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Given the daunting complexity of this theme, it is understandable if a theologian like myself – with philosophical and other interests but with a very patchy grasp of economics and finance – should proceed with considerable modesty. Nonetheless, the differing orientations in investment policy and the actual direction of investments themselves are making a vast difference to the way the world is going. Matters as humanly significant as these need the widest interdisciplinary airing. In the largest sense, we are all stakeholders in the investment process. My hope is to contribute something of common interest to the conversation; perhaps even to widen its scope, and certainly to affirm the worthwhileness of our concerns.
1. INVESTING FOR LIFE
Investing for life? Well, life is fired at us point blank; and whether we like it or not we are men and women of this time, confronting this set of problems, heirs to the past with its accumulated expertise and blind-spots, yet at the same time facing something unprecedented in scale. Now, at this historical moment, we are being called on to act with responsibility and to put our best resources in terms of experience, intelligence, energy and social concern into doing things as best we can. Ethics are as large as life – and, indeed, the path to eternal life, as the biblical tradition of faith confesses.
Investing for life? Now there's a problem. What exactly is investing? In the broadest economic terms, anything that adds to capital can be termed ‘investment’. Here ‘capital’ is taken as any resource that is apt to produce something more. Hence, some economists speak of at least three types of capital – physical (e.g., money), human (e.g., education, dedication) and social (e.g., established patterns of collaboration). Obviously, that is pretty broad, but at least it indicates that economists are trying to make an inventory of human resources larger than immediately monetary values. That is a good general context.
Still, what is the definition of investment most applicable to our present concerns over the ethics of investment? A colleague, the Professor of Accounting, informed me that the topic, ‘investment’, was not even listed in three of the four standard dictionaries of financial terms with which he was familiar. Even in the wider field of economics, a distinguished professor of economics at another university admitted that his discipline was in such a state of creative disarray that his department did not know what to teach its first year students. Ours is evidently a time of transition, and, one must hope, of far reaching developments. Still, you have to follow some markers if you are to address the issue. And here the above-mentioned colleague suggested a clear working definition of investment: the transfer of wealth to a third party on a promise to return said wealth plus a charge (interest, dividend) for the use of this wealth.
Such a working definition, seemingly, has not a bat-squeak of ethics about it. However, for the amateur at least, it strikes me as pretty clear. Interestingly, it is almost exactly the definition of investment that you find in the parable of the talents in the Gospel of Matthew (Matt 25: 24-29). The merchant reproaches his inactive servant for burying his one talent in the ground for safe-keeping rather than engage in productive investment: "You wicked and lazy slave... You ought to have invested my money with the bankers, and on my return I would have received what was my own with interest" (Matt 25:29). Needless to say, that does not exhaust what the New Testament might have to say on the ethics of investment!
The precise financial definition
of investment is not helped by any number of metaphorical extensions
of the term. Playing the pokies or visiting the TAB might
be an investment of sorts. It is not, however, quite the
responsible activity we are envisaging – granted that having
a flutter is no bad thing in itself. Buying a book on how
to get rich quick might be advertised as a good investment; but
alas, the publishers are in no position to guarantee a speedy
return. Some speak of investing time with your family and
friends; but those unpredictable recipients of your "investment"
are not likely respond to any suggestion that you be guaranteed
a predictable outcome—even though the role of the family
in the economy is a crucial issue.
In fact, in all these instances, be it in the games of chance, or in study and education, or in our relations with others, the value lies in there not being a calculable outcome. Life is bigger than any economy; just as any economy ideally serves the full range of human values. Or, as the New Testament asks, "What does it profit a man if he gain the whole world but suffer the loss of his soul?" (Lk 9:25). Jesus is not content with a purely empirical description of the way business works. He stands for a ‘normative’ view of things, in which the men and women of business are not only creating wealth for the good of all, but in a sense creating themselves. By acting in the world, be it in the world of business or any other pursuit, we can in fact become our best selves, good persons who not intend the good, but are the source of goodness. By developing into persons of genuine goodness, we can ‘save our souls’, not despite, but through our responsibilities in the world of business.
2. SOME THEOLOGICAL POINTS
Admittedly, you could take the words of Jesus in the Gospel to discourage going any further on our topic:
Do not store up for yourselves treasures on earth, where moth and rust consume and thieves break in and steal, but store up for yourselves treasures in heaven, where neither moth nor rust consumes and where thieves do not break in and steal. For where your treasure is, there will your heart be also (Matt 6:19-21).
