Monday, August 17, 2009
The Magnitude of Our Economic Crisis &
Appropriate Religious Response
Val J. Peter
PART I – The Magnitude of the Economic Crisis
In 1991, the unbelievable happened, namely, the Soviet Union collapsed. What Ronald Reagan called “the evil empire” fell in upon itself and its collapse was caused by the Russian government politicians. In the year 2008, the United States suddenly ceased to be the economic leader of the world. What caused this great crash of 2008 and the loss of American’s leadership, as well as a geopolitical setback for the West? Basically, American bankers and American government politicians who failed to regulate as they should. This is a far greater event than has happened in America in at least a century and maybe more.
A. America loses its supremacy in the world
1. The American financial system is seen as having collapsed. The American government regulatory framework is seen as an enormous failure to curb widespread abuses and corruption.
2. People argue about what caused this crisis and mostly they say it was housing prices and the subprime mortgage market in the USA. Others say it in a different way, namely, that when you have very, very low interest rates and an awful lot of money available, the temptation is to make more and more loans and bigger and bigger loans to less and less credit worthy clients. Examples: you are a lending agent at a bank and you get paid on the basis of how many loans you make. So at this low interest rate, you can make more money by giving mortgages to people who can’t possibly pay them back. And you also collect a bigger bonus or perhaps a 10% cut.
When the mortgage rates started to rise, thousands and thousands of borrowers could not afford the rise in variable rates with subsequent delinquencies.
3. Americans have lost one quarter of our net worth in just about a year and a half since June 30, 2007 and the trend continues. Why? Because the single largest asset of Americans is equity in their homes. Total home equity in the United States in its peak in 2006 was $13 trillion and has dropped to $8.8 trillion by mid-2008 and continued falling.
Retirement accounts are the largest household asset of Americans. These dropped by at least 22% from $10.3 trillion in 2006 to $8 trillion in mid-2008.
At the same time, savings and investment assets (apart from retirement savings) lost $1.2 trillion. Pension assets (apart from retirement savings) lost $1.2 trillion. Together these losses total a whopping $8.3 trillion.
4. By November 2008, the S&P 500, the U.S. market indices, was down 45% from its 2007 high.
5. This crisis reflects the greatest regulatory failure in modern history. Western capital markets will not return to full health for years. The U.S. financial system is seen as having failed. This will stop the global shift towards economic deregulation.
6. The U. S. will remain the most powerful nation on earth for a while longer because its military strength alone ensures this. But America has lost its place as economic leader in the world.
B. Globalization in retreat
1. The longstanding brief that everybody wins in a single world market is no longer widely held. Much of the world blames the U.S. financial excesses for the global recession. So the U.S. model of free market capitalism is out of favor.
2. The world’s three largest economies, U.S., European Union and Japan will not be able to generate a normal cyclical recovery. The global expansion of goods, capital and jobs started reversing. The exports started falling sharply. The World Bank says exports from China, Japan, Mexico, Russia and the U.S. fell by 25% or more in the year ending 2008.
Capital flows were plunging. Emerging markets are projected to receive only $165 billion in net positive capital inflow this year (2009) down from $461 billion in 2008.
3. Immigrant workers are now returning home in waves. Japan and Spain are offering them cash to leave. Malaysia is forcing them out.
4. Countries in Africa have been hardest hit. Democratic Congo, as well as the Central African Republic are in political chaos. Central African Republic cannot pay its civil servants. It is literally falling apart. The Democratic Congo will be soon be unable to import food and fuel, namely, essentials. A World Bank study estimates that 53 million people living in emerging markets will fall back into absolute poverty in 2009. Then Russia and Iran are hurt very, very badly. Iran has been losing money on every barrel of oil it sells. Russia is too dependent on a single giant source of income…oil and gas. Its economy, too, is in trouble.
