KINGDOM VALUES AND ECONOMIC MODEL OF DEVELOPMENT: FACING THE ISSUE OF POVERTY AND WEALTH

I see that the overall logic of the discussions about overcoming poverty assumes, or is framed within, the logic of free market economics.  Reading some papers and reactions to them, I discover a tremendous “optimism” with this way of doing or promoting projects, business or activities without much reflection about systemic matters such as current trends in market economy are not much under discussion.

 

            Coming from Latin America – as a contrast with North Western “developed” countries – we are more concerned about globalization and neo-liberalism as a critical issue to explain the mass poverty problem, inequity and generalized social insecurity and unrest. So, I am more interested in seeing “poverty and wealth” starting off from a framework which seeks first to understand the global socio-economic situation, and Christian mission with regard to that reality. Afterwards, to take the matter of economics and business trying to understand some of its correlated critical features. All together should conform a coherent framework of mission working towards engineering social changes which will bring real benefits to those who have less privileges. 

 

 

1. On economics and biblical paradigms

 

            Economics is a fundamental sphere in the process of social development and without it human existence could not be feasible. As a cultural being, man has developed the institutions, structures and social systems throughout history to satisfy their multiple needs and fulfill his existence as a being created with possibilities of reaching fulfilment. Thus, in politics, economics, education, art, religion, etc, society has advanced from the most elementary forms to the most complex developments found in modern times with socioeconomic interrelations at a world scale. From a scriptural perspective,human life should be orientated by specific values, the values of the Kingdom of God.Therefore, any aspect of  social life, must be evaluated in the light of such criteria.

 

            According to Biblical Anthropology, since the Fall, human endeavor is characterized by ambiguity . All that man does has a dual expression, whether he is alone or in public, in what is small as in what is macro, in what is secular as in the religious sphere, in what is partial as in what is systemic. Due to the common grace that reaches all creation, we see the constructive signs of human craft and creativity;  because of the autonomous project of man with regard to the will of God, we see the sinful, destructive and alienating signs of his actions. Therefore, neither political nor economic activities can escape the judgment of the divine perspective, and neither can the pro-active posture of believers trying to transform such activities and spheres nearer to the ideal of scriptural values.

 

We treasure the virtues and values of Scripture. In the Old Testament – the values most promoted by Christian entrepreneurs are perhaps discipline, hard work, wisdom(“go to the ant you sluggard…” Prov. 6.6 NIV, etc., etc). I don’t know if  Christian businessmen  emphasize enough honesty, solidarity with the needy; even less the strong prophetic tradition of justice and strong confrontation of slavery and exploitation. Perhaps too, implicitly they are against the affirmation  that “the earth is the Lord’s” and we are simple stewards – not private owners with unrestricted rights;  and I am sure, that there has been a total rejection of the need of a periodic systemic and paradigmatic  reordering of society for equity and shalom exemplified in the Jubilee.

 

However, acknowledging  the treasures of the Wisdom literature and other parts of the OT, for Christians  the word of God should be interpreted in the light of the New Testament values,  centered in the Gospel and the person of Christ, “who being rich became poor”, who chose to be born in a manger and to die in a cross, who said “we can not serve God  and Mammon” at the same time, who warned against the man “who stores up things for himself but is not rich towards God”(Luke 12: 21 NIV), a real warning about the attitudes of anxiety of the gentiles(Mt. 6: 25-32) pursuing material accumulation (“Soul, you have many  goods laid up for many years; take your ease; eat, drink, and be merry” Luke 12:19  WL)   perhaps to secure the rest of their lives and several generations that will inherit them. Instead, He taught  us “ to seek first the Kingdom of God”, that “blessed are those who struggle for justice” and “it is better to have treasures in Heaven where moth and rust not destroy”(Matt. 6:20 NIV).  Or, coherently with the gospels, the Pauline counsel of being satisfied with what is basic for sustaining life and not to put our confidence in material riches which are  uncertain(not real) but to be rich in good works, helping other in their needs(which is a solid base)(I Tim. 6: 8, 17-18) “…Then, there be equality, as it is written: ‘He who gathered much did not have too much, and he who gathered little did not have to little’ ”(2 Co. 8: 14-15).

