stocks, from creating music to launching cruise missiles. Most traditional (male) economists have tended to restrict the concept of “the economy” to those activities that can be priced. But as Tufts University economist Neva Goodwin has eloquently written, this concept ignores billions of non-monetary activities that take place in the “core economy,” which includes tending babies, raising children, making dinner, caring for sick relatives, and millions of other activities that are not monetized but on which the global economy depends.

Capitalism

Many people disenchanted with the present economic system rail against capitalism, which has become a powerfully contested word. To be effective, critics need to understand that “capitalism” is not one thing.

Simply put, capitalism is an economic system founded on private ownership; it encourages individuals to pool their money in order to invest in new enterprise; it produces goods and services based on the principles of supply and demand in the pursuit of profit.

We are all, in some ways, beneficiaries of the technological and material advances this system has enabled. The way that capitalism has manifested itself over the years has changed dramatically, and there are now multiple forms of capitalism at work in the world. We need to be alert to its many expressions as we look for more intentional ways to build a just and sustainable economy.

By expanding the definition of what an economy really is—the full range of activities that provide for human well-being and planetary sustainability—we can more easily see the distortions introduced by the narrow pursuit of financial capital as both the principle and goal of economic life. For most of the twentieth century, modern capitalism, though claiming to be a system that met all needs, actually pursued very narrow objectives that deliberately overlooked considerations of justice, prudence, and sustainability.

To protect the world from being destroyed by unfettered capitalism, we need to employ strong, knowledgeable, and relentless analyses of its failures and to focus intensively on creative pathways for its structural reform. We will not achieve this, however, if we content ourselves with unbalanced, cartoon-like portrayals of how it works. Capitalism’s most effective critics often start by acknowledging its immense achievements and seductive power. It is a system whose mechanisms of investment, exchange, and production have remade our world in a handful of generations.

The changes have come at such a blistering rate that we have lost the capacity for surprise—and, in a strange way, for gratitude for the dazzling devices that have fundamentally altered our capabilities and behavior. We have reached the point that every few months we are introduced to some tool or machine or app that will expand our abilities a thousand-fold—often for free. For Americans, the endless introduction of new technologies has habituated us to anticipate and desire the next miracle insatiably. These breakthroughs, which would have been regarded as mind-bending magic to a previous generation, have become the routine, humdrum technology of their grandchildren.

We also have come to take for granted that problems of unthinkable complexity and scale have been solved by huge corporations. Consider the design and construction of a 747, an airplane that, although it has been in service for almost fifty years, remains a marvel of complex manufacturing. A 747 has more than 6 million parts, each of which has to be designed, engineered, and machined to exact specifications by hundreds of suppliers in different locations and then brought together at one place to be assembled with absolute precision.[9]A single plane has 171 miles of wiring, uses 147,000 pounds of high-strength aluminum, and has two 95,000 pound wings, each with a surface large enough to park 45 cars. It can fly at 565 miles an hour—just short of the speed of sound—6 ½ miles above the earth for an average of 7,700 nautical miles. As of March 2014, a total of 1,520 747s had been built, at an average cost that rose from $24 million in 1967 to $352 million today. In sum, it is a miracle of human achievement that we now take for granted.

Despite its flaws, our economy still routinely allows us to combine tens of thousands of people under one corporate entity, coordinate their complex skills, and provide goods or services to hundreds of millions of people. The colossal flow of money and resources to complete a vast project can transform communities and ecosystems—but the underlying intention of the transformation will determine if the result is positive or negative.

Our current system is primarily designed to maximize the wealth of investors by capturing the spending of consumers. One can sell small quantities of something at high prices to wealthy people or large amounts at lower prices to consumers with less income—either way, the aim is to see profits go up. This is why companies so often feel it is essential to hold wages down and transfer external costs (like environmental impacts) to others. Even when companies discover these practices to be faulty, they almost always persist and thus reinforce a deep flaw in the economy.

As currently structured, the consumer economy provides most of our jobs and accounts for more than two-thirds of our annual national income. As citizens become more addicted to consumption, we see the system respond by offering everything for purchase. In the developed world, we take it for granted that a virtually unlimited number of consumer choices await those with enough money. According to the research firm FMI, the average supermarket in the United States stocks 42,000 different items.[10] If one tried a different product a day, beginning at birth, one would have to live for 115 years to sample them all.

The economy’s ability to provide privileged citizens with unlimited options, launching hundreds of thousands of new products and technologies, and giving privileged investors strong financial returns, is an amazing achievement in human history. Those who unabashedly support the role of big business in society are often mystified and frustrated that capitalism’s critics seem blind to this reality. At the same time, capitalism’s boosters themselves can be oblivious to the unintended consequences of that same system. They see no problem with the simple statement that the “purpose for the firm is to create value for you, the owner,” a statement that appears on the very first page of the first chapter of a classic textbook on corporate finance.[11] The feverish short-term scramble for profits, the distortions in income and wealth, the globalization of production, and the anonymity of exchange have produced great harm to the planet and to millions of people—harm that is rarely acknowledged or reflected in the price of a shiny new consumer item. Our lack of knowledge and connection to the place of origin of what we buy, or the worker conditions of its production further strips away the sense of moral responsibility for the way we spend and consume.

Earnings and Debt Proportions

Debt issues arise not only because of the sheer amount of borrowed money, but also because of the debt’s percentage of one’s income. People with low income can have a much harder time paying off small debts than wealthier people who owe much more. This is something to ponder for students who may be entering careers that are rich in spiritual rewards but less so
financially.

In 1972, during the early phase of the South African divestment movement, three Yale University professors published a groundbreaking book called The Ethical Investor, which examined the conditions under which people had special moral obligations to strangers. One of them was the principle of proximity: If a person is physically close to someone who is in desperate need, that person has a strong obligation to offer assistance. This obligation diminishes with distance. When a homeowner discovers a starving baby on her doorstep, she may not slam the door and ignore it. The baby’s need creates an immediate moral duty and will prompt her to act. But if that baby is one of a million indistinguishable infants rendered homeless in a distant land, the sense of obligation shrinks virtually to zero.

We all recognize and regret the reality of this ethical limitation, which we justify by saying that the suffering of the world unfolds daily on an unimaginable scale, and our limited minds and fragile souls can only absorb so much. We already feel overwhelmed by information, by uncertainty, and by other people’s sanctimonious criticism of our priorities. Under such conditions it is not surprising that we find ourselves inert and indifferent

Toward Transparency in
Food Products

Some people are attempting to use Quick Response (QR) codes (the odd black-and-white pixelated boxes on all sorts of products and signs) to increase transparency in the global market. This article from Food Safety News discusses how this technology is now helping people trace their foods through platforms like HarvestMark and CLEARthru.

These technologies not only help consumers trace their food and make the supermarkets more transparent, they also enhance food safety and support greater social justice in the supply chain that stretches all the way back to the original farmer or producers.

Global markets benefit from this dynamic of distance. If an object is made on one side of the planet, and sold on the other, awareness of the human and environmental costs steadily disappears. Each point of transfer and exchange adds a new layer of distance and anonymity, stripping the consumer of knowledge and diluting responsibility. The final purchaser may be completely ignorant of the conditions in which the product was made. Our ignorance permits us to defend our innocence. For decades this has allowed us to use energy, buy jewelry, feed our pets, wear clothing, and talk on smart phones without any awareness of the often harsh and unjust conditions under which those products have been produced.