5. Only China has prevailed. China’s growth did diminish, but not by much. It is becoming clear that the U.S./China relationship emerges as the most important bilateral one in the world. The two nations have very similar geopolitical interests. Neither China nor America wants Iran to acquire nuclear weapons. Neither wants Korea to become destabilized. Neither wants Pakistan to become a failed state.
SUMMARY: Free market capitalism, globalization and deregulation which had been rising for 30 years has now ended.
C. What does this new world look like?
1. Free-market capitalism is in enormous decline.
2. In its place has come state capitalism, a system where the state functions as the leading economic actor and uses markets primarily for political gain.
For example, it has been said that the economic capital of the United States is no longer New York City, but is now Washington, D. C. And with that, comes the injection of politics into economic decisions. A bad deal!
3. State capitalism has four primary agencies:
(a) National oil corporations – the 13 largest oil companies in the world measured by their reserves are owned and operated by governments, not multinational corporations such as BP, Chevron, ExxonMobil, Shell or Total. These companies are: Saudi Arabia’s Saudi Aramco; the National Iranian Oil Company; Petróleos de Venezuela; S.A.; Russia’s Gazprom and Rosneft; the China National Petroleum Corporation; Malaysia’s Petronas and Brazil’s Petrobras. State owned companies control more than 75% of global oil reserves and production.
(b) State owned enterprises – Here governments don’t just regulate the market. These state owned enterprises help bolster political leaders. What are state owned enterprises? Think of Angola’s Endiama (diamonds), Azerbaijan’s AzerEnerji (electricity generation), Kazakhstan’s Kazatomprom (uranium), and Morocco’s Office Chérifien des Phosphates. Then also think of Russia’s fixed line telephone and arms-export monopolies. Think of China’s aluminum monopoly, power-transmission duopoly, major telecommunications companies and airlines. Think of India’s national railroad.
(c) In some developing countries, large companies remain in private hands, but rely on government patronage in the form of credit, contracts and subsidies. Here you have corruption, bribery and everything that you get when you drive out competition. For example, in Russia any large business must have favorable relations with the state in order to succeed. National champions are controlled by a small group of oligarchs who are personally in favor with the Kremlin. The companies Norilsk Nickel (mining); Novolipetsk Steel and NMK Hlding (metallurgy); and Evraz, SeverStal and Metallionvest (steel) fall into this category. In China, the same applies.
Variations of the privately owned but government-favored national champions have cropped up elsewhere: Cevital (agroindustries) in Algeria, Vale (mining) in Brazil, Tata (cars, steel and chemicals) in India, Tnuva (meat and dairy) in Israel, Solidere (construction) in Lebanon, and the San Miguel Corporation (food and beverage) in the Phillipines.
(d) The task of financing these companies has fallen in part to Sovereign Wealth Funds (SWFS). These act as repositories for excess foreign currency earned from the export of commodities or manufactured goods. They are more than just bank accounts. They are state-owned investment funds with mixed portfolios of foreign currencies, government bonds, real estate, precious metals and a stake in lots of companies, foreign and domestic. The Kuwait Investment Authority, now the world’s fourth-largest SWF, was founded in 1953. But the term “sovereign wealth fund” was first coined in 2005, reflecting a recognition of these funds’ growing significance. Since then, several countries have joined the game: Dubai, Libya, Qatar, South Korea and Vietnam.
All of this makes markets less competitive and less productive. Only free markets can produce durable prosperity. Please note that since the great collapse of 2008, governments of the world’s wealthiest countries are now intervening in their economies and taking ownership of private assets. The U.S. and Europe governments know that to maintain popular support they must promise to return these long enterprises and banks into private hands once they’ve been restored to health. Not so in other places.
We said above New York City was the world’s financial capital. It is now no longer even the financial capital of the United States. Washington is. Similar shift of economic responsibility is taking place throughout the world: from Shanghai to Beijing, from Dubai to Abu Dhabi, from Sydney to Canberra, from Säo Paulo to Brasilia, from Mumbai to New Delhi. And in London, Moscow and Paris, where finance and politics coexist there is the same shift occurring toward government.
