18 May #121 – Creation Capitalism
ESSENCE: Sadly, “capitalism” has become a four-letter word for many people. Just as there are dozens of ways to define capitalism, there are dozens of terms people have come up with to describe the problems with capitalism that have made it a four-letter word and dozens of terms people have come up with to prescribe ways to move capitalism out of the category of four-letter words. We believe the problem is not capitalism per se–it is capitalism played out through what we call business as usual, which produces work as usual. As there are already so many terms for a way to reform capitalism, we thought it couldn’t hurt to throw in one more–Creation Capitalism. We like this term because it serves as a reminder of God’s WHY, WHAT and HOW for work and business, which leads us to business in alignment with Biblical beliefs, values and priorities–business a better way.
Sadly, “capitalism” has become a four-letter word for many people. “Googling” the term capitalism returns dozens of variations, but the essential elements are private ownership of the means of production and an intention to earn a profit —neither of which inherently warrants expletive status. But capitalism is associated with business as usual (business in accordance in accordance with the world’s beliefs, values and priorities), and business as usual has big problems.
Just as there are dozens of ways to define capitalism, there are dozens of terms people have come up with to describe the problems with capitalism that have made it a four-letter word and dozens of terms people have come up with to prescribe ways to move capitalism out of the category of four-letter words.
As there are already so many, we thought there was no harm in proposing and describing a new aspirational term–“Creation Capitalism“. We believe it describes the WHY, WHAT and HOW of capitalism in line with Biblical beliefs, values and priorities.
Capitalism: The Four-Letter Word
Just like money is not the root of all evil (it is the love of money) and profit is not bad (it is when profit becomes an idol), private ownership of the means of production with the intention of earning a profit is not inherently bad. We believe the problem is not capitalism per se–it is capitalism played out through what we call business as usual, which produces work as usual.
We devoted many posts to describing the attributes of business as usual (Profit As Purpose, Scarcity Assumption, Self-Interest Assumption, “Can We” Ethics), the problems with business as usual (Ignores Other Types of Capital, Works Against Shalom, Devalues Human Dignity, Devoid of Trust in God, Does Not Prioritize Community, Not a Path To “A Better Way”) and the attributes of work as usual (Idol and Identity, Money and Power, Burden, Unhealthy Relationship).
We don’t think “replacement” is the answer. Private ownership of property is a Biblical concept (if you doubt this, we recommend an article on this topic by Wayne Grudem), and as we have emphasized in prior posts, we believe profit is necessary for business in alignment with Biblical beliefs, values and priorities (e.g., post #119–Faithfully Positioning Profit–Optimize or Maximize). We also do not agree with those who try to argue that the community in the book of Acts was an example of socialism (it is clear people owned their property and voluntarily shared it–it was not appropriated and redistributed by a central authority).
The problem is not with the two key elements of capitalism.
Capitalism: Descriptions and Prescriptions
As we mentioned, many adjectives and verbs have been suggested to describe the problems with capitalism or to prescribe solutions. Just search “capitalism” on Amazon and Google and you will find dozens of books, concepts and organizations. Here are just a few:
• Virtuous Capitalism. Interestingly, although it is usually an aspirational term, sometimes this phrase has been used to suggest capitalism is not as bad as it seems. Aspirationally, Pope Francis has urged that the “virtues” are needed in business. We agree.
• Redeeming Capitalism. This is an excellent book by Kenneth Barnes that looks at how capitalism can be redeemed by reclaiming the moral roots of capitalism.
• Redemptive Capitalism. This is more than just “redeeming” capitalism–it is business practiced in a way that is redemptive to the world. The faith-based Praxis accelerator has developed a robust “Redemptive Framework” around entrepreneurship.
• Stakeholder Capitalism. We devoted a post to “stakeholder capitalism” and how it differs from what we call business a better way.
• Conscious Capitalism. This is a book and an organization urging stakeholder capitalism with a “higher purpose”.
• Inclusive Capitalism. This is a CEO-led movement of businesses pursuing profit in ways that lead to a more inclusive and sustainable economy. It urges stakeholder capitalism with an emphasis on equality of opportunity, equitable outcomes and fairness.
• Shared Value Capitalism. The “shared value initiative” is about doing well by going good. They describe it as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.”
• Completing Capitalism. This is an insightful book we have talked about in many posts. The authors, Bruno Roche and Jay Jakub, identify four key types of “capital” needed by a business: natural, human, social and financial (the thesis of the book is that the problem with “capitalism” is that business has focused on just one “capital” and failed to steward and manage appropriately the other three–for “capitalism” to work, it must be “completed”).
• Financial Capitalism. This is what the authors of Completing Capitalism argue is at the heart of the problem–capitalism focused only on financial capital. It is the view espoused by Milton Friedman that has been the predominant view in the United States since the 1970’s. The only legitimate purpose of business is to maximize profit for shareholders. This has often focused on “short-term” profits, with management held to quarterly expectations and incentivized.
• Connected Capitalism. This is a book by David Weitzner on how Jewish wisdom teaching can transform capitalism through transformational cooperation.
• Surveillance Capitalism. Hopefully descriptive rather than prescriptive.
• Renter Capitalism. Again, hopefully descriptive.
• Better Capitalism. This is the title of a book that urges movement from “plantation economics” (an exploitive “winner take all” approach) to “partnership economics” (mutuality for the common good). It seems to align with the “economics of mutuality” concept developed by the authors of Completing Capitalism.
We share in doing the things that God has done in creation—bringing order out of chaos, creatively building a civilization out of the material of physical and human nature, caring for all that God has made. This is a major part of what we were created to be. (Tim Keller)
Fixing Capitalism: The Importance of WHY
The various prescriptions mentioned above for “fixing” capitalism are all good because they identify and try to address areas of economic, social and human brokenness caused by business as usual. But readers of Integriosity posts know that we are obsessed with the importance of WHY.
