Posts tagged with: wealth

Urban prairie Detroit 2I wrote a bit about my short essay describing some of the principles and concepts at play concerning intergenerational ethics and economics. There are also important intergenerational cultural consequences following the Great Recession. A decade ago there was much concern about the rootlessness of current generations and the transience of the workforce. But that ability for workers to move quickly to new jobs in other cities and states has been undermined by the housing crash. Most anyone who bought a home in the last decade will not be moving anywhere anytime soon.

As Robert Bridges contends in a WSJ op-ed, “Coming generations need to realize that while houses are possessions and part of a good life, they are not always good investments on the road to financial independence.” The “ownership society” means something far different today than it did even a decade ago.

In her book How the West was Lost, Dambisa Moyo describes well some of the background leading up to the housing crash. One of the contributing factors was this cultural ideal of a “homeownership” society and resulting government policy to promote homeownership. She contends,

The direct consequence of the subsidized homeownership culture was the emergence of a society of leverage, one where citizen and country were mortgaged up to the hilt; promoting a way of life where people grew comfortable with the idea of living beyond one’s means.

She also judges that there are significant intergenerational implications:

Under the government guarantee system which propels the rapid appreciation of house prices, the only winners are those who can downsize (downgrade) their housing, or move to a different area, and buy a smaller (cheaper) place. Everyone else loses…. This ‘escalator’ effect continues until the time that the kids go to college. It’s a wealth transfer from the younger generation to the older generation as house prices become more expensive.

One of the effects of what Moyo calls “government guarantee system” is that resources (capital) was increasingly invested in homes that might have been invested in other, more productive, sectors.

An incisive piece by Roben Farzad explores why the aftereffects of the housing bubble are not likely to go away anytime soon. He quotes Doug Ramsey of Minneapolis investment firm Leuthold Group, “a student of asset bubbles,” who says, “The housing decline will be a long, multiyear process, and the multiplier effect across the economy will be enormous.”

Jonathan Smoke, head of research for Hanley Wood, a housing data company, argues, “We’ve gone through a period when we should have been tearing down houses. The supply of total housing stock is beyond what is necessary.”

Why then are we still celebrating “new housing starts” as signs of a rebounding economy rather than a continuation of misplaced investment and cultural priorities?

In his recent lecture “Christian Poverty in the Age of Prosperity,” Rev. Robert Sirico reminded us that “We should not minimize the demands of the scripture but we should embrace them.” The quote was in context of caring for the vulnerable among us. He also talked about the need to be wholly devoted to the Lord despite the distractions of technology and prosperity in our midst.

At the same time, Rev. Sirico also admonished religious figures who offered superficial exegetical statements condemning all wealth. A great example being a topic I previously covered on the PowerBlog, “The What Would Jesus Cut?” campaign. In my devotional reading this week, I came across a very appropriate quote by 17th century English Puritan Jeremiah Burroughs. The words compliment the pastoral tone Rev. Sirico set during the lecture, and reminds us just how woefully inadequate superficial pronouncements are when it comes to the gospel call. Burroughs words are below:

Suppose a man had great wealth only a few years ago, and now it is all gone-I would only ask this man, When you had your wealth, in what did you reckon the good of that wealth to consist? A carnal heart would say, Anybody might know that: it brought me in so much a year, and I could have the best fare, and be a man of repute in the place where I live, and men regarded what I said; I might be clothed as I would, and lay up portions for my children: the good of my wealth consisted in this. Now such a man never came into the school of Christ to know in what the good of an estate consisted, so no marvel if he is disquieted when he has lost his estate. But when a Christian, who has been in the school of Christ, and has been instructed in the art of contentment, has some wealth, he thinks, In that I have wealth above my brethren, I have an opportunity to serve God the better, and I enjoy a great deal of God’s mercy conveyed to my soul through the creature, and hereby I am enabled to do a great deal of good: in this I reckon the good of my wealth. And now that God has taken this away from me, if he will be pleased to make up the enjoyment of himself some other way, will call me to honor him by suffering, and if I may do God as much service now by suffering, that is, by showing forth the grace of his Spirit in my sufferings as I did in prosperity, I have as much of God as I had before. So if I may be led to God in my low condition, as much as I was in my prosperous condition, I have as much comfort and contentment as I had before. – Jeremiah Burroughs, from his book Rare Jewel of Christian Contentment

Below is the full-length version of “The Rich Young Man: The Law Versus Privilege,” an essay published in the winter 2011 Religion & Liberty. John Kelly’s essay was shortened because of space limitations for the print issue. He was passionate about sharing the full version, which he edited himself for readers of the PowerBlog. Mr. Kelly, a financial advisor, also authored a piece in 2004 for Religion & Liberty titled “The Tithe: Land Rent to God.”