The result: deep state intervention in the economy means a door is opening to bureaucratic ways to inefficiency and corruption. This is more likely to hold back growth.
Now there is much talk about “decoupling,” the process whereby emerging economies develop a domestic base to free them from dependence on consumer demand in the U.S. and Europe. Incidences of decoupling are found in Brazil, China, India and Russia.
PART II – The Spiritual Implications of Global Crisis
A. Economic theory in the last 20 years has harmed human flourishing
In the Catholic tradition, there was a Second Vatican Council. One of the documents was called “The Church in the Modern World.” And reflecting on Scripture, it says something very important for all of us.
“Christ’s redemptive work, while of itself directed toward the salvation of human beings involves also the renewal of the whole temporal order.”
This document insists that “the spiritual and temporal orders are so connected in the one plan of God that He, Himself, intends in Christ to appropriate the whole universe into a new creation, initially here on earth, fully on the last day.”
In other words, one of the spiritual messages we receive here is to try to integrate the following of Christ with wellbeing of the world’s economic systems and social systems and wellbeing of all human kind.
There was a lot of optimism in those years when this document was written in 1964. Not so anymore! In that sense, the document (the Church in the modern world) is outdated. It would be easy, but false to say that we each have to, in our own lives, simply become better followers of Christ. Of course, that is necessary. It is absolutely essential. There is nothing more important.
But, on the other hand, all the matters related to finances and economy are in trouble at a magnitude never seen in the history of the world. We see what happened when free market economy was joined with less government regulation and how the whole world was harmed. The development of economic theory in the last 20 years has been harmful to the human condition in so many ways which we are experiencing today. In 1964, no one had even thought of that happening.
We were moving toward globalization and it was thought that everyone would gain if we all went down that path. Not so.
B. The moral problems generating the economic collapse
On one hand, the moral problems generating the economic collapse are so enormous that no one can get their hands totally around them at the present time. Theories are in conflict. Issues are extremely complex. Economists live in silos which are ideological, regional, national and global. There is no one grand moral scheme that is concrete enough to be put into effect with very immediate results.
On the other hand, that should not stop us from moving forward. How? There are very clear moral mandates which we should attend to right now, today, tomorrow and into the future.
The first moral mandate is that what is needed among world leaders is traditional virtue. Most everyone will agree we have too many leaders of nations who are very lacking in virtue, who are filled with pride, greed, arrogance. And many others are simply blind to the realities. So the call for virtue among national leaders in an international way would be enormously, enormously helpful. For example, in Zimbabwe, Robert Mugabe is apparently dictator for life. In Burma, the military junta has again silenced their Nobel Peace Prize political activist. Yes, democratic gains have been in Burundi, Liberia, Tanzania, Ghana, Botswana and Mozambique. But 15 heads of African nations have held power 15 years or more and 25-26 for at least ten years.
Various great religions of the world including, especially Christianity, could help enormously by insisting traditional virtues and character count in every country and every place.
The second moral mandate is for economists to repent! Too many economists believe that self-interest (selfishness) will promote the common good. They need to do penance, perhaps not in sack cloth and ashes, but penance. They need to agree that selfishness should not rule.
The third moral mandate is for all of us to relearn the importance of justice.
Justice between individuals (which is contracts and promises).
Distributive justice - allocating goods in such a way that the minimum needs of as many people as possible are met and opportunities for as many people as possible to achieve human flourishing are the goals to be sought after. In the old days, this amounted to, and still does, the right to work, the right to own property, the right to vote, etc. But today it is far more complex than anyone could have ever realized. Free market capitalism is out and state capitalism is in. We then need to realize the real dangers of state capitalism: with its lack of competition, its tendency to bribes, corruption and undue influence.
Social justice is particularly important because it calls us to look beyond yourself to the needs of our neighbors, namely, the common good. It calls on governments to move towards meeting the needs of all.
