The Role of Money and Finance in the Economy and Society from the Christian Faith Perspective

by Dr Rogate R. Mshana, Ecolife Centre Director

Introduction

The topic of Faith and Finance entails responding to some questions: what is money, what is finance, what is society and even more loaded is the question - what is the Christian faith. This paper outlines briefly the conceptual understanding of these issues and also the role that money and finance ought to play in the economy and society from the perspective of the Christian faith based on the teachings of Jesus Christ.The topic of Faith and Finance entails responding to some questions: what is money, what is finance, what is society and even more loaded is the question - what is the Christian faith. This paper outlines briefly the conceptual understanding of these issues and also the role that money and finance ought to play in the economy and society from the perspective of the Christian faith based on the teachings of Jesus Christ.

What is money?

Money is primarily understood as a medium of exchange or a means of exchange. It is a way for a person to trade what one has for what one wants or needs. It was devised so as to solve the intricacies and complexities of the barter system in trade relations. Ideally, money has three critical characteristics: It acts as a medium of exchange; it is an economic good and it is a means of economic circulation.¹

People today speak about real money and virtual money. Money has been transformed into various complicated instruments such as derivatives² that cannot be understood by people who are not professionals; what we need to know is that it is the commodity used in the modern trading systems – and this is really virtual money. Money has been turned into a commodity instead of in essence being a medium for the exchange of goods and services. A few people benefit vastly from doing nothing but sit at a desk and engage in speculation and become more and more wealthy; while millions of others are impoverished with little access to real money. What we have today is a monetary system that is delinked from real economy. It is here that issues of Christian faith and ethics come into play asking a question, have we reached a point of worshiping mammon instead of God? What role does money have in an economy of life for all people and all of creation?

Finance can simply be understood as the science of the management of public money as well as that of companies. Such management is done by governments, banks and many financial institutions. However, today global money has no one global authority to manage it. Is such a global manager and institution essential? The lack of such global control of finance was seen as one of the reasons for global financial volatility and indebtedness that has affected the global crises as well as national economic crises. Currently there are attempts to create another type of money that will replace the central banks or any type of middle men during financial transactions. The proposal is to apply what is called “blockchain technology” which has the potential to transform how people and businesses cooperate. It is a discovery of the Bitcoin with a block chain ledger; which makes possible to use a currency without a central bank³. This makes it even more pertinent to ask the question - should the management of money be with the financial institutions or should it be with the people?

The third President of the United States of America, Thomas Jefferson (13th April 1743 -4th July 1826) said, “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs”.⁴

These strong words seems to have fallen on the wayside. On the other hand, what can be noted today is that the current financial system redistributes wealth from the poor to the wealthy through usury. So, we ask again should the management of money be with the people where it belongs? How can this be done? This is another question for Christian faith. Is it the management of a bitcoin or is it local community-based currencies that are the panacea? These are questions that need to be raised as faith communities look for alternatives to the current unethical and corrupted financial management systems.

What is Society?

A human society is a group of people involved in persistent social interaction or a large social grouping sharing the same geographical or social territory typically subject to the same political authority and dominant cultural expectations. An individual is a basic component of a society and hence the interaction among individuals with each other gives birth to a group and they together form a society. Interaction among nations creates a global community. Such interactions can be manifested in various forms of life such as economic, political, cultural and social. As far as the subject of our reflection today is concerned - the role played by money and finance in economic interactions in a community/society is crucial.

The management of money destroys community because dependence on money means we no longer need our neighbours. We can get everything from anonymous strangers in return for money. We have no obligation to no one when the bills are paid. Every trade is a complete action: you provide me with something and I give you money. No one does us any favours and we need no favours from any one. This means that money creates individualism and destroys communities. Individuals are seen as more important than communities and society in general. Margret Thatcher, the late British Prime minister maintained that there is no society but only individuals. But as people of faith would we not say that it is people not profits that should determine the role of money and finance in society.

When we speak about Christian faith, we include all Christian denominations that follow the teachings of Christ Jesus namely the Roman Catholic Church, the Orthodox churches, and the Protestant churches in their various denominational forms that have now grown to over 3,000 groups worldwide. Despite their differences, Christians have maintained unity of the Spirit as noted in the Bible in the letter of Paul to Ephesians, “in the bond of peace… just as you were called to the one hope that belongs to your call, one Lord, one faith, one baptism, one God and Father of us all, who is above all and through all and in all.” Christian faith is based on the basic belief that Jesus Christ came to the world, suffered, was crucified, died, descended to the dead and was resurrected for the forgiveness of our sins. This faith is summarised in the Apostles Creed recited by Christians every Sunday during worship.