Without belief in a transcendent WHY driving an approach, its WHAT and HOW can be misdirected or become unsustainable. Some of these fixes do look to a faith WHY. Some are grounded in the “common good” or concepts such as “equity and “fairness”, and we do believe that God has implanted every human with what Tim Keller calls “first-order beliefs” such as “honesty, justice, love, the Golden Rule“– a “universal knowledge of God and of good“. Others aim at fixing the problems of business as usual capitalism but without a clear WHY other than that the brokenness is clearly bad.
Recent books, press reports and articles illustrate the problem of capitalism “fixes” not having a transcendent WHY. Just as an example, here are a few addressing the WHY behind some E.S.G. (Environmental, Social, Governance) investing initiatives.
• The New York Times recently published an article titled “The Pushback on E.S.G. Investing” noting that “There is a profit motive to E.S.G. . . . If shoppers and investors are looking for environmentally positive offerings, then it makes sense for businesses to respond“.
• A recent Bloomberg article talked about a top executive admitting “His firm’s low-carbon portfolios didn’t address global warming in a robust way. They were instead created simply because of client demand.”
• Harvard Business Review published an article in 2021 titled “An ESG Reckoning is Coming”. It noted “According to research last year, investors who signed onto the United Nations [Principles for Responsible Investment] did not improve the social and environmental performance of their investments. According to the researchers, signatories ‘use the PRI status to attract capital without making notable changes to ESG’.“
Humans were purposefully created with a purpose. We believe business leaders need a transcendent Biblical WHY for their work and their business. They need a “so that” that ultimately gets them back to who they are as creations of God and gets their business back to being a platform for people to live out who they are as creations of God.
As there are already so many terms for a way to reform capitalism, we thought it couldn’t hurt to throw in one more–Creation Capitalism. We like this term because it serves as a reminder of God’s WHY, WHAT and HOW for work and business, which it leads us to business in alignment with Biblical beliefs, values and priorities–business a better way.
• “Creation” as WHY. We find the purpose of work and business in Creation–in the Creation story in the book of Genesis. The Creation story is where we see work created as a good thing. It is where we learn that we were created in the image of a creative, productive and relational God, and because of that work makes us more human. It is part of how we live out Imago Dei. Genesis is where we see work as an essential part of life itself.
• “Creation” as WHAT. We find in the Creation story–in Genesis–our mandate to be “co-creators” with God through our work. God created the world to need us in order to flourish. It is where we are commanded to “be fruitful and multiply and fill the earth and subdue it“. Theologians tell us that this includes creating life sustaining and life affirming PRODUCTS and CULTURE. God placed us here to bring order to the world. We are to cultivate nature to enable it to flourish.
• “Creation” as HOW. The concept of Imago Dei found in the Creation story means business and work (and capitalism) must be carried out in a way that treats all people with dignity.
We also find in the Creation story–in Genesis–that we are to “have dominion”. Although that term sounds ominous and, on its face, seems to hold the potential to justify abusing the earth and its creation, theologians (which we do not claim to be) seem to be pretty confident that the term means “stewardship“. We are to care for God’s creation as its STEWARDS. As we explained in post #58 (Respect and Sustainability – God’s Limits), Stewardship translates practically into two things–Respect and Sustainability:
RESPECT: Respect for all humans God created, which means treating all stakeholders of an organization with dignity (owners, employees, vendors, customers, communities).
SUSTAINABILITY: Sustainability across all aspects of a business, including its utilization of all forms of capital that drive the business and its relationships with the stakeholders related related to those forms of capital. And sustainability in a business requires profit.
Creation Capitalism is not about “fixing” capitalism–it is about fixing work and business by bringing it back to its original WHY, WHAT and HOW. Remember the two essential elements of capitalism: private ownership of the means of production and an intention to earn a profit.
Creation Capitalism embraces both of those elements within the Creation constraints of stewardship and flourishing. Private ownership of God’s creation as God’s caretakers for the maximum flourishing of all creation touched by the business. Profit not as an end but as a means to facilitate the maximum flourishing of all creation touched by the business.
We will end with a quote from Tim Keller that we first introduced back in post #046:
The word “subdue” indicates that, though all God had made was good, it was still to a great degree undeveloped. God left creation with deep untapped potential for cultivation that people were to unlock through their labor.
We are called to stand in for God here in the world, exercising stewardship over the rest of creation in his place as his vice-regents. We share in doing the things that God has done in creation—bringing order out of chaos, creatively building a civilization out of the material of physical and human nature, caring for all that God has made. This is a major part of what we were created to be.
PERSONAL NOTE (from PM): Pastor Tim Keller holds a special place in my spiritual journey. He was a frequent speaker at meetings and retreats of the New Canaan Society. For several years I also attended the Thursday Men’s Breakfast at the Harvard Club of NYC where Tim spoke every month. I want to use this opportunity to share a prayer request he posted a few days ago:
Friends-This month, I am celebrating the 2-year anniversary of my diagnosis with pancreatic cancer. I can call it a celebration with justification as the chemotherapies have reduced the stage 4 cancer that was found and God has seen it fit to give me more time.However, we are also moving onto an immunotherapy trial at the National Cancer Center in Bethesda, MD as of June 1, 2022. This has shown great promise in potentially curing cancer, though it is a rigorous and demanding month-long program (that will need updates up to 6 months).Please pray for me and for our family. Kathy and I will be displaced from our home and separated from one another, as I will be an inpatient. Your continued prayers for truly miraculous effects of the procedure and minimal side effects would be very much appreciated.
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Photo Credit: Original photo by Samuel Regan-Asante on Unsplash (photo cropped)