Indeed, he goes on to say, "No one can serve two masters... You cannot serve God and mammon" (Matt 6:24). I think, rather, that such bracing statements are meant to summon us to a more realistic and humane grappling with the issues of the economic world we live in. The Gospel calls us away from an idolatrous fixation on mere material possessions – a point that will come clearer as we go.
In this regard, let me highlight a few sentences from John Paul II's encyclical on social justice, Centesimus Annus (1991), - The Hundredth Year. The first deals with limitations of purely economic criteria:
Of itself an economic system does not possess the criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality, eg., drugs, ecological destruction (#36)
Then, there is need for a moral and ethical economy:
It is not wrong to want to live better; what is wrong is a style of life that is presumed to be better when it is directed toward "having" rather than "being", and which want to have more, not in order to be more, but in order to spend life in enjoyment as an end in itself. It is therefore necessary to create lifestyles in which the quest for truth, beauty and goodness and communion with others for the sake of the common growth are the factors which determine consumer choices, saving and investments... Even the decision to invest in one place rather than another, in one productive sector rather than another, is always a moral and cultural choice. Given the utter necessity of certain economic conditions and of political stability, the decision to invest, that is, to offer people the opportunity to make good use of their labour, is also determined by an attitude of human sympathy and trust in providence which reveals the human quality of the person making the decisions (#36).
I suggest that the hundred years of Catholic Church teaching (dating from Rerum Novarum in 1891) on social and economic issues is eminently sane, while remaining open to advances in economic theory and social conscience. It recognises the developments that have occurred:
The modern business economy has positive aspects. Its basis is human freedom exercised in the economic field, just as it is exercised in many other fields. Economic activity is indeed but one sector of a great variety of many human activities , and like every other sector, it includes the right to freedom as well as the duty of making responsible use of that freedom... Whereas at one time the decisive factor of production was the land and later capital -- understood as the total complex of the instruments of production -- today the decisive factor is increasingly man himself, that is, his knowledge, especially his scientific knowledge, his capacity for interrelated and compact organisation as well as his ability to perceive the needs of others and to satisfy them (#32).
Though critical of Marxist collectivism and unbridled Capitalism and calling for something new, the Pope admits that,
The church has no models to present; models that are real and truly effective can only arise in the framework of different historical situations through the efforts of all those who responsibly confront concrete problems in their social, economic, political and cultural aspects as these interact with one another. (43)
These are some indications of an ongoing reading of the Gospel in the economic world that has emerged over the last two centuries or so. Note the positive evaluation of economic activity as a means of maintaining and developing social well-being in increasingly global dimensions. It can lead to a realistic interpretation of some striking words of Jesus in Luke's Gospel. Though the Gospel is quite suspicious of the idolatrous propensities latent in any economic activity, it is open to the possibility of using wealth for good purposes: "I tell you, make friends for yourselves by means of mammon so that when it is gone they may welcome you into the eternal homes" (Luke 16:9). Radically it is a question of using wealth and material resources for good ends, and of not allowing ourselves to be so possessed by what we own that we end by excluding both God and our neighbour from our lives, and destroy our own selves.
I have often heard it said by concerned economists that the most difficult question they face concerns what human beings really want. If they had an answer for that kind of questions, economies could be designed and investments directed to bring about what was really wanted. As it is, we human beings tend to be a jumble of conflicting desires and interests, as any examination of conscience would reveal. Our situation can appear to be a hopeless mess of cross-purposes, made up of greed and vaguely good aspirations.
This is where religious faith can play its part. While the main engines of the economy can too often appear to be the seven deadly sins, faith sees things otherwise: there is room for forgiveness, for humility, for going beyond oneself to care for our neighbour, for the global neighbourhood and its economic ordering. There is a love that is genuinely selfless. It comes as a gift from beyond this world, even if it has an energising effect within it. In such faith, hope and love lies the promise of a new beginning. God’s gift, if you like, is an ever-renewable resource to nourish the wisdom and the hope, the patience and solidarity we need, even in hopeless situations.
