Religion on Money & Economics

"Money is the root of all evil!"

This is not exactly what the Bible says. In 1 Timothy 6:10 it actually says "the love of money" and not "is the root of all evil" but, rather, "is a root of all kinds of evil." But now does that really change anything? That maybe there are other roots of different kinds of evil? Or maybe the sense is not our modern "all kinds" meaning "a whole bunch of kinds" but really means all kinds of evil. But what we want to know is: is money a bad thing? And if it's not, how can the love of it be a bad thing? What idea is really being expressed? Here are the preceding verses:

For we brought nothing into this world, and it is certain we can carry nothing out. And having food and clothing, with these we shall be content. But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition.

Now is it clearer? Not to me! Yes, none of us come out of our mothers with bank accounts, although some have wealthy parents and trust funds waiting for them when they arrive. It's also true — a cliché, in fact — that "you can't take it with you." But do all — or even most of those — who "desire to be rich" end in having their lives ruined?

"Rich" is something of a relative term, of course. Most people living below the poverty level in the United States today, for example, are materially better off than the wealthiest people of the past and distant past, and certainly of people who lived in biblical times. Even the richest of our ancestors in the not-so-distant past had no such things as indoor plumbing, hot and cold running water, electric lights, refrigeration, radio and television, fresh fruits and vegetables year-round, or modern ambulance and hospital emergency room services. Even clean, drinkable water was not widely available until relatively recently in historical terms. Yet today in the United States even homeless people enjoy the benefits of most of these things, while being "rich" is at least beginning to mean not so much having what other people don't but having more of and a better quality of what most other people have.

Now it seems to me that we owe these happy circumstances at least in part to the "desire to be rich" that "Saint Paul" condemned in his letter to Timothy. Sure, at least some or maybe even most of the people who discovered the scientific principles that made modern technologies possible were motivated by simple curiosity. But the ambitious people who developed the technologies that made it possible for technology to be widely applied were in it for themselves. They were in it for the material rewards, because they "desire[d] to be rich." And the results were the exact opposite of the human race "drown[ing] ... in destruction and perdition."

Money is itself a very clever invention. Clearly, it has played a huge role in facilitating human progress and remains an important instrument of our advanced civilization. So it can hardly be considered a bad thing, nor can the love of it be considered a bad thing.

Ayn Rand deconstructed the "money is the root of all evil" slogan in her classic Atlas Shrugged novel. Her argument was that money, as a facilitator of voluntary exchanges, "is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value." "Your wallet," she said, "is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money." At the same time, Rand made it clear that money is not the end-all and be-all. Rather, money is subordinate to values and what gives money its value:

Money will not purchase happiness for the man who has no concept of what he wants; money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. ... Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices.

It seems to me that Rand here is implicitly allowing for the idea that money, as a tool, can be misunderstood and misused. Money isn't everything and can't do everything. Rand even talked about how money can harm people:

Did you get your money by fraud? By pandering to men's vices or men's stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment's or a penny's worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you'll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity?

Rand was also against paper or fiat money not backed by gold. And at the time she was writing — 1957 — the United States had not gone off the gold standard which took place under Nixon in 1971. This gets into another complicated subject but it's worth considering that gold, like paper, have the same "intrinsic value." That is, these and everything else have the value that people attach to them. A roll of toilet paper, for example, has a certain value and so does a book. Gold has value, of course, but, although scarce, and pretty, you can't clean up with it or enjoy reading it. As King Midas famously found out, you can't eat it either. In fact, it's interesting to consider that all the effort and lives lost and misery produced bringing New World gold and silver back to Europe mainly had an inflationary effect. Bringing tomatoes and potatoes and chocolate, on the other hand, transferred and brought about the creation of real and lasting wealth. The famous 1849 Gold Rush and other such migrations were much the same story. We're a strange species, aren't we?

It may be supposed that back in "bible times" something similar may have happened. That is, if someone — perhaps a king and his army returning from pillaging some nearby lands — brought "riches" home, it might be used to build a palace and pay soldiers and servants of the king. But in a preindustrial era that may well have taken resources away from, oh, say, producing food and clothing and shelter for ordinary people. The ultimate results may not have been very helpful. And people would certainly have been very puzzled, if they stopped to think of it, as to why this was.

Jesus doesn't seem to have understood basic economics either. In fact, he seemed a complete dunce when it came to the principles of economics. For one thing, of course, he famously and violently threw out the money-changers and dove-sellers in the temple, calling them "thieves" when all they were doing was supplying people with what they needed to offer the prescribed sacrifices. Worse, in the famous passage of Luke 18:22 Jesus tells a rich man: "Sell all that you have and give to the poor." Gee, why isn't that verse held up at football games and generally pushed into people's faces by the Bible worshippers I wonder? But what would happen if suddenly everyone went and sold all that they had? Who would buy it all? And what would happen to prices when everyone was trying to sell and few were interested in buying? That's a nice recipe for a market crash and an economic depression.

