God, Man, and Money, or How to Succeed in Business Without Going to HellMICHAEL NOVAK
Money is a far more complicated reality — and more tightly related to matters of the spirit — than we usually recognize.
The invention of money as a medium of exchange was an enormously helpful social invention. In the beginning, however, money was scarce and the temptation to hoard it — as in the fairy tales of misers "in their counting houses counting up their money" — was apparently powerful. In those days, those who hoarded a scarce resource deprived others of its use. Thus, misers were universally regarded as villainous, even evil, and "avarice" seemed to be a particularly vicious sin against the whole society. It did not harm merely the miser, as overeating harmed the glutton; it hurt all those into whose lives it brought deprivation. In those days, "wealth" [understood as pecunia, gold or silver coin] implied a zero-sum game. If one person had all, others had zero. Any money one person had subtracted from the sum available to others. To possess an excess, more than one needed, felt to the miser or the avaricious man like security, power, and prestige. Many of the parables of Jesus remind such persons that in wealth of this sort lies no real security, or peace, or virtue.
was one other feature to pre-modern times. Land was the main cause of wealth,
and agriculture and agricultural products — including cloth of various kinds —
were the main goods of trade. Artisans worked in metals and leathers and woods.
Yet on the whole there was relatively little invention and manufacture of new
products. With few exceptions, such as the manufacture of instruments of war,
including warships, in the employ of the king, modern institutions such as factories
and the division of labor had few precursors. Thus, money was almost entirely
a medium of exchange. It had very little role as investment capital — as a social
instrument for the creation of new wealth for the whole society through sustained
invention and discovery. In short, the role of money as an instrument of the creative
human mind did not really emerge until modern times, at least in sufficient density
to lend a new character to the era. Until that happened, the only real way for
a king or a baron or even a brigand to acquire new wealth was to mount up an army
and go seize it. No one knew how to "create" wealth or cause "development"
(as we say today), but only how to "take" wealth. Getting wealthy was
often a matter of seizing the property of others by force. Wealthy people lived
in fortresses and castles to protect themselves.
is instructive to note that whereas the figure of the miser was a stock figure
in novels and short stories and fables from early times until the middle of the
last century, this figure has virtually disappeared. Why is this? In the old days,
when money had virtually no creative use as investment for innovation and discovery,
anyone who hoarded money was a villain, subtracting financial liquidity from the
scarce public store. Today such a person — piling up his money in an attic strong-room
would be less a villain than a fool. What good is money that is sitting still?
A wise man would invest it in a reasonable, safe, creative project, and perhaps
use a smaller portion of it in riskier projects that may or may not work out,
but promise larger rewards if they do. Today, for example, there are all sorts
of investment opportunities in fiber optics, cellular and satellite technologies,
internet services, revolutionary software, and smaller and swifter and more efficient
computer hardware. Without investors, these new technologies would never be tried.
Investment is the waterfall that moves the mill of innovation. (More than half
of all the risk capital invested in innovation in the world today is raised and
spent in the United States, under the protection of the Patent and Copyright clause.)
Money, in the sense of investment capital, is a new handmaiden of the creative
human spirit, the investment capital that enables human capital to flourish.
This insight transforms arguments about population control. It is false that crowded or "overpopulated" countries must be poor, and underpopulated countries are more likely to be rich. In fact, some of the most densely populated regions of the world — Japan, the Netherlands — are among the wealthiest. The main cause of wealth is the training and the organization of the human mind. This factor is even more important than natural resources. The Swiss have few natural resources, but a great concentration of intelligent application. Some of the regions of the world richest in resources remain mired in great human poverty. This phenomenon is almost always related to the maleducation or malorganization of human capital — the neglect of education and proper laws and proper incentives.
If in a country such as Bolivia a thousand pigs are born, an old-fashioned economist might say that this expands the per capita income, while if a thousand human babies are born, this is bad for economic growth, because one thousand more mouths to feed lowers the per capita income. But human babies are not just open mouths, consuming more than they create. Each is born in the image of the Creator, and each is endowed by God with the capacity to create more wealth in his or her lifetime than he or she consumes. This is the very condition for human progress. Unless it were so, human progress would not be possible, let alone likely. Everything depends, of course, on whether the economic system in Bolivia (or any other country) nourishes, or represses, the creative capacities of each child. Bolivias greatest resource is each child. Everything depends on wise investments (education, training, morals, good laws, etc.) in those children — in the human capital of Bolivia, in the technical language of contemporary economics [Cf. Gary Becker].
is one more point that must be made before we reach our conclusions. If you purchase
new software for your computer today — WordPerfect, for example — you may pay
(say) about $90.00 for the computer disc. You will then become aware that the
material elements of your purchase — the silicon of the chip, the alloy of the
disc — is worth less than one dollar. What you are paying for is predominantly
spiritual, the intellectual content embedded in the software codes miniaturized
on the chip. Goods today tend to become smaller, miniaturized, cleaner, and more
spiritual, less material by far than fifty or one hundred years ago. Factories
and workstations are cleaner now, too, as electronic processes replace mechanical.