4. SOCIALLY RESPONSIBLE INVESTING
But now to focus a little more clearly on our main area of concern. I have found John R. Boatright, Ethics in Finance [1] a useful resource. In his fourth chapter, Ethic Issues in Investment Decisions, he closes directly with the issue. On the one hand investment decisions by large holders of capital profoundly affects the quality of life in our communities and nation (p. 99). On the other hand, these investment decisions are surely meant to be based on objective calculations of risk and reward, and not directly on considerations of the public good or social welfare. Adam Smith's "invisible hand" hovers over the market place and sorts things out, irrespective of anyone's intention. It never promised prosperity for everyone, let alone an egalitarian distribution of wealth. Such concerns are for governments. That of course faces us with a basic question. In any viable economy, must not some concern about the social impact of investments enter into the calculus? Even the grossest greed still needs a functioning world in which to operate (p. 99). True, that might be the beginning of some kind of wisdom; but it is hardly the end of it. Nonetheless, it does point to the need for ethics to arise precisely from the economic situation itself, and not be an alien imposition made by well-intentioned people who have never had to worry about how business and investment work.
A serious situation is emerging. The instinct
not to mix money and morals is understandable. There is an immediate
attraction in "sin stocks" (however that be interpreted: tobacco
and alcohol? Gambling and gaming machines? Arms and oil production?
Nuclear energy? Pharmaceutical companies dumping out-of-date drugs in
the third world?). Nonetheless, the more virtuous – those who have
not lost hope for the world – are trying to implement a range of other
values in their investment activity: employment relations, environment, human
rights, political stability, international peace, respect for local cultures
and the like ( p. 107). This Socially Responsible Investing (SRI) had
its origins in the protest against US involvement in the Vietnam war and in
the efforts to isolate apartheid in South Africa. Out of such
experience, it is gaining ground and exerting an influence screening prospective
companies according to a wide range of criteria.
But, given the extent and complexity of the market, the frustrating question lingers: does SRI make any difference? Besides, and more troublingly, do portfolio managers, with a fiduciary duty to seek the highest return for investors, have the right to consider non-financial matters in the selection of stocks, especially if SRI is likely to reduce the overall gross profit? (p. 108). In other words, are investors subsidising socially virtuous activities to their loss? Big questions remain, but also great aspirations are stirring: can investors make a profit and still make the world a better place to live in? (pp. 109-110).
It is suggested that SRI brings a certain stability into the performance of many corporations over the long term, tending to cause them to be better run, and more unlikely to face major scandals and crises. What's more, SRI tends of its nature to make for better communication between investors, corporations, the work force and the local communities. In this it inspires a more humane style of doing business. The invisible hand of market efficiency is made to be accountable to the clear-seeing eye of a larger human evaluation. Market efficiency? But, efficient for what? New values are at least being named in the formerly mono-dimensional world of business as usual. Note, too, that ‘socially responsible’ investing is a good basic definition, from within the financial world, of what ethical investment means.
New Finance Theory, we are told, is less content to describe the market situation and has moved to a quasi-scientific ability to explain it (p. 122). If X, then Y. Now there is nothing wrong with a good theory. For a good theory is not only most practical; it also provides the underpinning intelligence for genuine moral judgment. But if either economic or finance theory is a closed world -- a kind of black hole sucking into itself and its purposes the entire ecological, social, political and cultural reality of our co-existence on this planet -- then matters are different. Leadership in management and investment by shareholders are the blind leading the blind along an ever darkening road. As Boatright observes, ‘If finance theory is purely technical, however, concerned only with means and not ends, then perhaps we should look elsewhere for the guidance that would make the world ethically a better place (p. 128)?
5. THE NEW ECONOMIC SITUATION
The inhuman aspects of the current economic situation are such, not because of a lack of ethics, but because of the failure to be respond intelligently to a new situation. It is all very well to berate the multinationals and to protest against their growing power, especially in the light of severe financial crises in so many parts of the world. [2] As everyone knows there is nothing new in multinational corporations. The Hanseatic League in the Middle Ages and the East India Company realised the potential of maximising profits through international connections. The new thing is that the huge multinationals of today have become an economy unto themselves, and thus tend to displace the diversity of economic entities amongst which goods were formerly traded. Something new has to emerge; and it has to emerge from human creativity. Be socially responsible, most certainly; but before that, be attentive to the new situation and notice what has tended to be overlooked. Be intelligent in interpreting what is going on it all its aspects. Be reasonable in judging what is the most promising course of action, and rejecting other alternatives. And then decide what the best or better course of action is.
Robert B. Reich, in his The Work of Nations: Preparing Ourselves for 21st Century Capitalism [3] highlights the novelty of the situation. The "high volume" of standardised goods was formerly dictated by the industrial giants of the USA in the early half of this century. Now such enterprises are global networks intent more on "high value" production tailored to specific needs of customers. An example here is the transition of IBM from mainframes to "e-business solutions".
