© 2013 by Jim Wallis

Published by Brazos Press

a division of Baker Publishing Group

P.O. Box 6287, Grand Rapids, MI 49516–6287

www.brazospress.com

Excerpted from On God’s Side: What Religion Forgets and Politics Hasn’t Learned about Serving the Common Good

Ebook edition created 2013

ISBN 978-1-4412-4598-4

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—for example, electronic, photocopy, recording—without the prior written permission of the publisher. The only exception is brief quotations in printed reviews.

Scripture quotations are from the New Revised Standard Version of the Bible, copyright © 1989, by the Division of Christian Education of the National Council of the Churches of Christ in the United States of America. Used by permission. All rights reserved.

Contents

Cover

Title Page

Copyright Page

God’s Economics: Principles for Fixing Our Financial Crisis

Epilogue: Ten Personal Decisions for the Common Good

Notes

About the Author

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Back Cover

God’s Economics: Principles for Fixing Our Financial Crisis

The truth is that the economic and social order isn’t a self-contained affair, separate from actual human decisions about what is good and desirable. Certain kinds of political and economic decisions have the effect of threatening the possibilities for full humanity.

—Archbishop of Canterbury Rowan Williams[1]

“To be generically against markets,” says Indian economist Amartya Sen, “would be almost as odd as being generically against conversations between people.”[2] The market produces continual conversations, interactions, and transactions about economics. As a mere mechanism, the market is amoral. But the events of the last few years and the consequences of the Great Recession the world has experienced are now demanding a new moral conversation about the market and how it should operate—which individual human beings make moral decisions about every day. Or as I asked of a plenary session at the 2009 World Economic Forum in Davos, Switzerland, right after the 2008 global financial meltdown, “What happens when the invisible hand lets go of the common good?”

Adam Smith, who wrote famously in his Wealth of Nations about “the invisible hand” of the market, wrote earlier in his book The Theory of Moral Sentiments concerning what happens when economics forgets ethics. Smith said capitalism can’t function properly without a moral framework. Another proponent of capitalism, Austrian economist Joseph Schumpeter, agreed and said that without ethics, the market ends up devouring everything else and, finally, even itself. That’s what happened on Wall Street to begin the current economic crisis. While the market may be amoral in itself, it takes place within a moral structure, either good or bad.

A Moral Economy

But those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. (1 Tim. 6:9–10)

The World Economic Forum now calls for a “moral economy”[3] and has begun new studies and “global action councils” on values and the role of business. We have lost the ability to speak in moral terms about economics, and many are feeling the need to recover an ethical and values-based language about the economy. After having little to say about market behavior for many years, the religious community has reengaged in the moral conversation about the financial crisis, and it claims that the recent failures of some of our leading banks and corporations are breaches of moral and even religious principles.

The road for that moral conversation is becoming clearer. We will see it by focusing on what we have learned, or need to, from our recent financial catastrophe and the massive economic suffering that resulted. It is about remembering and reestablishing neglected but critical virtues that could help us get from where we are to a new and better place. How to get there isn’t entirely clear yet, but where we need to go is becoming more so.

Here is the road for a new moral economy: from massive inequality to decent equity; from the narrow definition of shareholders to a broader vision of stakeholders; from short-term to long-term thinking and acting; from the ethics of endless growth to the ethics of sustainability; from doing well to also doing good; and from broken social contracts to a new social covenant between citizens, business, and government. And that is the new road we now need to travel. Let’s look at what it would mean to start moving toward a more moral economy that could enhance rather than undermine the common good.

Repent, for the End May Be Near Again

We are all familiar with the famous pop-culture image of a street evangelist holding up a sign reading, “Repent, for the end is near!” But repentance is actually a fundamental religious theme, and one that’s often misunderstood. With the recent recession, we could imagine a group of pastors, priests, rabbis, and imams holding up a sign on Wall Street for the titans of the financial industry to see, reading, “Repent, or the end could be near again.”

As we discussed in chapter 3, the biblical meaning of repentance is to turn around and take a new path. In a religious framework, it means realizing you have made a moral mistake and deciding to change your behavior. It’s not enough to feel guilty or sorry for something; genuine repentance requires a change in decisions and actions, moving in a different direction. Merely admitting you were wrong is not enough. You have to change.

In these past few years, I’ve had serious conversations with financial leaders about ethics, morality, and even faith. Some come like Nicodemus—a religious leader who came to talk to Jesus in private—at night. Many have felt remorseful about what happened on Wall Street and how it has hurt so many people. They describe the behavior in their profession with words such as “greedy,” “risky,” and “reckless.”

In one conversation with a senior trader at a leading financial investment company, I asked if the trader’s firm had practices and products that led to this crisis. The answer was yes. Then I asked what my conversation partner had done to raise these issues at the highest levels of the company, to which the reply was, “We can’t do that.” Many of the business and banking leaders do feel sorry, but repentance means that remorse must be coupled with a change in the behaviors that led to the problems. And that has yet to happen on Wall Street.