 

If we think that Christ, his person, actions and teaching  encapsulates what should be the ideal of the human race, then we should see in him the paradigm to inspire personal and social life. This includes family, politics, economics and religion. If we discover in Scripture a basic design, an hermeneutical key, this is Grace. How to build and judge economic systems which reflects grace and all the Kingdom values and virtues that flow from His person, “grace upon grace”? This applies to work, relation to natural and human environment, use of resources, production, commercial interchange, maintenance of life, cultural development, within the complexity of the present interrelated world which has much suffering, and like in older times operates under rationalities and power structures to maintain  the world as it is.

 

2.  “Free”(deregulated) market economy versus a more coordinated and planned economy

2.1                 The stock market, the “kernel” and dominant sphere of the present market economy and its dubious ethical nature

A first thought in this part  is to say how distant is this kind of economy – stock market economy – from the purpose of  economics in its original meaning, understood  as the management of the household(oikos), the domestic administration of the home. How distant for the majority of  populations of the world, the poor, for whom work is hard toil, “with the sweat of their forehead”. Evidently, such kind of economics as managed in the stock market cannot be understood by the common citizen of the majority of the countries of the world, whose their lives are decided in these “casinos” and by their omnipotent owners.  Although it seems that in those “developed” countries they are trying to teach a “culture of petty shareholders”, this is mainly because the interest in defending the system where they have power and dominate; not so much to benefit the later but to use them to pressure and impose a consumerist system to the rest of the world.  

 

            In theory, it is said that the stock market is a perfect market. This, under the assumption that the following requisites are accomplished:

-          Each investor knows the best price at which he can buy or sell.

-          Each participant has the same access to the relevant information

-          No operator has the power to influence in the prices of assets, holdings, shares, 

bonds, etc[1]

 

However, we all know that in real life it isn’t a “perfect market”, due to especially privileged information. Then, participants are not under equal conditions. Some use of these privileges or reserved information as guides to operations that conduce for some benefit at the cost of the ignorant. Speculation becomes rampant and the unethical nature of the process becomes evident.

 

When reading manuals and information about the stock market, it appears as a “rational” construction according to economic laws of investment and profitability. It might be that according with the complexity of the process mathematical matrixes are used to produce indexes, forecasts and recommendations of investment. However, observing factual behavior, irrationality and speculation appears that converts the system in a betting shop and a “den of iniquity and thieves”. There is a saying in science (from Physics) “ Matter is not destroyed but transformed”. Those speculators and thieves suck the blood of those who have worked: the earnings of someone sacrificed life, are robbed in a dirty trick of the gamblers of the stock market. The “blood” of some appears in the pockets of others.

 

            “How to take over a public company” and “ How to make your shell company into a go-go stock in ten lessons” are  the title an a subtitle of  a chapter of  the book  The key to making money in the New Stock Market by Luke Johnson & Richard Roberts (London: George Weidenfeld and Nicolson Limited, 1988).  I want to transcribe some excerpts of this chapter:

 

The stock market is primarily a system for industry to raise finance, and for individuals to invest in industry. In this sense the stock market fosters commercial growth and so creates wealth, and provides a return on savings invested in it. But the stock market is also a vehicle for certain individuals to enrich themselves. In this context, operating companies can be seen as a career in itself. (the underlining is mine). [2]

 

…It is important to realize that a shareholder might have a holding of only 5 per cent in a company and still control the board and the business…[3]

 

( therefore) …Once you have acquired a controlling interest  in shell, get appointed to the board. Contact the existing directors and say that you expect to be given at least two non-executive seats on the board in acknowledgement of your serious investment in the company. If they cooperate, fine. If not, threaten to call and EGM, and put forward a resolution expressing no confidence in the board, and asking to resign…

 

As soon you get appointed to the board, start harrying the executive members of the board, making suggestions about how you could change things for the better and improve the company’s dull trading performance. Identify the most robust and hostile board members and aim to have them kicked out first, to remove opposition….Privately win round the weaker board members by offering them personal job benefits if they cooperate. Then organize a coup against the resisting members, out-vote them at the meeting, and demand that they leave. Once the independent members are gone, keep the puppet members while useful or until better creatures come along. [4]

 