There are consequences. The "goods and services" of an older economic language now has to extend to a new range of "high value" services that immediately serve production in a way rather different from the "service industries" that deal with human beings directly, e.g., hospitality, tourism. Moreover, "capital and labour" relationships are changed with the essential presence of a comparatively small number of highly expert technicians, "symbolic analysts", who occupy each phase of the production process, and who are given a great financial stake in the company. As a result, managers don't so much manage in the former sense, but rather function as facilitators among and between the creative groups and individuals involved in the enterprise. Managers don’t so much direct the work from on high, but to some degree improvises the outcome out of the creative resource groups available to them.
Naturally it is increasingly difficult to assign a "nationality" to high value products, let alone to distinguish clearly between imports and exports. Closer to our topic, investment knows no borders, as standardised assembly and data-production are located in low-wage/ tax countries, while engineering and marketing services are bought from experts wherever they happen to be.
One result is that income patterns vary enormously. It is not what you own that matters, but what you know how to do. The semi-skilled suffer most; and whatever the cliche, the reality of the rich getting richer and the poor becoming poorer is a tragic reality. Reich would see the need for government intervention for the continuing education of the losers in the process, and for the creation of international infrastructure, to ensure the population enjoys the benefits of "high value" production.
Now I doubt that everyone has the capacity of desire to become a high level symbolic analyst or computer programmer. Reich has been criticised for ending with a version of Marie Antoinette's infamous, "Let them eat cake" response. But notice the moral considerations hidden in this problem. In the production of great wealth what is to done with the profits? How much profit is enough? How much should be put back into society? The biggest ethical question emerging is really the redistribution of wealth, so that the economy can function for the good of the whole human community. It is not a matter of charity in the popular sense of the word, a kind of handout activity. What is crucial is to have an understanding of the economy and its investment activity that looks to the integral progress of society, not only producing wealth but producing it in such a way that it is so distributed that health, education, the arts and the higher reaches of the human spirit are helped to flourish. It is indeed a matter of "investing for life", even if the mechanisms for achieving it have as yet not been devised, as long as we are locked in the "vestigial thinking" that Reich attacks.
6. A DEMOCRATIC ECONOMY
In a more radically theoretical mode, philosophers with an economic bent have been asking some searching questions. What innovation is necessary if the economy is to achieve its purpose? [4] What better ways of doing things can we find? Hope and patience will be required: the greater the innovation needed, the longer it takes to find and apply.
On the theoretical
level, there are some outstanding questions that we must rely
on the experts to solve, each of which will have a profound effect
on what we call the ethics of investment. Obviously the
production process is about raising the standard of living through
the production of goods and services in which call can share.
Yet there are now features of the production process, and a correlative
profit, that deal with the production of the means of production:
most obviously the microchip and its associated and technologies.
When things like that come into play, there is a boom of production
that promises huge profits for some in an expanding phase of
production, but ends in a bust when that phase has run its course.
The basic ethic of the economy is to assure that there is some
kind of relative increase in the standard of living without incurring
what is often accepted with economic resignation as an inevitable
bust when the innovative phase of production runs its course.
How can a more egalitarian shift in profits be secured in a way
that will not short-circuit the whole process? How can
recession and depression be avoided with all the job loss and
human misery that results? The problem here is that is
that the notion of profit is not sufficiently differentiated:
i.e., between a normal healthy profit and social dividend that
enables an economic entity to continue. If companies interpret
supernormal profit as normal, the quite predictable diminishing
rates of returns may provoke destructive and panicky responses.
Self-preservation at all costs becomes the imperative.
If some kind of equilibrium returns, it means a loss for
everyone. The producers cannot sell, consumers cannot buy,
and the standard of living declines with misery for many.
Admittedly, the notion of a supernormal profit associated with the expanding phase of the economy through the creation of new means of production may not figure in the usual calculus of capital. Still, the sensible distribution of that boom profit is a major concern for the well-being of the economy and for those who are prepared to participate in it through their investments. Most obviously, situations described, say, as a favourable balance of trade in one economic bloc mean an imbalance somewhere else. Eventually, if this goes unchecked, debtor countries, for example, simply cannot repay what they owe and the creditors cannot recover what they are counting on. Such is the problem that has arisen with special urgency in the cancellation of debt discussions associated with the Jubilee Year of 2000. The underlying question in all this can be phrased in the following terms: Does global economy support or diminish a global humanity? Is doing business an act of solidarity with others or an exploitation of them? More to the point, is free enterprise an enterprise for the enabling of the human freedom of the many or blinkered practice of the favoured few?
