The Financial Seminary
“Socialism failed to deliver the bacon or the paradise. Capitalism delivered the bacon but not the paradise. Hence so much disenchantment with capitalism at the moment of its economic triumph. The problem proponents of the free market face today is this: How to bring capitalism back into harmony with deeply embedded religious ideals.”
Professor Robert Nelson, Forbes Magazine
The implosions of socialism in the Soviet Union and casino capitalism at Enron have resulted in a crisis in confidence in the world’s dominant forms of political economy. The losses have been so great that Prospect magazine has suggested: “The search for the third way must begin by rejecting all forms of political ideology.”
Perhaps we do need to reinvent the wheel. But that revolution would require additional expenses that might dwarf the losses to date. A more evolutionary “back to the future” approach might prove more enriching. For assuming we can believe three of the world’s most respected thinkers, America may not be as far from the Promised Land as many of us now believe. That is largely due to our Judeo-Christian heritage in general, and in particular that well-spring of economic morality once known as “stewardship.”
Needed: A Fourth Great Awakening
Sure, that heritage has been largely forgotten. Even in our churches, stewardship is little more than a synonym for ecclesiastical fundraising. And if you ask most any pastor if America is still a Christian nation, he or she will likely reply: “No, America is now a post-Christian nation.” If you then ask what kind of nation America is, the pastor will likely respond that they don’t know. But since most Americans have stopped thinking about loving God and neighbor from Monday to Saturday, they have been capitalists and thinking about making money. The rest are probably thinking about politics. Very few are thinking about “the root of all evil” and the reality that excess junk food and leisure only make it more difficult to squeeze through the eye of the needle.
Legendary management guru Peter Drucker recently suggested in a prophetic book by the same name that America is now transitioning to a Post-Capitalist Society. In short, he believes the crystal-like separation of church, state, and estate that many of us have seen for decades is dissolving into a liquid-like integration of the three. (I would simply nuance that many of us would prefer the reintegration of faith, political philosophy, and personal finance, or a more voluntary and personal paradigm.)
If I understand him correctly, Drucker also believes that, in the greatest change since Plato, the world may be shifting on its axis largely due to spiritual reasons. That is, the fear of the state that motivates socialism, and the greed for money that motivates capitalism, is now being enriched spiritually as members of society are increasingly motivated by seeking that responsibility, both personal and social, that provides meaning and purpose in life. That could be good news not only for our electorate but for the stakeholders of America’s companies. For the bad apples who ruined Enron are now denying their corporate sins, which usually involved loving themselves without loving their neighbors. That is, at their cores, a few bad apples eroded the trust in corporate America by ignoring their personal and social responsibilities.
Meanwhile, Nobel-laureate in economics Robert Fogel of the Chicago School of Economics has authored The Fourth Great Awakening. Though the good professor is a religious skeptic, he believes that awakening might make additional spiritual resources available during the rest of this century. We’ll need them.
The so-called “Third Way” is a political concept developed by Anthony Giddens of the London School of Economics. It can be explored in a book of the same name. Giddens convinced Tony Blair of the need for such a way, and he in turn convinced Bill Clinton. George W. Bush responded with his own version, known as “compassionate conservatism.” That term suggests governments and markets might evolve toward a more socially responsible approach, particularly toward the least of these, most of whom live beyond America’s borders. As the “third way” attempts to integrate the various sectors of society (public, private, and independent in America’s case), The Wall Street Journal recently compared it to a chemical compound that is very powerful but difficult to hold together, particularly by mere mortals. A little divine structuring might help in that regard.
the concept that you have a life in business and a separate life spiritually is false.
A political economy that produces both material and spiritual blessings for all of us—but the poor in particular—requires two things: financing and the tough love to use it responsibly. That’s where the book Agape Love by my friend and mentor Sir John Templeton comes in. Often called “The Dean of Global Investing,” this Rhodes Scholar in economics and legendary mutual fund manager is anything but a weak-minded religionist. Yet John believes that “the concept that you have a life in business and a separate life spiritually is false. So my advice to a school of business management is to teach the business manager to give unlimited love and he or she will be more successful.”