The fourth moral mandate is to call ourselves to greater virtue (not just our leaders). For those of us who are Christians, our relationship to the Lord has to be deepened so that we serve God and non mammon. It has to be so deepened that we, every day, work on it, do not put it in a silo outside of what we do in the market place.
The fifth moral mandate is to realize our moral categories and traditional teaching are inadequate for how we can address this global crisis from moral perspective. The economic collapse is global, just as we have never seen that before.
This is simply a very brief outline of where we need to go. Let us conclude with thoughts from a very powerful holy person, Dietrich Bonhoeffer, Lutheran pastor martyred by the Nazi’s and who in 1938 published a little work called The Cost of Discipleship. He talked about cheap grace and expensive grace. “Cheap grace is grace without discipleship, grace without the cross, grace without Jesus Christ, living and incarnate.”
Bonhoeffer sees the rich young man in each one of us. We refuse to be detached from possessions. Yes, we can remain in a cheap grace relationship with God, but it will only harm us and harm the common good. Bonhoeffer says: “He who loves God loves Him as Lord of the earth such as it is. He who loves the earth loves it as God’s earth. He who loves the Kingdom of Heaven loves it…as the Kingdom of God on earth.” In other words, we should use our material goods as God means them, namely, not our own but given only to us in stewardship for a short time. “Come Lord Jesus” into our lives, into our national economy and into our world.
Postscript: Much of the data in this chapter comes from three marvelous articles in the July/August 2009 issue of Foreign Affairs. They are: “The Great Crash, 2008” by Roger Altman, formerly U.S. Deputy Treasury Secretary in 1993-1994. The second is: “State Capitalism Comes of Age” by Ian Bremmer, President of Eurasia Group. The third article is: “Globalization in Retreat” also by Roger Altman. See also John Hughey, The Holy Use of Money (Garden City: Doubleday, 1986). Much of the data here is paraphrased from these three articles. However, the moral reflections are my own.
Appropriate Religious Response
Val J. Peter
PART I – The Magnitude of the Economic Crisis
In 1991, the unbelievable happened, namely, the Soviet Union collapsed. What Ronald Reagan called “the evil empire” fell in upon itself and its collapse was caused by the Russian government politicians. In the year 2008, the United States suddenly ceased to be the economic leader of the world. What caused this great crash of 2008 and the loss of American’s leadership, as well as a geopolitical setback for the West? Basically, American bankers and American government politicians who failed to regulate as they should. This is a far greater event than has happened in America in at least a century and maybe more.
A. America loses its supremacy in the world
1. The American financial system is seen as having collapsed. The American government regulatory framework is seen as an enormous failure to curb widespread abuses and corruption.
2. People argue about what caused this crisis and mostly they say it was housing prices and the subprime mortgage market in the USA. Others say it in a different way, namely, that when you have very, very low interest rates and an awful lot of money available, the temptation is to make more and more loans and bigger and bigger loans to less and less credit worthy clients. Examples: you are a lending agent at a bank and you get paid on the basis of how many loans you make. So at this low interest rate, you can make more money by giving mortgages to people who can’t possibly pay them back. And you also collect a bigger bonus or perhaps a 10% cut.
When the mortgage rates started to rise, thousands and thousands of borrowers could not afford the rise in variable rates with subsequent delinquencies.
3. Americans have lost one quarter of our net worth in just about a year and a half since June 30, 2007 and the trend continues. Why? Because the single largest asset of Americans is equity in their homes. Total home equity in the United States in its peak in 2006 was $13 trillion and has dropped to $8.8 trillion by mid-2008 and continued falling.
Retirement accounts are the largest household asset of Americans. These dropped by at least 22% from $10.3 trillion in 2006 to $8 trillion in mid-2008.
At the same time, savings and investment assets (apart from retirement savings) lost $1.2 trillion. Pension assets (apart from retirement savings) lost $1.2 trillion. Together these losses total a whopping $8.3 trillion.