This phenomenon—in which distance defuses obligation—is a major reason for the “globalization of indifference,” as Pope Francis calls it.[12] Under global capitalism, too many consumers, corporations, and governments have come to accept the inevitability of such exploitation. We gradually have permitted ourselves to classify billions of fellow human beings as undeserving of the same dignity and protections that we would demand for ourselves. Some have even argued that this is a necessary and desirable path for poor countries: Their low wages and horrendous working conditions, it is claimed, are an economic advantage, attracting investments by global corporations that provide at least some work and some income to those who would otherwise have none.

The question, then, particularly for communities of faith who believe in the equality of all human beings, is how to bring light into the darkness of anonymous exchange and to trace the history of our everyday consumer products back to their origins, exposing injustices that exist along the way. Some organizations like the Stockholm Environment Institute have deployed brilliant information technology to be able to trace specific shipments of certain commodities—such as cocoa, soy, seed, and palm oil—back to the exact place where farmers are deforesting vast amounts of virgin land.[13] Religious activists, whose institutional bonds often transcend national boundaries and who know how to connect communities across the world, have played a critical role by pressing corporations about the ethics of their supply chains. Over the past twenty years, they have toiled tirelessly to expose the working conditions of farmers, migrants, and factory workers; the abusive hours, working conditions, and wages; the cycle of debt and indentured work—all enabled by corporate voracity, violent oppression, and government complicity.

One organization called Fashion Revolution, created in the aftermath of the 2013 collapse of the Rhana Plaza garment factory in Dhaka, Bangladesh, that killed 1,133 people and injured 2,500 more, decided to test consumers’ purchasing behavior before and after they were given much more detailed information about production. They set up a vending machine in the middle of a public square in Berlin that offered one T-shirt for 2 euros (about $2.25). When a potential buyer inserted her money and chose the size, a video appeared introducing Manisha, a young garment worker, and then proceeded to show how she and millions of other workers, many of them children, worked up to 16 hours a day sewing T-shirts for 15 cents an hour. At the end of the video, the machine asked whether they still wanted to buy the shirt or preferred to donate the money to Fashion Revolution to fight for decent working conditions. Most donated. “People care when they know,” the video concludes simply.[14]

III. THE TRANSFORMATION TO A NEW ECONOMY

So a pressing question for any person of faith, whether operating individually or as part of a community, is how to behave in a world where we face a blizzard of consumer choices, each of which is hawked as necessary for our happiness, and many of which have a troubled story of origin that is aggressively concealed.

Urgently we need to assert four questions that advertising and marketing have desperately labored to nullify:

1) Do I really need this?

2) Where did it come from?

3) When I am done with it, where will it go?

4) What is the true price of what I am buying?

Know the Basics: Liquidity

Liquidity is another financial term that sounds complicated but in fact is very simple.

If an asset is “liquid,” it means it can be turned into cash quickly. Tickets to a concert that everyone wants to go to would be considered liquid. If it is “illiquid,” it means that you might own something valuable (a house) but it might take a long time to turn it into cash. Assessing liquidity allows individuals or companies to know how quickly they are able to fulfill their financial commitments.

When you see a sign that announces a “liquidation sale,” you know that the company is likely going out of business and needs to quickly turn its inventory into cash in order to pay its debts.

There are different ways to assess the liquidity of one’s assets, which you can read a bit more about here.

The fourth question is particularly important when looking at a global economy. When we buy a car, we know that we will be imposing costs on other people by pushing carbon dioxide into the atmosphere for the entire life of the vehicle. But we do not pay for that expense, either when we negotiate the sticker price or when we buy gas. Those environmental expenses are simply sloughed off, and any damage that comes to our collective health, our water, our land, our air must be paid for by public means, through taxes. In buying a car we thus pay a much lower price than its actual cost, an arrangement that offers car manufacturers no incentive to change what they are doing.

Such market failures are actually common and it is the responsibility of governments to correct the most serious ones. The traditional manner is to impose a surcharge on the price of the object so that the price contains all the costs of its production and use. Manufacturers don’t like this because it makes products more expensive—which in turn might reduce the number of buyers. Some argue that making products more expensive is particularly unjust to the poor, who should be allowed to buy cheap, dangerous products even if they have to pay for the damage through their taxes later.

A higher, more realistic price would put pressure on companies to find ways to solve the failure and lower the cost, and it would save the public the money that it is otherwise forced to spend to fix problems created by the market failures in the first place. One of the most pressing debates about pricing can be found over the issue of carbon fees. We know that the burning of carbon is doing deep and irreparable damage to the planet—to the global flows of wind, water, air, and heat—and we must brace for much more to come. Today we are in the absurd and dangerous position of not only selling but subsidizing something that we know will impose a brutal cost on humanity starting now and continuing for centuries. The current system is so entrenched—benefiting so many powerful people, delivering so much evident bounty while concealing such lethal damage, favoring the present while sacrificing our future—that we are well on a road to environmental and economic collapse. If ever there were a time when human beings needed to adopt the biblical role of steward, caretaker, and guardian, it is now.

Virtually every U.S. economist from left to right agrees that carbon should be priced both to reduce the amount that we use and to generate a source of income to be rebated to consumers or spent on promoting new technologies for a low-carbon economy. Even major oil companies such as Exxon, Chevron, and Shell have publicly proclaimed that they support placing a price on carbon—while simultaneously spending hundreds of millions of dollars to block government action on that or any other serious climate measure.

For all of human history—until now—people have believed the earth was an unlimited resource. There seemed to be so much of everything—land, water, minerals, wildlife, fish, food, timber—that the human task was self-evident: Find these resources, capture them or dig them up, and make use of them. While people in Europe and Asia have steadily been forced to reckon with limits, most citizens and everyone in power in the U.S. have remained committed to the exhilarating conviction of the land’s first European settlers—that the continent was a source of endless natural wealth, and no matter what we did or how much we took, we could never exhaust or damage the abundance of the earth.

This conviction was the root of what we now call the extractive economy, which is one name for the oldest and most primitive economic model. In an extractive economy, physical material is gathered from the fields or the woods, ripped from the ground, captured from the sea, and then forged into products and services that are considered both necessary and desirable. We dig and drill deep below the surface to pull up the carbon deposits of solar power captured in decaying plants millions of years ago. For centuries wealthier nations have both tapped the resources of their own countries and gone abroad to appropriate those of poorer ones.

To take advantage of these vast but dormant assets required the mobilization of huge amounts of money, labor, and intellect. Particularly in the eighteenth and nineteenth centuries, Americans were intoxicated with the possibilities of abundance and pushed aside physical limitations and moral qualms to seize it at maximum speed. The necessary pooling of capital to extract resources or to concentrate labor on this immense scale became much more efficient through the invention of a particular kind of business, the limited liability corporation.

Know the Basics:
What is a Stock?

Buying stock is a form of investment in which you purchase a small share in a company, thus becoming one of its many owners. (At last count, Apple has 5.477 billion outstanding shares owned in different quantities by individuals and institutions).

When you are invested in a stock you can make or lose money, depending on whether the stock price goes up or down. For some companies a share also entitles you to a proportion of the earnings of the company, which can be paid out to shareowners through annual dividends.

Though the corporation in its original form was created by royal charter for public purposes, it steadily morphed into a mechanism for private parties to invest money for future gain. Wealthy individuals or institutions could pool their money into a venture by buying a piece of a company—known, logically, as a “share.” By selling many shares, the leaders of an enterprise could amass enough money to start a large and hopefully successful enterprise—a store, a ship, a railroad, or a factory.

If the project was profitable, the investors received a proportion of the returns. In the early days, if the project failed, the creditors could come after the board members and investors for their own personal money. The creation of the limited liability corporation (LLC) fixed this; when a corporation went bankrupt, creditors could go after the assets of the corporation, but not seize the personal wealth of the directors and other shareholders. This made many more people willing to risk their money, because the risks were limited while the gains could be vast.