The point to note here is that ethical deliberations do indeed need intelligent answers. In the vast complex area of our present consideration, a major component of any ethical imperative is to inspire and demand the best intelligent grasp of the situation. Otherwise ethical concerns are in danger of being dismissed as mere "feel-good" posturing ignorant of the economic realities that are being evaluated. In shaping the pattern of ethical investment you need two blades of the scissors: the upper blade of the best available economic, philosophical, theological and moral resources, and the bottom blade of the data pertinent to this or that precise situation. If the two blades don't come together, or you have one without the other, well, the best you can hope for is a stab at the material you want to shape but without the hope of achieving anything worthwhile.
7. EIGHT POINTS TO KEEP IN MIND
At this stage, after outlining the question in the first section and highlighting the necessity of intelligence to base our ethical reflections in the real world, it might be helpful to make a number of more general points, thereby heading off objections or questions that might be stirring.
1. The first observation is very simple. We are not dealing with a radically evil world. Economic and financial activity, though familiar with the demons of greed and anxiety. are not wicked. They are, to any Christian view of things, activities within the good creation that God is bringing into being. You can't have a good world without a good functioning economic order. You can't have a good economic order unless there is finance available to fund production and innovation. You can't have a reserve of finance unless you have investment. And you can't have good investments unless you have people like ourselves reflecting on what they would really like to do with the money for the sake of a better world for the many. Finance and investing can indeed be working for the common good. The present Pope would allow that it is even working with God's creative activity:
The word of God's revelation is profoundly marked by the fundamental truth that Man, created in the image of God, shares by work in the activity of the Creator, and that, within the limits of their own human capabilities, human beings in a sense continue to develop that activity, and perfect it as they advance further and further in the discovery of the resources and values contained in the whole of creation (Laborem Exercens (1989) #25).
And again, but this time from the Second Vatican Council:
Far from thinking that works produced by human talent and energy are in opposition to the power of God, and that the rational creature exists as a kind of rival to the Creator, Christians are convinced that the triumphs of the human race are a sign of God's greatness, and the flowering of the mysterious divine design. For the greater our power becomes, the farther our individual and community responsibility extends... People are not deterred by the Christian message from building up the world, or impelled to neglect the welfare of their fellows. They are, rather, more stringently bound to do these very things (Gaudium et Spes, # 34).
2. Any economic situation is the outcome of millions of human decisions. Some historian of the future, looking back at what we are doing here in this conference, might judge it as part of the emergence of a new economic order, a new more humane way of doing business. But from the inside, all we experience are sudden insights and confused gropings, a growing sense of responsibility along with increasing frustration, the enormity of the challenge, yet the poverty of resources, the hazards, contingencies, false starts; the landslides and earthquakes on level playing fields... and yet despite it all, hope and the readiness to address the issues. You can't see what the final shape will be. Innumerable acts of attention, insight, reflection and decision are necessary for the formation of an economic order that will serve the human race at this historical stage. When it emerges, we might say, "How obvious!". But in coming to that point, there is a lot of struggle and puzzlement. Here a moral stance means patience with the whole process: a willingness to be attentive to all the data, giving time to understand what it means, reflecting on the evidence that emerges and being prepared to make a judgment, and then deciding in accord with the real probabilities we have discerned, and in it all committing oneself to collaboration with all people of similar mind and heart; and for that matter, at the deepest level of our spirituality, surrendering oneself to the transcendent purposes that the Creator intends.
3. Lest ethical decisions be confused with the imposition of new forms of regulation, we should note that moral or ethical decisions are going on all the time in a usually unnoticed way. Just doing one's job or ordinary involvements with marriage and family are profoundly ethical activities when, one way or another, we are putting ourselves on the line, preferring what is truly valuable and good to what not is merely pleasurable or self-regarding. That's it really: not being self-serving, but being a self involved in a universe of value where you can be counted on to be honest, collaborative and decent. Experience is a complex of pushes and pulls that never lets us rest. In some ways we live in a habitat like the animals, but we do not stay there. The human self is "self-transcending" : through questioning we occupy a world of meaning which goes indefinitely beyond the comparatively small world of our immediate habitat. Just as we go beyond our sensations and feelings into a world of ideas and insights, so too we must go beyond that world of insight and idea, however bright, to the question of truth, which confronts us with things as they are, objective reality, you might say. Is it really so? Is what you have imagined or conceived really so? Here we must bow to the evidence, and experiencing the piercing reality of the truth of things. But consciousness keeps expanding even further. It is not a matter of just interpreting the world and coming to a right judgment about it but of entering into it in a way and transforming it into a truly human world. This is the level of moral/ ethical self-realisation. We are no longer pushed or pulled by sensations, feelings, satisfactions, but occupy and even enrich the world of values with our personal energies, so as to perform and collaborate with others in the bringing into being the truly good. Without this kind of self-transcendence, peace and justice would be impossible, the market place would be a den of thieves, and no relationship could pretend to honesty, faithfulness, forgiveness.
