Economy in the service of life

Council of Churches in the Netherlands

Foreword

The world is changing at a rapid pace. New forms of communication and new products are introduced quickly. The globe seems more and more like a village in which distances do not matter. Some of the inhabitants of the global village profit substantially from these changes and are materially better off than ever. Yet there are increasing indications that many of them, despite their wealth, are not genuinely happy. Perhaps they pay a high price for their material wealth, which often comes at the cost of their wellbeing.

Of more serious concern is that a much larger number of the inhabitants of the global village are excluded from the new developments. They have no access to the market, they receive no credit at the bank, and they live in slum districts located at the edge of the village, without decent schools or healthcare centres. Were someone to view the globe from a distance, he or she would be shocked at the stark discrepancy. In spite of the earth's tremendous possibilities, and in spite of efforts made towards a more just distribution of wealth, things are not going well in the global village. The future appears bleak.

Thankfully, there are clear indications that many inhabitants of the global village believe that things need to change. Churches in the poor south call believers in the rich north to their responsibility. Many Christians and others in the north are not deaf to the voices from the south. Dialogue is taking place, and plans are being developed for a better world.

The Council of Churches in the Netherlands is pleased to host a gathering of churches and Christians from the south and the north to discuss these issues. From June 15-20 2002, an international ecumenical consultation will take place in Soesterberg entitled "Economy in the service of life". Conferees will consider the causes of the problems, the nature of globalization, and the role that money plays in globalization. But they will also reflect on what these problems have to do with faith. Collectively, they will expand on new ways of arriving at a more just world. The churches of western Europe will attempt to make their contribution in this way.

If the effort is to have a genuine impact, then it is crucial that millions of believers in western Europe be fully informed about the issues and do their part, each one in his or her own way. The Netherlands, as the host country for the conference, has a special responsibility in this regard. I am therefore pleased that the organizers of the conference have found time to prepare this brochure for local church councils, congregations and parishes. This brochure is meant to help believers gain insight into the global problems, reflect on the issues from the perspective of their faith, and search together for alternatives. To all those who use this brochure in their work, I wish much inspiration and creativity.¹

Rev Ineke Bakker, general secretary, Council of Churches in the Netherlands

What kind of world are we heading towards?

Frequently asked questions

After the fall of the Berlin Wall, many people thought that peace had arrived permanently. But since then we have been alarmed by tragic events in countries like Bosnia and Rwanda, and September 11 2001 is engraved in our memories as a day when evil struck in a terrifying manner. More than ever, we have the sense that we live in an uncertain world.

Supporting that sense is the feeling that so many political and economic situations seem to be out of our own control. Political decisions made in the United States influence our lives much more than decisions made in The Hague or in Brussels. In our daily work, too, many of us experience a sense of impotence. Sometimes we simply have no choice but to live with decisions made by people far away, because the company we work for is a daughter of a multinational corporation. We are more dependent on the "global economy" than ever before. And as part of that global economy, every day enormous streams of capital dart back and forth across the globe - capital flows that are capable of destabilizing entire economies (such as Indonesia's and Argentina's) in short periods of time.

These realities are related to what is known as "globalization". Whether we like it or not, we have become incorporated into a global political and economic whole.

All of this raises questions touching the fundamentals of our lives. If so much is decided outside of us, then what happens to the notion of personal responsibility? "Globalization" - the word itself can make us feel very small. As Christians, we profess faith, hope and trust in God. But is it possible to continue to walk in that profession in a time of globalization?

Making the questions more difficult is the fact that the advantages and disadvantages of globalization are distributed across the world in such a lopsided fashion. The advantages - economic growth, international contacts, the Internet - merely enhance the social and economic headstart that the rich already have over the poor of the world. Sadly, the story of globalization therefore also includes the story of streams of refugees, not to mention further assaults on the environment. What has come of Jesus' words in the book of John (Jn 10.10): "I came that they may have life, and have it abundantly"? How do we account for the fact that so little of his appeal resonates in the global economy?

At the initiative of four umbrella organizations,² the Council of Churches in the Netherlands has invited western European churches to a consultation about these pressing questions. The consultation will take place in June 2002, in Soesterberg, under the theme "Economy in the Service of Life". Churches and ecumenical movements will be expected to measure international monetary and economic structures against the requirements of justice, as well as to critically assess the role that Christians have in more affluent countries. Churches in the east and the south have, in as many words, requested that we do so.

Ought churches to delve into such complex issues? The answer may be surprising. When it comes to globalization, neither political life nor business life holds the earliest credentials. They belong to the church instead. The apostles travelled across all of what was then the known world - the oikoumene - to proclaim the gospel. They did so in the knowledge that the whole earth is God's domain. "For yours is the kingdom", they prayed. Even the most remote areas reached by globalization fall under the promise of God's kingdom. They therefore deserve our love and care. God's call to do justice holds for the whole world.

