econotheology

Really? The "Dismal Science" and the increasingly irrelevant discipline of theology?

Category Archives: Trust

Does anyone not look out for their own self-interest?

Before I get to far, there is a great opinion piece about the government’s role in the sub-prime mortgage crisis and how this led to the Occupy Wall Street movement in the Wall Street Journal this morning.

My real concern, as I state at the top, is the question about what is greed? Is it a bad thing? Are all forms of self-interest necessarily a bad thing? In the popular media, moralizing abounds about people being greedy and only looking out for themselves. Usually, it is CEOs, bankers, businessmen, pretty much anybody involved in finance or business broadly. I started thinking about this while listening to this radio show from Here and Now on NPR. The main guest Mr. Ron Hira, calls out the heads of Microsoft and other IT companies for being “greedy” and “only looking out for their own self-interest.” The entire show is about older IT workers who can’t get jobs, while at the same time, IT companies are looking for relaxed immigration regulations to higher new workers. The story is mildly interesting but the whole time I was thinking, “the IT workers are looking out for their own self-interest too.”
It seems to me that this is a classic case of people using ethics as a will to power. Of course the IT workers are looking out for their own self-interest. They need work. But, it is not correct to say that the only ones looking out for their own self-interest are the CEOs. I am trying here to clarify some terms. On the popular level, greed means something like “wanting any amount of money more than I say you can have.” I should think we could do a little better. I am proposing something like greed meaning, “wanting an excessive amount of money or wealth.” Excessive being the key term that would be difficult to pin down. The old IT worker would be immune from being called greedy simply because he does not have a good enough job (he is a janitor) and wants to work in IT because at one point in his life he was qualified. The CEO, who already has a high paying job, wants cheaper, younger, better trained employees so his/her company can run more efficiently to maker more money is the greedy one.*
*I guess at this point, we should say that because this show was on an American radio station, and presumably most of the listeners are Americans, that we should not be concerned with Indians being able to get work that they are qualified for.
I guess I am just wondering do we really expect people not to act in their own self-interest? Maybe there is a better way to frame this discussion such that we do not just resort to amateurish moralizing in order to get the upper hand in a debate.
I guess I can’t get away from my academic days, so I like a lot of citing. I recently read a great piece by Michael Lewis on the problems in California government, focusing on the local level. He writes, “Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans.”
So, I am circling back to Occupy Wall Street and the IT workers. We are all grabbing as much as we can. We are all self-interested. Let’s not deny that this is the case. What we need to do is find a way to be for our own self-interest while also looking out for the self-interests of others. The mad grabbing and name calling will not work out in the end. I think that there is some kind of “selfishness” that is a bad thing. But, it has to be more than just looking out for your own self-interest because that is unavoidable. Selfishness has to go deeper and more insidious. Selfishness must me grabbing so that no one else can have any and totally denying that my grabbing won’t have larger social implications or caring about those larger social implications.
I have said much about selfishness without bringing it into the theological or religious arena. Some must be wondering, “where is the Scripture quoting and theological language about selfishness?” That is where we get the idea that selfishness is bad isn’t it? Scripture? Certainly, it is. Much of the discussion of selfishness and money comes form Jesus himself. In the Sermon on the Mount in Matthew 6, Jesus says, “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” Moreover, you do not need a prooftext to realize that the purpose of Jesus life was to lay down his life humankind. This example is clear, we should not just look out for ourselves. While, I am not going to exegete all of this, I think that the interesting part in the whole discussion is just before the previously quoted verse. Jesus discusses storing up for yourselves “treasures in heaven.” Jesus does not spell out exactly what he has in mind. However, it is clear that Jesus knows that incentive drives behavior. He does not say, “do not seek out treasure or reward, or any self-interest.” He wants us to have self-interest. Not self-interest that grabs at the complete expense of others. Self-interest that looks out for the interest of others. In the broader context, the Sermon on the Mount is primarily about looking out for other people. This is probably what Jesus has in mind for treasures in heaven, although it is not made explicit.
I think that Paul sums it up nicely when he writes, Phillipians 2:4 – “Let each of you look not only to his own interests, but also to the interests of others.” What I am arguing for is really nothing new. I am not saying St. Paul could have foreseen what is going on in today’s society, but the injunction seems particularly apropos. And, let’s be clear. The people who have failed to look out for the interest of others, are NOT just Wall Street bankers or CEOs. People signed up for the mortgages that they should have known they could not pay for. Our ENTIRE society is at fault for what is going on here and it will take much more cooperation to rebuild it then what I have seen is going on.
Sorry that was so long. Bonbons for those who finished! Although I doubt there were any! Let me know if you did!