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THE RICH YOUNG MAN: THE LAW VERSUS PRIVILEGE

by John Kelly

As Jesus conducted his public ministry, he drew considerable crowds. Within the throngs were, of course, the peasants of the neighborhood, along with longer-term disciples. There were many who wished to see miracles, many who wished to hear his sayings of peace, love, hope and promise. There were those who wanted reinforcement of the Law and those who wished to see some of the Law abandoned. And within all these groups were many who were troubled by personal doubt.

Jesus spoke with these people, engaging them, answering their questions, asking them questions, all the while proclaiming the authority and the efficacy of the Law. He said, “Do not imagine that I have come to abolish the Law or the Prophets. I have come not to abolish – but to complete them.” He then goes on – he’s trying to make sure his listeners understand: “In truth I tell you, till heaven and earth disappear, not one dot, not one little stroke, is to disappear from the Law until all its purpose is achieved.” (Matthew 5:17-18 – NJB)

Some of Jesus’ most engaging images come from these conversations. Rich and poor, titled and powerless, legalists and apostates, disciples and strangers all had encounters with Jesus that fleshed out for them his view of the Law. However, our lack of knowledge regarding the economic, political and cultural environment in which Jesus lived and preached sometimes hampers our understanding of his message.

One of the more famous of these encounters was with the rich young man. This story is found, in almost identical versions, at Matthew 19:16-22, Mark 10:17-22 and Luke 18:18-23. He approached Jesus and asked what was necessary to be saved. “Good Master, what must I do to inherit eternal life?” Jesus replied that the young man should keep the commandments. “I have kept all these,” stated the rich young man, “What more do I need to do?” Jesus said to him, “If you wish to be perfect, go and sell your possessions and give the money to the poor … then come, follow me.” This was too much for the young man. Scripture says that he “went away sad, for he was a man of great wealth.”

This story seems too hard for most of us. What is fundamentally wrong with being rich? Preachers try to make sense of this passage by assuming that the rich young man was too materialistic, and that the story is a warning to us about that failing. That much may be true, however, that interpretation is about the young man’s reaction, not about Jesus’ words. Jesus instructed him to sell everything he had and give it to the poor. Why? (more…)

Blog author: jballor
posted by on Tuesday, October 12, 2010

Last week I linked to Joe Carter’s On the Square piece, “What the Market Economy Needs to be Moral,” challenging his view that we need a “third way.” He has since clarified his position, and noted that what he wants is not really an alternative to the market economy but an alternative grounding, view of, and justification for the market economy. This is a position with which I wholeheartedly concur.

Today I want to highlight something else from Carter’s helpful piece. Carter first cites an anecdote from Andy Morriss:

One minister recounted how another minister had told him how God had answered his prayers and healed a headache the second minister had before a major sermon. The first minister commented on how arrogant the second minister was, to demand a miracle to cure his headache when God had already provided aspirin. Surely it is arrogant for us to pray for miracles to relieve drought and poverty when God has already handed us the means to do so—markets. Again, however, we rarely hear moral criticism of those who refuse the miracle of the market and insist that God (or someone) perform the far greater miracle of making economic planning work.

Carter then goes on to note:

This raises an interesting question for Christians: Does God’s sovereignty not extend to markets? If so, why do we expect God to circumvent the institution he has created and provided for our well-being by providing a “miracle”? The primary reason, in my opinion, is that we no longer think theologically about economics.

These two quotes bring out one of the most intriguing points in Carter’s piece. The point is that we are to appreciate the market for what it is, a God-given institution in which human beings created in his image relate to one another for the betterment not only of themselves but also of each other.

Think about the implications of Morriss’ anecdote for a moment.

God works through human means…this is his regular or normal way of acting in the world, through secondary causes including human action. We need not always pray for miraculous healing, but rather that God empower skilled doctors and nurses to heal us. We need not always pray that manna fall from heaven, but rather that God enable farmers to farm.

