Friday, September 17, 2010

Churches and the lending industry

An article from Christian Century came across my screen today asking, in light of the banking and securities debacles of recent years, which banking and investment institutions should churches do business with. 

Good question: Should churches base their banking choices on the best deal they can get (stewardship), or should they consider the moral background, financial practices, and perhaps the causes they fund, in their financial decisions? 

Following is an excerpt from the article.
Given our practically inescapable participation in an interest-based economy, the relevant question may not be "Should Christians loan at interest?" but "What would it look like today to participate in lending and borrowing in such a way that it served human good and benefited all parties involved?" Such a question might, in fact, lead us to more radical proposals for social change than would come from simply rejecting capitalism from the sidelines.
Despite his reputation for giving a Christian blessing to capitalism, John Calvin was quite candid about his assessment of lending at interest: "Usury almost always travels with two inseparable companions: tyrannical cruelty and the art of deception" of the poor. (Now widely taken to refer only to lending at excessive or unlawful levels of interest, Calvin uses the term usury in the classical sense to mean any lending at interest.)
Calvin proves to be a helpful guide. He was quite reluctant to allow usury and did so only with clear restrictions intended to conform the practice to justice and the common good. "To be certain, it would be desirable if usurers were chased from every country, even if the practice were unknown," he wrote. "But since that is impossible, we ought at least to use it for the common good."
Among Calvin's rules for rightly ordered money lending were the following.

1)    One should not lend money at interest to the poor. Lending at interest made moral sense to Calvin only if it functioned as investment in someone's business rather than exploitation of someone's need. The proper response to indigence was to lend without interest or expectation of return.
2)    Lending should follow the precept of "natural equity." Equity for Calvin was displayed most clearly in Jesus' command to do unto others as you would have them do unto you. Interest-based lending is just only when it is perceived by all parties as mutually beneficial. This sense of equity was not, he argued, to be based simply on common practice but on God's word.
3)    Lending should serve not only the private advantage of the parties involved but also the wider public good. Faithful lending required a vision of how the transaction affects the larger economy and thus human flourishing in a given community.

Whether one thinks that Calvin's standards were too stringent or too lax, he resolutely thought about money lending as a moral and theological issue.
The real break with Chris­tian tradition comes with the rise of [a theory based on evolutionary principles], a purportedly autonomous sphere called the free market and a discipline called economics, which teaches us to see economy as a set of mathematical rules that exist outside the sphere of moral debate.
The current financial crisis has led Christians and many others to ask questions not only about particular players and trans­actions but about whether the weight of our current financial system pushes people in a moral direction—that is, in the direction of solidarity, justice, mutual benefit and common good.