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Faith, Wall Street, and everything inbetween

By Gustav Spohn
Director of Communications and Publications

How can faith communities impact what transpires on Wall Street? Does a rising economic tide lift all boats?  Why is it that good people do bad things? Is there an historic basis for a religion/economics nexus?

FriedmanThese are just a few of the questions that were addressed at Yale Divinity School’s Sarah Smith Conference 2010, a May 6-7 gathering that brought together theologians, economists, and pastors to talk about the intersection of faith, ethics, and the economy.  The conference was held in conjunction with release of the Spring 2010 issue of Reflections, YDS’s magazine of theological and ethical inquiry.  Conference and magazine shared the title, Money and Morals after the Crash.

Keynote speaker Benjamin M. Friedman, the William Joseph Maier Professor of Political Economy at Harvard, made a strong case in support of a “rising tide” perspective—marshalling statistics that he said show that the least fortunate citizens fare best at times characterized by ongoing material benefits to a majority of citizens.

And the benefits, Friedman said, are not just economic.  Times of economic expansion, he noted, are also times “when opportunities and freedoms have broadened, when our political institutions have become more democratic, and when the treatment of our society’s unfortunates has become more generous.”

Conversely, he argued, the consequences of stagnation in the incomes of a majority of citizens “will spill over well beyond the realm of business and economics,” inflicting “collateral damage on our race relations, our religious tolerance, our generosity toward the disadvantaged.”

Does wealth lead to apathy?

But Friedman’s position did not go entirely unchallenged. 

Awet Andemicael ‘10 M.A.R., posed a question during the question-and-answer session that she said was based on observations made by economist John Kenneth Galbraith in his book The Culture of Contentment.  “At times, a certain amount of wealth and progress can sometimes lead to an apathy toward helping those in need rather than necessarily being something that’s an engine for that kind of sympathy,” said Andemicael, who pursued an economics concentration as an undergraduate at Harvard.

Friedman, author of the book The Moral Consequences of Economic Growth, acknowledged that economic improvements to a majority of citizens might not always lead to increased generosity to the needy.  But the weight of history, he argued, suggests a close correspondence between economic prosperity and increased generosity.

Later on in the conference, Scott Black Johnston, senior pastor at New York’s Fifth Avenue Presbyterian Church, said, “I’m not against that (rising median wage levels) by any means, but I think, scripturally, again and again we find in the Bible about how do we decide whether the economy is just... It’s not about rising median wage levels but it’s how are the people at the bottom doing.”

He pointed to recognition of the “interconnectedness” of people as fundamental to creation of a just society: “If we can look at this and know that we’re connected there, and know that we’re responsible to all members of the household, and to have their lot rise, there’s hope there.”

Other speakers also spoke of “interconnectedness” as an important element in the discussion of money and morals.

Nicholas Hood III ’76 M.Div., pastor of inner city Plymouth United Church of Christ in Detroit, said he tells his congregation, “Look, you know if the Lord has blessed you where you’re still working, then you have an obligation to reach back for that person who perhaps is not doing so well.

“It’s okay to strive toward prosperity.  But at the same time we are responsible to our brothers and sisters, the poor, the tired, and the hungry.”  Hood noted that his church had its second-best year ever, financially, during the past year, despite the slumping economy.

According to Friedman, it was the sense of interconnectedness that made the Great Depression one of the few exceptions to his theory that economic downturns spawn negative attitudes toward the poor: “The sense of everyone being in the same sinking ships might have overwhelmed the competitive instincts that normally come when you feel like you’re falling behind.”

Go fast alone, go far together

In a sermon delivered on the second day of he conference, Stephen Bauman ’79 M.Div., senior minister at Christ Church United Methodist in New York, recounted an old African proverb that says, “If you want to go fast, go alone.  If you want to go far, go together.”  The current financial collapse, Bauman suggested, has resulted in “a collective addiction to going fast alone.”  But, he argued, “going far together” is a healthier “derivative of the Gospel.”

BaumanIt might seem strange to mix economics and religion.  But Friedman pointed out that the roots of today’s flagship organization for professional economists, the American Economic Association, can be traced to a late 19th century call by Protestant church leaders for economic reform, inspired by the Social Gospel movement and its theological architect, Walter Rauschenbusch, minister at New York’s Second German Baptist Church.

Frederick Simmons ’00 M.Div. ’06 Ph.D., assistant professor of ethics at YDS, noted that Rauschenbusch provided critical insights about how political structures can provide models for economic structures—insights, according to Simmons, that can be put to use today in areas such as corporate governance.

