07 May 2016

Inbox: Finance Capital and Why I Don't Have a 401K or an IRA

This is not meant to condemn those that do or those who invest in the market. You must form your own convictions but I will briefly explain why I do not own investments or a retirement account.

First, I think as Christians we need to question the modern notion of retirement. Industrial and now Technological Society has profoundly affected how we live. The cash economy has also changed the nature of work, income and a host of other domestic issues. Many things could be said and weighed on this point but I don't think a strong case can be made for the popular notion of retirement.

While it must be granted we will reach a point in life where our ability to work in a highly productive and competitive manner will certainly decrease and perhaps may reach a point in which we are no longer able to financially support ourselves, this reality is far different from the mindset of it's time to play golf and go on cruises while I live off dividends from investments.

Those of us who engage in physical labour also feel (acutely) the reality that we won't be able to fully engage in the type of work we did at the ages of 40, 30 or 20. Yet, there are seasons to life and there are other ways we can spend our time. I will also grant that many retired people actually stay quite busy, volunteering, helping family and the like and that's certainly admirable and worthwhile. Not all work has to be income based and that's important to understand. I suppose what I'm questioning is the life of leisure based on dividends from investments. Beyond that there are many variables about how we spend our time and pay our bills in old age.

For myself, I will most definitely reach a physical breaking point and I'll have to find other means to bring in some money. At that point I may use some Social Security money (if it still exists by then) and couple that with some part-time earnings. It's hard to say and everyone's situation is different.

Over the years I have come to question the nature and ethics of finance capital. I realise this is completely at odds with the whole of industrial society and certainly the foundations of American Capitalism. I don't think we are to reap what we have not sown and I think there's a problem in earning beyond that which we have laboured for with our hands. This is a generalisation and immediately many exceptions can be considered but there is something to the notion of an honest day's pay for an honest day's work. I understand the arguments about risk and reward and for the most part I reject them.

While I understand that the stock market isn't necessarily 'gambling' if you spend even a little time looking into it you understand that like it or not it is greatly affected by speculation and manipulation. It continues to fascinate me that people who have a problem with fiat currency, money that has an arbitrary and fluid value, have no problem with the idea that a company is worth one amount on Tuesday and (almost magically) it is suddenly worth more (or less) on Wednesday. Their wealth is suddenly increased or decreased by perception, a consensus on value.

Even if the currency is pegged to a precious metal, the value of stock, commodity or even real estate is not. Currency tied to a standard is limited and thus to a degree so is the economy. At this point we can get into a big discussion about inflation and deflation, the business cycle and why purists should accept this economic 'law' and why avaricious men will always seek to overcome it but that's beyond the point of the discussion. The ideal whether truly ideal or not does not reflect either the present or historical reality and I will argue that it never will.

So often the value of one's money or holdings does not reflect a tangible  reality, but a perception or consensus of reality. This is the nature of money in a modern finance economy. I'll agree with the Gold Standard Libertarians that the present system is immoral but I'll go further and posit... there's is not only unrealistic but in the end equally immoral. I am not at all convinced by the arguments against (or for) deflation, as either a concept or a positive correction.

The coin is to be rendered unto Caesar because in the end it is his. I know many Dominionists cannot accept Christ's teaching on this point. They cannot accept the antithesis with the world. Christ is not abdicating His Sovereignty which is what they hear when I say the coin belongs to Caesar. Christ is drawing a covenantal line so to speak. There's the Church and the world. Money belongs to This Age, the world. We live here as pilgrims and have to utilise it but it's very clear from the New Testament it's not something we're supposed to care about or focus on. Get what you need, pay your taxes and live your life. Anything else is what the Gentiles seek after, what the lost world is caught up in.

Contrary to the Protestant tradition I think interest is not a legitimate way to make money. I think 'usury' has been toyed with and all but explained away. But in addition to the idea of interest I think usury implies profiting from the disadvantage of others which is one of the backbones of our modern economic system. If I am to treat others as I would be treated and to look out for the interests of others as the Apostle exhorts us then I cannot in good conscience seek to make money at the expense of other people's poor decisions, misfortune or even their own avarice.

I understand the arguments regarding risk and reward but as I said, for the most part I don't accept the ethics of the model. It's one thing to invest money and directly participate in the growth of a company, you're part of it, building it and working with the people that are helping you. No one is suggesting that all wages or remuneration would have to be equal. But this is far different from the world and mindset of finance where you move around money simply to gain dividends and have no real interest in what's actually happening or what your actions do to people's lives. Yes, you can pretend that you do and that you're conscientious in your investing but in many ways you're little more than a parasite living in a symbiotic relationship. I understand that's how much of the world works, but as Christians we don't operate that way.