Though the shareholders were deemed to be the owners of the firm, everyone involved in a corporation was supposed to receive some sort of reward—workers received their wages, lenders received their fixed interest, and shareholders got whatever was left. Because the shareholders were the last to be paid (in theory), they were the bearers of the largest risk. Thus, the argument went, the enterprise itself should be managed to make sure that the risk to such shareholders was relatively low and the return high. The combination of these convictions—that the earth’s resources are unlimited, and shareholders’ interest should dominate—created the dynamo of extraction that rules our modern economy.

It also created so much activity that people had trouble understanding what was really taking place. Until the twentieth century our economic measurements were hopelessly crude. Governments could count the amount of money that came in through taxes or tariffs; traders could observe whether prices were rising or falling; corporations could roughly measure whether they were making money. But it was only in the last two generations that people began to ask themselves whether it was possible to obtain a complete picture of how an entire economy was performing.

When the Great Depression threw millions of Americans out of work, President Franklin D. Roosevelt, elected in 1932, initiated hundreds of programs to halt the downward spiral, restart the economy, and create jobs. To do so, he and the other members of the federal government had to find ways to measure the speed, size, and direction of economic growth. In 1934 Simon Kuznets, a member of the National Bureau of Economic Research, unveiled a measurement of “aggregate production and aggregate demand,” called the “gross national product.” (Eventually this measurement was slightly altered and we now refer to it as the “Gross Domestic Product.”)

The GDP tries to count every form of economic activity, without judging whether the activity is positive or negative. Though GDP measures factory production, employment, sales, and other positive forms of growth, it also counts the economic activity that resulted from crime, automobile accidents, divorce, hurricanes, and other calamities. But even this is a far too limited and distorted approach to the overall economy, and Kuznets explicitly stated that it would be wrong to use GDP as a gauge of societal improvement. “The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP,” he wrote.[15]

Despite his warning, this is exactly what happened over the last fifty years: The Gross Domestic Product became the uncontested measure of success for national economies. All governments, including the United States, became obsessed with promoting GDP growth, regardless of whether that growth arose from truly beneficial changes in the economy. Today, media both at home and abroad report small movements in GDP with breathless attention. Any Ph.D. student in a traditional economics department or guest on a business TV network who suggests GDP is not a legitimate indicator would instantly be dismissed as a fool or a heretic. Government officials slavishly toil to find methods to goose the GDP higher. And yet the GDP measures only a very limited part of what we need to know about our progress. It is like comparing baseball teams by how many steps players took over nine innings, rather than whether they won or lost games.

Two particular failures result. The first is that most economists routinely ignore planetary limits. A few rare visionaries stand out, such as Ken Boulding, a former president of the American Economic Association, who famously commented that “anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.”[16] Despite such barbs, economists have taken decades to catch up to the obvious in their calculations, and most still fall short.

Molding the Market

Though they can seem like everlasting forces of nature, money and finance are actually human inventions that have changed drastically over the last 4,000 years. As William N. Goetzmann and K. Geert Rouwenhorst demonstrated in The Origins of Value. we are not confined to our present financial system, but could, as our ancestors did, choose how this system will evolve.

“The differences in development between East and West suggest that Western capitalist economies were not the inevitable product, or the sole equilibrium outcome, of a set of common factor,” they write. ”…Our current financial architecture may simply have been due to the accident of history.” If this is true, what do we want our economy to achieve?

Secondly, with every passing year the GDP’s limitations as a national measurement become more evident and more dangerous. GDP does not record whether economic inequality is increasing or decreasing. It does not measure the cumulative damage and future cost of climate change. It does not take into account whether people are healthier or happier. In 1968 Robert F. Kennedy beautifully summarized this point in a speech at the University of Kansas only weeks before his assassination.

Our Gross National Product ... counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities...

Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.[17]

IV. FOUR APPROACHES TO SYSTEM CHANGE

So here is our dilemma. We want the benefits that a modern economy can offer—the extraordinary range of products and activities that can protect and enhance our lives, the continuous flow of new technologies and information. But we also want to eliminate the destructive exploitation of people and planet that is taking place, largely invisibly, around the world.

Within Christianity and other major world religions, we have clear guidance about our obligations as caretakers and stewards over our miraculous planet, unique in its beauty and fertility. Whether we are reflecting personally, institutionally, or communally, we must ask ourselves, as co-authors John de Graaf and David Batker have done, “What’s the Economy For, Anyway?” We may formulate a practice for our own lives and we may create communities that enhance the gifts of simplicity, balance, wisdom, and generosity, but what are we to do about a huge global system that looks so entrenched and invincible?

Members of communities of faith who aspire to see the U.S. shift toward a more just and sustainable economy often face a hurdle: a lack of clear ideas about how to change such large and impenetrable systems. The good news, however, is that there are many things that people of faith and communities of faith can do—especially when they act together. There are four practical and powerful approaches to making structural change in our economy. All of them are currently in motion, steadily advancing across the country and around the world. All of them would benefit from the support of informed individuals and communities of faith. They are:

Changing the measurements of national progress;

Increasing corporate transparency and accountability;

Using investor power to adjust the objectives of business; and

Developing hybrid mechanisms of ownership and control.

Each of these approaches, by itself, can have a significant effect, but taken together they have the potential to move the economy in truly new directions. Let us examine each of them.

1. CHANGING THE MEASUREMENTS OF PROGRESS

The problems with GDP have been understood for a long time, and multiple efforts over the last half-century have endeavored to correct deficiencies and create a better measure of national economic wealth. In the 1990s, various divisions of the United Nations began tracking social indicators in order to better evaluate the impact of UN policies.[18] In 2006, John Talbert, Clifford Cobb, and Noah Slattery of Redefining Progress published “The Genuine Progress Indicator (GPI), 2006: A Tool for Sustainable Development.” In it they tried to calculate the true well-being of the country by adjusting the Gross Domestic Product in light of other factors, including resource depletion and pollution. This was to avoid the absurdity that pollution, under normal GDP rules, would be counted twice as a positive in GDP: once when it occurred, and then again when it was cleaned up.[19] GPI has drawn increased attention—Maryland, Oregon, and almost a dozen states are exploring or adopting it.

In 2008 an initiative was created called the Commission of the Measurement of Economic Performance and Social Progress, chaired by Nobel Prize-winning economists Amartya Sen and Joseph Stiglitz. The Stiglitz-Sen-Fitoussi Commission labored mightily and came out with a report in 2009.[20] “What we measure affects what we do; and if our measurements are flawed, decisions may be distorted,” the distinguished panel wrote. “Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance.”[21] They concluded: “The time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.”[22] Despite the reputation of its authors and the power of its ideas, the report remains largely unimplemented.

Though numerous amendments to our calculation of GDP have been proposed, none has effectively been adopted. As a result, our press, business leaders, and elected officials continue to use data that is misleading and thus destructive.

The Ceres Principles

Originally known as the Valdez Principles because of the infamous 1989 Exxon oil spill in Prince William Sound, Alaska, the Ceres Principles created a new set of guidelines for corporate environmental policy. These included:

• Protection of the biosphere

• Sustainable use of natural resources

• Reduction and disposal of wastes

• Energy conservation

• Risk reduction

• Safe products and services

• Environmental restoration

• Informing the public

• Management commitment

• Audits and reports

Principles 8 and 10 eventually led to the creation of “sustainability reports” that have now become standard for most large corporations, though there is still debate about the depth and breadth of the reports.