4. Naturally, as moral
theologians and ethicians have long observed, this process of
moral self-transcendence would sound hopelessly abstract unless
we experienced it in the good people who make up our lives.
In their presence, despite all the variety of human failures,
we each find a steady inspiration and hope of a better world.
Without the witness of intelligent, responsible, collaborative,
socially concerned and hopeful people, "ethics" is
at best a nice construction or a new set of rules imposed on
a deeply ambiguous situation. Even though we may not have
all the answers, the reason why we are asking these questions
about ethical investment arises from the good impulses of our
own hearts, and from the daily witness of good people who hold
the world together and keep alive the possibility that it could
be better.
5. Ethics are not a set of rules to be followed in purely external fashion. Better regulation is only a tiny part of ethics. Take for example the most universal of all ethical pronouncements, "Love your neighbour as yourself". Why should we do that? The Biblical and other religious traditions give their reason, based on our common destiny in a world created by God, and, for Christians, a world in which God, in Jesus Christ, has become one of us, and one with us, in a communion of everlasting life. In other words, there is a vision of the universe involved. Then there is a sense of human existence within that universe: the unique vocation and destiny of human beings as made in the image of God, for example, and as already participating in the life of God through the gift of grace, the celebration of the sacraments, and the practice of prayer. Then, associated with loving one's neighbour, are the teasing questions of how to do it, since we are inclined to selfishness, and what does it mean in the concrete situation. As regards, how to do it, any religious interpretation of love of neighbour would envisage formation in the virtues of humility, generosity, patience and forgiveness. Classically there are the four moral virtues: prudence ( that is, attentiveness to the demands of the concrete situation); justice (opting for a world in which one is not the centre, but in which others exist with rights and demanding a responsibility on one's own part); fortitude (seeing the whole thing through: indeed, any new vision will be first of all dismissed as silly, then admitted as true but of insignificant import; and finally, is opponents will claim that they invented it!); and temperance: attentiveness, not only to the inner ecology of one's own being, but as open to the whole ecology of life on this planet). Any moral formation allows for failures even as it points the way to forgiveness, penance and conversion. Further, any humane tradition sets moral formation and guidance within a larger framework of education in order to instill the largest possible sense of our human reality which would ideally include history, sociology, psychology, philosophy, religion and art. Such an approach would expect that the general imperative to love one's neighbour would spill over into specific precepts and laws– usually of a negative nature, since it is much easy to forbid what is wrong than to prescribe what is right: hence, Don't kill, maim, defraud and many things of that nature. The how-to question is, as I mentioned before, given inspirational force in the lives of the saints and martyrs who embodied this imperative to a remarkable degree. Mother Teresa of happy memory taught the world more about ethics than all of the theologians and philosophers.
6. But reference to her raises the other side of the question, not only how to love one's neighbour, but what does it entail in the concrete situation. Detractors of Mother Teresa maintained that she should have concentrated on structural reform, not on piece-meal gestures, however personal and dramatic. She would insist that you have to start with your own concrete decision to serve your neighbour, and build up to the structure, and the more complete social analysis. Obviously both movements are necessary and interdependent. Note how we are involved with both sides of the issue, the lower blade of the scissors if you like that metaphor consisting in actual hands-on involvement with bringing moral issues to consciousness among investors, and the upper blade of reflection and vision, trying to come up with more adequate macro-structures to make the process more creative, thoroughly informed and resolute for the long haul.
7. It is important not to try to be too spiritual all at once. Morality must be built on realistic judgments. Moral feelings without reliable information and tested knowledge would be a soul without a body. For instance, one might be justifiably concerned about the quasi-monopolistic power of, say, big oil companies. But it is also true that, without oil there would be no commercial food production or distribution. Ethical commitments, therefore, must be prepared ally themselves with the best developing science and technologies and with best capacities to imagine the world otherwise, and with the research that would make that world feasible.