That faith can encourage us. It can prevent us, for example, from seeing globalization only as a dead-end. For the Lord who first called the world into being also stands at the world's horizon. He is the alpha and the omega, the first and the last letter of the alphabet of world history. God not only created the world, he also actively sustains it. It is for that reason that we have asked people to test the developments occurring in globalization with the requirements of the gospel.

Some history

The churches of western Europe will meet in June 2002 to discuss globalization. But churches from elsewhere have been meeting already. In 1999, during the Asian crisis, a symposium was held by Asian churches in Bangkok to discuss the effects of globalization on the poor in Asia.³ The churches there drafted an impressive "letter to the churches of the north" in which they asked western Christians whether they are still familiar enough with "the richness of sufficiency", ie the "wealth" that comes from knowing that we have enough or have reached a saturation point. In the summer of 2001, churches in the Pacific Islands held an ecumenical conference entitled "Islands of Hope". At the same time, the churches of central and eastern Europe met in Budapest. Their chief message was that all churches and societies are again confronted with the choice of whom they wish to serve: God or Mammon (the god of money). Their message parallels the appeal made by the World Alliance of Reformed Churches (Warc) in 1997 in Debrecen, an appeal which the Assembly of the World Council of Churches in Harare later strongly endorsed, namely "that all churches around the world must begin to reflect on the meaning of the Christian confession in this time of increasing injustice and uninterrupted environmental destruction".

In fact, almost all church communities are busy with the issue of globalization. It is striking how related all of these efforts are. For example, in the "Jubilee Year" of 2000, Pope John Paul II issued an appeal to finally grant the poor man Lazarus a fully fledged place at the table of the rich. The Pope's powerful call for a "globalization of solidarity" has since travelled around the world. Similarly, the Lutheran World Federation does not tire of linking the motif of the communio (the community expressed most strongly in the eucharist) with the question of worldwide social justice.

The conference in June 2002 will attempt to carry all of the ecumenical themes described above further. But more people need to take this ecumenical journey. It is crucial that all believers in various parishes and congregations participate. To assist in that process, this brochure attempts, in as simple a manner as possible, to describe how the world of capital affects all of us as citizens. It also attempts to suggest how we, from out of our faith in Christ as the Lord of the world, can respond.

A first glance

What is globalization?

The word "globalization" is relatively new. In fact, it suggests little more, but also little less, than that a global society has come into being. Though that process has been happening for a long time, it has accelerated rapidly in more recent years. And people are much more aware of it now than they were before.

That globalization is not new is most apparent in the economy. For decades, an item like a refrigerator has shown the marks of global interrelationships. The refrigerator may have been assembled in south Korea with iron from Sweden, aluminium from Jamaica and copper from Chile. It was likely manufactured in Spain using nuclear energy from France with uranium mined in South Africa.

Today, however, new possibilities in transportation and communication technologies have strengthened the interrelationships, while political decisions have further paved the way for the development of global markets. We therefore live in a global economy, and no government today can prevent its citizens from becoming dependent on the powerful forces propelling it.

Politicians seem to have faith in this global economy. But many other people do not. Demonstrators protest in the streets. They do not put faith in something abstract like the "global market". They fight against their increasing sense of impotence. They see that the power of national governments is steadily eroding in the face of the rising power of money around the world. Indeed, it seems that never before has money held such attraction and power.

What is money, and what does it do?

People earn money with their labour. With that money, they provide for their daily needs and desires. The money that people spend is received by companies and then spent on wages and the purchase of raw materials. A portion of the wages earned is deposited in the bank. Banks then loan money to families who, for example, take out a mortgage to buy their own house.

Money therefore makes possible an exchange of goods and services. Some have pictured the relationship between goods and services and money as a two-sided coin: one side represents the goods and services paid for, while the other side expresses their monetary value. The government must ensure that there is approximately as much money in circulation as is needed for the exchange of goods and the payment for services.

This simple cycle of money and goods becomes somewhat more complicated when people from various countries exchange goods with each other. The Dutch merchant who buys tomatoes from Morocco must have money in Moroccan currency in order to pay the supplier. Before, if you needed foreign currency, you went to your country's central bank. You filled out a form and the bank decided whether there was a need for the products you wanted to buy. That has now completely changed. International trade in money and capital (ie money that is used for loans) is now unregulated. There are now a number of places where you can buy foreign currency. Due to the free exchange of currencies, international trade in goods and services has become much easier and has therefore increased. In fact, in the past twenty years, the volume of world trade has quadrupled. The number of linkages between those who make or harvest the product and the end user has also increased. Indeed, a whole global network of economic alliances and financial relationships has arisen. The economies of the world are, as it were, chained to each other. In general, governments try to ensure that the international exchange of goods, services and mutual payments is done correctly. But with the increased independence comes conflict, such as when oil supplies dry up.