Alan Blinder, professor of economics at Princeton University and a former vice chairman of the Federal Reserve Board, said in an op-ed for The Wall Street Journal:

When economists first heard [Gordon] Gekko’s now famous dictum “Greed is good,” they thought it a crude expression of Adam Smith’s “Invisible Hand”—which is one of history’s great ideas. But in Smith’s vision, greed is socially beneficial only when properly harnessed and channeled. The necessary conditions include, among other things, appropriate incentives (for risk-taking, etc.), effective competition, safeguards against exploitation of what economists call “asymmetric information” (as when a deceitful seller unloads junk on an unsuspecting buyer), regulators to enforce rules and keep participants honest, and—when relevant—protection of taxpayers against pilferage or malfeasance by others. When these conditions fail to hold, greed is not good.

Plainly, they all failed in the financial crisis. Compensation and other types of incentives for risk were badly skewed. Corporate boards were asleep at the switch. Opacity reduced effective competition. Financial regulation was shamefully lax. Predators roamed the financial landscape, looting both legally and illegally. And when Treasury and the Federal Reserve rushed in to contain the damage, taxpayers were forced to pay dearly for the mistakes and avarice of others. If you want to know why the public is enraged, that, in a nutshell, is why.[4]

Those who led us down the path to financial ruin or helped to accommodate it—causing millions of people to lose their homes, jobs, and savings—now have some serious repenting to do. Yet the statements and behavior of many Wall Street executives, and the revelations in the media about what is going on inside some of our leading financial institutions, make it painfully clear that repentance and public accountability are still far from many economic minds.

I keep coming back to the concepts of forgiveness and grace. When the government tried to save the economy from meltdown, real grace was extended to the big banks—but now the banks seem unwilling to extend that forgiveness and grace to anyone else, including homeowners struggling to make mortgage payments. They have decided instead to reward themselves. As a founder of Citigroup, John S. Reed, told The New York Times, “There is nothing I’ve seen that gives me the slightest feeling that these people have learned anything from the crisis. They just don’t get it. They are off in a different world.”[5]

When you preach, one of the most important parts of preparing is selecting a text relevant to the issue of the day. A clear and obvious biblical text for this crisis is 1 Timothy 6:9–10, quoted above: “the love of money is a root of all kinds of evil.” Or, as Jesus succinctly put it, “You cannot serve God and wealth” (Matt. 6:24).

The critics of Wall Street call it putting self-interest above the public interest. But the Bible would just call it sin. We could call it the sin of putting personal profit and gain above the common good, above the good of your customers and consumers, and even above the good of your clients and investors. My friend Robert Lane was the CEO of John Deere and is also a person of faith. He speaks of the market as a tool that, like any tool, can be used for good or harm. He once told me “the market was meant to be a means and not the end.” But when the market is an end unto itself, it runs the danger of what religion might call “market fundamentalism.” And when that happens, there are times when outside pressure is needed to change destructive behaviors—times like now.

Americans have always had a love-hate relationship with both business and government. The climate shifts like a pendulum between eras of an “anything goes” mentality and periods of more careful public oversight and government regulation. The excesses of the 1920s, leading to the Great Depression, were followed by the reforms of Franklin Roosevelt’s New Deal, including the creation of the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and new rules of the road for banks and investment companies intended to protect citizens from excessive risk and abuse.

But over the last forty years, many of these regulations were relaxed (by both Republicans and Democrats dependent on the political contributions of Wall Street), while new financial realities, products, and practices have developed for which there were no regulations. Because of the Great Recession, a new financial regulation debate is now raging.

The Bible does not prescribe any economic system, nor does it lay out an ideal means of economic governance. And while religious leaders will not often get into the details or partisan wrangling, there are some principles that—from a moral and even religious viewpoint—should guide those economic deliberations.

The Church of England’s General Synod 2009 report on the financial crisis was summarized this way: “The dominant assumptions in our economic system may be innately un-Christian—assuming that human beings are strangers who relate to one another only with the aim of maximizing profits and pleasure. Economics is not simply a science for experts. It contains assumptions about the nature of human beings, which is a moral and theological question.”[6] Archbishop of Canterbury Rowan Williams, quoted at the beginning of this chapter, went further by saying that “certain kinds of political and economic decisions have the effect of threatening the possibilities for full humanity.”[7]

In October 2011, a new and quite direct pontifical statement came from the Vatican expressing the perspective of the Roman Catholic Church on the reforms needed after this financial crisis. It was a note of real warning about massive inequality and against the assumption that self-interest alone can ensure the common good. It specifically provided a theological rationale for new public regulation and accountability. It reads:

Recognizing the primacy of being over having and of ethics over the economy, the world’s peoples ought to adopt an ethic of solidarity as the animating core of their action. This implies abandoning all forms of petty selfishness and embracing the logic of the global common good which transcends merely contingent, particular interests.