In his important book, Work: The Meaning of Your Life–A Christian Perspective, Lester DeKoster makes programmatic use of this reality in an interpretation of the parable of the sheep and the goats. As DeKoster writes,

The Lord does not specify when or where the good deeds he blesses are done, but it now seems to me that Jesus is obviously speaking of more than a vocational behavior or pastime kindnesses. Why? Because he hinges our entire eternal destiny upon giving ourselves to the service of others—and that can hardly be a pastime event. In fact, giving our selves to the service of others, as obviously required by the Lord, is precisely what the central block of life that we give to working turns out to be!

So, in the case of the sheep who gave Christ something to eat when he was hungry, we find that

God himself, hungering in the hungry, is served by all those who work in …

  • agriculture,
  • wholesale or retail foods,
  • kitchens or restaurants,
  • food transportation or the mass production of food items,
  • manufacturing of implements used in agriculture or in any of the countless food-related industries,
  • innumerable support services and enterprises that together make food production and distribution possible.

DeKoster goes on to outline similar lists for those who regularly provide water to satisfy the thirst of others and those who provide clothing for those in need. These three are representative, he says.

The Lord’s choice of the kinds of services that are instanced in the parable is carefully calculated to comprehend a vast number of the jobs of humankind. The parable is about the work needed to provide the sinews of civilization. Doing such work, the Lord says, is serving his purposes in history, and in exchange he rewards workers far beyond their input with all the abundance of culture’s storehouse.

As I’ve noted previously, this view of work is transformative for how we approach views of wealth and poverty. We begin to finally be able to see work not just as a way to get a paycheck, but as the way God has ordained for us to truly serve others and thereby to serve Him as well.

Blog author: jballor
posted by on Wednesday, September 8, 2010

There has been some good discussion over the past week and Labor Day holiday about the nature of work and its role in our lives (particularly here).

The first thing I’d like to point out about Lester DeKoster’s claims regarding work is that he has in mind, at least partially, the classical Greek philosophical distinction between the active and contemplative life, particularly its disdain of manual labor. You can get a hint of this from the video short, “How did Plato and Aristotle Justify Slavery?” Some people are simply born to work with their hands and be governed by those who are wiser and able to think, take responsibility for society, and so on.

It’s with this distinction in mind that DeKoster and Berghoef write,

The forms of work are countless, but the typical one is work with the hands. The Bible has reference to the sower, to the making of tents and of things out of clay, to tilling the fields and tending the vine. Hand work makes visible the plan in the mind, just as the deed makes visible the love in the heart. While the classic Greek mind tended to scorn work with the hands, the Bible suggests that something about it structures the soul.

WorkIn his book Work: The Meaning of Your Life—A Christian Perspective, as some comments have noted, DeKoster explicitly takes on Pieper’s thesis that leisure is the basis of culture. DeKoster writes,

The writer who speaks of Leisure, the Basis of Culture (Josef Pieper) is confused, even though he can quote some ancient Greek thinkers in his support. Work is the basis of culture. Leisure cultivated as a way of life produces no harvests but only dilettantes—drones that absorb culture without sacrificing for it, merely thieves of others’ sweat.

The disdain of manual labor, literal manufacturing, and the celebration of leisure, contemplation, rest, are in this way correlated.

We get a sense of why this is so in DeKoster’s distinction between work and play. He defines work as that which we do for others, but play as “that which is done to please or serve the self.” Thus he observes,

Play may absorb much effort, long planning, and lots of time. But so long as the end in view is the satisfaction of the self, such effort cannot be called work. This is true whatever the form of play, whatever its esteem in the community as compared with work. What the self heaps up in time for its own use does not carry over into eternity, and burdens the soul which is thus occupied.

Play may be indulged as recreation, that is as preparation for doing work better when the worker has been so refreshed.

This is, in many ways, a more helpful distinction than Pieper’s juxtaposition of work and leisure. For after all, work in DeKoster’s sense is really much more than what we do for a paycheck. It includes all of the things we do primarily for others. Service in its various forms is work, including that work done by mothers and fathers for their children inside the home.

Dietrich Bonhoeffer’s views on work and culture complement DeKoster’s in that his social ethical structure makes no basic distinction between work and culture [Bildung]. Each term is used essentially synonymously to cover the estate of our interrelations along with the church, family and marriage, and government [Obrigkeit].

We’ve pointed to play as one of the concepts that limits work. But some of the discussion has also pointed to a kind of sacred/secular distinction, that between worship and work. And here the traditional pairing of prayer and work comes to the fore.