Now one would expect that, along with the growth of international trade in goods and services, a matching growth in the international trade in money and capital would also have occurred. But surprisingly, that has not at all been the case. On the contrary, over the past twenty years, international trade in money has increased not four times, but one hundred times!

Why is that, and what are the consequences?

If a dealer in Europe expects a shipload of wheat from America every month, then every month he or she must have enough US dollars to pay the supplier. If the dealer does not want to risk the possibility that the US dollar will be more expensive then than now (in other words, that he will have to pay more euros for the same amount of dollars), then the dealer would do better to buy the US dollars now at today's price. The dealer transfers the risk of loss (or gain) in the exchange to the bank. The bank therefore fulfils an important bridge function and fosters trade between countries. The bank makes money by buying and selling foreign currencies.

More recently, however, banks have also done something else. Through the development of communications technology, banks can profit from the differences in exchange which exist in different places around the world for the same currency. With the touch of a keyboard, an instruction can be given to buy money in Singapore and to sell money in Mexico. Billions of euros, dollars, yens and other units of currency flip from one side of the world to the other instantly each day. People also think up and try out more and more financial instruments in the trade of both stocks and goods, such as stock options, swaps, futures and other "derivatives". What all of these "bank products" have in common is that they profit from the distribution of financial risks across various times and places.

In this way, money is turned over without a corresponding production of goods. It is as if a large balloon is inflated. The turnover does not add any social value: it does not result in more bread being baked, more bikes made or more houses built.

Banks hire talented young people to sit behind a computer screen the entire day, watching for places around the world where currency deserves attention. Sometimes the process is so complicated that even accounting firms have difficulty following it. In Singapore, for example, one of the currency speculators at the British Baring's Bank drove the entire company into ruin. He took great risks and then attempted to restore the bank's position through even greater risks. As a result, the bank not only suffered a multi-billion dollar loss, it fell into disrepute and bankruptcy.

These developments in international currency speculation have gradually led to the utterly remarkable situation that the volume of international trade in money and money products is now one hundred times greater than the total volume of international trade in goods and services. Money is therefore not merely the flip side of the goods and services coin. It has become an independent good or product in its own right. Trade in currency-derived "products" is becoming more and more independent from trade in goods.

Money has therefore acquired a different role. If earlier money was primarily a medium of exchange representing the value of goods and services provided, today money is primarily a commodity from which one can make a large profit. For banks, trade in this commodity has now become their most important source of income. But the production of goods and services has not increased accordingly.

The consequences for wealthy nations

Let us state at the outset that the free exchange of international currencies has a positive side. Sometimes, for example, with the support of "big money", necessary initiatives can happen that would have no chance of succeeding without the assistance of large donors.

But there is cause for concern. There is an essential difference between a society in which money serves people and a society in which money controls people. Now that trade in international currency substantially outstrips trade in goods and services, and now that the international currency economy has become the artificial heart of the globalization process, harmful consequences are bound to appear. We shall describe four such consequences.

First, according to the new financial logic, a business is valued less and less by the value of the goods and services that it provides. Instead, its value is determined more and more by the value it has in the eyes of the suppliers of capital or shareholders (its "shareholder's value"). As a result, the objectives that the business establishes become warped. The continued existence or continuity of the business gives way to satisfying the desires of the stockholders. It is the next fiscal quarter that counts. An announcement of strong earnings and massive labour force restructuring makes a rather good impression on the stock market. Decisive managers are lured to the company with huge salary options to work on behalf of the company's interests (ie the stockholders' interests) as aggressively as possible.

Secondly, the notion that money is our highest end has permeated all of society. A money culture has emerged. Why, for example, would one set up a factory, hire people and produce goods, if one can earn money in the stock market without nearly the effort? People have become infected by the craving for more - as we see in the rise of any number of investment clubs. The more that the culture of money permeates our society, the more it affects our social fabric, a fabric based on mutual trust and solidarity. Directors of companies today must contend with an almost unsustainable tension between their business role on the one hand and their task as a reliable employer on the other hand - and even their role at home as fathers or mothers. Family members care for each other, orienting themselves to loving, helping, sharing and giving to one another. But that culture of giving and serving does not always agree with the culture of the work situation. Yet it is precisely the culture of solidarity that is so important for the renewal of global economic relationships.