Will this kind of thinking put me and Christians like me near the bottom of the social order? Yes, it will and it has. And I think that's right. That's our calling in the New Testament.

I know many parables are appealed to, both the Talents, the Labourers in the Vineyard and such like. As I've argued elsewhere these parables are being read in a worldly as opposed to spiritual manner. The parables taken prima facie are somewhat misleading. They are mysteries hidden to the spiritually blind. Their true meaning is only available to those enlightened by the Spirit. To take them as instructive lessons about finance or agriculture is to miss their point and to understand them in the same way lost people do. They are lessons and pictures concerning the Kingdom of God, the Holy Covenant and are inapplicable to the common order. Jesus was not giving us financial tips, at least not in the parables.

This is where the parable-finance crowd runs into real hermeneutical trouble because they use their commitment to finance capital to overthrow and cast down what Christ actually teaches about money. We're told to give with abandon, live as pilgrims laying up treasures in heaven. We're told to in the New Testament to provide for our families but we're also told not to worry about tomorrow or plan our lives as if we were something more than vapours. Living by faith we're not supposed to focus on our security or seek the respect of the world. We will be a peculiar people as poor yet making many rich.

The whole mindset of investing and profiting from the sweat of others labours is highly problematic.

When one considers the whole nature of the Western financial system the way in which it exploits others in terms of labour, the way in which it manipulates the culture with lies and marketing, it's a little troubling. I think everyone would agree but what to do about it?

The system is built not on a quest for moderate profit but the drive to profiteer to maximise growth even to the point of harming the lives of others. And if you don't do the same, someone will do it to you. The system is tied in with the courts, with threats, with a global system that tramples the poor, steals resources often at the point of a gun, a system which leads to war and suffering. This is life in a fallen world and we cannot escape it. We cannot escape sin or sinners.

Yet, as a pilgrim and stranger even though I use the coins and bills with Caesar's image, even though I have to shop in some stores and pay bills to some very evil exploitative companies I don't want to invest in the system. Even certificates of deposit while more conservative and lower yield than a stock or bond... are still investments in the system. We have to use banks but we don't have to like them or what they do.

Now how can I say that while I have a mortgage or sometimes a car payment? I admit it's tough. If I'm paying interest I'm feeding the machine. There's no way around it and thus just because I don't want to place my money in CD's or bonds doesn't mean I'm going to insist you don't. I can't do that. I'm not the lord of your conscience.

I have a mortgage payment because where I live it's cheaper to buy than rent. My area is unique and there aren't many like it. If I lived somewhere else I would not buy. Yes I know renting is terrible from an investment perspective but as any renter will tell you there are also advantages. As a Christian I don't care about viewing my house as an investment. It's a roof over our heads and nothing more.

Do I have a car payment? Because of where I live I often have to drive 25-30,000 miles a year for work...sometimes more. I often drive 60 miles a day but it's a drive with more deer than cars and much faster than a 10 mile commute in an urban area.

But because of the miles I need a reliable car. The grocery store is 20 miles away. For years we followed the Dave Ramsey/Larry Burkett/Howard Dayton model and drove older cars. Those programmes are largely for well-to-do middle class people and they rarely address the realities of the working poor. I could say a lot more about those shows and I'm afraid most of it would be critical. Nevertheless spending $300 a month on repairs, losing days of work and the uncertainty finally drove us to the point of just buying a good reliable used car and having a payment. We've always been able to pay them off and drive them for some time after but we never have enough to pay cash for a new vehicle when it's needed.

I don't want to invest in the system. I can't escape it but I don't want to be a part of it. I want to live here as a pilgrim, a foreigner in the land and bear witness.

Further reading on Parable Inversion:

At this point someone might invoke the Proverbs and the myriad verses referring to money and finance. I'm not going to address it fully here but I will argue that first the Proverbs must be interpreted in light of the New Testament. Establish principles based on the teaching of Christ and the Apostles and then go back and read the Proverbs. And read them from the very beginning, understanding that Christ is Wisdom and that true riches are not silver and gold. With that in mind, you'll read many of the Proverbs in a different light. While it's true that sloth leads to poverty and work leads to security, the proper way to understand riches (or even security) is not in terms of worldly success. We must read the Proverbs spiritually and define the concepts eschatologically, not through a Dominionist lens. The riches we seek are Christ Himself and thus our 'labours' need to be understood not in terms of bill and coin.