In economic and financial matters, the most significant difficulties come from the lack of an effective set of structures that can guarantee, in addition to a system of governance, a system of government for the economy and international finance.

In this process [reform of international financial institutions], the primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics—which is responsible for the common good—over the economy and finance.[8]

What principles should guide us?

First, provide transparency and accountability. Given the human condition and the many temptations of money, we need transparency and accountability in financial markets and instruments, including high-risk and questionable instruments such as the now infamous “derivatives.” We need regulators who are genuinely independent of the industries they regulate rather than those who come from and go back to the very companies they are supposed to hold accountable. To protect the common good, we need to enact better oversight of all elements of the banking industry. Earlier regulations—now discarded—had enforced a clear separation between day-to-day banking and speculative banking, and this separation desperately needs to be reintroduced.

Second, protect consumers. Any pastor can tell you stories of how parishioners are mistreated, cheated, and damaged by current banking practices. My good friend Joel Hunter, pastor of a large church in Orlando, Florida, says the major credit card debts of his parishioners have put people “in bondage.”[9] A survey in his church showed that the average debt of his parishioners (excluding home and car debts) was $31,000! Many clergy strongly favor protecting consumers from predatory financial lending practices, either by payday lenders or by credit card companies. We need something like a strong independent consumer finance protection agency, with jurisdiction and enforcement power over companies in the financial sector and over those who run the credit card businesses, in order to protect people from fraudulent, misleading, and abusive behavior. Those long and confusing credit card contracts are now full of abusive procedures and practices devised to cheat people and turn them into debtors, a familiar biblical category of injustice. It’s time to level the playing field by introducing clarity and transparency and taking on the exploitative behavior of the small number of huge banks who now control most of the credit card industry—the ones most opposed to public openness and accountability.

Third, change the banks that were “too big to fail” and were therefore bailed out at public expense. This may mean limiting the size of financial institutions or the risks they can take. Give a stronger voice to shareholders and investors, and perhaps other stakeholders, in institutional practices and policies—including determining executive compensation and the now-infamous bank executive bonuses. If banks have become too big to fail, they perhaps have become too big not to be held publically accountable, just as public utilities in the energy industry are. Right now, these banks are just too big to care about the common good.

Fourth, address the volatility of increased financial exchanges, which create great riches for some but great instability for economic systems. In the mysterious and secret global transactions between investment bankers and hedge fund traders, the profits continue to grow. From 1973 to 1985, the financial sector peaked at 16 percent of domestic corporate profits. In the 1990s it reached postwar-period highs by climbing to between 21 and 30 percent. But this decade the financial sector’s share of corporate profits hit 41 percent.[10] These profits weren’t from products, and they weren’t always from finding the best use for capital; they were from money making more money for a new class of superrich financial traders. Even traders from some of those banks, some of whom are people of faith, privately tell me that when the percentage of corporate profits from the financial sector grows from 15 to 40 percent, something has gone terribly wrong with the economic system. The financial industry, they say, was meant to facilitate a productive capitalism, not become the primary engine of a casino-like economy for financial gamblers. A number of groups, including several religious institutions, have suggested reforms such as the banning of tax havens and the institution of a new taxation on those financial transactions (the Tobin, or “Robin Hood,” tax) with the revenues going toward needed global development.

Fifth, begin church-inspired campaigns against exploitative lending practices on the basis of both biblical and early-church teaching against usury. Such campaigns aim at setting limits on what lenders can charge. Theologian Luke Bretherton describes how issues of money and lending are fundamental to the Scriptures:

At the heart of the story of salvation we find the power of money and liberation from debt is a central concern. The admonition that we cannot serve both God and Mammon (Matt. 6:19–24) is not a trivial matter: the central drama of salvation history is an act of liberation from debt slavery. To put the pursuit of money before the welfare of people, and use money to re-enslave and exploit people, especially the poor and vulnerable, is to turn your back on God’s salvation and deny in practice the revelation given in Scripture of who God is.[11]

These principles—clarity, transparency, accountability, and protecting the common good against private greed—are not just economic policy matters. On a more transcendent level, they provide the metrics of real repentance for those who have behaved badly and must now change. Perhaps we need some sermons on repentance for Wall Street, some pastoral care for the financial giants who sit in our pews, and maybe even some prayer vigils outside the nation’s biggest banks. If the banks fail to repent, another financial meltdown could be near.