Thirdly, we notice the dominating role that money plays in the affairs of national governments. Every western government is confronted with the question of how far to go in protecting the public sector and its own system of social programs. Every politician today knows that if the government levies high taxes and social premiums on companies, then it undermines the nation's competitive position in the global economy. Government faces pressure to decrease such burdens on its business sector. That in turn jeopardizes its system of social security. Governments also try to eliminate high taxes by ending tasks that cause huge losses, decreasing subsidies and privatizing industries. In many countries a wave of privatization has swept important public companies - such as public transportation companies and those concerned with gas, water and air - under "the discipline of the market." The promise was that this would lead to better service at lower cost. But in a number of cases privatization has dealt huge blows to the stability and survival of the companies involved. In the Netherlands, consider the examples of KPN and Dutch Railways.

Finally, all social sectors face increasing commercial pressure. The influence and power of huge international money infiltrates such sectors as sports and health care. International pharmaceutical concerns try, in a number of ways, to persuade doctors to prescribe their medicines. Companies sponsor scientific research in order to further increase the receptivity of children to TV advertising. In the United States, "crony capitalism", where politicians and economic power brokers play ball with each other, marches on. In Europe, too, we are acquainted with our own Berlusconis.

The consequences for poor nations

The more important question is how today's process of globalization affects the poor countries. For some countries, globalization brings increased prosperity, especially countries which have large amounts of natural resources available for export. Unfortunately, however, a close relationship exists between globalization and rising impoverishment in large parts of the world, such as in Africa. That has occurred for two reasons. The first is exclusion: the global economy systematically prevents the interests of the poor countries from receiving adequate recognition. And the second is that debts can pile up further even when a poor country is doing its utmost, economically speaking, to pay them off.

Exclusion

At the end of the second world war, in the small American town of Bretton Woods, the wealthy countries established new rules for the international currency economy. The rich countries wanted to prevent a dramatic economic crisis from happening again, such as the Great Depression of the 1930s, when millions of people were reduced to begging. The International Monetary Fund (IMF) was created in order to assist countries that might run into temporary payment problems, and the World Bank was erected in order to supply sufficient capital to the poor countries. Yet in subsequent years gaping holes have appeared in these plans. A healthy world trade organization was lacking. And decision-makers paid too little attention to the reality that the rich countries look after their own interests first.

The consequences of their self-interest appeared quickly. To assure their own growth, the rich countries wanted prices for natural resources to remain as low as possible. But for their own development, the poor countries that exported natural resources desperately needed the earnings which higher prices would have brought in. The system contained nothing that would hold the wealthy nations accountable for their actions. The rich countries blocked the regulation of the natural resources market that was needed and did not look after the capital needs of the poor countries, despite a colossal increase in the international currency exchange. Their actions account for the fact that, since 1950, the wealth of the world has increased sixty-fold, while in that same period of time income in the majority of countries around the world, particularly in Africa, has decreased. In the intervening decades, the dissimilarity reached absurd proportions. The UN estimates that, together, the 225 richest people in the world possess an amount of wealth equivalent to the annual income of the two billion poorest people in the world. One in four inhabitants of the earth must make do on less than a US dollar a day.

These facts cannot be divorced from existing international agreements. To this day, voting power in both the IMF and the World Bank is determined on the basis of national income. In other words, those with the most money vote. The wealthy countries, as the strongest party, are therefore able to impose their will upon the poorer countries.

Rising debt

We see the direct consequences of the inadequacies of the international monetary system in the problem of third world debt. The fact that the indebted countries - or better, the leaders of these countries - have made huge mistakes in borrowing from foreign banks and other institutions is beyond dispute. Corrupt dictators have often funnelled the borrowed money into private accounts held in rich countries. But it must also be said that mistakes have been made by the banks issuing loans to fraudulent leaders who all too readily offered the stolen money to subordinates.

In the 1970s, many developing countries followed the development model recommended to them by the developed countries. That model dictated that investment in huge infrastructure projects (such as nuclear energy facilities, flood control dams and airports) receive priority. By the end of the 1970s, however, the economic tide had turned, and interest rates, including rates on old loans, went sky high. It therefore became more and more difficult for the poor countries to pay off their existing debts. In order to prevent a worldwide financial crisis, the IMF and World Bank stepped in. They offered the indebted countries new loans, but on the condition that they follow a policy called "structural adjustment" - a policy that remains in place even today, though people now avoid the term as much as possible. Structural adjustment consisted of forcing the indebted countries to expand their exports and slow down their imports. They would achieve this by, among other things, devaluing their own currency and, at the same time, curtailing their government expenditures. These measures would allow countries to, as it was said, "restore" their exports, pay off their debts, and receive new loans. But what escaped the financiers' attention was the fact that if the majority of poor countries adopted this export policy at the same time, then the prices of their export products would drop even further, due to oversupply. That is in fact what happened. Precisely by following the policy prescribed for them, their burden of debt became higher, not lower. And with all of the cutbacks in public expenditures, governments were increasingly unable to provide for basic human needs, such as health and education. The consequences were especially dramatic for the poor in Africa. They watched as prices rose while, at the same time, schools and hospitals were forced to close.