The issue throughout is to reconnect the economic goods of production and profit with the whole human good. We read in the life of Berlioz, the great French composer, that after presumably a very satisfactory dinner in Rome, he was walking to his residence with some companions when he happened to fall into the Tiber. He surfaced from those yellow depths, not only alive, but singing a melody that he had long been looking for in his then current composition. A parable, you might say. The more we immerse ourselves in the totality of the human good and get with the flow of genuine development, the more those elusive moral norms we are looking for are likely to appear.
8. Economists lament that the developing character of economies is seldom sufficiently recognised. Theorists and planners prefer models based on stationary entities, after the model of analysis in the physical sciences. However, any economy, and its correlative patterns of investment, must take into account what has developed in the wider human world. For that world, in its democratic institutions, is a world of human rights. It has brought with it an impressive concern for the victims of progress, and recognises the legal right to redress and compensation. Today's democratic consciousness is profoundly troubled by the excluded and forgotten other, whether in the past or the present. The days when economic values and decisions alone were the focus of consideration in a world in which the poor hardly seemed to exist, or indigenous races had no place in society, when women, children and the aged were all expected to know their place, when the vigour of family life was taken for granted, and when the ecological well-being of the region or the planet was irrelevant, have gone; and with that development, the economy must come to acknowledge the new cultural world in which it operates, and which, ideally, for its long term interests, it must serve. Any economy is ill-advised to proceed as though no historical development in social living as taken place, or to forget that human culture today is increasingly alert to the range of values that constitute human well being, or to dismiss the witness of a growing number of those who see things differently.
8. VARIETIES OF BIAS
Still, we are well advised, especially in the matters that at present concern us, to note the existence of four types of bias which can distort the moral development we need. [5] The first is neurotic. Judgment is compromised by anxiety, fear and the crippling memory of past traumas. Investors are not alone in that kind of problem. More obviously, there is the matter of individual bias. Here the ruling concern is "What's in it for me?" A usual kind of business question, but if that is the extent of one's morality, most of what is good and gracious in human life will be forever alien. More generally, with greater relevance to investors, is group bias: "What's in it for us?" There is no problem with enlightened self-interest, but if the "us" here presupposes a radical and terminal division between the privileged few who have and the multitudes who have not, then there are big problems in speaking of the common good and even of the maintenance and development of democracy itself. Finally, there is what we might call the general bias of the status quo which contents itself with the ways things were always done; this is "the real world", untroubled by any theoretical reflection; nothing else will work – mainly because nothing new has been tried. The question whether there might be a better way of doing things, appears quaintly academic. Clearly to get beyond any or all of these biases is quite a leap. Learning, reflection, and dialogue can help the scales fall from one's eyes and make the narrowness of one's former horizon stand out. There can be a quiet growth and development, or something more radical in which people begin to live and move in a completely different horizon. It is an about-turn leading to a transformation; it is a conversion.
9. DIMENSIONS OF CONVERSION
The word "conversion" immediately conjures up religious connotations. But even if that exhausted the meaning of the transformation in question, the reality is much more comprehensive, and very important to the ethical questions we are addressing. Something happens, you might say, "from above" which reaches down into all our activities and gives them a new basis and perspective. No doubt some kind of radical change in horizon, some change of heart, has brought a number of you present this morning to take "investing for life seriously. You could consider it under four headings.
The first, not necessarily in order of time, is what I call "personal' conversion. Basically it the occurrence of a sense of oneself as a free agent, a person of spirituality and hope and solidarity with our fellows, especially the underprivileged, with a calling, not to be carried along with the way things are, but to be prepared to shoulder the responsibility to make things different. The sense of oneself as capable of making a difference, as a living moment in the great equation when one decides that something must be done, and the time for action is now. Something like this seems to be going on with John le Carré's latest book on the drug companies operations in Africa, The Constant Gardener. [6] In an article in The Spectator, [7] he writes,
Times have changed since the Cold War, but not half as much as we might like to think. The Cold War provided a perfect excuse for Western governments to plunder and exploit the Third World in the name of freedom; to rig its elections, bribe its politicians, appoint its tyrants, and, by every sophisticated means of persuasion and interference, stunt the emergence of young democracies in the name of democracy... That is why many influential people in the United States and in Russia would like nothing better than to put the clock back. Bush versus Putin? They's love it. So would Wall Street. No more damned ecologists to worry about: this is war. And no more arms control. Let's go for it.