But I am also reminded of what writer G. K. Chesterton once said when asked what was most wrong with the world. He reportedly replied, “I am.” We are all going to need some deeper moral reflection on the meaning of this Great Recession. We do need real reform of our financial institutions and systems. But it will also require the “reform” of ourselves—our own economic choices, desires and demands, and lifestyle requirements. Our consumption-soaked culture was on an insatiable binge when the recession hit. New York Times columnist Tom Friedman wondered about the deeper meaning of the Great Recession when he asked, “What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall—when Mother Nature and the market both said, ‘No more’?”[12]

The Un-Economy

At the deepest level, our global economy is not fulfilling the role that economics is meant to fulfill. It has instead become the “un-economy.” In an international meeting with economists, business executives, nonprofit organizational leaders, and theologians, my colleague Stewart Wallis of the New Economics Foundation succinctly summed up the problems of the current global economy: it’s unfair, unsustainable, unstable, and is making many people unhappy.[13] These issues of the “un-economy” were at the heart of our discussions at the World Economic Forum and the Occupy Wall Street encampment I had visited in New York City just days before. Let’s use Stewart’s framework and expand on it.

Unfair

Since the Occupy Wall Street movement began, the issue of massive inequality has been brought to public attention. In our discussions about the economy, this has been the elephant in the room that few wanted to discuss out loud. The “occupiers” have given voice to the unspoken feelings of countless others that something has gone terribly wrong in our societies. And this message has resonated widely. In the last hundred years, there have been two peak periods of great inequality in American society: just before the Great Depression in the late 1920s, and in 2008, right before our current Great Recession.

The Occupy movement has created the space for a new conversation, a moral discussion, about inequality. The 1 percent and the 99 percent are now a metric and a template that is widely discussed and is changing the cultural and political framework. What is fair, what is just, and what is right are all on the table now. And both economics and politics will have to answer those questions.

Of course, the many differences between talent, opportunity, contexts, work efforts, and sheer luck will always create human inequality. Opportunity and creativity make inequality inevitable and even necessary. But the level of that inequality is the moral question, along with whether those levels are making fairness and opportunity even less possible. The Bible treats extreme inequality in a very negative way, and the extent of our inequality today has now reached biblical proportions.

At the end of the nineteenth century, the ratio of the richest 20 percent in the world versus the poorest 20 percent was about 7 to 1; at the end of the twentieth century, it was 75 to 1.[14] Eighty percent of the real increase in wealth in the United States between 1980 and 2005 went to only 1 percent of the population.[15] In the United States now, the richest 400 people have as much wealth as the poorest 155 million people. The top 1 percent controls more wealth than the next 95 percent.[16] A Wall Street Journal poll found that more than three-quarters of Americans say the country’s economic structure is out of balance and “favors a very small proportion of the rich over the rest of the country.”[17]

In most advanced countries the ratios of chief executive officer salaries to the pay of the average worker in their companies has risen astronomically over the last thirty years. In the United States, that ratio has grown over the last three decades from about 30 to 1 to about 500 to 1! Inequality has grown rapidly in most of these countries, often fueled by corruption and extreme greed.

In contrast, from 1949 to 1979 all income groups in the United States saw gains from prosperity, but the largest gains went to the bottom 20 percent.[18] Since 1979, the top 5 percent have seen their real family incomes increase by 72.7 percent, while the real family income for the bottom 20 percent has dropped 7.4 percent.[19] From a religious point of view, there is a great moral difference between those two very different eras of prosperity. When prosperity is inclusive of everyone, especially those near the bottom of society, religion and the Bible seem to approve; but when prosperity is skewed mostly toward those on top, it is attacked by our Scriptures and by the religious affirmation of the common good.

As Richard Wilkinson and Kate Pickett demonstrate in their book The Spirit Level, excessive inequality, even more than poverty, harms everybody in society. Countries with dramatic inequality have far more social problems, including crime, corruption, and lower trust levels; and everybody’s well-being is depressed in such countries when compared to ones with more equality. In a similar vein, Nobel laureate Amartya Sen has argued that those who suffer from great inequality (even in wealthy societies) face a diminution in their basic economic and political freedoms, such as their ability to achieve political efficacy.

Underneath it all, a deeper issue of mistrust is being raised—that leaders have betrayed the public trust, that systems aren’t fair, that the rules of the game don’t apply to the people at the top, and that most people are really on their own in this modern economy. The levels of economic and political inequality that we now experience, along with the social immobility also being revealed, undermine the public sense of ownership and belonging in society. People have little trust in their governments and economic institutions, believe they are penalized for the mistakes of others who continue to reap handsome rewards, and do not believe they themselves are rewarded fairly for their efforts. People are fearful for their future, their old age, and the prospects for their children. More and more people now have little stake in society. Opportunity is a lost hope for many, as social mobility in America is now lower than in Western Europe.

When the risk taking, greed, and selfishness of the wealthiest created a crisis for many others, we bailed them out and left everyone else to suffer in the economic wilderness of unemployment, home foreclosures, pension losses, deep middle-class insecurity, and shamefully rising poverty rates. If you search the Scriptures, you’ll find that God cares not only about poverty but also and especially about real unfairness and shameful inequality. That’s what the young people “occupying” Wall Street and so many others are angry about.