To read more about them, see www.ceres.org

If our compasses all point in the wrong direction, is there any wonder why we are lost?

2. INCREASING CORPORATE TRANSPARENCY AND ACCOUNTABILITY

Another sustained effort at changing measurement has focused on business. Instead of calculating the nature and growth of the national economy, many business and investment analysts are now trying to measure the financial and sustainability performance of particular corporations and industries.

For most of the twentieth century, corporate executives viewed environmental concerns as a wrong-headed constraint on their freedom to make profits. They fought the passage of federal and state regulations. When those regulations went into force anyway, they often did as little as possible to coply.

In March 1989 the Exxon tanker Valdez ran aground in Alaska, dumping 11 million gallons into pristine Prince William Sound. At the same time, a visionary investment leader, Joan Bavaria, had been working to bring together leaders of environmental groups, endowments, and religious pension funds to push companies to adopt an environmental ethic that would go far beyond normal legal compliance. By the fall of 1989, the new group, known as the Coalition for Environmentally Responsible Economies (or Ceres), announced a ten-point code that asked companies to take positive steps on environmental problems.

Two of the ten points focused on disclosure, asking companies to release environmental information to everyone who might be affected by the operation of the firm and to report on how well the firm was following the Ceres Principles. As the idea of environmental reporting caught on, companies, investors, and activist groups encountered a new problem—the proliferation of questionnaires and inquiries all asking companies to release information in different forms and on different topics.

This led to the creation in 1998 of the Global Reporting Initiative (GRI), an international effort to create standards for measuring corporate sustainability performance. The GRI modeled itself on the organizations that established financial disclosure standards, such as the Financial Accounting Standards Board.

There was one important difference: The GRI was not driven solely by the needs and opinions of investors, but by the concerns of tens of thousands of stakeholders from around the world, including labor, community, human rights advocates, environmental leaders, UN officials, accounting professionals and theorists, and corporate executives. Now based in Amsterdam, the GRI has become a standard-setting body with rules and indicators used by nearly 10,000 multinationals worldwide.[23]

Today the two bedrock principles of corporate disclosure—that corporations manage what they measure and that disclosure leads to change and accountability—have been accepted around the world. The question now is whether the change is deep enough and fast enough. As often happens, the successful proliferation of information—a long-sought goal—has itself created new challenges. In many settings, the disclosure of sustainability information remains voluntary; some traditional investors still wonder whether sustainability information can help an investor or a company make more money. Nevertheless, the acceptance that such information identifies systemic problems has grown to the point that major investment firms are now analyzing such data.

Battles for Corporate Control

Battles over the control of corporations often involve huge sums of money and equally huge egos. They can also produce highly mysterious dramas and confusing jargon for people who are unfamiliar with finance. In the 1980s, “corporate raiders” often borrowed immense amounts of money in order to buy vulnerable companies (this was called a “leveraged buy-out” or LBO). In order to pay back their loans, they would then sell off pieces and assets of the company, which sometimes meant firing all the workers, pay back their loans, and end with a large profit.

“Hedge funds” are financial firms that often use money provided by pension funds and other investors to buy companies and manipulate them to extract more money. One common approach has been to force the purchased company to take out a massive loan and use it to pay a special dividend to the new owners, who might also move facilities overseas and then sell off the company with its painful new debt load.

In recent years, dozens of powerful organizations have begun to explore different ways to package non-financial information, or “environmental, social, and governance” (ESG) data. The Bloomberg terminals that sit on the desks of bankers, traders, and investors around the word now include ESG information on most of the firms they cover. A movement is growing to bring financial and sustainability reporting together. In 2009 Charles, Prince of Wales, through his Accounting for Sustainability project, invited the heads of the world’s most prominent accounting and sustainability groups to gather and explore the fusion of financial and sustainability information into an “integrated report.” The report of the International Integrated Reporting Council (IIRC), released in December 2013, included an integrated reporting “framework.” The document contained some startling conclusions that have the potential to alter the way corporations understand themselves in the twenty-first century.[24]

Though the IIRC framework acknowledges that its purpose remains primarily to inform the “suppliers of financial capital” (i.e., investors), it made a startlingly bold proposal to change the concept of business purpose. Instead of conceiving a business as an organization that applies resources to create financial capital, the report suggests that a business should be re-conceptualized as a model that draws from several forms of capital (intellectual, social, natural, human, manufactured, and financial capital). Drawing from different stocks of capital, a firm runs them through business models that produce outcomes for each of the different kinds of capital. Instead of simply analyzing how much money the organization made, a deeper understanding would require a more complete explanation of the creation or destruction of value, by examining and measuring the impact on all the stocks of capital. So we might ask: Yes, financial capital went up, but did that mean that human or natural capital went down?

Battles for Corporate Control
(continued)

When the board of company A agrees to be bought by company B, it is part of a “merger and acquisition” or M&A. When company A does not want to be bought, and company B goes ahead and does it anyway, it is a “hostile takeover.”

Why do investment bankers make so much money? In part because they are among the few people who, because of their exclusive web of connections inside the financial world, can handle the complex arrangements and arrange the financing for these million- and billion-dollar shifts in ownership.

The most important insight of this new approach is that corporations routinely create or destroy important forms of value that cannot be measured solely by financial indicators. Such an insight, if widely adopted, would revolutionize accounting (a field that would be asked to measure multiple forms of capital stocks and flows), finance (which would have to calculate new trade-offs that had previously been invisible), and public policy (which would have to take into account whether the increase in financial capital came from destroying other valuable forms). Not surprisingly, even though this has been backed by many of the most powerful corporations and accounting associations in the world, the IIRC frameworks still face resistance from those who dislike change. But they represent an extraordinary reformulation of the theory of business and value creation that has the potential to alter the global economy.

This understanding of the potential of “multicapitalism” is entirely consistent with the values of most communities of faith. If such communities—as well as schools of theology—were to recommend this concept energetically, they would be catapulted from the sidelines into the forefront of the global debate about capitalism, economic choices, and the moral values shaping the future.

3. USING INVESTOR POWER TO ADJUST THE OBJECTIVES OF BUSINESS

A third approach is to rally shareholder action to urge corporations to adopt new policies. The traditional corporation is structured—in theory and in myth—as a democracy. Accordingly, investors, as joint owners of a business enterprise, hold democratic elections (with one share equaling one vote) to elect a board of directors. The board of directors in turn hires and oversees management. Every now and then this system works when, for example, the control of a corporation changes because one corporation buys enough shares to vote out the existing board and management.

For the most part, however, the system of shareholder democracy at the heart of capitalism resembles the old Soviet system of power: The chief executive picks the board members with a particular eye to their loyalty, there is only one candidate per vacancy, and the shareholders are normally powerless to change control of the firm. Shareholders are permitted, under tightly controlled circumstances, to submit resolutions that the corporation must put up for a vote by all the other shareholders. But even in the rare cases that these resolutions prevail, they are only considered advisory.

Nevertheless, starting in the 1960s, religious and activist groups began using this process to raise unwelcome questions with senior management regarding a wide range of controversies—the war in Vietnam, the manufacture of weapons, the use of toxic chemicals, and hundreds of other social and environmental questions. The resolutions were limited to 500 words and had to be printed on the corporate ballot and mailed to all shareholders. At first, it was rare for a resolution to get 3 percent of the vote, which was the necessary threshold for allowing it to be filed again the next year. Over time, however, organizations like the Interfaith Center on Corporate Responsibility created clearinghouses so that religious denominations, pension funds, foundations, universities, and others could join together in filing resolutions.

Ben Franklin

“He who is of the opinion

that money will do everything

may well be suspected

of doing everything for money.”