These two examples, Asia and Russia, indicate that more is involved in the value of money held on accounts these days than purely economic factors. In Asia, the lack of truly democratic accountability, the lack of transparency, the phenomenon of one-party rule and the rewarding by political authorities of relatives and cronies, and severe problems of transition upon the death of dictators, and other chiefly political factors undermined confidence in economic transactions. Too many unseen hands manipulate economic factors beneath the table. Imputed valuations collapsed.
In Russia, the repression of all religious and moral inspirations during seventy long years of Communist Party rule deeply injured the moral ethos of the nation, and the failure of the political system after 1991 to establish the rule of law; to suppress violence, extortion, murder, and gangsterism; and to tie the value of money to real and universally dispersed assets, gravely wounded trust in normal economic life. As Centesimus Annus points out (no. 42), to work for true human liberty, an economic system requires both a constitutional political system and a moral/ cultural system that protect human liberty, too. Without a supportive political system and a wisely shaped moral ethos, a creative and orderly economic life is not possible. Economics does not live by economics alone.
All these complex considerations lead us to the reflection that "money" today is a far more profound and spiritual concept than we would have thought, even fifty years ago. It is worth no more than the faith people put in it. That faith depends on political factors, moral factors, and cultural factors (such as the quality of education and the high, or low, standard of morals and mores). The work ethic that has become a tradition in Japanese families over the past six or seven generations, for example, is of very great economic value, even though it seems far remote from "money," and its continuing vitality is a source of realistic hope for the recovery of the Japanese economy and the renewed strength of the yen. Let me add to that the relatively new concentration of the Japanese upon sustained innovation.
In Italy, too, ancient habits of enterprise and economic creativity, especially in small and mid-sized firms, is making Italy one of the top two or three nations in Europe in terms of entrepreneurial vitality and innovation. The cultivation of creativity in Italian schools, not least aesthetic creativity, gives Italian products a distinguishing flair that most of the world finds attractive. Behind currencies, in short, lie entire ways of life, replete with moral, spiritual, and psychological habits of infinite variety.
Europe, the Euro is an attempt to enforce a certain continent-wide common economic
discipline, while reaching for the rewards of more efficient international accounting
transactions. Reflection on the Euro brings out even further the new level of
moral and spiritual common life for which Europe is now reaching. Money and spirit,
or at least money and deeply rooted human habits and acts, are far more tightly
interlinked than we have heretofore thought.
Besides, it is my experience that more people today are led to God by the emptiness they find in success than through being broken by hard experiences — although, of course, the ways to God are infinite, and there is no shortage of the latter. Just when they attain what they always dreamed of, when they get to the position they have long worked for, they find themselves restless and unsatisfied. They ask themselves tell themselves — "There must be more than this!" It really is true that humans do not live by bread alone. Those who find an abundance of bread quickly taste boredom.
Finally, I must answer one question I am always asked. "Isnt it idolatrous that on the dollar bill and on some U.S. coins it is written In God we trust?" Actually, that inscription is actually a reflection of a profoundly American belief in original sin. The American experiment in self-government is no utopian or rationalistic experiment. We know that every human being without exception sometimes sins. When we say, therefore, "In God we trust," what we really mean, operationally, is: "In nobody else. For everybody else there are checks and balances." Executive power is checked by legislative and judicial, and each of those also by the other two, and all other offices in the Republic are also divided, so that the interests of each part become a sentinel over the ambitions of the other. In other words, "In God we trust" is an expression of biblical realism.
Perhaps this seems quaint to Europeans, I grant that. But maybe it is not a bad thing to say even on paper money that our trust is not in it, that even its value depends on multiple factors of the human spirit and human practice, and that it, too, rests on many kinds of checks and balances. Money is a far more complicated reality — and more tightly related to matters of the spirit — than we usually recognize.
It is useful to meditate on the humble realities of daily life. They all do, in the end, lift the mind to God, dont they?
Michael Novak. “God, Man, and Money, or How to Succeed in Business Without Going to Hell.” Catholic Dossier (May/June 1999).
Reprinted by permission of Catholic Dossier. This article previously appeared in an Italian publication, Nuntium, March 1999.
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