It seems that little has been learned from these facts. In 1997, at the beginning of the Asian crisis, hundreds of millions of people in Indonesia, Thailand and Korea fell (again) under the poverty line as a result of the adjustment policy imposed by the IMF. The international economy and government policy, which ought to have served life, turned against people instead.

What do globalization, church and faith have to do with each other?

If anything is clear from the foregoing, it is that globalization, irrespective of its benefits, has a painful shadow side. Its shadow side almost always emanates from thoughts and actions driven by self-interest, self-enrichment or recklessness. Indeed, the economic and financially-driven process of globalization is not a neutral phenomenon. It is conceived of and shaped by people.

But churches have also begun to move on a global scale. Sometimes, sensitive to injustice and the destruction of the creation, they have sounded the alarm. Behind their concern lies the conviction that things need to be different. It seems that the churches are saying that there cannot only be one method of globalization, especially one that happens to coincide exactly with what the rich and powerful in the world want. But if that is the case, then what kind of globalization are the churches envisioning?

The call to solidarity and frugality

Consider the example of Pope John Paul II. In the document The Church in America, released in 1999, the Pope suggested that we must view globalization in the light of what social justice requires of us. That starting point led him to issue an appeal for a "global culture of solidarity" - ie for a humanization of the globalization process, so that the poor receive justice and local cultures are respected.

Already in the encyclical Sollicitudo Rei Socialis, Pope John Paul II juxtaposed the underdevelopment of many places in the south with the overdevelopment of the wealthy, materialist north. He believed that the two types of development are related; that, in fact, the overdevelopment of the rich countries can increase the underdevelopment of the poor countries.⁴ In 1999, the Pope also pointed out that the enormous growth of financial markets threatens the rest of the economy. He therefore called for regulations that would save the weakest from always having to pay the highest price when a crisis erupts. Financial activities, he asserted, "must serve the common good of the entire human family". Finally, in an address to workers on May 1, 2000, the Pope stressed that globalization must never undermine the value and the central place of the human person. We must therefore build structures that guarantee justice and solidarity, he said. We ought to orient social systems towards what people need, and people themselves may never be sacrificed to the system.

These are statements and insights that we believe belong to the ecumenical heritage of all churches.

In our time, the invitation to the church and to society is to ensure a globalization of solidarity, a globalization of inclusion. That is a clear obligation of justice. And while the obligation rests on the shoulders of government, it is also a challenge and responsibility for all of us.⁵ One of the hallmarks of Catholic social teaching is its personalist character. In the concrete person, sociality and individuality come together. Solidarity is the cement of a community of people. The organizational principle of this is "subsidiarity", which means that everyone is called to and must be able to contribute to the wellbeing of the community.⁶

By developing a concrete witness of moderation and generosity, the churches in Europe today can become a "sign and a means" towards achieving a human globalization. Moderation involves dealing more decisively and responsibly with our own consumption goods. But the rationale is not that living a simpler and more sober life is somehow better. Rather, moderating our consumption will create the means allowing us to open our hearts to the needs of the world through concrete acts of love. We need to adopt a different consumption practice for the sake of our neighbour who knocks on our door either today, because of globalization, or tomorrow, because of our untrammelled use of the creation and its natural resources.⁷

Almost every recent church document about globalization has noted the degree to which western culture - and as part of it, western Christianity - is caught in the curse of materialism and consumerism. Remarkably, the dominant illusion in the wealthy nations is still that a higher level of consumption makes people happier, despite mounting evidence to the contrary. "More and more" does not make people happy. On the contrary, it lands more and more people in isolation. Moreover, unrestricted material consumption in already wealthy countries puts a corresponding pressure on the natural resources still available, on energy supplies and the environment - to such an extent that it undermines the ability of the poorer countries to build up to a level of consumption that will free them from poverty.

The enduring task of government

In a healthy economy, money serves life, not the other way around. In order to ensure that society is not overpowered by the world of money, and that the weak are not abandoned, churches have always believed that government has a certain corrective role to play with respect to the creation and value of money. Governments must monitor the monetary system and oversee the exchange of money in appropriate ways. But what about today, since national governments have, to a great extent, lost their grip on the monetary system, due to the globalization of the economy? Globalization now makes self-enrichment possible without any monitoring at the national or international levels. A new, just, public regulation of the world monetary system is therefore needed more urgently than ever before. The ship of international money has gone adrift and requires a new anchoring in the norm of public justice. For that reason, many churches in the south have correctly voiced their disapproval at the laxness of governments in renewing the world monetary system. They ask us: for you and for your governments, what value do you actually place in God's promise that he will establish justice over all the earth?