            A real manual of greedy “ethics” with no scruples, associating business and stock market. However, thinking in the healthier investors, they also succumb to the utilitarian and concentrating logic of the market. The financial capital, the boss of world economy, has no interest in coherent processes of development in countries where the investment is done, where the human factor – labor – or social services like education, health or basic infrastructure have a priority. Capitals are moved from one place to another where profitability is best; volatility is its intrinsic nature, the result is thus social insecurity and social unrest. If there is pressure from trade unions for better salaries or from the state for payment of more taxes to promote social development, real bribery happens threatening  to move the capital to other side of the planet.[5]

 

Sometimes “robbers steal from robbers”, but the most of the times, they suck the blood of innocent investors. Political threats, fears of whatever kind could be invented, sexual affairs of  important politician holding executive power, all this is a matter for gaining or losing, according to those privileged of knowing the hidden information and agenda of what is to happen. The many cases we have heard in the last times show the putrefaction of the system, which led to the generalized economic world crisis of the end of this first decade of the new century. A climax clearly announced by a common behavior pattern from top companies.  See for instance the report “Executive Excess 2002: CEOs Cook the Books, Skewer the Rest of Us” of the Institute for Policy Studies and United for a Fair Economy[6].

 

(Mis)using some Proverbs we can not assume the logic that mass poverty is product of laziness or lack of stewardship on the part of the poor. According to history, more could be argued to causes of pillage through conquest and invasion, and systemic slavery; to kings and “lords” against the many Nabots (I Kings 21: 1-19), to corruption within nations  sustained within a legalized world system of accumulation that allows and stimulates that pillage.  To mention a current example, how difficult is to explain to a peasant who understand that he needs to work hard – “with the sweat of his forehead”-  to obtain  the fruit of the earth to survive and to feed his family, yes how difficult is to explain him that the prices will fall and he will not cover the costs of his work, because there was speculation by the “smelly big flies” of the stock market whose motto is “know the chaos and you can be rich”. But the confusion  that exist is to believe that these “big flies of the financial world” are rich because  “they work hard” and have more “wisdom” than other  “a 100 times wiser than such poor and miserable peasant”; and that the future of the world and the poor are in their hands and decisions.  

 

If we assume that the world need to convert to the Lord, to the ways of the Kingdom, persons and their evil creations ¿What is wrong with assuming that the present economic system is full of evil? Why consecrate  a system of accumulation where most of the studies of specialized world organism tell us that they have not promoted equal opportunities for all and what is being generating is more and more concentration of wealth? If history has advanced from systems of slavery  to more freedom and better conditions of life,  why try to maintain the present system as opposed to a less slaving one? Why after discovering pus in the system (Enron, Exxon, and many other corporations in connection with the stock market) try to defend this advocating that “because the 5% are bad, not all of the 95 % of the rest of the system is also bad”(last president Bush). Then, how is the situation?. American believers affirm they live every time in a more pagan society –USA- which needs conversion, but then  somebody argues(Bush) that   95 % of their businesses are like if were managed by “saints” with a  “holy behavior”[7].

 

 

2.2                The moral force and rationality of the socialist ideals, yet.

 

In the churches we labor hard, donate our time, create and invent, don’t want to be paid for “something for the Lord”, don’t want to use our brothers to promote us, or ever think that we want to take advantage of them to enrich us materially and so forth. Can we not bring this paradigm of values to the market place so as to change the system? Why defend that the market can function only under the savage competitiveness of its “greedy values”? This inevitably conduces us to think in the need for a coherent global model of development for society where first, the kind of business we want to promote should incarnate kingdom values, and flow into, if we don’t want to arrive to the vacuum, a kind of society which also should represent those principles and values. To act differently is to fall into confusion and contradiction of perspectives.

 

 In our human body, does the head or brain ask more food or energy supplies (although each organ needs specialized substances) – in spite of the significant role it has in our whole body and person-  than other organs or part of the body?  This meaningful representation  of the Church by Paul illustrates the kind of relation that the new humanity must represent: service within the plurality of gifts and capacities. Can we built a social system for mature persons inspired by the values of  the Kingdom of God? I would say that, the values of the Kingdom are more of a solidarity type, without negating freedom. Then, we should endeavor to reform our social systems to a kind of society more akin to those values. We resist to think that the cross is not the symbol that encrypts the way and that the “utopian” ideal of the Kingdom of Heaven  is not the engine of history, pulling up this world to more justice and equity and welfare for all. Without any doubt, with the apostles as with the Church Fathers, our conception of society is one with the freedom of the Spirit and human beings, but more of a socialist type, a more rationally planned one for the sake of all.(“Didn’t it belong to you before it was sold? And after it was sold wasn’t the money at your disposal? What made you think of doing such a thing? You have not lied to men but to God.” Acts 5: 4  NIV) Can the economy be managed in a more planned and rational way to redistribute welfare, and to avoid excessive enrichment through the system?

