The Change Book by Mikael Krogerus

Author:Mikael Krogerus
Language: eng
Format: epub
Publisher: W. W. Norton & Company

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HOW JESUS WOULD INVEST

There’s no way around it: capitalism is the all-dominating economic system of our time. It is the system. But it’s stuck in a crisis. In a world in which Nobel prizes are awarded for financial derivatives (Black-Scholes formula); in which banks can lend nine euros for every euro they receive; in which neither customers nor sellers understand the products that they are dealing with—the question has to be asked: can we even trust the rules of the game?

A number of Western economists regard “Islamic banking” with a mixture of curiosity and envy: a tightly controlled banking sector based on religious laws (prohibition of interest, ban on speculation, ban on investment in alcohol, prostitution, pork, etc.) What is surprising is not that this system works—and made it through the financial crisis relatively unscathed—but that there is no equivalent in Western capitalism despite an interest in sustainable, ethical investment. This then begs the question of whether the West would even be capable of establishing an ethical banking sector. And if so, based on what principles? On Christian ones, says Paul S. Mills, an economist at Cambridge University. It’s worth thinking about his model.

Mills establishes four basic rules that cannot be broken with a Christian investment:

1.Be informed: Do you know what happens with your invested money? The globalized financial market functions according to the principle: what you don’t know won’t hurt you. Problematic information is kept at a deliberate distance.

2.Take responsibility: What are you earning your money with? The Bible is not against profit, but it should not be earned at the cost of others. Rule of thumb: it’s better to earn with transactions (money in exchange for service/goods) than with interest. Purchasing a property to let is acceptable, but don’t speculate with it. Don’t reap what you did not sow (Luke 19:22).

3.Take risks: Money that’s lying around—even in a bank account—has a limited use-by date. Money has to be invested, so that others can profit from it. That you could lose in the process is part of the gain. Through a loss you gain sancta indifferentia, holy indifference (Luke 10:35).

4.Practice humility: Hands off put options (security against a slump in the market)—we should not insure ourselves against the will of God.

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