Reflections from Seminary Students

Grace and Money

April 18th, 2011 § 0 Comments

Kathryn Tanner splits Economy of Grace into three sections. In the first, she questions whether Christianity provides specific influence on economic discussions. Answering in the affirmative, Tanner continues in the second section to outline a theological foundation for economics. Finally, she concludes with a section promoting potential applications of a theological economy in a practical manner.

At first glance, theological and economic discussions contain little similarity. On one side resides the language of justice, faith, and health; on the other resides the language of capital, profit, and competition. In the first chapter of her tome, Tanner explores the relationship between Christianity and economics. While most typically view theology in the realm of the individual and economy in the realm of community, Tanner suggests that the link between the two in the simplest form is grace and money.

Without further explanation, of course, such an assertion raises the eyebrows of many theologians as the threat of prosperity theology presents itself. Tanner battles these assumptions by suggesting the link between grace and money lies in the conception of distribution.

Just as theology is concerned with the distribution of grace in our society, so too is economics concerned with the distribution of money. Yet the two starkly contrast, since the distribution of grace operates under noncompetitive assumptions.

Tanner writes,

By setting Christian ideas of the production and circulation of goods into a comparative economy, by making that comparative framing an economic one, my intent is just to suggest that a Christian economy has everything to do with the material dimensions of life – with the economic more narrowly construed. It is clear that, set within a comparative economy, grace has everything to do with money (29).

Unconditional Giving

Having presented the connection between theology and economics, Tanner utilizes the space in chapter two to discuss alternative forms of the economic system based on a theological lens. While efforts have been made to promote a theological economy through the concepts of inalienable property rights and gift exchange, both systems fall short of truly uniting with the notion of noncompetitive grace.

A theologically based economy must act similarly to the way God acts in relation to humanity.

Tanner adds,

The whole point of God’s dealings with us as creator, covenant partner, and redeemer in Christ is to bring the good of God’s very life into our own. Our lives participate in that divine mission and thereby realize the shape of God’s own economy by giving that follows the same principle: self-sharing for the good of others (85).

Scripture presents God as an unconditional giver. Everything we have is a result of God’s generosity, and humanity is incapable of repaying such a gift to God. Therefore, our best approximation is to unconditionally give to others as God gives to us.

Constructing an Economy of Grace

But does this theological view of economy contain practical application, or does it merely reflect a utopian state? In the third chapter, Tanner attempts to apply her framework on a practical level.

Tanner admits that her economy of grace carries utopian themes. Given the current state of the global economy, it is probably impossible for noncompetitive grace to achieve an economic stronghold.

Nevertheless, noncompetitive grace possesses applicable principles.

Photo by Annette Young

For example, capitalists typically seek the highest  profits by pursuing the most efficient production. The cheaper the cost of manufacturing with a maintained quality, the higher the profits. Yet such practices usually result in capitalists paying employees less and less. Taking this thought process to the extreme, if a company pays employees so little that they are unable to purchase the products, profits will plummet as consumption dies.

An economy of grace, however, suggests that a principle of noncompetitiveness solves this inherent flaw in capitalism.

Tanner notes,

One should, whenever possible, promote growth strategies in which the economy grows and poverty is reduced at the same time (96).

While capitalists can earn significant profits in the short term through diminishing wages, such practices are detrimental in the long term. An economy of grace, on the other hand, suggests that gradually raising wages and lifting the poor out of poverty benefits all of society.

A Slight Critique

While Tanner presents an intriguing vision for a theologically based economy, I find her conclusions to be inconsistent. Although she readily admits that a pure economy of grace is utopian, considering the current state of global affairs, her application of theological tenets to the current form of capitalism changes underlying assumptions minutely.

More specifically, if an economy of grace is based on noncompetitive giving, a gift given in order to expect a return on investment violates the economy of grace. Tanner’s third chapter provides many examples where supposedly altruist behavior helps all stakeholders. But in my mind such assertions betray the root purpose of noncompetitive giving: the notion of self-sacrifice for the good of another.

In this way, Tanner’s attempt to reconcile a theologically based economy with the current capitalist system equates to an argument of good ethics equals good business. What if good ethics equal bad business? Surely at some point a manager must face a decision between ethical behavior and bottom-line profits. Does Tanner’s economy of grace answer this manager’s dilemma? I am doubtful that it can escape its utopian nature.

Charity vs. Microfinance

April 11th, 2011 § 1 Comment

This weekend I attended the Bottom Billions | Bottom Line Conference hosted by SPU’s Center for Integrity in Business. The event served as a convergence zone between business, nonprofit organizations, and the academy seeking to better understand ways that business can help alleviate world poverty.

Of the many interesting subjects discussed at the conference, the topic of microfinance seemed to continuously echo through my head. For those unfamiliar with the term, microfinance occurs when banks or nonprofit organizations loan small amounts to the poor, helping them to use these miniscule amounts of capital to begin income-generating endeavors.

Muhammad Yunus, founder of Grameen Bank, observed that the only thing the poor lacked was opportunity. Without capital, the poor would take a loan from a moneylender at exorbitant rates in order to partake in the economy. At the end of the day, these people took home pennies to support a family. Yunus figured that if he could loan these slight sums at low interest rates, the poor could enjoy selling the products of their labor on the open market, thus creating economic capital and a trail out of poverty.

Photo by lecercle

Charity, on the other hand, gives freely without expectation of return. Many, though, have suggested that pure charity does not eradicate poverty, because the poor become dependent on receiving aid. Blogger Filip Spagnoli aggregates international development aid on his website. The evidence he has compiled suggests that the amount of aid contributed to these developing nations is staggering, and yet economic growth is not a result.

Would development function differently if aid came in the form of a loan instead of charity? Yunus believes that loans to the poor provide the best investment.  Many stuck in the cycle of poverty are smart and hard working; they just need the money to start. While big banks typically consider micro-loans to be both risky and inconsequential, Yunus’ experience argues that the poor possess the highest incentive to repay their loans.

Of course, when unforeseen problems such as natural disasters and economic meltdowns place the poor in positions where they are unable to repay the loan, Yunus extends grace and loans more money to help the poor back on their feet. In this way, microlending encourages entrepreneurial spirit. Where charity gives the widow a fish, microfinance engages in teaching the widow to fish.

Although charitable giving in and of itself is never a bad thing, I do wonder if it is the best thing. Of course, a free gift without expectation of repayment carries the highest blessing for the receiver, yet long term, I wonder if microloans create a better society.

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