Biblical themes and reflections

The Bible contains a number of impulses supporting a better regulation of the world economy. For example, possession of money is not central to the biblical definition of "economy" (in the Greek, oikonomia) Rather, oikonomia means good care for the household (oikos means "household"). The caring administration of the land, and care for the life of all people who work the land, were therefore primary. That emphasis came to expression in the practical laws that held for ancient Israel. Every 50th year - the year of jubilee - impoverished Israelites had the right to reassume, debt free, possession of the land they once held, land that they had lost over the course of the years, either because of their own fault or because of oppression by their countrymen.

The prophets latched onto this theme. In gripping fashion, Nehemiah also described how the poor of the time - women in particular - had resisted their rich counterparts. They stated that they were of the same flesh and blood as their brothers, but that had made little or no difference. They had to mortgage and give their houses and vineyards to the rich, who, when things went wrong, conscripted their daughters and sons into slavery. The poor found an audience in the prophet, who persuaded the rich to voluntarily give back to the poor what they had taken. (Neh 5.1-13). We hear an echo of this theme later in the song of Mary (the magnificat), when Mary declares, "he has filled the hungry with good things, and sent the rich away empty" (Lk 1.53).

The Bible also illustrates that responsible social laws can contribute to the wellbeing of all. For example, the edges of the fields in ancient Israel could not be harvested, and the fruit left behind in the vineyards could not be picked, because that was reserved for the poor and the alien. The creditor could not enter the house of the debtor but had to wait outside. In the Koran too there are various prescriptions that protect the dignity of the poor and ensure that they have a life. Millions of devout Islamic people around the world set aside a fixed percentage of their incomes – 10% - in support of the poor.

For us today, the issue is not finding a way of copying the Old Testament laws. Our economy is different. In biblical times, the soil was the main source of prosperity; today the primary sources of prosperity are the possession of capital and access to knowledge. But the directions given by scripture indicate that we are called to shape the economy in such a way that everyone has access to the sources of prosperity.

What can be done?

A tree economy, not a tunnel economy

It is no longer possible to divorce the great economic issues in the world from what people hope and believe. A certain vision - a form of belief - animates even today's reigning pattern of globalization. It is for that reason that churches and church movements must dare to confront the one-sided pattern of globalization.

What that implies is perhaps made clear by introducing two images. The first is that of a traffic tunnel, and the second is that of a fruit tree coming into bloom.

In a traffic tunnel, traffic is moving towards a destination - the light at the end of the tunnel. As drivers, we know that we must first go through a dark and narrow part before we arrive. And doing that successfully requires certain things. Slow cars may not enter the tunnel, because they would hold up the other traffic too much. We have no choice but to simply accept the noise pollution. And traffic moves well only if everyone obeys the rules of the road.

The image of the tunnel reflects how people often see the economy today. Priority is given to fast traffic - ie to the interests of the maximum economic growth possible. For maximum economic growth is how we reach the light at the end of the tunnel as quickly as possible. When we arrive there, we will have arrived at a situation of material abundance and prosperity for all people, including the poor, not to mention the money needed for healthcare and care for the environment.

But to get there, we must comply with the laws of the tunnel. People need to move promptly to the right lane in order to leave room for someone who wants to drive faster. Everyone must strive towards the greatest efficiency and productivity possible. Of course, the fact that there will be certain casualties because of these processes is annoying. Regrettably, certain countries will fall back further temporarily. Sometimes mass layoffs will be necessary. We will need to exclude people who are "unsuitable" for work from the production process, and we cannot avoid some environmental damage. But the people and the environment affected can receive financial compensation, which higher economic growth makes possible. Growth also allows for higher social expenditures for social programs, and it provides us with more money needed for the environment and for development aid.

The image of the tunnel helps us to see how arguments of this nature have often been used to defend even the most vicious forms of globalization. In our economy, we give preference to those who grow the fastest economically. We simply put up with the resulting damage to the poorest countries and to the environment. After all, as the saying goes, there is no alternative (TINA).

But there is a sound alternative view of economic globalization, one that can be illustrated with the image of a flowering fruit tree. A flowering fruit tree is bursting with growth, even at the outer extremes of its branches. Like a tunnel, the tree is an efficient, well-organized whole. But it is more than just a well-functioning mechanism. It is first and foremost a living organism. As such, it works continually at utilizing all of its living cells in growing and then producing fruit. The tree is also completely attuned to its surroundings: it will never exhaust the soil because of its growth.

