Prosperity theology in recent years made so much out of the notion that the faithful could pray their way to riches. However, that was all before the 2008 financial crisis, which has left a number of televangelists now focused on debt reduction rather than wealth accumulation.
There are deeper religious questions to ask, however. Can being spiritual increase your bottom line? Should our faith and pocketbook be aligned? Lastly, can this belief in capitalism be viewed as the moral way forward as the world's economies struggle to get back on their feet? This feature is a review of some current and intriguing efforts to explore these questions.
In 2008, with the backdrop of Lehman Brothers collapse, the John Templeton Foundation added to "Big Questions" several questions regarding the market and morality. The foundation, which has supported a number of religion and science initiatives nationally and internationally, was interested in exploring the relationship of recent economic developments to ethics and morality.
The question posed to various academicians and policy makers was, "In what ways does the free market strengthen or undermine personal virtue and concern for others?" Several individuals have responded with research papers.
For Jadgish Bhagwati, university professor of economics and law at Columbia University, markets can be moral. He found that many believe that poor peasants would respond to the greater economic opportunities of taking their children out of school and putting them to work to earn income, when in fact the opposite happened. The rising earnings of rice growers in Vietnam, for example, spurred parents to keep their children in school. It appears rice growers no longer needed the meager income that an additional child's labor could provide and so encouraged education.
John Gray responded that the morality of markets depends on variables. An emeritus professor at the London School of Economics and author of
False Dawn: The Delusions of Global Capitalism. His take is that free markets always involve some moral constraints, which are policed by governments. For example, slavery is forbidden in modern market economies.
A modern economy in China may show some of capitalism's dark side according to Qinglian He, a Chinese economist and the author of
The Pitfalls of Modernization: The Economic and Social Problems of Contemporary China. She argues that the market flaws stem from the actions and motivations of its participants rather than its design. Enforcement is the issue. She points out how activities such as bribery, child labor and selling of body parts are illegal but no decisive action is taken by the government or by business leaders. Chinese government and party officials make the laws and supervise economic activities even as they themselves seek to make profits. She says the tolerance of these activities, not the growth of the free market, "distorted the moral order of Chinese society."
Another 'no' answer was from Michael Walzer, professor emeritus in the School of Social Science at the Institute for Advanced Study in Princeton, NJ, and author of
Thinking Politically. He believes competition may be to blame. He found that competitive pressures to break ordinary rules of decent conduct are strong and also encourage the desire to produce good "reasons" for having done so. The result of competition is the corrosion of moral character.
Michael Novak, a scholar at the American Enterprise Institute, took a look at American history and found that U.S. commercial society was developed in a way that encourages hard work and innovation, and the roots run deep in Jewish and Christian religions. Former US Secretary of Labor Robert Reich says we would rather not know whether markets were truly moral. He believes that our market desires conflict with our moral commitments. For example, when products can be made more cheaply overseas our search for great deals may come at the expense of our neighbor's jobs and wages.
There are additional questions to explore besides those being asked by the Foundation. For instance, what about the stock market? Can earnings and profits that lead to higher share prices be aligned with our ideals of hard work and innovation?
Nicholas Nassim Taleb, known as the Black Swan economist, has talked about a "black swan robust" society, which is a society that can withstand difficult-to-predict events. He has said that we live in a world that is much more complicated than our economic system. There are intricate connections in a system we do not understand, and some of these connections were behind the 2008 financial crisis. As the nation's largest banks become larger due to consolidation, the mistake of a single bank may lead to a magnified domino effect in the future.
John Bogle, founder and former CEO of mutual fund complex Vanguard, told the Templeton Foundation that stock ownership of individuals has fallen significantly from the 1950s when 92% of stock ownership was by individuals, whereas in the 1990s that figure fell to 25% with the remaining 75% of the stock market being owned by mutual funds and pension funds. He believes that too frequently corporations, pension managers and mutual fund managers have put their own financial interests ahead of the interests of the principals whom they are duty-bound to represent. Those are the 100 million families who are the owners of mutual funds and the beneficiaries of our pension plans.
Given that not all market players are acting in their constituent's best interest, an another question becomes, is there a way to make profits without taking advantage of people or that even helps society to become a better place?
Ted Malloch of Yale University believes it is possible for economic practice to make society a better place through "Spiritual capital" or virtues that sustain a business and a free market. These are virtues that build up a network of trust that is ultimately critical to the success of a global economy. His search has led him to look at the very "soul" of a company as the source of long-term success.
Through a $1.875 million grant from the John Templeton Foundation, the Yale Center for Faith and Culture is now exploring spiritual capital by developing case studies, a documentary, and other resources such as Malloch's book
Spiritual Enterprise: Doing Virtuous Business.
In his book, Malloch looks closely at the role of faith in the leadership and operation of a successful business and the necessity for "spiritual capital" for a healthy market. His formal definition of "spiritual capital" is the fund of beliefs, examples and commitments that are transmitted from generation to generation through a religious tradition, and which attach people to the transcendent source of human happiness.
The case studies review companies for a myriad of aspects, including the role and scope of personal religious ethics in economic decisions faced by all persons and groups. Malloch and the Center will also look at the impact of religion on conduct and rules affecting employees and employers, consumers and producers, and customers.
The case study of Chick-fil-A illustrates this work. It is one of the nation's most profitable, privately owned fast food companies with sales totaling more than $3 billion in 2009. In the study Malloch focuses on the unique move by the restaurant chain to close on Sundays. The move reflects the company's spiritual values and is a reading of the Fourth Commandment to "honor the Sabbath and keep it holy." According to founder S. Truett Cathy, the company has been blessed by God because of the keeping of the Sabbath. The case study considers how these spiritual values affect the company's ability to create value in a competitive marketplace and looks at how the values connect with Chick-fil-A's broader corporate culture and philanthropic endeavors.
Over time Spiritual Capital Initiative plans to host conferences to discuss practical wisdom and business from perspectives of other religions, such as Hinduism, Buddhism, Judaism and Islam. It will culminate with a global conference at Yale in 2013.
Susan Barreto is a journalist who has been following religion and science since 2003 with articles appearing in various newsletters and The Lutheran
magazine. She is also a deputy editor of a monthly hedge fund magazine owned by Euromoney Institutional Investor. Susan is a long-time member of Luther Memorial Church in Chicago, where she lives with her husband and son.
Covalence, June 2011