Eventually the resolutions had a solid impact. Corporate executives found it so embarrassing to have a negative statement embedded in the midst of a document otherwise praising the achievements of the firm that they often negotiated agreements to get the resolution withdrawn. This system became a primary mechanism for communicating investor displeasure about corporate investment in support of the apartheid regime in South Africa, the marketing of infant formula, the lack of diversity on corporate boards, and hundreds of other topics.

Know the Basics: Net Worth

Net worth is another term often thrown around when talking about extreme wealth, as in, “Bill Gates has a net worth of $79.4 billion!” But what does that concept mean? Why is it useful?

Knowing your net worth will give you a good understanding of your present financial situation. Net worth is calculated by subtracting all of your debts from your total assets. If you own a house worth $100,000 and you owe a mortgage of $80,000, your net worth (and equity in the home) would be $20,000.

But what counts as an asset?

Assets are all the cash you have plus everything that you own that has real value—cash, money in savings accounts, investments, appraisable fine art, jewelry, books, collectables, etc. The portion of a home still covered by a mortgage, the lease on a car, and the value of anticipated salary do not count.

Once you have calculated your total assets, simply subtract all the money you owe, and you will have calculated your net worth.

People who graduate from an educational program with a debt higher than the value of everything they own are said to have a “negative net worth.”

An important financial goal is to build one’s net worth over the course of a lifetime so that in old age, when one’s ability to earn drops, one still has resources on which to live, or to give away.

Today this system has been developed into a highly complex and mostly effective system of communication and negotiation between shareholders and corporate managers. The topics range widely—executive compensation, board diversity, lobbying, political contributions, also human rights, climate change, sexual orientation, minimum wage, and gender pay discrimination. And the groups willing to file such resolutions have expanded from smaller activist groups—like religious institutions—to the largest pension funds in the country.

In 2003, Ceres launched the Investor Network on Climate Risk, which brought together state pension fund managers in a meeting at the United Nations to discuss the financial dangers of climate change. INCR now has more than 100 institutional members with combined assets of more than $11 trillion—including the public pension funds from California (CalPERS and CalSTRS), Maryland, New York City, New York State, Pennsylvania, Vermont, and many other states.

The emergence of the shareholder resolution system has given civil society organizations a proven mechanism for communicating their concerns directly to corporate boards and executives.[25] In the past the only recourse had been lawsuits, legislation, or regulation. Today there are well-established systems for engagement, backed up by hundreds of skilled professionals who understand and employ these means continuously to introduce critical issues into the decision-making machinery of the modern corporation. Indeed, this has become so routine that the idea of including environmental, social, and governance considerations into investments has vaulted into the mainstream practice of many of the largest asset managers and institutional investors in the world.

Though shareholder engagement and shareholder resolutions are now commonplace, they are most effective when they address secondary issues rather than the core purpose of the firm. A critical case in point is climate change. For nearly thirty years, shareholders have been filing resolutions asking corporations to address the financial and business risks of climate change, and for the most part they have only succeeded in getting many companies to make promises and issue reports. It has been much harder to get corporations to lower emissions, even when such action would bring efficiency and savings to the firm. When dealing with the major producers of fossil fuel—coal, oil, and gas companies—the shareholder engagement approach has largely failed. This is partly because the only way for such corporations to address the burning of carbon is to alter or repudiate their business models, and this is something no corporate executive or board has been willing to do. In some cases, chief executives like Rex Tillerson of Exxon (now Secretary of State) have openly mocked the shareholders who have traveled to the general meeting to urge action on climate change.

Even more troubling, fossil fuel companies have spent billions of dollars on lobbying and campaign contributions here and around the world to resist the science of climate change and to block any substantive action by the governments of the world. An estimate by the financial firm Carbon Tracker in the UK has estimated that we can only afford to burn 565 gigatons of carbon before we break through the 2-degree Celsius (3.6-degree Fahrenheit) barrier that is considered the outer limit of safety for the planet. Oil companies already have 2,700 gigatons of reserves listed on their balance sheets—five times more than we need. Despite this excess, oil companies are spending more than $600 billion a year to look for new oil reserves, oil that we must not burn if we are to protect the biosphere.

In these cases, when resolutions, dialogue, and engagement have failed, the only remaining option is divestment, selling off the stock. Divestment is sometimes portrayed as an aggressive action, but really it is only a modern version of the so-called Wall Street Rule that has governed conservative investing for the last 100 years. The Wall Street Rule says that if you approve of a company’s management and business model, you hold the stock. When you stop approving, you sell it.
Around the world thousands of institutions have decided, for both moral and financial reasons, that fossil fuel companies are pursuing a dangerous path, and they are divesting.

4. DEVELOPING HYBRID MECHANISMS OF OWNERSHIP AND CONTROL

In the last ten years, even as we have seen large blocks of shareholders become more active trying to influence corporate direction, we have also seen investment banks and other financial institutions hurl themselves into inventing complex and volatile financial arrangements that are in truth forms of high-stakes gambling. When this happens, companies no longer even care about pleasing shareholders but about placating the analysts, the capital markets, and the stock exchanges. Even more shocking is that many executives and traders were willing to trash their own clients’ interests in order to enrich themselves. During the financial crisis of 2008, some executives happily sold losing investments to people who trusted them, knowing that the bank could make money by betting against the very investments that they had just sold.

These scandals, frauds, and breaches of fiduciary duty—recurring with mind-numbing regularity—are unmistakable signs that the underlying system is both corrupt and broken. In earlier years, Wall Street existed to generate capital that could be used by businesses on Main Street. Today the future of Main Street itself is often determined by the whims and gains of a relatively small number of people on Wall Street—people who have largely lost touch with the goal of creating real value for real people in the real economy. The system is now massively geared toward extraction—extraction of resources from the ground, of value from the environment, of intellectual gifts from employees, and of cash from customers. We now have an immense and insatiable system, functioning on autopilot, and it is wrecking the planet.

The question then—not only for people of faith but for everyone who wants to live in a just and sustainable world—is what to do about it. The goal before us is, in writer Marjorie Kelly’s words, to fashion a living economy that is designed to generate the conditions for life to thrive and “an economy with a built-in tendency to be socially fair and ecologically sustainable.”[26] This she calls a generative economy. How do we transform our extractive economy into a generative economy?

One Person’s Trash...

Have you just arrived in town, found an apartment, and need furniture? Go to the “free” section on your local craigslist page or to freecycle.org and see what you can find! Re-using and recycling is one way we can minimize our use of the extractive economy.

We can find the answer by asking the kinds of questions we have considered from the beginning. Just as we can orient our lives and our communities by gradually defining our purpose, and by designing and embedding that purpose into the structures of our lives and communities, we can commit ourselves to improving the economy by identifying what we want from it and then designing rules and structures that meet those goals and purposes.

The best book on the transition to a generative economy is indeed Kelly’s Owning Our Future. A scholar at the Democracy Collaborative at the University of Maryland, Kelly attributes many of the problems of the modern economy to the excessively narrow objectives built into the structures of our largest corporations—and to the lack of diverse alternatives. “Ownership is the underlying architecture of our economy,” she writes. “As the dominant form of ownership continues to spin off crisis after crisis in our time, alternative forms are at the same time emerging in largely unsung, disconnected experiments around the world.”[27] Those who defend the current system of large-scale corporate capitalism do so in part because they fear that the only alternative would be state control of enterprises, an experiment which, when taken to the extremes of twentieth-century communism, not only failed to produce prosperity, but managed to destroy the environment and do untold damage to human freedom. As a result, most twentieth-century Americans assumed that we could only live in a simplified bipolar world—either unbridled consumer capitalism or ham-handed state control.

