“Gregg lays out a careful and detailed argument for the proposition that, done well, financial endeavors can serve the common good,” says Adam J. MacLeod in a review of Acton Research Director Samuel Gregg’s most recent book For God and Profit: How Banking and Finance Can Serve the Common Good. MacLeod’s review at The Public Discourse, gives praise to Gregg’s book saying that anyone who feels called to the finance industry “can get quite a lot straight by reading this fine book.”
The review starts out by noting how well Gregg is able to explain the ins and outs of the finance industry so anyone can understand it. MacLeod says:
A major barrier to seeing this possibility is widespread ignorance of how finance works. Clearing away misconceptions is a delicate task, especially in a book for a general audience. One wants not to assume too much knowledge but also not to insult readers’ intelligence or good will. Gregg strikes the right balance as he walks through the fundamentals of economics and finance.
He examines the historical foundations of zero-sum economic thinking (which was founded in ancient experiences with zero-sum and exploitative economies), and how the rise of capital during the commercial revolution of the Middle Ages enabled widespread participation in economic growth. He explains financial practices such as short trading, the role that a government’s monetary policy has on inflation and unemployment, and much else. Throughout, he probes financial practices for their underlying logic and purposes. Readers will benefit from his insights, no matter how much economic knowledge they possess at the outset.
In the next session of the book review, MacLeod talks about some the moral issues associated the finance and the way that Gregg responds to them. He says:
Of course, systems of capital finance raise other problems. One particularly acute issue in our age concerns the separation of the ownership of businesses from their management and operation. Executives who run publicly traded companies take risks with other people’s money. Conversely, the shareholders often have no inherent interest in the business’s plan of action or the moral value of the particular goods and services that the business provides. Their interest is purely instrumental. Many of them are happy as long as the business turns a profit. In these corporate structures, unlike in family businesses and closely held corporations, there is no intrinsic connection between stakeholders and any common good of the enterprise, much less the common goods of the communities in which the business operates.
Gregg insists that these problems are not new. They have persisted “as long as there have been stock markets,” in fact since “the late-medieval and early-modern world through devices such as triple contracts.” And he observes that financial markets today spread wealth more equally than ever, giving millions of investors a stake in the world of finance. “This in itself is surely a good thing.” Yet he concedes that the cost of equality and wealth opportunities “may be more depersonalized relationships.” This is almost certainly true, and this cost begs for further examination.
In the last portion of the review, MacLeod discusses money and the way that Gregg thinks Christian’s should approach this topic:
The universal destination of material goods may strike non-Catholics as an artificial, unrealistic, or even oxymoronic notion. Furthermore, it seems anachronistic in the age of intellectual property and microfinance, in which human flourishing requires the liberation of creativity and productive labor more than access to material commons. Nevertheless, Gregg’s main point comes through clearly: Finance can play an integral role in meeting the requirements of distributive and commutative justice.
This role is described in the last chapter of the book, which concerns the “goodness of money.” Gregg acknowledges that that term will strike dissonantly many ears that are attuned to Christian and natural law teachings. Money is neither intrinsically good nor inherently evil, Gregg observes; it is an instrument. Yet, when it works well, it functions as no other instrument does, building relational interdependence and trust among those who participate in commerce, generating wealth and enabling charitable giving, and creating opportunities for the poor to lift themselves out of poverty.
You can read MacLeod’s full review at The Public Discourse here.