That more socially responsible concept might be seriously considered by the business schools training the leaders of the private sector. They were recently questioned about being “schools of scandal” by The Economist, largely for having no organizing paradigm other than “shareholder maximization,” which at its most coarse expression is dangerously close to naked greed. Yet governments and charities might consider John’s counsel as well. America’s official foreign aid is the lowest of major nations and only 3 percent of philanthropy leaves our borders. Yet The Economist magazine has said John’s responsible yet rewarding use of investment capital may have done more economic good for the world’s poor than Mother Teresa.
John’s example that love can motivate the efficient utilization of investment capital as well as the effective use of philanthropic capital grows all the more important when you understand that The Economist has judged the Third Way according to Giddens to be “vacuous.” As I’ve alluded, I believe there are two primary reasons. First, the concept according to Giddens is almost exclusively a theory of political economy. But political economics in the real world is simply the sum total of individual actions. So to produce enriching change—or paradise as well as bacon—any new approach needs a transforming spiritual dimension at the very personal level.
Don’t Ignore Human Nature
There’s an old political saying that “the problem with socialism is socialism; the problem with capitalism is capitalists.” That is, the problem with socialism was structural, in that it largely ignored the way human beings are wired. Adam Smith was a professor of moral philosophy before becoming the founder of modern economics. He taught us in The Wealth of Nations the reality that mankind was created as self-interested beings. Yet he also taught us in his less-read Theory of Moral Sentiments that our Creator intended self-interest to be “rightly understood,” to use Tocqueville’s famous phrase. Those moral realities are why Christ summarized moral behavior as love God and love your neighbor as yourself rather than instead of yourself.
For socialism, those realities of human nature mean that very few secular saints are motivated to create wealth when the bulk of it goes to the state. It has been said: “What is common to all is dear to none.” That is understood by even those former liberals in America who have been “mugged by reality,” to use their term, and become “neo-conservatives.” Largely due to the increased political activities of religious conservatives, some of those neo-conservatives are now most influential in our federal government.
Yet conservatives should not grow complacent, or worse yet, proud. Ancient moral realities have a habit of popping up on conservatives as well. Moses and Mohammed built theocracies to be governed by devout leaders. Their good intentions have oftime paved the way to something less than paradise. So Christ showed us how to live perfectly righteous lives despite leaders who considered themselves gods. Despite the recent successes of conservatives and the anticipated spiritual reawakening among the populace, the humanism of cultural elites suggests the Christ-model will remain relevant in America for sometime to come.
the problem with capitalism is that even those who regularly attend church and confess our faith can do serious harm to society when their religious responsibilities are deemed to be purely personal
Those who would build paradise on the foundations of a theocracy in Washington might consider that Enron and other corporate implosions were led by very visible Christians. They illustrate that the problem with capitalism is that even those who regularly attend church and confess our faith can do serious harm to society when their religious responsibilities are deemed to be purely personal, rather than a balance of personal and social. That balance may be more important today for building trust, the lubricant of free markets, than in biblical times. High-tech capitalism implies that millions of us are dependent on others in ways that we—and even regulators—cannot always understand. That modern reality only makes the inner moral development, rather than the public expression of faith, of each market participant all the more crucial.
economic performance is the primary but not the sole responsibility of business.
That reality also makes the new highly individualized morality developed by Ayn Rand—whose “gospel” Atlas Shrugged is second only to the Bible as the most influential book in America—particularly troublesome. Her secular morality claims that man is an economic rather than a spiritual being. It is also highly individualistic and may even have prompted the respected economist Milton Friedman to famously suggest: “The only social responsibility of a corporation is to make money. Period.” Yet Drucker has replied, “The individual needs a return to spiritual values, for he can survive only by reaffirming that man is not just a biological and psychological being, but also a spiritual being, existing for purposes of his Creator and subject to Him.” Drucker has pointedly added that Friedman’s social philosophy is “futile” as “economic performance is the primary but not the sole responsibility of business.”
Ironically, many conservative Christian ministers unwittingly advance Rand’s individuality by preaching a “personal relationship with Jesus Christ” without preaching a similar relationship with our neighbors. They unwittingly provide moral support for politicians and economists who would build a more abundant life on political and economic foundations alone. Each unwittingly encourages us to stand on two-legged stools. Lady Margaret Thatcher has observed: “The moral foundations of a society do not extend only to its political system; they must extend to its economic system as well. Capitalism is not an amoral system based on selfishness, greed, and exploitation. It is a moral system based on a biblical ethic.”