Inequality is an inevitable part of the human condition. But when it becomes too extreme, it is a moral and even a religious issue. Something has gone terribly wrong in the United States when the middle classes have experienced stagnant wages for decades, the poverty rate is the highest in fifty years, and the richest just continue to get richer and exercise more and more political power—which they are using toward their own selfish advantage, as we discussed in the last chapter. When human inequality and its resulting injustice become so great, God becomes angry too, as the biblical prophets testify.

Unsustainable

Economies are also ecosystems. If everyone had a Ferrari, the planet could not survive. The earth groans as the ethics, or nonethics, of endless growth are measured only by corporate shareholders in quarterly profit-and-loss statements. “Short-termism” is a phrase heard over and over again now in the broad conversations about values at the World Economic Forum. A global economy based on dirty energy creates unjust regimes, angry populations, endless terrorism and war, and dangerous warming of the planet, which is all clearly unsustainable. Add to that an advertising industry that systematically, psychologically, and even spiritually turns “wants” into “needs,” and you have a formula for human and ecological disaster.

It’s time to move from a narrowly defined shareholder economy to a stakeholder economy that includes workers, consumers, the environment, and future generations in our economic calculations and decision making.

Theologically speaking, we have been witnessing a massive despoiling of God’s creation. We were meant to be stewards of places like the Gulf of Mexico, where many faith leaders, including me, traveled to see the consequences of the BP oil spill. We saw what happened to the wetlands that protect and spawn life, to the islands and beaches, and to all of God’s creatures who inhabit the marine world. At the root, we saw the results of an ethic of endless economic growth, centered on carbon-based fossil fuels, that is ultimately both unsustainable and unstable.

It’s not just that BP had lied, even though they did—over and over—to cover up their behavior and avoid their obligations. It is that BP is a lie; what it stands for is a lie. It is a lie that we can continue to live this way, a lie that our style of life is stable and sustainable, and a lie that these huge oil companies are really committed to a safe and renewable energy future.

Many people now apparently agree with the new direction of a “clean energy economy.” And we know this will require a rewiring of the energy grid. But it will also require a rewiring of ourselves—our demands, requirements, and insatiable desires. Our oil addiction has led us to environmental destruction, endless wars, and the sacrifice of young lives, and it has put our very souls in jeopardy.

We need a new beginning and a new direction for America’s energy future; we must turn away from oil and fossil fuels toward cleaner and renewable energy sources. And we must start by mitigating the effects of climate change and beginning the critical process of adapting to a new energy future. For that adaptation, much more help will be needed for the world’s poorest people—who will be first and most impacted by climate change—and the world’s more affluent countries must lead the way.

There is not just one answer to these calamities, but many: corporate responsibility, serious government regulation, public accountability, and real civic mobilization to protect our endangered atmosphere, waters, coasts, and species, as well as people’s livelihoods. But at a deeper level, we need a conversion of our habits of the heart, our energy sources, and our lifestyle choices. And somebody will need to lead the way. Who will dare to say that an economy of endless growth must be confronted and converted to an economy of sustainability, to what the Bible calls stewardship? There is hardly an issue more central to the common good than that.

Unstable

One of the most critical conversations taking place around the world is about dangerous and growing conflicts over food, water, land, and energy resources. Conflicts, both present and future, will not be over ideology alone but over survival in the face of resource scarcity and highly unequal resource distribution. Contrast our global maldistribution to the fundamental principle of God’s economy: there is enough, if we share it.

Both the instability and sustainability issues are huge factors here. Where poverty is the greatest, people live in far more vulnerable environments and have much less influence on political decision making. While much is made about the politics of the conflicts in places like Darfur and the Middle East, the matter of resource scarcity is often at the core of many conflicts today. In both western Sudan and the Palestinian territories the battles over water are absolutely central, as will soon be the case in many other parts of the world as well. The location of oil reserves is also very entwined with the politics of why “ethnic cleansing” continues in southern Sudan and why countries like China and Russia take the wrong side in such conflicts because of their own energy needs and investments. And there is little doubt that oil is the fuel that keeps the fires of conflict raging in the Middle East. Awful pictures of hand-to-hand fighting over the limited food and water from relief trucks in many situations of conflict are simply a metaphor for the future global battles over what is necessary for human survival.

The most hopeful talk about economic stability is occurring around the myriad of new economic approaches based on local, cooperative, and sustainable models of market activity. My goddaughter, Korla Masters, is engaged in the mushrooming urban gardening movement in my hometown of Detroit, and she tells me that if only half the vacant land in the city were cultivated, it could provide up to three-quarters of the needed vegetables and fruits in the Motor City! A local economy like this could have profound effects on the food industry, dramatically reducing the amount of energy used to transport food across the globe. Vibrant local economics are likely the most productive path to a more stable economic future—both locally and globally.

Unhappy

Being rich doesn’t make you happy. Of course, happiness and well-being are connected to a modicum of economic security that we all need. But “enough is enough” is proving to be a better guide to a happy life than the maxim “greed is good.” The logic of a manic consumer economy is that you are never supposed to be satisfied with what you have but should always demand more. That endless striving and never-ending desire is not making people happy but rather has led us into a lifestyle of constant stress.