4. By November 2008, the S&P 500, the U.S. market indices, was down 45% from its 2007 high.
5. This crisis reflects the greatest regulatory failure in modern history. Western capital markets will not return to full health for years. The U.S. financial system is seen as having failed. This will stop the global shift towards economic deregulation.
6. The U. S. will remain the most powerful nation on earth for a while longer because its military strength alone ensures this. But America has lost its place as economic leader in the world.
B. Globalization in retreat
1. The longstanding brief that everybody wins in a single world market is no longer widely held. Much of the world blames the U.S. financial excesses for the global recession. So the U.S. model of free market capitalism is out of favor.
2. The world’s three largest economies, U.S., European Union and Japan will not be able to generate a normal cyclical recovery. The global expansion of goods, capital and jobs started reversing. The exports started falling sharply. The World Bank says exports from China, Japan, Mexico, Russia and the U.S. fell by 25% or more in the year ending 2008.
Capital flows were plunging. Emerging markets are projected to receive only $165 billion in net positive capital inflow this year (2009) down from $461 billion in 2008.
3. Immigrant workers are now returning home in waves. Japan and Spain are offering them cash to leave. Malaysia is forcing them out.
4. Countries in Africa have been hardest hit. Democratic Congo, as well as the Central African Republic are in political chaos. Central African Republic cannot pay its civil servants. It is literally falling apart. The Democratic Congo will be soon be unable to import food and fuel, namely, essentials. A World Bank study estimates that 53 million people living in emerging markets will fall back into absolute poverty in 2009. Then Russia and Iran are hurt very, very badly. Iran has been losing money on every barrel of oil it sells. Russia is too dependent on a single giant source of income…oil and gas. Its economy, too, is in trouble.
5. Only China has prevailed. China’s growth did diminish, but not by much. It is becoming clear that the U.S./China relationship emerges as the most important bilateral one in the world. The two nations have very similar geopolitical interests. Neither China nor America wants Iran to acquire nuclear weapons. Neither wants Korea to become destabilized. Neither wants Pakistan to become a failed state.
SUMMARY: Free market capitalism, globalization and deregulation which had been rising for 30 years has now ended.
C. What does this new world look like?
1. Free-market capitalism is in enormous decline.
2. In its place has come state capitalism, a system where the state functions as the leading economic actor and uses markets primarily for political gain.
For example, it has been said that the economic capital of the United States is no longer New York City, but is now Washington, D. C. And with that, comes the injection of politics into economic decisions. A bad deal!
3. State capitalism has four primary agencies:
(a) National oil corporations – the 13 largest oil companies in the world measured by their reserves are owned and operated by governments, not multinational corporations such as BP, Chevron, ExxonMobil, Shell or Total. These companies are: Saudi Arabia’s Saudi Aramco; the National Iranian Oil Company; Petróleos de Venezuela; S.A.; Russia’s Gazprom and Rosneft; the China National Petroleum Corporation; Malaysia’s Petronas and Brazil’s Petrobras. State owned companies control more than 75% of global oil reserves and production.
(b) State owned enterprises – Here governments don’t just regulate the market. These state owned enterprises help bolster political leaders. What are state owned enterprises? Think of Angola’s Endiama (diamonds), Azerbaijan’s AzerEnerji (electricity generation), Kazakhstan’s Kazatomprom (uranium), and Morocco’s Office Chérifien des Phosphates. Then also think of Russia’s fixed line telephone and arms-export monopolies. Think of China’s aluminum monopoly, power-transmission duopoly, major telecommunications companies and airlines. Think of India’s national railroad.
(c) In some developing countries, large companies remain in private hands, but rely on government patronage in the form of credit, contracts and subsidies. Here you have corruption, bribery and everything that you get when you drive out competition. For example, in Russia any large business must have favorable relations with the state in order to succeed. National champions are controlled by a small group of oligarchs who are personally in favor with the Kremlin. The companies Norilsk Nickel (mining); Novolipetsk Steel and NMK Hlding (metallurgy); and Evraz, SeverStal and Metallionvest (steel) fall into this category. In China, the same applies.