In his Life Together, Bonhoeffer has a helpful way of putting how prayer and work are distinct and yet relate intimately. He says,

The unity of prayer and work, the unity of the day, is found because finding the You of God behind the It of the day’s work is what Paul means by his admonition to ‘pray without ceasing’ (1 Thess. 5:17). The prayer of the Christian reaches, therefore, beyond the time allocated to it and extends into the midst of the work. It surrounds the whole day, and in so doing, it does not hinder the work; it promotes work, affirms work, gives work great significance and joyfulness. Thus every word, every deed, every piece of work of the Christian becomes a prayer, not in the unreal sense of being constantly distracted from the task that must be done, but in a real breakthrough from the hard It to the gracious You.

Prayer is not conflated with work in this account, but rather provides work with its limits, its boundaries, and orients it towards its ultimate end in God.

For more on Bonhoeffer’s affirmation of work as an order of divine grace in the context of global Lutheranism, see “Lutheran World Federation Misses the Mark on Work and Wealth.”

And for the rest of this week you can pre-order the new paperback edition of Lester DeKoster’s Work: The Meaning of Your Life—A Christian Perspective at a special Labor Day discount. Just add the book to your cart to see the discounted price, or download it to your Kindle reader right now.

Today’s NYT has an op-ed by David Brooks that’s been getting good cyber-circulation, “The Gospel of Wealth.” Brooks highlights in particular Southern Baptist pastor David Platt, who is touted as the youngest mega-church leader in the country. Rebelling in many ways from the new traditions associated with mega-churches, Brooks says Platt inhabits the nexus between “between good and plenty, God and mammon,” spirituality and materiality, and that Platt “is in the tradition of those who don’t believe these two spheres can be reconciled.”

Here’s what Brooks concludes: “Americans will not renounce the moral materialism at the core of their national identity. But the country is clearly redefining what sort of lifestyle is socially and morally acceptable and what is not. People like Platt are central to that process.”

It’s true that the call to follow Jesus is a radical call. But it is false to juxtapose that radicalism with a demarcation between those areas of life in which one can be faithful to him and not.

What we can really hope for is that each of us will be obedient to Christ in our own callings, whether in plenty or in want, in abundance or scarcity. In the realm of economics, for most people that will mean that they act responsibly with their money, avoiding the temptation to live in the midst of crippling debt and seeking meaning in buying and identity with what we purchase and consume. This is what I’ve called the “fourth” pillar of the new economy, “Spend all you can.”

But as Brooks points out, the pursuit of sustainable wealth and profit in the midst of responsible giving and saving isn’t at all a new idea. It’s only the excessive spending and unsustainable consumption of recent decades that make it seem new.

Acton University faculty member Jeffrey Tucker has an insightful essay over at InsideCatholic.com, “Why Catholics Don’t Understand Economics.”

Throughout the piece, Mr. Tucker employs a distinction between scarce, economic goods, and non-scarce, infinitely distributable, spiritual goods:

I have what I think is a new theory about why this situation persists. People who live and work primarily within the Catholic milieu are dealing mainly with goods of an infinite nature. These are goods like salvation, the intercession of saints, prayers of an infinitely replicable nature, texts, images, and songs that constitute non-scarce goods, the nature of which requires no rationing, allocation, and choices regarding their distribution.

None of these goods take up physical space. One can make infinite numbers of copies of them. They can be used without displacing other instances of the good. They do not depreciate with time. Their integrity remains intact no matter how many times they are used. Thus they require no economization. For that reason, there need to be no property norms concerning their use. They need not be priced. There is no problem associated with their rational allocation. They are what economists call “free goods.”

[...] This is completely different from the way things work in the realm of scarce goods. Let’s say that you like my shoes and want them. If you take them from me, I do not have them anymore. If I want them again, I have to take them back from you. There is a zero-sum rivalry between the goods. That means there must be some kind of system for deciding who can own them. It means absolutely nothing to declare that there should be something called socialism for my shoes so that the whole of society can somehow own them. It is factually impossible for this to happen, because shoes are a scarce good. This is why socialism is sheer fantasy, a meaningless dreamland as regards scarce goods

The whole article is worth reading (there is even a good St. Augustine reference)

This week I’m attending Mises University, one of the largest and most rigorous summer courses in the Austrian School of economics (or “reality economics,” as my friend Michael McKay likes to call it).