An advertisement from Hargrave Custom Yachts captures the spirit of what a consumer culture believes makes people happy. It reads: “We used to sell yachts as luxury items—in today’s world they’re really a necessity.” It goes on, “Successful people have now become the target.”[20] But in Detroit, we are seeing the burgeoning urban gardens producing several things: jobs, healthy food, and a sense of community—all of which are ingredients for a happy life.

At its core, this is also a spiritual crisis. More and more people are coming to understand that underlying the economic crisis is a values crisis, and that any economic recovery must be accompanied by a moral recovery. This should be a moment to reexamine the ways we measure success, do business, and live our lives—a time to renew spiritual values and practices such as simplicity, patience, modesty, family, friendship, rest, and Sabbath.

We need nothing less than a pastoral strategy for the financial crisis. We must use our religious teachings to develop Christian, Jewish, and Muslim responses to it. What should people of faith be thinking, saying, and doing now? What is the responsibility of churches, synagogues, and mosques to their communities, to the nation, and to the world? I keep hearing about churches that are starting adult Sunday school classes on economic values, personal finances, and community social responsibility.

Pastors, lay leaders, and innovative faith-based practitioners are suggesting creative answers: mutual aid, congregational and community credit unions, and new cooperative strategies for solving such problems as hunger, homelessness, and joblessness. If these initiatives succeed, the economic crisis may offer congregations an opportunity to clarify their missions and reconnect with their communities.

Going Local

One step that many people are now taking is to go local with their own household economies. When I wrote that my wife, Joy, and I had decided to close our account at Bank of America and move our money to a local bank that has behaved more responsibly, I was amazed at the response. Religious leaders and pastors from around the country called to say that they too were ready to take their money out of the big banks that have shown such shameful immorality and instead invest according to their values by putting money into more local and values-based community institutions. Websites have created searchable databases of community banks and credit unions. The idea is beginning to spread.

Local congregations and national church denominations alike should reflect on where they keep their money and how their investments reflect their faith. Some congregations are creating checklists to evaluate whom they do business with, and national church bodies are even taking a deep look at where they invest their pension funds, which are very substantial. Christians, Jews, and Muslims are all asking these questions. Already we are hearing reports of whole congregations, groups of churches, and faith-based organizations from California to New York deciding to transfer their funds to local banks and credit unions.

While the actual effect on banks will take some time, statements of moral integrity are being made. The “unrepentant” banks, whose greed helped destroy our economy, who relied on us to regain their health, and who are now simply back to business as usual, are being sent the clear message that we find their behavior unacceptable. Removing our money can help send that message. And we see seemingly small personal stories and campaigns going viral when they resonate with people in the same situation—such as the story of a young woman whose protest against Bank of America’s fee hike drew hundreds of thousands of other people to the cause and forced the bank to back down.[21]

Economic reform will take both external regulation and self-regulation for the nation’s leading institutions, both external accountabilities and the internal moral compass that comes from embedding values in a business. Klaus Schwab, the founder and executive chairman of the World Economic Forum, years ago wrote about the need for business to take into account not only the interests of shareholders but also those of the many other stakeholders—including employees, consumers, the poor, the environment, and future generations.

That the World Economic Forum would take these issues very seriously, and would turn to faith community leaders for help, is good news indeed. But a New York Times article on an opening day of the 2011 Forum indicated that we still have a long way to go: “Intentionally or not, Davos [Switzerland, the meeting place of the WEF] will focus attention on one of the most striking consequences of the most recent technological revolution and the spread of globalization that has transformed the world economy in the past 30 years or so: the emergence of an international economic elite whose globe-trotting members have largely pulled away from their compatriots.”[22] Many of those superrich are at Davos; and the only people whose lives seem to have gotten back to “normal” since the financial crisis began are those whose behaviors helped to cause it in the first place. They are back to record profits, while we see dramatic and devastating unemployment around the globe, especially for young people.

Moral Facts and a Religious Response

The fundamental facts and morality of the current economy are now very clear. The very top end of the economic order is receiving most of the benefits from current growth and profits. The middle parts and people of the economy have experienced decades of stagnating income, declining wealth, and a growing insecurity. Other periods of prosperity, like the thirty years following World War II, saw great gains and a hopeful social mobility for many people in all sectors of the economic class structure—including people who had been at the bottom. But prosperity over the last thirty years has been extremely skewed to the increasing advantage of those at the highest end. The reasons why have to do with political decisions directly shaped by the wealthiest people and institutions in our society and by the politicians of both parties whom the rich have been able to influence. Meanwhile, most people are more insecure than ever before, and those at the bottom face a literal struggle for survival. And that is simply and morally wrong. It’s been a long time since “the rising tide” has “lifted all boats.” Another euphemism, “the rising tide lifts all yachts,” is not simply a clever variation but an accurate description of the stark reality we now face.