Variations of the privately owned but government-favored national champions have cropped up elsewhere: Cevital (agroindustries) in Algeria, Vale (mining) in Brazil, Tata (cars, steel and chemicals) in India, Tnuva (meat and dairy) in Israel, Solidere (construction) in Lebanon, and the San Miguel Corporation (food and beverage) in the Phillipines.
(d) The task of financing these companies has fallen in part to Sovereign Wealth Funds (SWFS). These act as repositories for excess foreign currency earned from the export of commodities or manufactured goods. They are more than just bank accounts. They are state-owned investment funds with mixed portfolios of foreign currencies, government bonds, real estate, precious metals and a stake in lots of companies, foreign and domestic. The Kuwait Investment Authority, now the world’s fourth-largest SWF, was founded in 1953. But the term “sovereign wealth fund” was first coined in 2005, reflecting a recognition of these funds’ growing significance. Since then, several countries have joined the game: Dubai, Libya, Qatar, South Korea and Vietnam.
All of this makes markets less competitive and less productive. Only free markets can produce durable prosperity. Please note that since the great collapse of 2008, governments of the world’s wealthiest countries are now intervening in their economies and taking ownership of private assets. The U.S. and Europe governments know that to maintain popular support they must promise to return these long enterprises and banks into private hands once they’ve been restored to health. Not so in other places.
We said above New York City was the world’s financial capital. It is now no longer even the financial capital of the United States. Washington is. Similar shift of economic responsibility is taking place throughout the world: from Shanghai to Beijing, from Dubai to Abu Dhabi, from Sydney to Canberra, from Säo Paulo to Brasilia, from Mumbai to New Delhi. And in London, Moscow and Paris, where finance and politics coexist there is the same shift occurring toward government.
The result: deep state intervention in the economy means a door is opening to bureaucratic ways to inefficiency and corruption. This is more likely to hold back growth.
Now there is much talk about “decoupling,” the process whereby emerging economies develop a domestic base to free them from dependence on consumer demand in the U.S. and Europe. Incidences of decoupling are found in Brazil, China, India and Russia.
PART II – The Spiritual Implications of Global Crisis
A. Economic theory in the last 20 years has harmed human flourishing
In the Catholic tradition, there was a Second Vatican Council. One of the documents was called “The Church in the Modern World.” And reflecting on Scripture, it says something very important for all of us.
“Christ’s redemptive work, while of itself directed toward the salvation of human beings involves also the renewal of the whole temporal order.”
This document insists that “the spiritual and temporal orders are so connected in the one plan of God that He, Himself, intends in Christ to appropriate the whole universe into a new creation, initially here on earth, fully on the last day.”
In other words, one of the spiritual messages we receive here is to try to integrate the following of Christ with wellbeing of the world’s economic systems and social systems and wellbeing of all human kind.
There was a lot of optimism in those years when this document was written in 1964. Not so anymore! In that sense, the document (the Church in the modern world) is outdated. It would be easy, but false to say that we each have to, in our own lives, simply become better followers of Christ. Of course, that is necessary. It is absolutely essential. There is nothing more important.
But, on the other hand, all the matters related to finances and economy are in trouble at a magnitude never seen in the history of the world. We see what happened when free market economy was joined with less government regulation and how the whole world was harmed. The development of economic theory in the last 20 years has been harmful to the human condition in so many ways which we are experiencing today. In 1964, no one had even thought of that happening.
We were moving toward globalization and it was thought that everyone would gain if we all went down that path. Not so.
B. The moral problems generating the economic collapse
On one hand, the moral problems generating the economic collapse are so enormous that no one can get their hands totally around them at the present time. Theories are in conflict. Issues are extremely complex. Economists live in silos which are ideological, regional, national and global. There is no one grand moral scheme that is concrete enough to be put into effect with very immediate results.