We could consider the fruit of a flowering economy as satisfying the basic needs of humanity, creating employment opportunities in all countries, and caring for the environment. But then a question arises. Why would a flowering economy be able to accomplish what the great mechanistic global economy cannot? For today the tunnel in our tunnel economy seems only to get longer, while the light at its end fails to appear at all for the poorest.

The images themselves provide part of the answer. A human society, including its economy, consists of more than a mechanism geared to achieving the maximum material prosperity possible. No tree, for example, will coerce its bark to simply grow as tall as possible, at all costs. That would destroy the most delicate cells, and it would put much heavier pressure on the soil. Every tree, in other words, possesses a built-in form of restraint. It has the capacity to stop growing in height. And precisely when it stops growing tall, the tree is able to build up energy reserves which it later uses to produce fruit.

Images have limitations. But they can illustrate a profound truth. Economically speaking, if we can prevent damage to the environment and harm to people, for example - instead of compensating them afterwards - how much will we have gained for the world as a whole! Surely it is a form of superstition to believe that financial compensation (which generally fails to materialize), given after the damage is done, can right what went wrong. Money has no liberating power. So much would be gained for people and the environment if we could further develop the capacity of economic restraint in the culture of the rich countries. Indeed, slowing down the pace of unlimited growth in production and consumption for the sake of others is not just a good ethical requirement. It reflects a healthy and mature insight into what only a flowering economy can provide.

We therefore categorically reject the view that there is no alternative to today's dominant pattern of globalization, in which those who expand the most aggressively win. Not only is the alternative possible, it already actually exists in a number of areas in our world society, where care is a priority before deciding on the scope of production, and where there is a willingness to share economic activity. Consider the Focolare movement, for example, which has spawned the "economy of communion" in a number of countries.

The structural approach needed

But even if people embrace a different lifestyle and way of thinking, would that, in and of itself, result in a better economic structure? Simply mapping out the complex problems is nearly an impossible task, let alone finding solutions in today's obstinate political climate. But here too the work has already begun. The highly respected Dutch economist, Nobel prize-winner Jan Tinbergen, formulated a wonderfully simple idea for the world monetary system. Suppose we examine, he suggested, how a well-run country manages its monetary system. If finances can be managed well at a national level, he asked, then why can they not also be well-managed at a global level? Tinbergen noted that every well-run country manages three key financial institutions. The first is a central bank, which ensures that money circulates that is as stable as possible. Then there are banks, which, using people's savings, invest in businesses. Finally, the ministry of finance spends the taxes levied according to the national plans and priorities.

On a world scale, Tinbergen observed, we find the beginnings of a central bank (the International Monetary Fund) and an investment bank (the World Bank), but no evidence of the third institution. Tinbergen argued that, to have a well-functioning international monetary system, the IMF and the World Bank must first be structured democratically. But then they must also become coupled together under a kind of world ministry of finance.

As we saw earlier, the most significant problem plaguing the International Monetary Fund and the World Bank is that both were created in a period when most poor countries were still colonies and largely served the interests of the wealthier countries. Applying democratic principles requires that their methods of decision-making and their attention shift in the direction of the majority of the world's population. Further, certain decisions of the type that a ministry of finance makes must be made on a world scale. Tinbergen wanted a "world treasury". Certain important matters, such as a more just international distribution of wealth, the protection of the environment, and maintaining an international order of justice, must be overseen at a global level. He further argued for reforming the international monetary system by introducing a new type of international currency based on the value of about 30 natural resources, rather than on gold or the dollar.

Tinbergen's proposals date from 1964. Had they been accepted at the time, they would have ensured higher and more stable prices for natural resources. That, in turn, would have prevented the deep debt crisis plaguing the poor countries today. The rich countries have repeatedly shoved these ideas to the sidelines. But in these perilous times, might we not be able to breathe new life into them?

Democratizing international organizations remains absolutely essential, but so is creating the financial resources needed for essential public expenditures on a global plane. In order to achieve that, James Tobin, another Nobel prize-winning economist, proposed a global tax linked to the international currency exchange - the "Tobin tax". The amount levied - the suggestion is a tariff of .2 percent on all international financial transactions - would not only generate billions of dollars, it would also create a dampening effect on the uncontrolled streams of speculative capital in the world, streams which have such crippling effects on the poor countries. The legal grounds for such a tax exists: if money has become a "product", then why should it not be taxed like other products?

The political step of moving from voluntary donations to compulsory contributions is huge, but if globalization is to serve life, it is essential.

What will help? Can ordinary people mean something?

Have we not paid too much attention to changing the course of the huge global economy? What can ordinary people accomplish in their towns, districts, churches or parishes? Or does the enormous power of the global economy render our own forms of sharing, restraint and austerity meaningless?