So money — and the love of money — are not evil and definitely aren't "the root of all evil." Funny, isn't it, that "the root of all evil" as one religion has it is nevertheless the very thing that the same religion and its leaders work so hard to acquire? But, yes, people certainly can be misled and led to ruin by their own misunderstandings about money. The prisons hold many such people, "those who desire to be rich" who chose to satisfy that desire by robbery, embezzling and fraud and worse. And at times a kind of phobia of money, or the doctrine that money represents a kind of absolute economic value — which is part of Marx's Labor Theory of Value — has caused great harm to whole societies and nations of people.

Now there is the element of simple jealousy. This is sometimes elevated to the idea that it is "unfair" if anyone has more of something or a better something than someone else. I always thought that it was, in part, the task of religion to help people deal with such foolish and potentially harmful feelings. But it seems to me that the science of economics teaches us that, except for buying weapons to kill us, there is really nothing that anyone can do with money or wealth that can hurt other people. Whatever riches one's neighbor has does not make onself poorer.

Let's say you have a thousand dollars in your pocket. Well, of course, being here with that much money, you should donate it to our church by putting it in one of our rainbow-colored boxes! I mean, why else did you bring it? But let's say you go out afterwards today and spend it. You have stimulated the economy! Hurrah! Well, but maybe you don't do that. Maybe you just like the feel of all that money in your pocket. Or maybe you like it better in your mattress. In that case, you're sequestering it from the rest of economy. But that is helpful too because it makes all the other money that other people are spending just a bit more valuable instead of competing with their dollars for the goods and services that are available and having an inflationary effect, the inevitable side-effect of "stimulating the economy." OK, so maybe you invest the money to start or expand some business. Now the money is creating jobs! Oh, but there's also the possibility that you're sending the money overseas to buy or invest — but in that case the people who get the US dollars can only use them to buy American goods and services. Or, the foreigners use the dollars for something else, maybe to put in their mattresses as "reserve currency" or something which, again, is the sequestration effect. So someone else having money, however irksome it may be that it's not we who have the money, doesn't harm us and, indeed, can really only help us.

Now besides shaping some attitudes on money and commerce, theological doctrines have had other noticeable economic effects. Arguably, the practice of slavery and the slave trade are examples of this. Although slavery is an old institution practiced by the ancient Greeks and Romans and others, Bible verses and Christian doctrines were definitely cited as supporting it, as well as, later, opposing it, as we know. Much more recently, "blue laws" to keep businesses closed on Sundays are another example. Think of those as a kind of government-enforced monopoly for churches to be "the only game in town" for something to do for one whole day a week. It is curious, though, isn't it, that Exodus' commands "six days shall you work" — actually commanded four times in Exodus, once in Leviticus and twice in Deuteronomy — and yet this didn't seem to offer any impediment to the five-day-work-week! (Even Ben Franklin pointed out this biblical command and complained about "Saint Monday" and "Saint Tuesday" holiday-taking. Why don't these clear divine commands cause as at least as much emotional fury as those vague and unclear Bible verses that are cited in opposition to abortion?

Perhaps one of the most well-known effects that religious doctrines have had on economics, at least in the West, has been on the practice of loaning money at interest. Based on biblical texts and backed up by ancient notables including Plato and Aristotle, the Christian Church from very early on held that such loans — usury — is a grave sin. As recently as 1745 the Pope reiterated this doctrine and added that it cannot be overcome by "arguing that the gain is not great or excessive, but rather moderate or small" or by any other argument. Now add to this that Jews were in most places in Europe in the Middle Ages barred from making a living in other vocations and that the Old Testament primarily barred the charging of interest to one's fellow Jews, and you have the ingredients for Jews becoming dependent for their livelihoods on the practice of moneylending. And what would be the further effects of an identifiable class of people being engaged largely in something considered sinful by the prevailing moral standards of the Christian Church authorities? Obviously, an enduring and abiding hatred of such people by Christians.

But it wasn't just Christians. When Mohammed came along and established Islam in the 7th Century he included this doctrine — the immorality of loaning money at interest, what Muslims call the practice of riba — in the new faith.

Today's bulletin includes a passage from the famous work — considered the first work of modern economics — by the Scottish moral philosopher Adam Smith. Smith observed that Hindu religious beliefs and practices resulted in the people of India depending on others for transporting goods over long distances at sea. We see, obviously, the same thing in Europe where Christians became dependent on non-Christians, mostly Jewish people, for loans.

And much the same thing has applied in the Muslim world, which may have been hampered in its economic development by the many years it took for Muslim scholars to finally find ways around and through Islamic Law prohibiting riba. It really was not until the 20th Century that this began to be significantly developed. So, for example, under Islam a mortgage involving the payment of interest is prohibited. But, if you want to buy a house you might go to an Islamic bank and you would agree that the bank would purchase the house, and you would then buy the house from the bank at a higher price and pay the bank in installments on an interest-free loan. This, the Muslim jurists hold, is far more ethical than the decadent and hellish practice of mortgage loans paid back at some rate of interest!

It is simply amazing — dumbfounding really! — not just that theological doctrines have created so much confusion and difficulty in the natural sciences like astronomy and biology and medicine but even in economic matters.