Through the teachings of Christ, Christian praxis requires carrying out of the ministry of Christ on Earth as stated in John 10:10b (NRSV), “I came that they may have life, and have it abundantly.” Christ came with a wholistic ministry as stated in Luke 4: 18-19 (NRSV), “The Spirit of the Lord is upon me, because he had anointed me to bring good news to the poor. He has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, and to proclaim the year of the Lord’s favour.” Christian faith therefore includes good life both on Earth and in the after-life in heaven.⁵ On Earth this means working for social, economic and ecological justice. Christians have to follow the 10 commandments as prescribed by God; and practice to “Love one another” as Christ demonstrated. They are taught to care for the earth by overcoming greed. Instead of only performing good deeds they are driven by the Spirit to go a step further; as stated in Romans 8: 1-39, “There is therefore now no condemnation for those who are in Christ Jesus. For the law of the Spirit of life has set you free in Christ Jesus from the law of sin and death. For God has done what the law, weakened by the flesh, could not do. By sending his own Son in the likeness of sinful flesh and for sin, he condemned sin in the flesh, in order that the righteous requirement of the law might be fulfilled in us, who walk not according to the flesh but according to the Spirit. For those who live according to the flesh set their minds on the things of the flesh, but those who live according to the Spirit set their minds on the things of the Spirit.” In Christ they are propelled to challenge all injustice in the world.

Economy of Life

by Rev Nikotemo Sopepa, CWM Mission Secretary, Pacific Churches and the ecumenical movement have for many years studied the global economic system and globalisation. From the Christian faith, economy is described as the management of a household, (Oikos), in which all members have access to livelihood and the abundance of life. In that sense, God is the economist and the Homemaker. And human beings, created in God’s image, are called to be economists and homemakers-preservers of creation-organising life and God’s gifts so that all have the requisites for livelihood in order to enhance the life of the community⁶. Women practice this when they practice the economy of care. Christian faith, therefore, includes economy as a matter of faith. The works of many theologians on the subject have enriched this link between economy and theology in Christianity. Reformers like Calvin and Martin Luther wrestled to relate economy with Christian faith. There are a number of studies done on Orthodox fathers and their reflections on wealth and poverty. All in all, there has always been a Christian concern regarding poverty, wealth and God ‘s creation. Today we are working on promoting an economy of life⁷.What then is the Christian understanding on the role of money in an economy of life?

Following the teaching of Christ as in John 10: 10b, Christians are looking for alternatives - an Economy of Life which is different from the current destructive systems. In this understanding the main characteristics of God’s household of life are:

The bounty of the gracious economy of God (oikonomia tou theou) who offers and sustains abundance for all. God’s gracious economy requires that we manage the abundance of life in a just, participatory and sustainable manner; The economy of God is an economy of life that promotes sharing, globalised solidarity, the dignity of persons, and love and care for the integrity of Creation;⁸ God’s economy is an economy for the whole oikoumene- the whole Earth community; God’s justice and preferential option for the poor are the marks of God’s economy.⁹

The role of money and finance in the economy and society can then be seen from the prism of the above five criteria.

The Role of Money and Finance in the Economy

Money is good but its management in the economy and society is bad. In the Bible it is written in 1 Timothy 6: 10a, “For the love of money is a root of all kinds of evil.” Unfortunately, this verse has been misunderstood as, “Money is a root of all kinds of evil.” What we should understand is that money itself is not evil but what is evil is the love of money. This love of money is what we today call “Moneytheism” – the worship of money. Humanity has constructed a system of “moneytheism” in which the role of money has been that of exploitation of people and destruction of our mother Earth instead of serving them and creation. The following is what happens:

Indebtedness

“The rich rule over the poor, and the borrower is slave to the lender.” Proverbs 22: 7. The financial system is benefiting from indebtedness – with systems controlled by debtors. It ensures that as many people as possible are perennially indebted. These are turned into slaves under moneytheism. Today we are indebted through the issuing of credit cards which at the same time encourages consumerism by pushing us to purchase wants instead of needs. Through indebtedness poor countries and individuals have turned into slaves of banks and other financial institutions. Furthermore, money is created when banks grant loans. Thus for every unit created there is one unit of debt. Money is essentially information and has no physical existence yet banks encourage us to think of it as a ‘thing’ so that they can ‘lend’ to us and thereby make a profit by charging interest. The ‘thing’ money has to be created, distributed and controlled so that there is not too much of it. It can also be stolen,lost,bought, sold and counterfeited, with serious consequences for everyone.

6 Aaart Van Den Berg, God and the Economy: Analysis and typology of Roman Catholic, Protestant. Orthodox, Ecumenical and Evangelical, Theological Documents on the Economy 1979-1992, Eburon Publishers, Delft 1998 p.22 7 See “Economy of Life Now: An Ecumenical Action plan for a new International Financial and Economic Architecture” https://www.oikoumene.org/en/resources/documents/commissions on international-affairs-policy/report-of-the march-2009-ccia-meeting. 8 See Rogate R. Mshana and Athena Peralta (Eds) Linking Poverty, Wealth and Ecology: The Agape Process from Porto Alegre to Busan, WCC publications 2014. 9 Four of these five characteristics reflect the “Criteria towards economic policy- making” presented in the WCC study document on Christian faith and the world economy today, Geneva: WCC,1992, p.29. The document was an important step in understanding that economic matters are indeed matters of Christian Faith.