Wittingly or unwittingly, Anabaptist theologian Paul Lederach has supplemented the political economists with his work entitled A Third Way. It says: “On the one hand, A Third Way avoids the privatized piety of many conservative believers. On the other hand, A Third Way would challenge a liberal faith that is socially active without a vital spirituality.” That is, progress toward the third way during the coming fourth great awakening might require the bulk of American Christianity to reintegrate the vertical axis of the Cross with the horizontal axis.
Those axes were weakened to the point of collapse when the liberal mainline churches and the conservative evangelical churches separated nearly a century ago over the social gospel. At the risk of over-simplifying, too often today Americans who want to love God gravitate toward evangelical churches while those who want to love God’s creatures and creation gravitate toward mainline churches. Yet a more holistic third way might help us to better understand why theologian Richard Niebuhr wrote these words in The Responsible Self during more holistic Christian times: “There are doubtless as many ways of associating Jesus Christ with the responsible life as there have been ways of associating him with the ideal life or the obedient or dutiful one . . . The Christian ethos so uniquely exemplified in Christ himself is an ethics of universal responsibility.”
the ethos of Christ led him to disclaim earthly power but accept responsibility for all the world’s impoverishing acts.
If I might paraphrase Drucker, the leaders of Enron adhered to the ethos that has dominated the world’s political economies since the days of Plato: they claimed power but denied responsibility. But the ethos of Christ led him to disclaim earthly power but accept responsibility for all the world’s impoverishing acts. Or, the innocent lamb paid the price for the sins of us wolves. As Christ explained, that ethos is impossible for we mere mortals concerned with political economics. But as he also explained, “What is impossible for man is possible with God.” So a spiritual reawakening built on the authentic and transforming Christian ethos may assure a more responsible culture, and therefore a more peaceful and prosperous future.
Back to the Third Way
By definition, if that approximates the Gospel, it transcends human understanding. But let me try to share what I’ve glimpsed while researching six books on the topic, the reasons why I now believe the third way is a “back to the future” movement; one built on that simplicity that exists beyond confusing complexity.
The ancient texts claim that wealth does not belong to: 1) the state or 2) the individual, but to 3) a Creator who, in the words of our Founding Fathers, endowed the world with spiritual and material resources. When we humbly confess that starting point, we also acknowledge that we are neither: 1) rulers or 2) owners with no one to be responsible to, but 3) stewards who are responsible to the Creator. That means we are free of: 1) the dictates of the state, or socialism and 2) the naked self-interest of owners, or capitalism as Rand and Freidman understood it. We then practice: 3) stewardism in response to our loving Creator.
Our hearts tell us that the good life requires trust in the leaders of Wall Street and Washington to consider the public good.
Socialists need little persuasion these days to consider a different way. But those who are content to enjoy bacon outside the gates of paradise, or materialists, may see little pressing need for conversion to stewardism. But the rest of us are increasingly concerned about those who would live on even BLT’s alone. Our hearts tell us that the good life requires trust in the leaders of Wall Street and Washington to consider the public good. And even the most rational of us must confess that the world we manage has survived too many bloody and impoverishing moral experiments on the parts of states and individuals. Our souls tell us there simply must be a third and more eternal approach on which we might build a more abundant life.
What might all that top-of-the-mountain philosophy mean to the typical person’s life in the valley below? As it’s the only discipline to which this investment counselor can speak with any real knowledge, I will use investing as an example. In a truly soul-searching New York Times article entitled “The Irresponsible Investor,” financial author Michael Lewis confessed:
“The investor likes to think of himself as a force for honesty and transparency, but he has proved in recent years that he prefers a lucrative lie to an expensive truth. And he’s very good at letting corporate management know it. Investors, in their shortsightedness, encourage companies to neglect their social responsibilities . . . The best thing to be said about the typical investor is that, without actually caring very much about anyone but himself, he helps to make us all rich. He pursues the highest returns without worrying too much about the moral consequences of his actions. This sort of hypocrisy is woven deeply into the fabric of American business life.”