Among the various lectures, there was one in particular that struck me as particularly relevant to the work of the Acton Institute. Peter Klein, professor of economics at the University of Missouri, delivered a presentation on entrepreneurship, a large part of the focus of his academic work.

Dr. Klein approaches the subject of entrepreneurship from the more realistic Austrian perspective. Rather than viewing people as examples of the homo economicus, as almost robotic, quantitatively-driven machines, Dr. Klein views human beings as unique and free actors. When we act, we do so under conditions of time and uncertainty. Though every human action presupposes cause and effect, there is no guarantee that our instincts are correct or that our efforts will pay off. In this way, every one of us, whenever we choose some action, is a kind of entrepreneur. In the face of uncertainty, we have an intended – but not guaranteed – result of action.

Combine that with the Austrians’ very realist take on production: production is not some kind of abstract graphical function, but the concrete act of taking a natural resource (e.g. some wood, a stone,  some metal ore), and using one’s labor – almost investing a part of oneself – to physically transform it.

In a very broad sense, we all participate in this two-sided entrepreneurial action: actively and consciously transforming the world around us, and doing so in the face of uncertainty and imperfect knowledge.

In a much more specific sense, this activity applies to the people we would usually call entrepreneurs (Ludwig von Mises called them, “entrepreneur-promoters”). These are the businessmen we all know: the small-business owner, the investment banker, the risk-taker. These are individuals whose entrepreneurial spirit in a special way exceeds those of everyone around them. They are the ones willing to take on greater risk, confront greater uncertainty, and make more difficult decisions.

In any case, I find that this realistic description of the role of entrepreneurship fits extremely well with the theology in The Call of the Entrepreneur. In the film, we learn that the entrepreneur is a “co-creator”: He  participates in the act of transforming raw materials and natural resources into products for consumers; but the entrepreneur does so by investing time and energy into the production process. And creativity and imagination play an indispensable role in this process of co-creation.

I remember a kind of feeling of awe when this thought dawned on me during Dr. Klein’s lecture. Here we find yet another example of how the market process, when understood and employed correctly, is not simply a morally indifferent result of choice, but a morally positive thing. Society and its consumers are made better off, and both the laborer and the entrepreneur are reminded of their human dignity as they participate in God’s work of fashioning the world.

In this week’s Acton Commentary, “Lutheran World Federation Misses the Mark on Work and Wealth,” I reflect on the recently concluded general assembly of the Lutheran World Federation, held in Stuttgart. The theme of the meeting was “Give us today our daily bread,” but as I note, the assembly’s discussion of hunger, poverty, and economics lacked the proper integration of the value, dignity, and importance of work.

As I contend, work is the regular means God has provided for the maintenance of our physical needs. And work that is connected to the larger human community becomes increasingly oriented toward the service of others and productive of civilization. Lester DeKoster defines civilization in just this way, as

goods and services to hand when we need them. There are countless workers, just like ourselves—including ourselves—whose work creates the harvest that provides each of us with far more than we could ever provide for ourselves.

These words come from DeKoster’s little classic, Work: The Meaning of Your Life—A Christian Perspective, newly available in an updated second edition.

The omission of considering work in relationship to the development of wealth, globalization, and civilization is endemic to the larger mainline ecumenical movement, which I examine in greater length in my book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. In that book I look especially at the outcome of the previous LWF gathering in 2004.

The trend observable in LWF recent history looks to continue unabated. The newly appointed LWF general secretary, Rev. Martin Junge of Chile, has the pursuit of “economic justice,” conceived largely of opposition to globalization, as a high priority. (Full story after the break).
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Blog author: jballor
posted by on Thursday, January 14, 2010

The Big Picture blog has some remarkable images from the last 48 hours in Haiti (warning: there are disturbing images among the collections).

In the wake of the disaster, many are looking back at Haiti’s history to see what has kept this nation in generations of economic despair. As the AP reports:

Two years ago, President Rene Preval implored the world to commit to long-term solutions for his nation, saying a “paradigm of charity” would not end cycles of poverty and disaster.

“Once this first wave of humanitarian compassion is exhausted, we will be left as always, truly alone, to face new catastrophes and see restarted, as if in a ritual, the same exercises of mobilization,” Preval declared.

Indeed, after the early days, weeks, and months following the disaster pass, the “paradigm of charity” needs to give way to the “paradigm of prosperity” if Haiti is to ever achieve its potential.