Then add the global reality in which 1.3 billion people live in the extreme poverty of less than a dollar a day, and half of God’s children—three billion people—live on less than two dollars a day. The unbelievable truth is that more than twenty-five thousand children die each day due to utterly preventable hunger and disease. And the rest of us live with that fact every day because we simply do not care enough to change it. That lack of will offends a just and loving God and should shame and motivate us.

Such a situation of economic clarity requires a religious clarity in response. Such massive inequality and economic injustice is an affront to biblical principles and direct disobedience to God, who demands that prosperity be shared and the poor be protected. These are no longer just financial matters but, rather, matters of faith. It’s time for the religious world to tell the financial world that God requires a different kind of economy—both domestically and globally. To make that happen is a moral imperative and a test of faith.

Building a New Social Covenant

Old social contracts have unraveled. Former assumptions and shared notions about fairness, agreements, reciprocity, mutual benefits, social values, and expected futures have all but disappeared. The collapse of the financial systems and the resulting economic crisis have not only caused instability, insecurity, and human pain; they have also generated a growing disbelief and fundamental distrust in the way things operate and how decisions are made. Over the last twenty to thirty years, we have witnessed a massive breakdown in trust between citizens, their economies, and their governments. This is true whether we look at Occupy or at the Tea Party.

We urgently need a new social covenant between citizens, businesses, and government. Contracts are what have been broken, but a covenant adds a moral dimension to the solution that is now essential. By definition, this will require the engagement and collaboration of all the “stakeholders”—governments, businesses, civil society groups, faith groups, and especially young people. Social covenants should be discussed in many contexts, and their results will vary from place to place. But they should all include shared principles and features, such as a value basis for new agreements, an emphasis on jobs that offer fair rewards for hard work and real contributions to society, security for financial assets and savings, a serious commitment to reduce inequality between the top and the bottom of society, protection or stewardship of the environment, an awareness of future generations’ needs, a stable and accountable financial sector, and the strengthening of both opportunity and social mobility. Such a covenant would aim at the promotion of human flourishing, happiness, and well-being as social goals and affirm the movement from a shareholder model to a stakeholder model of corporate governance.

Such new social covenants are already being drafted and discussed in a variety of settings and countries. The discussion itself will help produce the conversation leading to the results that we need.

A moral conversation about a social covenant could ask what a “moral economy” should look like and whom it should be for. How could we do things differently, more responsibly, more equitably, and yes, more democratically? In forums where business and political leaders meet, the conversation should focus on the meaning of a moral economy as a way to safely interrogate our present failed practices. Such a discussion could lead to new practices driving both ethical and practical decisions about the economics of our local and global households.

Lack of trust is bad for politics, bad for business, and bad for overall public morale. It undermines people’s sense of participation in society as well as their feelings of social responsibility, and makes them feel isolated and alone—more worried about survival than interested in solidarity. Because the “contract” was broken, a sense of “covenant” is now needed, fused with a sense of moral values and commitments. And the process of formulating new social covenants could be an important part of finding solutions. What better conversation could we have for the common good?

Epilogue

Ten Personal Decisions for the Common Good

The common good and the quality of our life together will finally be determined by the personal decisions we all make. The “commons”—those places, as we noted earlier, where we come together as neighbors and citizens to share public space—will never be better than the quality of human life, or the human flourishing, in our own lives and households.

Here are ten personal decisions you can make to help foster the common good.

1. If you are a father or a mother, make your children the most important priority in your life and build your other commitments around them. If you are not a parent, look for children who could benefit from your investment in their lives.

2. If you are married, be faithful to your spouse. Demonstrate your commitment with both your fidelity and your love. If you are single, measure your relationships by their integrity, not their usefulness.

3. If you are a person of faith, focus not just on what you believe but on how you act on those beliefs. If you love God, ask God how to love your neighbor.

4. Take the place you live seriously. Make the context of your life and work the parish that you take responsibility for.

5. Seek to develop a vocation and not just a career. Discern your gifts as a child of God, not just your talents, and listen for your calling rather than just looking for opportunities. Remember that your personal good always relates to the common good.

6. Make choices by distinguishing between wants and needs. Choose what is enough, rather than what is possible to get. Replace appetites with values, teach your children the same, and model those values for all who are in your life.

7. Look at the business, company, or organization where you work from an ethical perspective. Ask what its vocation is, too. Challenge whatever is dishonest or exploitative and help your place of work do well by doing good.

8. Ask yourself what in the world today most breaks your heart and offends your sense of justice. Decide to help change that and join with others who are committed to transforming that injustice.

9. Get to know who your political representatives are at both the local and national level. Study their policy decisions and examine their moral compass and public leadership. Make your public convictions and commitments known to them and choose to hold them accountable.

10. Since the difference between events and movements is sacrifice, which is also the true meaning of religion and what makes for social change, ask yourself what is important enough to give your life to and for.