We argue emphatically that it does not. Consider two reflections.

First, church communities, districts, parishes, basis communities, congregations and religious orders have not come together by accident. They are groups whose members know that they need each other in order to learn, live and serve together. They are held together particularly by a common experience of God's word on the way to the kingdom of God.

It is significant that our sisters and brothers in the south and the east speak to us as church communities. They know that we have in common a language and a promise - the word of God. They know that that language and promise relate to both church and society. They therefore appeal to us on the basis of our joint responsibility for the future of the earth. We may not dodge that responsibility by claiming neutrality and passivity.

Some, especially some outside the church, will say, "Churches ought not to concern themselves with these kinds of questions - there needs to be a separation of church and state." But the separation of church and state hardly means that they may not carry out a critical dialogue. Further, the church may simply not be silent if society pursues a direction that fundamentally deviates from the norms and values of the gospel. That conviction drove the Confessing Church to speak out in Nazi Germany and the South African Council of Churches to speak out under the apartheid regime. It also compelled the Pope to speak out publicly against our society's all-encompassing materialism during the jubilee year in Rome. Ought the churches to remain silent today, in our time, when the pursuit of profit and materialism increasingly grips society, and when the companies for which people work to earn their bread simply become playthings of those who play with money, and of the anonymous forces of the stock market? Must churches remain silent when governments increasingly become opportunity-providers for the mighty and powerful, instead of protectors of the weak? All of that conflicts with the gospel.

Secondly, Christians cherish the hope that there is a meaningful way to the future. That hope affects not just their church communities. Remarkably enough, it touches all of us, as ordinary people in our own surroundings.

The book of Revelation applies to Jesus a beautiful image of hope: "I am the bright morning star" (Rev 22.16). The image refers back to the actions of Esther (whose name means "morning star") during the time of Jewish exile. In the midst of a situation of fate and doom, Esther, a trembling young woman, at the end of a period of fasting (which coincided with the time of passover), went to her husband the emperor. There she pleaded for the salvation of her people, who had been condemned to death. Ordinary people are important in the Bible. Sometimes God waits expressly for them, in order to link the power of his redemption to their humble acts of faith.

But the image of Jesus as the morning star also has another meaning. The morning star - the planet Venus - appears precisely when the night is at its darkest. Nothing seems capable of overcoming the all-encompassing darkness, certainly not the weak light of that one star or planet so far away. Yet the image of the morning star suggests that the "realistic" view of reality is in fact not realistic. True realism knows that, as soon as the morning star appears, the night has already been defeated. The darkness, however overpowering it may seem, has no choice but to withdraw in the face of that small star, which draws the morning in behind it.

That biblical image was used by the writer of the book of Revelation to encourage first century Christians in a time of great persecution. But it can also encourage us today. The image points to the expectation of God's kingdom of justice and righteousness. That kingdom may seem hidden and insignificant, but it shall fill the earth. And ordinary people like us may dare to live from out of it, even when - especially when - the surrounding darkness is so great.

On the way towards this great future of God, globalization plays a role. It too has a place in the great hope of salvation. But globalization today has hardly generated a just pattern of living and working in the world! Instead, it has adopted a course which misses the mark. It systematically overburdens people and the environment and consciously puts the lives of millions of people in jeopardy.

Thankfully, however, as people and as societies, together we may also choose life. Instead of clinging compulsively to the automatic operation of the tunnel economy, we may choose to care creatively for our fellow human beings and for the environment in all forms of society. And we may do so even in the smallest area of where we live and work.

In this time of globalization, the deepest resistance against doom, fear and impotence comes from living not just towards the future but from out of the future, the future of God's coming reign of justice and righteousness for all the earth.

Organizing a local event on globalization

You could organize an evening with the help of this brochure. You could use the brochure to introduce the topic yourself, or you could have the participants read the brochure ahead of time. In either case, having a discussion together afterwards is a good idea. Such a discussion, whether plenary or in small groups, could tackle the following questions:

• The first chapter talked about a feeling of impotence that many people experience in the face of the globalization process. Do you recognize that feeling? If so, where do you feel especially powerless; if not, why do you think that many others feel a sense of powerlessness?
• Can you describe what, in your opinion, are the advantages and disadvantages of globalization today? To put it more starkly, the advantages or disadvantages?
• Do you share the opinion expressed in the brochure that we live in a materialist age, and that money controls the lives of many people? Does that apply to you?
• What do you think of the position that the churches must oppose the negative consequences of globalization?
• Do you see possibilities in your own life for being in solidarity with people in the third world?

With your group, you could also attempt to draft a response to the "letter to the churches of the north" written by churches from the south. Do you share the critique presented by the churches of the south? How would you answer them? What points do you find important?

Notes