The practice of usury

“You shall not charge interest on loans to another Israelite, interest on money, interest on provisions, interest on anything that is lent…” Deuteronomy 23: 19f.

The practice of usury-making loans at inflated interest rates-ensures that the poor would remain in perpetual need, their paltry wages spent in paying off the interest but not the principal, a form of economic servitude. This banking practice, denounced throughout the centuries by the church, readily condemned the poor to hand-to-mouth existence and chronic anxiety that accompanies such a life. From the Lutheran tradition we have learnt that Luther did not ask for the abolition of bank loans. Rather, he argued that an exorbitant interest rate is not fair and it should be regulated and dropped to the point where a banker was justly paid and a bank client was not perpetually impoverished¹⁰. He followed Christ’s teaching, “Do to others as you would have them do to you.” (Matt 7: 12).

The true evil is not the loan in itself so much as the vices of those who apply themselves to lending.¹¹ Usury is almost always accompanied by two inseparable evils: tyrannical cruelty and the art of deception.

Today banks do not follow the command by Christ even so-called Christian banks. What we need here is still deep theological reflection and praxis within Christianity about how our banks could be unique in their practices.

The fundamental argument supportive of all biblical and Christian teaching on lending with interest is that money must not be a source of profit when payment for it is made at the expense of the poor. Money in society is properly intended to come to their assistance, and not to oppress them. Exodus 22:25 directs us, “If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not exact interest from them.”

The question to address: Is it possible to even have joint interfaith banks with practices based on faith so as to overcome usury? What about joint interfaith programs of awareness building for private lenders - some of them have been so tyrannical, to the extent that they force some individuals to sell their body organs such as kidneys in order to repay their debts.

“Speculate” comes from the Latin term speculum, a mirror where when one stands between two mirrors and you see an endless succession of images of oneself. Such a practice produces money from money but without producing any real wealth. This is the fetishisation of money, of greed, a thirst for gain and for accumulating money without limit. This is unethical and a poison to the economy of life.

The sign that there is addiction in financial speculation is the growth of the casino industry at local levels and the speculation on currencies in the world. This notion of profiting without producing anything tangible is not ethical. Calvin described it very early in history like this:

It is also a very strange and unfair thing, that, while everyone earns their living with much toil. While husbandmen tire themselves out in their work day by day, and artisans serve others by the sweat of their brow, and merchants not only work but also expose themselves to many inconveniences and risks- that money-mongers should sit at their ease without doing anything, and receive tribute from the labour of everyone else.¹²

Marcos Arruda describes the global casino system as follows, “In 2002, the value of speculative transactions worldwide reached a new plateau of 1,122.7 trillion US dollars…. including 699 trillion in transactions through derivatives, 384.4 trillion exchange transactions and 39.3 trillion in financial investments. The total is 34.76 times the 32.3 trillion US dollars transactions in goods and services i.e. the real economy”¹³.

From a Roman Catholic perspective, we learn: “A financial economy that is an end unto itself is destined to contradict its goals, since it is no longer in touch with its roots and has lost sight of its constitutive purpose. In other words, it has abandoned its original and essential role of serving the real economy, and ultimately, of contributing to the development of people and human community.”¹⁴ The church calls for a financial regulatory system at the global level.

How can faith-based communities help in linking finance with real economy today? What about working together on social financing?

The search for alternative financial systems in the context of the economy of life can be seen at two levels. First, it is at the level of advocating for an alternative financial system that will address the problems of indebtedness, usury and speculation. Here, interfaith initiatives to deal with global financial institutions and financial policy makers have to be designed and implemented. They can be consistent in combating speculation on the financial, particularly currency markets, with instruments such as currency transaction tax, capital flow controls and regulation of derivatives. It is also imperative to advocate for increasing the share of debt-free public money in contrast to the increase in debt-based money created by the banks through credits¹⁵. Advocacy and education on alternative social finance that promote solidarity and community welfare at local levels could be initiated.

Secondly, at the level of practice, interfaith communities could jointly initiate social finance schemes and people’s banks that will enhance either free interest on loans or fair interest rates to enable poor people to access credits that do not enslave them. The novel ground is whether, there can be interfaith alternative banks that will stop the flow of money from the poor to the rich. Can the existing church banks begin to restructure themselves by following the teachings of Christ? In responding to the preferential option for the poor, interfaith cooperation could lift up and scale up existing initiatives at financial alternatives including informal savings groups and micro-credit programs that expand access to finance without imposing commercial lending rates. Can we review the use of local alternative currencies and see if these could be globalised? All in all, can we design a financial system from which poverty and inequality can be eradicated while God’s creation is respected and protected for our future generations? In other words, can we create an economy of life where all people and the whole of Creation have the fullness of life and where money returns to its original role of being a medium of exchange for goods and services?

15 Ulrich Duchrow and Franz J Hinkelammert, Property for people, not for profit:

ALTERNATIVES TO THE GLOBAL TYRANNY OF CAPITAL, WCC publications, Geneva, 2004, pp.220