 

            Joseph Stiglitz says that the answer Socialism provided to the old question of inequality and the appropriate balance  between the public and private spheres, according to the present historical situation, appears as “false”(especially for the lapse of Eastern Europe). But, if Socialism functioned in false or at least in an incomplete manner, as an economic theory, it was also based in ideals and values, some of them of a transcendent nature. They represented the search for a more egalitarian and humanitarian society. Therefore, as leading nations of the socialist tradition are opening relations with capitalist world and market, it is important to keep in mind the ideals that motivated the many thinkers and founders of this tradition. Stiglitz sees as a more constructive example  in the case of China, an enormous country still rooted firmly in socialist principles, which is opening in a more controlled way to capitalist world;  than the case of Russia with its uncontrolled opening which has generated an undisciplined situation with the emergence of strong wealth concentration, “mafias” and many other of typical vices of open market economy.[8]

 

 To decide for the option of a more socialist type of society does not means to end with freedom and market. In a work previously quoted, Stiglitz[9] says: It is important to pose the problem correctly. The matter is not to oppose “market” versus “state”, but the appropriate balance between market and state control. We cannot assume the false and irrelevant paradigm of “perfect competitiveness” when in fact the market presents a costly and imperfect information,  imperfect capital markets, imperfect competitiveness.

Indeed, as Amartya Sen[10] has remarked, we can not be against interchange which is intrinsic to human nature and relations, included  gifts, services and products, and therefore the mechanism of the market.  Then,  if freedom is fundamental and the basis for “sound” development, it should be equitable for all. What is happening at present is a persistent exclusion of vast segment of population who have no access to the benefits of this society orientated by this market economy. To add to the many imperfections of this market economy, an immensely imperfect place of opportunities for all.  However, if the marginalized have the adequate social opportunities, individuals, families and groups can shape their own destiny and help each other to do so. Social opportunities, in the form of education and health facilitate economic participation. Economic facilities, in the form of opportunities for production and commerce, will help to generate personal and social economic development. Therefore, for Sen, the lack of equitable and fair participation in the market, given the many restrictions and present arrangements, restriction to freedom(seen as lack of opportunities) to participate in the market of labor and services is a form of maintaining people tied up and in slavery. No wonder the impatience and social unrest, and the importance of battles in many poor countries, as have been the many revolutions in history, including the American Civil War, the French Revolution or the Latin American Liberation Wars of the 18th and 19th Centuries.

 

Effectively, thinking in radical solutions in history to improve social conditions, social revolutions comes to our mind. These have happened along the centuries and have promoted change. However,  it is typical for those who now are accommodated  – although they themselves have passed through difficult situations, even through an act of force to defend or establish their rights – not to imagine that others need also to go through that process because situations of injustice continue to exist. That they need to confront and root out through force those unjust structures and relations that are enslaving them, confronting again to the “accommodated” within the new system.  We know that revolutions can be bloody, and like a real hurting social whip. However, is this the kind of processes wanted by those who now have the power and means, and who do not want to understand by dialogue and voluntary change that a new kind of social and juridical order is needed for more equity, justice and freedom for all?  Let business and economics  – micro, medium and macro – be a voluntary means to change the poverty situation of the world, but within a coherent  process of striving for a new world and social order, according with the Gospel values.

 

 

 

 

 

[1] Ver Patricia Crespo,  Invertir y Ganar en la Bolsa. Barcelona: Gestión, 2000, p. 22

[2] Op. cit. p. 16.

[3] Idem.

[4] Ibid. p. 29

[5] Ver  Rodrik, Dani “Why is there so much insecurity in Latin America?”, in CEPAL Review, April 2001

[6] The Other Side. Vol.38, No. 6, November-December 2002, p. 7

[7] HBO, Documentary “Corporations”

[8]  J. Stiglitz, Wither Socialism ?, Cambridge, Massachussets: MIT Press

[9] Stiglitz, Globalization and its Discontent..pp.247-252.

[10] A. Sen, Development as Freedom, Oxfor: Oxford University Press, 1999, pgs. 6-7