Enron brought that difficult reality to America’s consciousness. That has prompted an explosion in the number of investors who are now embracing a concept called “socially responsible investing” (SRI). During an interview with Money magazine, a fellow religious practitioner said he’d declared “war on corporate America.” It is in response that this old Army officer coined the phrase “spiritual investing,” as I now prefer to love my neighbors, future generations, and creation than to do combat. Other religious conservatives have coined the phrase “Christian Worldview Investing” as social investing is as appealing to them as socialism and social security.
Most social conservatives have not only ignored the movement to date but have actually resisted it.
Regardless, SRI, as it’s generally known, is a social movement very much akin to abolition and the civil rights movement. That means two things: 1) It percolated up from the populace rather than was handed down by our leaders on Wall Street or in Washington. And 2) Most social conservatives have not only ignored the movement to date but have actually resisted it. That is why after studying a few quite visible conservative Christian financial planners, The Wall Street Journal quipped: “The recommendations of Christian financial planners are often little different from those of secular planners . . . They use the same investment vehicles as secular planners.” That is also why The Economist has published a full-page “Obituary for Jesus.”
personal responsibility detached from social responsibility is simply the cultural gospel to look out for number one.
Ironically, some influential conservative Christian financial advisors and publications actually utilize the Bible for their rationalizations in much the same way plantation owners gave Bibles to slaves—to focus them on paradise rather than bacon. Perhaps indicating that Satan can still quote Scripture for his own purposes, these advisors and publications essentially advocate that investors focus on personal responsibility. But personal responsibility detached from social responsibility is simply the cultural gospel to look out for number one. Yet looking out for number two by investing in a socially responsible manner is as old as Moses.
In Exodus 21:28, Moses told his contemporary owners of agricultural wealth: “If a bull gores someone to death, it is to be stoned but its owner is not to be punished. But if the bull has been in a habit of attacking people and its owner had been warned but did not keep it penned up—then if it gores someone to death, it is to be stoned, and its owner is to be put to death also.” He applied the same ethos to owning a home, fields, and so on. So while stuff like Enron will always happen, the habitual failure to manage one’s wealth in a socially responsible way has always been a most serious sin. And sorry—there is no evidence that tithing prevented the stoning. Still, many investors essentially believe they can invest in cigarette companies as long as they give some of the profits to the American Cancer Society.
the next generations might imagine a world with authentic religion, one that is relevant to life outside that box we call Sunday morning church.
If Ayn Rand was the high priestess for our less socially responsible generation of investors, the Beatles may have been our choir when they asked us to imagine a world without religion. Yet this baby boomer now has far less hair than when liberals thought salvation could be found in human leaders, whether the politicians of Washington or the popular culture of Hollywood. He also has three decades of wounds from hitting the conservative wall of Wall Street. The losses and scars cause me to suggest the next generations might imagine a world with authentic religion, one that is relevant to life outside that box we call Sunday morning church.
Imagine a world where corporate leaders claim not only power but personal responsibility for their daily activities and social responsibilities for shareholders, employees, customers, and the environment; a world were attorneys care about their responsibilities not only to paying clients but to the society in which we live; a world where the media cares about its social responsibility to make us conscious of the beautiful realities of life rather than the aberrations that will attract our attention; and a world where religious leaders teach us to pray for the establishment of the Creator’s kingdom rather than simply for the expansion of government programs or our own territories.
Can we still imagine such a Way?
Gary Moore is the founder of The Financial Seminary. He has a degree in political science and was a senior vice president of investments for Paine Webber before founding his own company as “Counsel to Ethical and Spiritual Investors.” He lives in Sarasota, Florida.
This article is adapted from a piece in the New Barnabas/Zacchaeus Magazine: A Magazine for Effective Spiritual Investing sponsored by Wesley Theological Seminary.
The political, religious and ethical opinions expressed by Gary Moore are not endorsed by National Planning Corporation (NPC).
Opinions voiced are not intended to provide specific investment advice and should not be construed as recommendations for any individual. To determine which investments or investment strategies may be appropriate for you, consult with your financial, tax or legal professional. Please remember that investment decisions should be based on an individual’s objectives, goals, time horizon, and tolerance for risk. Furthermore, any listing of a vendor or product does not constitute an endorsement or warranty of the vendor or product by NPC. NPC is not to be held responsible for and may not be held liable for the adequacy of the information available. The Financial Seminary and NPC are separate and unrelated companies.