A pink arrow with illustrations of coins. CREDIT: ALEXSECRET
Can a financial organization succeed without a strong moral framework that demands honesty, appropriate caution, hard work, and fair dealing?

In his book, The Great Degeneration: How Institutions Decay and Economies Die (Penguin, 2013), Niall Ferguson takes on the world of global finance and the debate on regulations vs deregulation. He ends up arguing against those who believe more regulation will limit large scale financial crises. He believes that many of the newer regulations are obscure, overly complicated, and merely kick the problems they try to address further down the street for someone else to resolve. “Unintelligent design” is how he labels a number of monetary policies that are today in place.

He claims that a healthy economy is more or less “Darwinian.” Some good “genes,” successful economic habits, can be passed on from one financial organization to others. “Mutations” in the form of economic innovations should be encouraged. Competition helps determine which practices succeed best. Economies should be diverse, mirroring the biodiversity of the natural world. Extinction of business entities which no longer succeed should be allowed to occur naturally.

Also, it turns out that, according to Ferguson, the ethical behaviour of business leaders and managers of the economy is foundational to financial progress. If the rules are set up in such a way that financial actors can make fortunes by deviously manipulating the mechanisms they manage, a number will. Therefore, we need not only a rational system of rules. We also need strong penalties to deter individuals from profiting from practices that financially ruin those who are farther down the economic food chain.

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But this raises a question. Can a financial organization succeed without a strong moral framework that demands honesty, appropriate caution, hard work and fair dealing? In the Judeo-Christian tradition the answer to that question is, maybe, but don’t count on it. (For the rest of this article I will draw on passages scattered throughout the ancient biblical law codes, the collections of wisdom sayings, the teachings of Jesus Christ, and the collected letters that circulated in the first century Christian community).

That tradition is awash in requirements to treat our fellow person as we ourselves want to be treated. In the earlier parts of that tradition, in the earlier parts of the Bible, we find the command, “love your neighbour as yourself.” With respect to land ownership, it is forbidden to move boundary markers when your neighbour isn’t looking. In the marketplace the rule is to not have two sets of measures, one for when you are measuring out how much (produce) you have to pay, and another for measuring out how much is owed you. Debts are to be avoided. Exorbitant lending interest is forbidden.

No lies may be told in the courts. Individuals must not be lazy, but work hard with the opportunities the are capable of handling, especially when they are young and energy levels are high. There must be some mitigation of economic inequality in that the well-moneyed must temper their desire to acquire hyper-excessive wealth. And government must function with a special eye out for the disadvantaged who can easily become even more disadvantaged.

It seems to me that a cluster of rules like this, if followed by modern money managers, would eliminate international financial meltdowns of the kind we see from to time.

These same principles, however, also work very well for personal or household finances. Don’t lie, but be honest in your financial dealings. Don’t commit acts of fraud in real estate or other financial transactions, even if what you are doing is not strictly illegal. Keep your business and financial dealings “fair and square,” not playing favourites and being consistent in your communications. Avoid debt where possible, especially in today’s world, consumer debt. Don’t allow your desire for new things to turn into greed or envy. Aim to be content with what you have, while nevertheless doing what you can to improve your circumstances.

Last, I would say, be generous. One of the observations made in the biblical book called Proverbs is that a generous person is typically treated generously by others. In fact, the understanding is that the unseen God works behind the scenes, if not to guarantee, then at least to make it generally true, that if you are generous, many good things will come your way. You can “prove” this by trying the opposite approach. See how many doors open for you if you become greedy and grasping.

Many people claim that belief in God or in Christianity is a small thing that can be easily jettisoned or ignored. I do not believe that. My own experience is that with respect to economics and personal financial management, an informed Christian faith has a lot to offer and should not be dismissed.

Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.