And while they did this– whether in South East Asia, Central and South America or in Africa– a ludicrous notion took root which we are saddled with to this day... It holds to its bosom the conviction that, whatever profit-driven corporations do in the short term, they are ultimately motivated by ethical concerns, and their influence upon the world is therefore beneficial– and so God help us all.
In the name of this deluded theory, we look on, apparently helpless, while rainforests are wrecked to the tune of millions of square miles each year, native agricultural communities are systematically deprived of their livelihoods, uprooted and made homeless, protesters are hanged and shot, the loveliest corners of the globe are invaded and desecrated, and tropical paradises are turned into rotting wastelands with sprawling, disease-ridden mega-cities at their centre (p.14).
Personal conversion occurs when the conviction grows with any of us that we are not going to stand by as helpless observers. We are determined to be part of something better.
Integral to this intimately personal moment of conversion is moral conversion. It is a standpoint which insists that any evaluation of future possibilities be based not on self-serving motives, but on genuine human values. It is a decision to be an ethical person, to be socially responsible. It amounts to a willingness to collaborate with all people of good will in hope, justice, peace. One works for the progress for all, to bring about an economy of free enterprise, but in a situation in which freedom is not the possession of plutocratic few, but a context in which all human beings on this planet will live.
But good feelings and generous determination are not enough. There is need of an intellectual conversion as well. A compassionate heart is compromised if it is not accompanied by an open mind, ready to learn, able to dialogue, committed to researching the best solutions for the immense problems we face. As the French wit said, "The wicked are always surprised if the good are clever". I use the word ‘conversion’ here to underline the need to realise that the new global democratic situation that has emerged needs quite new solutions, new patterns of investment, and new understandings of what profits mean and of how they should be distributed throughout the economy. When the century past has been locked into a knock-down opposition between socialist collectivism and unregulated capitalism, it is not surprising that even the best economic analysts, while calling for some kind of new order, confess to certain vagueness as to how to bring it about. It may take many decades-- even a century. The point is that our minds must be open and informed enough to recognise the answer to our questions when it dawns.
If the above-mentioned dimensions of conversion – personal, moral and intellectual – are underpinned and sustained by a religious conversion, so much the better. There is an ever-renewable resource to refresh our energies and give new strength when all seems lost. Religious faith locates our lives in a universe of love and mercy, and underlines the destiny of each human being, and brings out a sense of vocation and purpose. In terms of morality, the good we do is governed not merely by internal conscience or social ethics of some kind, but actually participates in the transcendent purposes of the Creator, and is supported by help from an unfailing source. As Dag Hammarskjold, the former Secretary General of the UN, noted in his journal a few weeks before his death on a peace-keeping mission in the Congo, ‘I don’t know who or what put the question. I don’t remember answering. But I did say ‘Yes’—to something or someone—and from that moment I was sure that existence is meaningful, and that my life, in self-surrender, has a goal’.
CONCLUSION
To conclude: to grapple with the big question that looms before us, any ethical approach must bring forth new skills in interpreting and directing the economic world and investments as one aspect of it. It will need, too, to inspire a vivid appreciation of human values, and new ordering of values in accord with the cultural, democratically political world which is emerging, even if in some cases that is only an aspiration. It will have to grapple with huge vested interests, because egoism does not change into altruism overnight. Are we at the beginning of new moral ordering of the economic world? That is the question.
[1] John R. Boatright, Ethics in Finance (London: Blackwell, 1996)
[2] See Paul Hoyt-O’Connor, ‘Macroeconomic Dynamics and the Work of Nations’, METHOD 17/2, Fall 1999, 111-131.
[3] (New York: Random House, 1992).
[4] See Bernard J. F. Lonergan, Macroeconomic Dynamics: An Essay in Circulation Analysis : Collected Works of Bernard Lonergan 15 (Toronto: Toronto University Press, 1999).
[5] See Bernard Lonergan, Method in Theology (London: Darton, Longman and Todd, 1972, 43-44, 52-55).
[6] (London: Hodder and Stoughton, 2001).
[7] 16/23, 2000, 14-16.
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Anthony J. Kelly, CSsR, is the Professor of Theology at the Australian Catholic University. He also is the Head of the Sub-Faculty of Philosophy and Theology at ACU. Email: A.Kelly@acu.edu.au