In the twenty-first century, however, many are discovering that there are hundreds of variations in organizational structure, and each variant has the ability to emphasize and achieve slightly different goals. As noted in Chapter Two, Kelly compresses our knowledge into the brilliant observation that “structure is purpose expressed through design.” The gradual refinement of purpose in our individual and community lives can lead to the creation of structures that achieve what we really want. If we want to live lives of simplicity, balance, wisdom, and generosity, we can introduce patterns into everyday life that encourage those outcomes.
Through a nuanced and creative discussion of business purpose and design, we can begin to do the same thing in our economies as well.

Loan Problems of the Past

Loans are not a new financial concept, and modern American students are not the only ones who have been damaged by accumulated debt. Marc Van De Mieroop has examined Babylonian loans from thousands of years ago and noted that “the practice of making loans to individuals at times got out of hand, a problem best illustrated by the issuance of royal decrees annulling debts.”

(“The Invention of Interest” in The Origins of Value 20).

Kelly spends much of her book describing extraordinary variations in ownership and design that already exist and are producing refreshingly unexpected outcomes. One large and often overlooked domain in the U.S. is that of the 8,000 consumer-owned credit unions and the 7,600 community banks. During the financial crisis of 2008, these institutions were hit hard, and many of them closed. Kelly points out that it would have been smarter “to have used the bailout money not to prop up failing megabanks but to shift mortgage assets to community banks, Community Development Finance Institutions (CDFIs), and credit unions.”[28]

She lays out the benefits of other forms of ownership. Maine lobstering licenses, she notes, are only issued to individual boat owners, which means that a single conglomerate cannot come in, buy up a huge number of boats and licenses, and then use its market force to lower wages and raise prices. Instead, Maine has authorized 6,400 boat owners to trap lobsters, and each boat is limited to 800 traps. Thus the revenue from the overall catch of 287 million pounds of lobster in 2015—worth $616 million—was distributed across the entire seacoast of Maine (at an average of $96,200 per licensed boat owner). The money stays within small communities instead of getting transferred to the shareholders of a global multinational.
She tells the remarkable story of the John Lewis Partnership, the largest department store chain in the UK. Though the firm matches the size of many other modern corporations—it has more than 76,500 employees, 35 department stores, and 272 Waitrose grocery stores—it is unique for its declared purpose: to serve employee happiness. The company believes that with deeply committed employees, it will provide superior service and higher returns to investors. To match this intention, they have designed a parallel system that links traditional corporate structure to a democratic overlay. The employees elect a “Partnership Council” that works primarily to advise the board of directors, which has most of the actual power. The employee council also elects five out of fourteen members of that board. The aim is to share power “as far as seems practicable…with sufficient care not to go suicidally too far.”[29]

Well-Known ESOPs and
Cooperatives in the U.S .

ESOPs

• Kelly-Moore Paint - Paint Manufacturer

• Publix Supermarkets - Supermarkets

• Lifetouch - Photography

• Houchens Industries, Inc. - Supermarkets

Cooperatives

• ACE Hardware - Hardware Store

• Associated Press - Media Non-Profit

• REI - Outdoor Equipment Retai l

• Cabot Creamery - Dairy and Cheese Producers

Many Americans mistakenly think models of group ownership are rare here. One form that has existed for a long time is the cooperative, which can be organized by consumers, producers, or workers, and of which there are already almost 30,000 involving tens of millions of people. A particularly common form is the housing cooperative, which blossomed in the twentieth century, in some cases with the financial sponsorship of trade unions, and now covers 1.5 million families nationally.[30] The U.S. also saw the creation and expansion in the late twentieth century of the Employee Stock Ownership Plan (ESOP), in which employees acquire increasing amounts of shares in—and thus technically control of —the firms they work for. Today there are more than 7,000 ESOPs and another 2,000 profit-sharing plans in the U.S. covering a total of 28 million people, a remarkable 18 percent of the U.S. total workforce.[31] This form of collective ownership of corporate shares by workers and employees has drawn some surprising supporters over the years. “I can’t help but believe that in the future we will see in the United States and throughout the western world an increasing trend toward the next logical step, employee ownership,” said President Ronald Reagan in August 1987. “It is the path that befits a free people.”[32]

One of the most enduring problems for those who wish to create change is the tendency of people in any given moment to assume that the current system has always been in existence and will always remain the same. In fact, economies are continuously changing and being remade both by choice and by circumstance. The economy of the U.S. at the time of its birth was overwhelmingly dispersed and agricultural; in the nineteenth century, we experienced unprecedented geographic and industrial expansion; in the twentieth, America became a global economic and military power; and in the twenty-first, we are providing much of the stupendous new information technology that is altering every business model in the world. At each inflection point, as part of each transformation, opportunities abound for greater freedom and justice—or for elites to become more powerful and ensconced.

As more people recognize that our entrenched corporate economy and paralyzed political system have failed to address our deepest and most pressing problems, the frustration is pouring into new channels. Some of it is expressed as anger, as we saw during the Occupy protests or in the 2016 election. More of it is emerging in the guise of creative solutions, as Americans rediscover their traditionally inventive instincts and generate new models. To recall Marjorie Kelly’s point: Intention creates structure, and structure creates behavior. So it’s no surprise that as people search to create a more just and sustainable world, they are experimenting with new, hybrid systems of ownership and control.

In the United States we are also witnessing an explosion of ideas about the purposes an economy should serve. Advocates have come up with dozens of terms for what they would like to see—a sustainable economy, sharing economy, solidarity economy, a creative, social, generative, green, and circular economy. All of these are grouped loosely under the New Economy heading, a term that provides just enough of an umbrella to allow groups with similar objectives to start connecting, learning from each other, and finding common cause. From these organizations a flood of recommendations has appeared about how to make the economy more environmentally balanced and sustainable, including shifting money to credit unions, creating systems for participatory budgeting, strengthening community development corporations and land trusts, shifting government money to smaller banks, diversifying retirement plans.[33]

Gar Alperovitz, in his extraordinary guide to New Economy thinking titled What Then Must We Do?, makes the case that major “anchor institutions” across the U.S.—universities, hospitals, municipalities—are stimulating new networks of local prosperity. After cataloguing hundreds of examples, Alperovitz argues that a new system is already emerging in a checkerboard fashion that has not yet been acknowledged by our political, economic, and media elites.

V. FORERUNNERS OF A NEW ECONOMY: THE ROLE OF COMMUNITIES OF FAITH

What then is the role of the local faith community in the transformation of our economy? How can the many ways in which we interact with money become pathways to a just and sustainable society?

This question leads us to a place where all the pieces we have discussed fit together—the individual, the institutional, and the systemic.

We have learned that a community of faith can be a place where individuals find fellowship and support as they move more deeply into a life of commitment and cultivate the gifts of simplicity, balance, wisdom, and generosity.

We have seen how, by practicing these gifts, people can be moved to create or redesign institutions on the scale of a larger community with objectives that transcend and defy the financial pressures and vocabulary of our modern economy.

Know the Basics:
Paying Off Your Student Debt

Student debt is a huge issue—in the United States, only mortgage debt is greater. In December 2015 the U.S. Department of Education launched a new repayment program, REPAYE. This program is voluntary and caps loan repayments at 10% of one’s discretionary income.

This is only one of many repayment programs (including five income-based programs) offered by the federal government. Log in at studentloans.gov and check out the different repayment plans and figure out which one works best for you.

And now we see that communities of faith can become critical participants in the “checkerboard” that Alperovitz refers to—spaces where, in the consumer economy, an alternative set of values can be lived out. As such, they can become forerunners of the just and sustainable society we long for.