Finding the integral relationship between your own personal good and the common good is your best contribution to our future. And it is the best hope we have for a better life together.

Notes

[[1]]. Rowan Williams, “Human Well-Being and Economic Decision-Making” (a keynote address at TUC [Trades Union Congress] Economics Conference, Congress House, London, November 16, 2009), http://www.archbishopofcanterbury.org/articles.php/767/human-well-being-and-economic-decision-making.

[[2]]. Amartya Sen, Development as Freedom (Oxford: Oxford University Press, 1999), 6.

[[3]]. World Economic Forum, Faith and the Global Agenda: Values for the Post-Crisis Economy (Geneva: World Economic Forum, 2010), v.

[[4]]. Alan S. Blinder, “When Greed Is Not Good,” Wall Street Journal, January 11, 2010, http://online.wsj.com/article/SB10001424052748703652104574652242436408008.html?mod=rss_opinion_main.

[[5]]. Louise Story and Eric Dash, “Banks Prepare for Big Bonuses, and Public Wrath,” New York Times, January 9, 2010, http://www.nytimes.com/2010/01/10/business/10pay.html.

[[6]]. Arabella Milbank, Adam Atkinson, and Angus Ritchie, “Christian Responses to the Financial Crisis: A Briefing Pack for Clergy and Parishes,” http://www.londonpen.org/wp-content/uploads/2011/11/responding-to-the-financial-crisis.pdf.

[[7]]. Williams, “Human Well-Being and Economic Decision-Making.”

[[8]]. Pontifical Council for Justice and Peace, “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” (Vatican City: Pontifical Council for Justice and Peace, 2011), http://www.news.va/en/news/full-text-note-on-financial-reform-from-the-pontif.

[[9]]. Joel C. Hunter, “Freedom Begins with Christ! 2011 Sermon Series Preview by Pastor Joel Hunter,” NorthlandChurch.net, December 30, 2010, http://www.northlandchurch.net/blogs/set_free_a_sneak_preview_of_where_were_headed_in_2011/.

[[10]]. Simon Johnson, “The Quiet Coup,” Atlantic, May 2009, http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/#.

[[11]]. Luke Bretherton, “Neither a Borrower nor a Lender Be”? Scripture, Usury and the Call for Responsible Lending (London: Contextual Theology Centre, April 2011), http://www.londonpen.org/wp-content/uploads/2011/11/bretherton-on-usury.pdf.

[[12]]. Thomas L. Friedman, “The Inflection Is Near?,” New York Times, March 7, 2009, http://www.nytimes.com/2009/03/08/opinion/08friedman.html.

[[13]]. Stewart Wallis, “A Great Transition,” New Economics Foundation blog, September 27, 2011, http://www.neweconomics.org/blog/2011/09/27/a-great-transition.

[[14]]. Ibid.

[[15]]. Ibid.

[[16]]. Michael Moore, speech to protesters in Madison, Wisconsin, March 5, 2011, http://www.youtube.com/watch?v=wgNuSEZ8CDw&feature=player_embedded. This fact was substantiated by PolitiFact Wisconsin, http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/.

[[17]]. Jonathan Weisman, “WSJ/NBC Poll: Most Americans Say U.S. Economy Favors ‘Small Portion of the Rich,’” Wall Street Journal, November 7, 2011, http://blogs.wsj.com/washwire/2011/11/07/wsjnbc-poll-most-americans-say-u-s-economy-favors-small-portion-of-the-rich.

[[18]]. “Comparing the Growth of US Family Incomes,” United for a Fair Economy, April 28, 2011, http://faireconomy.org/node/1713.

[[19]]. Ibid.

[[20]]. Yachts International (September/October 2011): 89, http://viewer.zmags.com/publication/d0a6cd6a#/d0a6cd6a/91.

[[21]]. For the original petition against the fee, see http://www.change.org/petitions/tell-bank-of-america-no-5-debit-card-fees, and for Bank of America’s statement announcing their change of policy, see http://mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-newsArticle&ID=1624356&highlight=.

[[22]]. Chrystia Freeland, “Working Wealthy Predominate the New Global Elite,” New York Times, January 25, 2011, http://dealbook.nytimes.com/2011/01/25/working-wealthy-predominate-the-new-global-elite.

Jim Wallis is president and CEO of Sojourners and editor in chief of Sojourners magazine. He is a best-selling author, public theologian, national preacher, social activist, and international commentator on ethics and public life. Wallis has written ten books, including the New York Times bestsellers God’s Politics: Why the Right Gets It Wrong and the Left Doesn’t Get It and The Great Awakening, and is a frequent speaker in the United States and abroad. He has written for major newspapers and appears frequently on CNN, MSNBC, and Fox News, on shows such as Meet the Press, Morning Joe, Hardball, The Daily Show with Jon Stewart, and The O’Reilly Factor, and on NPR. He also teaches at Georgetown University and has taught at Harvard University.

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