Video: Root Cause of Meltdown

September 26, 2008

From Patriot Room


Friends of the Unrighteous Mammon

September 26, 2008

From First Things:

What is the theological significance of wealth and its production? The debate rages over this issue in American public life today. But the debate is not new. It is quite ancient, and it has only grown in complexity and precision in recent times.

A particularly fruitful period of discourse occurred in antebellum America. Here we had what was probably the freest and most productive economy in the history of the world. It was changing life for millions day by day—with new products, new lines of production, new methods of distribution—all of which had an enormous impact on family life and even the ethical outlook of people.Class roles were shifting constantly, and there emerged a new class of what was then perceived to be something new in history: the very rich who became that way through commerce. America’s pastors and ethical thinkers were challenged to come to terms with the meaning of all this material activity.

To put it in the memorable phrase of Dr. Stewart Davenport’s new study, Friends of the Unrighteous Mammon: “What did Protestants in America think about capitalism when capitalism was first something to think about?”

Associate professor of history at Pepperdine University, Stewart Davenport tackles the paradox of America’s exuberant spirituality and what he sees as its “gross materialism.” That such a paradox should exist in the Christian is easy to understand once one considers that the Christian ethic itself emerged in the first instance within a pre-industrial, pre-capitalist age. Coming to grips with the temptations and opportunities afforded by a free and prosperous economy would call for some thought.

Two additional questions also present themselves: Which ethic made possible the necessary preconditions of the free economy? Which ethic finds itself more suited for deepening the moral dimension and enriching the conversation among a people formed in such an economic system? These will become critical questions as the world economy continues its inevitable globalization and economic integration.

One unfortunate aspect of Davenport’s generally excellent survey is what appears to be his uncritical acceptances of the Weberian premise that “Protestantism’s unique contribution to this process [of the development of capitalism] was through the doctrine of “calling”, which hallowed the worldly and therefore conventional actions of everyday believers” producing a kind of “worldly asceticism.” This is a conventional mistake that fails to take into account the rather “worldly asceticism” of St. Benedict and the monks, with their charism of ora et labora; the Thomistic idea of grace building on nature; the defense of the merchant by St. Bernardino; or the incredibly prescient thought pouring out of Salamanca in the sixteenth century from writers such as Juan de Mariana. And unless one invents a novel theory to say that St. Josemaría Escrivá’s project of sanctifying the world through one’s mundane occupation (the Opus Dei or Work of God) somehow found its inspiration in the Protestant notion of vocation, I think there is a greater Catholic pedigree to worldly asceticism than is commonly supposed in academe.

But this blemish is understandable in that Davenport is looking at America, and in any case it is a mild blemish in what is an otherwise fine study of the period, providing an accessible catalogue of the various schools of thought, which he divides into three categories, each representative of three main ethical traditions of Western Christianity: Clerical Economists (distinguished by their utilitarianism), Contrarians (by deontology) and the Pastoral Moralists (by virtue ethics). The book offers an overview of these contending approaches, providing along the way a representative selection of the thought and writing of each respective school.

Such forgotten or unknown men as John McVicker, Alonzo Potter, Francis Wayland, and Francis Bowen were among the clerical economists, who were concerned “to explain how God was still part of the developing market economy, and . . . how this developing economy was good for America.” They were defenders of private property, the merchant class, and wealth production generally. They were at home with what later came to be called the American system, and they appreciated its genius. They counseled their flock to be at peace with enterprise, to work hard, to keep contracts, to defend their property, and to create wealth.

I might take issue with the designation “utilitarian,” unless we think of it in the strict sense of favoring the greatest good for the greatest number, which appears to be Davenport’s intention. The term, however, is likely to conjure up images of Jeremy Bentham opposing natural rights and favoring schemes for maximizing consumer welfare. Actually these people integrated orthodox protestant teaching with classically liberal ideas about freedom.

The Contrarians provide a mirror image of the first group. They felt great discomfort with the ever growing, ever changing environment of American economic life. One character among the Contrarians is Stephen Colwell. Energetically anti-free trade, he was also pro-slavery (though not happy about its existence in the U.S.), making the argument that U.S. slaves were better of in their master’s care than were English workers in their factories.

Also counted among the Contrarians, up until 1840, was the more well known and complex personality of Orestes Brownson, who more than any other figure in the book–possibly more than any other personality in the period–argued, at one time or another, virtually every side of the great issues of the day. A convert in the Second Great Awakening, a Presbyterian for nine months, Universalist, radical social reformer, atheistic rationalist, Unitarian, and transcendentalist—Brownson tried it all. Finally, at age thirty-six, he came to rest in the Catholic Church, where he remained until his death. Brownson is the only Catholic considered at any length in Davenport’s work, and the only thinker to be grouped into two categories: the Contrarians, and the Pastoral Moralists.

This latter group Davenport sees as those who “approved of the development of market capitalism but wanted to live as Christians within its confines.” Rather than being boosters of a market economy for what it could do and produce (like the utilitarian clerical economists), this disparate group, which reflects not so much a school of in-depth thought as much as a mode of thinking about the reality of a free economy and the lived Christian faith, focused on the individual’s virtue as an economic actor.