The communities of faith that have engaged me are largely Christian from across the spectrum of practice—from Protestant to Catholic, from monastic to evangelical. In each of these communities, indeed in virtually all faith communities, we can observe an inspiring sincerity of practice as people attempt to align their behavior with their beliefs. Within a complicated, diverse society, communities of faith often end up creating oases where people try to ease the short-term pressures of daily life and refocus themselves on the deeper questions of value and direction.

Privately, we may have strong practices of prayer, meditation, or contemplation, but we still need to be in contact with other human beings in order to grow. Communities of faith must not only be centers of inward retreat but also of outward engagement. They need to develop a strong self-understanding of their role as economic actors in their local settings.

Such communities do not consist simply of buildings to which the faithful can retreat to hold their services. With every dollar they spend, person they hire, building they construct, investment they own, and program they launch, they are participating in the economy. For generations this dynamic has been a place of uncertainty and struggle. Sometimes the values of the faith communities have pushed outward and influenced the marketplace. Sometimes the values of the market overrun the values of the community of faith, such as when a church overlooks the implications of its principles for its stock portfolio.

As I look around a church, I imagine we are all different musical instruments, capable of making the most exhilarating sounds—but to be able to do so, we need to be tuned from time to time. Just as an instrument goes out of tune through use, so our daily encounters with the world can push us off key. Just as the lead oboist in an orchestra brings her colleagues into harmony by playing a single A note, the words and practices of a liturgy or sermon or hymn can provide realignment in our spiritual lives. Communities of faith can create moments of peace, of reconciliation, of inner rest and deep healing. Many maintain powerful connections across time and space, honoring ancestors and elders who did their best in the long-ago past, or sharing messages and present-day support with others around the world, many of them outside a particular denomination or faith.
At its best, a community of faith can create a powerful sense that transcends differences or conflicts and moves into a harmonious domain of love.

Earlier in my life I suffered from liver cirrhosis as the result of hepatitis C, and as I declined over several years I eventually found myself so debilitated that I could no longer sit up in church. Instead, I lay down in the pew and let the words and music wash over me, sometimes passing in and out of sleep. I worried that my peculiar behavior might alarm visitors or annoy the other members of the congregation. One Sunday morning one of the older women who had spent her life in that particular congregation approached me. I wondered briefly if she was going to admonish me about sleeping during the service. Instead, she stepped forward, gave me a great hug, and handed me a beautiful wool blanket. “I was hoping this might make you more comfortable,” she said simply.

A community of faith is, as we have touched on, a kind of family. Many, alas not all, are able to create an atmosphere of non-judgment and forgiveness that allows people damaged by life to heal and rebuild. But such a community is also bigger and in crucial ways different from family. Although they are constituted by what the group has in common, most communities also embody many differences—opinions, backgrounds, theological views. There are often additional variations produced by race, ethnicity, class, gender, and sexuality. The community has to learn how to accommodate these differences by combining different forms of decision-making that move in a direction acceptable to the members. Historically in the U.S., while democracy was spreading, most of the democratically run churches were learning to provide both an example and a locus of support to their members and neighborhoods.

CONCLUSION: GARDENS OF THE IMAGINATION

Why is all of this important? Because every community of faith faces continuous choices about how to express its values through the expenditure of time and money, and how to interact with the wider civil society in which it lives. Some do this more intentionally than others. Some congregations focus their efforts inwardly, seeking to gather strengths and create programs for the support of their members. Some devote considerable time and money to supporting efforts in other parts of the country and the world, to support educational and medical missions, or transfer money directly to impoverished sister communities.

These benevolent qualities are by no means restricted to communities of faith. Many secular people and organizations care just as compassionately about promoting justice and healing. And we also can think of communities of faith that, despite the beautiful words of their liturgies, seem completely unaware of the failure and hypocrisy of their own actual practices. That criticism—that religious fervor sometimes hinders, rather than promotes, moral behavior—was in fact one of Jesus’s most frequent accusations against the religious establishment of his day.

But in thinking about the relationship between faith and money, we should consider how powerful the impact of religious congregations already is, and how much more powerful it could be if they reflected more deeply on their role as economic actors in their own communities. Instead of acting as a private society whose primary purpose might be seen as holding services indoors, out of sight of the wider public, or as a conventional non-profit that participates uncritically in the wider economy, they could embrace a huge opportunity to transform our economy.

Faith communities are, among their many qualities, gardens of the imagination, where participants are actively encouraged to dream about what a perfected life would be like. We cannot build what we cannot imagine. People have talked for thousands of years of the reconciled family of the human race, the place where the lion lies down with the lamb, the kingdom of God, which may exist primarily in the future, but is continuously attempting to break into present existence through the faithfulness of believers.

Dr. Martin Luther King and many other theologians and New Testament scholars have used the “beloved community” as a term to recapture Jesus’s idea of a reconciled humanity. Bill McKibben has spoken about an environmentally sustainable, economically generative, and politically just future that is “bright, beautiful, and interesting; complex, local, and interconnected.”[34]

The Hebrew prophets did not only speak with anger about the failures of the present but also about the hope of the future. The core theme of the Bible is that of renewal—no matter how badly promises have been broken, no matter how stubbornly injustice seems to have triumphed, no matter how much the moneychangers seem to rule the temple or how death seems to loom over the present day, the restorative power of God is always at work. The force of markets and money to determine almost everything about life will continue only as long as we surrender to it.

We spend so much of our time hiding from the world, hiding from the immensity of its profligate beauty, hiding from the implications of our mortality, hiding from the obscene cruelty that humans inflict on each other. How do we live in a world that has both the delicacy to nurture 26,000 varieties of orchids and the brutality that enslaves, rapes, and trafficks in girls in cities or boys on fishing boats that are hauling up our cat food?[35] How can we justify the destruction of the most beautiful and ancient parts of earth in order to satisfy the short-term whims of those who already have great wealth?

Our intention, mission, purpose in life does not need to be complicated. We can replace the dead totem of money that constricts our hearts with a living commitment to each other and to our world. We have many voices in our scriptures, in our culture, and in our communities to guide us with words and deeds. As the great Hebrew prophet Micah said,

God has shown all you people what is good. And what does the Lord require of you? To act justly and to love mercy and to walk humbly with your God.[36]

Everywhere around us we see signs of new invention and new life. Every morning we are called to embrace happily what is already within us and before us.

As the prophet Isaiah wrote jubilantly:

Forget the former things!

do not dwell on the past!

See, I am doing a new thing!

Now it springs up;

Do you not perceive it?

You, reading these words, have undoubtedly wrestled with the most pressing questions of how to live your life within your allotted portion of days. You have surely wondered how to live out your deepest beliefs in a world so dangerously enthralled by money. And you will be called upon, as a participant and a leader in whatever communities you engage, to witness to those convictions. The good news is that there is a path forward, rooted in grace.

The more you commit to the gifts of simplicity, balance, wisdom, and generosity, the more you will find peace. And as you do so, you will realize that as long as you hold breath you have both the profound obligation and the joyous opportunity to transform your life, your community, and your world into what you believe they should be.

Are you ready to embrace the next moments in that challenge—starting now?

END NOTES

1. Isaiah 58:6-7.

2. Luke 12:48.

3. The parable of the rich man and Lazarus (Luke 16:19-31), the parable of
the rich fool (Luke 12:13-21); the rich young ruler (Matthew 19:16-20).

4. “Consider the lilies, how they grow,” Luke 12:27.