“In God We Trust”

I tend to take my ideas for posts primarily from my favorite blogs and podcasts that help people like me digest the current topics in economics. One of my favorites, that I will continue to recommend is Planet Money recently did a podcast on what would happen in the event of a default of Greek banks, brought about by a vote against raising the amount of money disposable to the EU to support compromised countries and banking systems. For 20 minutes they discuss the domino effects of what seems increasingly inevitable in that area of probably the largest economic system in the world. What struck me the most about the story, and about the discussion of marketplace and the economy at large, is the issue of trust.
The argument essentially goes that the other European countries don’t trust that Greece or other countries like it (see: Portugal, Spain, Ireland, possibly Italy), can repay them if they lend them money to bail out the governments that have spent way more than they have. (The debt to GDP ratio of Greece is around 150% last I heard). So the Greek banks have lent money to the Greek government that can’t pay them back. The everyday depositors wonder if the Greek banks can then pay them back because they have poured all your money into the black hole that is the Greek government. Do you trust your bank? Other Europeans here about this going on in Greece, say in Portugal or Spain, and they start pulling their money out of their banks. They don’t trust their banks. And, on and on it goes. But at the root of it all is trust.
This is probably not a revelation to many readers. But, it is curious to me. My dad tends to be an optimistic guy, but most of the time that I talk to him about recessions, the mortgage crisis and things of that sort, he always tends to talk about it in a way that says everything will be ok. Now why is that? Is he just an optimist? (Sure partly, that’s why I always talk to him when things are going wrong. He can see a way out). But, whenever journalists or the media tells the story, they seem to be more negative. Maybe they just like to sell disaster scenarios. Planet Money journalists are pretty up front about their negativity. My dad also has an another motive. As a bank employee, he needs to be positive because people have to trust him with their money. I am not saying my dad is a liar or swindler, because he is most certainly the most honest and trustworthy man I know. That is why he is a great banker. What is evidenced is the degree to which our economy lives and dies by this idea of trust.
Our currency itself displays this, “in God we trust.” However, that’s not quite right is it. We trust the money itself that it is worth what it says it is. We trust the government who backs it. We trust the banks that will keep it for us to protect it. We trust the the buyers and sellers in the exchange of goods when we use the dollar as the basis for the trade. The government has built in extra layers of trust like the FDIC and various other government agencies that seek to protect that very trust but at the end of the day its still just trust. You could look at the rising costs of commodities like gold and silver as a kind of index of trust that exists in the US. It is at historic levels. It continues to rise daily. We don’t trust the Fed knows what it is doing. We don’t trust banks to invest our money there. What we trust is gold.
I think one of the most interesting explanations to the reason for the recession that began as a result of the mortgage crisis in 2008 was that our financial institutions became to intertwined and convoluted that they could not be understood. If nobody can understand what Citi Bank or AIG was doing with all their financial instruments, they pulled their money. The trust was gone. They just billowed out of control with their mortgages bundles, credit default swaps and the like. No one knew what exactly was going on and the trust eroded. With the trust eroding, the paper market ground to a halt. There was no money being lent. Companies and entrepreneurs need credit to grow and there was no trust. I am not saying I understand totally what occurred in this absurdly confusing quagmire, but it everything seems to revolve around trust.
I am not sure where to turn with all of this analysis or conjecture, but at the very least, it seems to me that it is disingenuous to fault believers of whatever their respective faiths for their trust in the divine. At bottom, any person who engages in the economy at large places large amounts of faith and trust in institutions that they have to believe have their best interest at heart. Or, if not their best interest, at least they most believe that they will not totally wipe out their life savings. We are a massively trusting people.
One considerable difference in the divine is that we are placing our trust in a being of some sort that we have of course never seen, or that nobody has ever seen. The quote from Hebrews 11:28 comes to mind, “faith is being sure of what you hope for and certain of what you do not see.” However, I am not sure that it only applies to the divine. The same might also be said for money, the government or the banks that we put our trust in. Or, the very notion, which cannot be seen, that our money is worth something. As with all esoteric notions, we only see the effects or evidences of their existence without seeing the thing itself. Why are we more likely to trust the banker or Ben Bernanke than we are a God, the creator and sustainer of the universe? It is at least no more foolish than the wager that we engage in daily by placing our savings and banks and relying on them to give us that money back in 10, 20 years when we need. Or the wager place that the labor we engage in on a daily basis will result in a currency that is trustworthy to be traded for the food and shelter we need in order to preserve our lives. We are tremendously trusting, and faithful people. Do not be fooled. Some of just place more faith in our manmade institutions than the divine.