For example, in cases where corporate boards do not exercise adequate oversight of executive salaries, said Simmons, governance can be “democratized” by giving shareholders “some kind of, if not oversight, then at least abilities to register their sense of what would be an appropriate type of compensation package.”

One of the primary vehicles for religious bodies to exert influence on corporate boards is through affiliation with the New York-based Interfaith Center on Corporate Responsibility, an association of 275 faith-based institutional investors that presses companies on matters of social responsibility and put forward 300 shareholder proposals in 2009.

The prophetic voice of faith

Laura Berry, executive director of ICCR, said that through such proposals ICCR “has functionally served the prophetic voice of faith in pretty powerful ways” as it bridges the divide between morality and markets and engages faith communities “so that we actually learn from and do something about this disaster that has resulted in an additional 100 million people on the planet living on less than $2 a day.”

Friedman encouraged religious leadership “to support public policy initiatives ... in which the majority of American citizens are able to be sufficiently productive that they will earn rising wages over time and therefore will have the rising incomes that are necessary to support rising living standards.”

Sondra Wheeler ’87 M.A.R., ’92 Ph.D., author of Wealth as Peril and Obligation:  The New Testament on Possessions, linked the need for regulatory control to human nature, citing what she said were insights from Christian theological anthropology that suggest “human propensities to sin are probably not going anywhere soon.”


She recounted a meeting she had had with a group of CEOs from major companies not long after the Enron scandal.

“These were people who were enormously troubled and significantly shocked by what had happened,” said Wheeler, “and they wanted to know, ‘My God, what went wrong, and what can we do about it?’” 

Getting up in the morning to sin

She told the CEOs, “Hardly anybody gets up in the morning and says, ‘Gee, I think I’ll be wicked.’  That’s not how it happens....People rarely fall in an instant.  They fall by increments.”

Warning that society should “not make it profitable for people to do evil,” Wheeler concluded, “It’s the ubiquity, the irradicability and infernal sneakiness of it that gets you in trouble.”

Sorting out “fundamental beliefs” is critical to getting straight on economics, according to Daniel Finn, a theologian and economist at St. John’s University in Collegeville, MN.

Said Finn, “I do think it’s really important for all denominational leaders, and for interreligious conversation, to engage these issues, and to be talking about them because there are fundamental issues at the basis of our problems—many other technical issues as well, but it’s not as if there were an economic world and a religious world.  We are integrated persons, and until we get our ultimate convictions right we’re not going to have any chance at all of getting our economic views right.”

Finn noted that, while principles of “natural law” are quite clear, implementation involves “prudential judgment.”  Indeed, much of the conversation at the conference highlighted the complexities of translating theory to practice, and how difficult it is to make black-and-what distinctions in matters of economics and ethics.

Bauman, for example, referenced in his sermon the somewhat uneasy alliance between much-maligned Wall Street and the financial wellbeing of his own congregation on New York City’s tony Park Avenue. 

Simultaneously confounding dependencies

Audience“While our membership spans a broad swath of folks from divergent communities, it is true that the major funding of our institutional life depends to high degree on the generosity of persons involved in the financial industry and its correlatives,” Bauman said.  Such “intricate interlocking and simultaneously confounding dependencies,” he suggested, “are all part of the moral, ethical and spiritual landscape, and they don’t necessarily sit easily together around the same table as we make our way attempting to figure out what it mans to love God above all things and our neighbors as ourselves.”

Scott Black Johnston said his New York City congregation includes what he termed “mid-level Wall Street players,” some who work for financially troubled AIG, where bonuses to high-level executives in the wake of federal “bailouts” created much moral outrage.  Some of those parishioners, Johnston said, have been subjected to criticism even though they were barely on the fringes of policy making.

AIG employees in the congregation, he reported, have said things like, “I can’t believe that I am being cursed and being called all kinds of terrible things because I’m working at a company and I don’t even understand what it is that went wrong.  I just do this job and I do it well and this division is actually doing okay.”

Harold Attridge, the Rev. Henry L. Slack Dean of Yale Divinity School, brought theory and practice together during his concluding remarks at the conference.

“What can we as an institution do to educate the future leaders of our churches and our academy who are going to be confronted by issues such as the ones we’re going to be facing now in the economy,” said Attridge.  “Some of the answers have to do with fundamental principles:  Love of God, love of neighbor, the reality of human sin, the necessity of keeping in mind the widows and the orphans and the aliens.”

But he added that conference attendees will also take away from the gathering “practical advice about the way in which money and morals interact,” both from a personal and institutional point of view.

Photos by Gustav Spohn