5. On the balance of time, see Luke 10:38-42, the story of Mary and Martha.

6. There are more than fifteen versions of the phrase “they have ears but
they do not hear; eyes but they do not see,” such as “He sees many
things, but does not observe them; his ears are open, but he does not
hear” (Isaiah 42:18-20); see http://www.openbible.info/labs/cross-referenc es/search?q=Mark+8%3A18.

7. See, for example, the widow’s mite, the good Samaritan.

8. See, for example, http://www.newyorker.com/magazine/2014/08/04/mon ey-talks-6.

9. https://sciencebasedlife.wordpress.com/2011/07/25/extreme-engineer ing-the-boeing-747/.

10. http://www.fmi.org/research-resources/supermarket-facts.

11. David Hillier et al., Corporate Finance, European edition (New York: Mc Graw Hill, 2010), Part One, Chapter One, p. 1.

12. Pope Francis, Laudato Si.

13. “Transparency in Agricultural Supply Chains,”
https://www.sei-international.org/blog-articles/3377.

14. See http://fashionrevolution.org; and the video at http://www.trueactivist. com/this- vending-machine-sells-t-shirts-for-2-euros-but-no-one-will-buy-one-see-why/.

15. http://www.socialprogressimperative.org/blog/posts/gross-domestic-product
-inventor-s-clear-warning. See also Robert Costanza, Maureen Hart,
Stephen Posner, and John Talberth, “Beyond GDP: The Need for New Measures of Progress,” Pardee Papers, #4, Boston University, 2009.

16. http://www.goodreads.com/quotes/399387-anyone-who-believes-in-indef inite-growth-in-anything-physical-on.

17. http://conversableeconomist.blogspot.com/2012/01/robert-kenndy
-on-shortcomings-of-gdp.html.

18. http://unstats.un.org/unsd/demographic/products/socind/.

19. https://en.wikipedia.org/wiki/Genuine_progress_indicator. To use a . that of the gross profit and the net profit of a firm. The GDP measures all the positive inputs, and the GPI then subtracts the costs to society so that one can better understand whether the increase in GDP was worth it.

20. http://www.insee.fr/fr/publications-et-services/dossiers_web/stiglitzdoc
-commission/RAPPORT_anglais.pdf.

21. The Stiglitz Commission (note 20) also wrote: “Market prices are distorted
by the fact that there is no charge imposed on carbon emissions; and no
account is made of the cost of these emissions in standard national
icome accounts.”

22. Stiglitz Commission (see note 20). For a later assessment, see also Joseph
Stiglitz et al., “The Measurement of Economic Performance and Social
Progress Revisited,” OFCE N° 2009-33, December 2009. The follow-up
work for the effort seems to be taking place through the efforts of http:/
www.socialprogressimperative.org/data/spi/methodology.

23. http://database.globalreporting.org.

24. http://integratedreporting.org/wp-content/uploads/2013/12/13-12-08-
THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf.

25. Many thanks to Steven Lydenberg for clarifying this point.

26. Marjorie Kelly, Owning Our Future (San Francisco: Berrett-Koehler
Publishers, 2012), Kindle location 305.

27. Kelly, Owning Our Future, Kindle location 223.

28. Kelly, Owning Our Future, Kindle location 792.

29. Kelly, Owning Our Future, Kindle location 2750.

30. National Association of Housing Cooperatives, http://coophousing.org/
wp-content/uploads/2015/04/2014-NAHC-Report-final.pdf.

31. National Center for Employee Ownership, http://www.esop.org; for work
force statistics see http://www.dlt.ri.gov/lmi/laus/us/usadj.htm.

32. http://www.cesj.org/about-cesj/history-accomplishments/pres-reagans- speech-on-project-economic-justice/, quoted in Gar Alperovitz, What Then Must We Do? (White River Junction, Vt.: Chelsea Green Publishing, 2013), p. 34.

33. Gar Alperovitz and Keane Bhatt, “What Then Can I Do? Ten Ways to
Democratize the Economy,” September 2013; http://www.garalperovitz. com/what-then-can-i-do/.

34. Personal conversation with the author.

35. http://www.nytimes.com/2015/07/27/world/outlaw-ocean-thailand-fishing- sea-slaves-pets.html?_r=0.

36. Micah 6:8.

ACKNOWLEDGEMENTS

This book emerged out of the generosity of dozens of people with whom I had long conversations over more than two years. My first word of thanks goes to John Lindner, former associate dean at Yale Divinity School, who raised the need for a short book on faith and money directed to theological students and other people of faith, while we were traveling on a bus together all over Israel and Palestine. He included this idea in a larger proposal to the Lilly Foundation on behalf of Yale Divinity School, and I am grateful to the program officers and trustees who approved it. As the project took shape, I was guided by the support and vision of Dean Gregory Sterling and other senior staff at YDS, including James Hackney, Gail Briggs, and Tom Krattenmaker. I also am grateful to Jason England, Michael Ferguson, and David Baker, who together brought this book from manuscript into readable form.

I benefited from the thoughtful advice of many who read early versions of these chapters. These include students from both Harvard and Yale divinity schools, who met with me to talk about their interests and concerns. Professor Harvey Cox, a dear friend and America’s most creative and engaged theologian, invited me to participate in his graduate course on “God and Money,” a course of study that led to his most recent brilliant book, The God as Market. Four students from that course—Julie Chow, Chris Hampson, Kathy Lin, and Antwan Steele—gave me perceptive written responses that guided my revisions. Eloise Blandiau also jumped in at a key point with astute and important observations. Many thanks to all of these talented and thoughtful young leaders!

I received additional responses from members of my own faith community, St. James’s Episcopal Church in Cambridge, Massachusetts. John Gay, John Hixson, Nancy McArdle, and Tom Tufts set aside time after church for several Sundays in a row. Their considerate and insightful reactions could not have been more valuable.

I would not have been able to write this book without the help of an extraordinary research assistant, Patrick Kelly. Patrick tracked down facts, corralled his friends for comment, drafted many of the sidebars, and responded impeccably to my abrupt requests for obscure information from many time zones away. Patrick’s acute theological and practical sensibility, his creativity and persistence, his good humor and patience with my foibles, and his keen understanding of our intended audience proved invaluable at every step. His observation that we are all simultaneously teachers and learners, leaders and servants, stayed with me and shaped how I approached the whole project.

I want to thank the trustees of the Belfast, Maine, public library, where I wrote the first draft of the first chapter of this book. The existence of such a beautiful, sunlit space proved an inspiration and offered yet another reason why public institutions are such a powerful and egalitarian form of wealth.

My wife, Anne Tate, once again patiently listened to me as I rehearsed my ideas. She commented on every chapter with her elegant eye for style, content, and structure. She understood better than anyone what a challenge it was to try to compress ideas about two of the most vast domains of human thought into three short chapters. Her encouragement helped me press on to the end.

Whatever wisdom this book might contain came from my contact with brilliant and compassionate people across many fields, whose ideas have now merged into my thinking so deeply that I can no longer provide the proper attributions. And I give glory to God, whose spirit continues to radiate into the world and bring transformation and healing to so many. I always feel privileged to retell the stories and parables of Jesus, which remain crystalline in their beauty and power after twenty centuries. In my part of the country, fewer and fewer people are familiar with them, which I think is a loss for our spirit and our culture. I hope this book will prompt readers who know them less well to investigate this treasure trove of loving wisdom, even as I hope readers will point me to the texts that have most profoundly moved and guided them.

Now I hope that you, the reader, will take these thoughts and improve on them in both word and deed. Nothing inspires people more than observing others who are living out their deepest intentions and values, and, in today’s complicated and often tragic world, nothing today is more urgently necessary. Peace be with you all.