On the other hand, that should not stop us from moving forward. How? There are very clear moral mandates which we should attend to right now, today, tomorrow and into the future.
The first moral mandate is that what is needed among world leaders is traditional virtue. Most everyone will agree we have too many leaders of nations who are very lacking in virtue, who are filled with pride, greed, arrogance. And many others are simply blind to the realities. So the call for virtue among national leaders in an international way would be enormously, enormously helpful. For example, in Zimbabwe, Robert Mugabe is apparently dictator for life. In Burma, the military junta has again silenced their Nobel Peace Prize political activist. Yes, democratic gains have been in Burundi, Liberia, Tanzania, Ghana, Botswana and Mozambique. But 15 heads of African nations have held power 15 years or more and 25-26 for at least ten years.
Various great religions of the world including, especially Christianity, could help enormously by insisting traditional virtues and character count in every country and every place.
The second moral mandate is for economists to repent! Too many economists believe that self-interest (selfishness) will promote the common good. They need to do penance, perhaps not in sack cloth and ashes, but penance. They need to agree that selfishness should not rule.
The third moral mandate is for all of us to relearn the importance of justice.
Justice between individuals (which is contracts and promises).
Distributive justice - allocating goods in such a way that the minimum needs of as many people as possible are met and opportunities for as many people as possible to achieve human flourishing are the goals to be sought after. In the old days, this amounted to, and still does, the right to work, the right to own property, the right to vote, etc. But today it is far more complex than anyone could have ever realized. Free market capitalism is out and state capitalism is in. We then need to realize the real dangers of state capitalism: with its lack of competition, its tendency to bribes, corruption and undue influence.
Social justice is particularly important because it calls us to look beyond yourself to the needs of our neighbors, namely, the common good. It calls on governments to move towards meeting the needs of all.
The fourth moral mandate is to call ourselves to greater virtue (not just our leaders). For those of us who are Christians, our relationship to the Lord has to be deepened so that we serve God and non mammon. It has to be so deepened that we, every day, work on it, do not put it in a silo outside of what we do in the market place.
The fifth moral mandate is to realize our moral categories and traditional teaching are inadequate for how we can address this global crisis from moral perspective. The economic collapse is global, just as we have never seen that before.
This is simply a very brief outline of where we need to go. Let us conclude with thoughts from a very powerful holy person, Dietrich Bonhoeffer, Lutheran pastor martyred by the Nazi’s and who in 1938 published a little work called The Cost of Discipleship. He talked about cheap grace and expensive grace. “Cheap grace is grace without discipleship, grace without the cross, grace without Jesus Christ, living and incarnate.”
Bonhoeffer sees the rich young man in each one of us. We refuse to be detached from possessions. Yes, we can remain in a cheap grace relationship with God, but it will only harm us and harm the common good. Bonhoeffer says: “He who loves God loves Him as Lord of the earth such as it is. He who loves the earth loves it as God’s earth. He who loves the Kingdom of Heaven loves it…as the Kingdom of God on earth.” In other words, we should use our material goods as God means them, namely, not our own but given only to us in stewardship for a short time. “Come Lord Jesus” into our lives, into our national economy and into our world.
Postscript: Much of the data in this chapter comes from three marvelous articles in the July/August 2009 issue of Foreign Affairs. They are: “The Great Crash, 2008” by Roger Altman, formerly U.S. Deputy Treasury Secretary in 1993-1994. The second is: “State Capitalism Comes of Age” by Ian Bremmer, President of Eurasia Group. The third article is: “Globalization in Retreat” also by Roger Altman. See also John Hughey, The Holy Use of Money (Garden City: Doubleday, 1986). Much of the data here is paraphrased from these three articles. However, the moral reflections are my own.
posted by Fr. Peter | 2:07 PM
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