Although never a ferocious champion of market capitalism, Brownson was perhaps attracted to accepting such ideas as the division of labor, free trade, and market institutions because he came to a different understanding of anthropology and how the person relates to any institutional and social arrangement—all of which are flawed aspects of the kingdom of man. With this understanding, Brownson came to repent of his earlier attempt “to translate Christianity into Socialism.”

Joining Brownson in this group would be Orville Dewey, Henry Boardman, Jason Whitman, and Andrew Preston Peabody—none of whom wrote any odes in favor of capitalism, but who together created, through their essays and sermons, a general sense of the acceptability of the free economy, tempered by reflection on the appropriate conduct required of moral actors within the context of economic liberty. From among these personalities there emerged the idea of the pastoral moralist setting boundaries and outlining moral principles, rather than descending into the nuanced and complicated technicalities of economic science as such, in which the Christian tradition does not pretend to possess competence.

This, of course, opens up the whole area of prudence, which is often disregarded in religious policy debates where zealots on all sides forget that once outside the “non-negotiables” of human life and dignity proper, the means of achieving good ends is most often a matter of prudential, rather than doctrinal, discernment.

In reading through Prof. Davenport’s text, I was struck by how similar are the contours of the economic debates in this period of American history are to our own debates. There are those who are comfortable with the idea of a free economy as a necessary institution for providing material well being for the human family. It simply is not possible to support six billion people on a system of central planning or on agrarian or distributivist principles. At the same time, there are the Sojourners who feel grave discomfort at what they perceive to be the materialism of our age and thereby seek system-wide change. Finally, there are the moralists who minimize debates about politics and rather seek to inspire personal moral piety.

What we need to see is the greater compatibility between the three positions than is usually supposed, provided there is freedom in which the three approaches can work. No society under any economic system will be free of greed, but the free economy produces the wealth that also makes charity and philanthropy possible. In addition, for those who seek simpler lives and private piety, the free economic system provides the room and possibility to make that choice. Davenport does not appear to be what I would call a pro-market thinker, which is what I suppose I might be called. Nonetheless, this book has identified the critical issues of the debate in those times and in our own. Christianity has adapted itself to many cultures and settings, but the advent of capitalism did provide its own special challenges.

How can a religion born in a world of poverty, and centered on the eventual glory associated with death on a cross, thrive in a world of fantastic levels of material prosperity? The experience of Americans shows how, and the views of the thinkers highlighted in this volume explain how a reconciliation can occur. It comes down to the critical fact that the most productive economic system ever known also happens to be the one that is most respectful of human rights and dignity, and provides the freedom to worship.


The Anatomy of a Train Wreck

September 26, 2008

If you are interested at sifting through the political posturing to get at the truth of this crisis, here is some good bedtime reading: The Anatomy of a Train Wreck: The Causes of the Mortgage Meltdown.


God and Wall Street

September 26, 2008

From Catholic Exchange:

Most of us have been badly shaken by the tumultuous events of the last 48 hours in Wall Street. If you have an IRA or some kind of retirement plan, no doubt you’re licking your wounds. You may even be fearful. I understand. I’ve experienced those apprehensions myself.

But as I told a worried young man on our team today, we need to remember that fear is always the enemy of faith. A few months ago, in the midst of fervent prayer during my devotions, I had an especially strong realization that my life was completely in God’s hands. To live is Christ, to die is gain. I’ve known that intellectually, but for the first time in my life, it is now engraved in my soul. Now, when things go wrong, I turn to God, pray, trust Him, and feel an amazing peace. I’m His.

And you know what else? The financial markets are His. The world is His. I don’t know why it took me 35 years to get this, but I finally have.

Here’s something else to remember: God often uses adversity for His greatest blessings-in this case in several ways. Christians are called to do the best things in the worst of times. Take, for instance, the plagues that wracked the Roman Empire, which I wrote about in my new book The Faith. The doctors and wealthy pagans fled the cities, but the Christians stayed and tended to the sick and dying. That sacrificial love-visible for all to see-fueled the incredible growth of the Church.

Today we have an opportunity to see how the Acts 4 church really works-where Christians help one another through tough times and reach out lovingly to our neighbors.

What’s more, there’s a great opportunity for you to explain the importance of a biblical worldview to your friends. Because these financial troubles are the direct result of our nation turning its back on God. Simply put, the rise of relativism in postmodern Western life has led to the collapse of a moral consensus. With everyone making up his own rules when it comes to right and wrong, is it any wonder our economic system is under stress?

Michael Novak, the great theologian, has said that Western democratic capitalism is like a three-legged stool, resting on political freedom, economic freedom, and moral restraint. Take away moral restraint, and the stool collapses.

Look at how we reached this crisis: Sensing easy money, Wall Street bundled up mortgages without regard to risk, sold them off, and made a big profit. Risky, even dangerous mortgages were then being offered to people who had little chance of paying them off. And when the housing market slowed and house values went down, the mortgage market began to collapse like-dare I say it-a house of cards.

So this is a time for steady nerves and keeping things in perspective. Take a look out your window. The sky is not falling.

Above all, remember this: God is on His throne. Maybe the “eat, drink, and be merry” attitude of Americans needed a little adjustment-as does the spiritually casual attitude of the Church.

The current troubles are not going to lead to the collapse of the American economy, the strongest in the world. But I do think God is telling us to sober up and get serious about what we believe and how we live.


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