by Ian Spong
For instance, if we own a country store that is mile from any public restroom do we put in a toilet for the convenience of customers or is it just too much of a hassle for us? The selfish capitalist will say that a restroom is an inconvenience to any business. There is the constant cleaning every few hours and the occasional bad mess to clean up. Some in the public will just abuse the privilege and write graffiti on the restroom walls or break things. None of that answers the question: does this show love to God and neighbor?
Of course, the answer is obvious. If we want to say that a restroom is inconvenient, maybe our customers will just find us to be too inconvenient because if they need to go to the toilet, and some customers do need to visit that room regularly, then perhaps the store in the other direction is better to shop at. Not every business decision is made by the bottom line. Perhaps it will cost a few more dollars to provide convenient facilities for customers than is returned by a slight increase in traffic, but that’s not most important question. Does it show love to God and neighbor?
A just compensation
CEO’s are either righteous or unrighteous kings of industry. Unrighteous CEO’s feed on their employees like scavengers feed on carrion. Such vulture capitalism is the height of selfishness. Righteous CEO’s are givers not takers. They give their lives not just for their own families, but also for their extended family of employees. They are caring shepherds who know that their life’s job is to look after not just a faceless list of names, but each and every employee and their families as well. How does this relate to pay scale?
Unions can also be very greedy, expecting too much from employers or destroying property and causing economic problems for the larger community. Certainly, unionism may be a needed balance to the greed that often exists at the top, but union thuggery can be just as bad as executive thuggery. Two wrongs don’t make a right. Tied in with righteous executive compensation is righteous employee compensation.
On the one extreme are grossly excessive CEO pay scales. For instance, the CEO of a large bank contracted for a quarter billion dollar package and a few years later played the game of outward appearances by taking a $1 salary during hard times. The whole think stunk of hypocrisy and executive muscle when employees were forced to forego bonuses and pay raises, but in the end the CEO still made out like a bandit with a grossly excessive golden parachute.
On the other hand, it is a shame to see businesses go bankrupt because employees are unwilling to negotiate a lower pay and benefits package during recessions. We must all make sacrifices in hard times and shooting the goose that lays the golden eggs is never a smart move.
Another extreme might be those who executives who take nothing from their businesses, either because they don’t need the money or in some cases have taken a vow of poverty. What a blessing it must be to have an income stream that is independent of the business and allows the luxury of returning all profits to the business and its personnel.
The most extreme of all must be monks who can run very lucrative businesses but take a vow of poverty. They live without such gross excesses of luxury as personal jets, yachts, limousines, mansions. They live without even everyday luxuries like a marriage and home. They live simple, uncomplicated lives and give any profits to the needy. Is that the standard that CEO’s should strive for? Are there CEO’s who live simple lives and have no need of luxury? It may be better not to make vows of celibacy or poverty, because life changes. However, the personal choice of poverty is certainly a very honorable one, even for those who are not monks.
Righteous CEO’s certainly have the right to take a salary, but at what level? For CEO’s who choose to take a salary, what is a righteous income? What about ordinary employees? How should they be paid? Should there be a big difference between the pay of an executive and an employee on the line? Some more principles might help make that very difficult decision.
Principle of double honorarium
What is a righteous pay level? The principle of double honorarium[146] for those who do well is a good place to start. A laborer or manager who directs the affairs of a business well deserves double honor and that is equated with double pay, especially those who teach. What? Ought employees to teach? Why not? Why do we have employees who hold back their fellow employees by refusing to share vital knowledge which would increase team performance?
Let’s theoretically call this principle of double honorarium a two-tiered pay scale: maybe minimum wage and double or perhaps to be generous, a multiple of minimum wage and double that. In such a two-tier system of pay how do we evaluate who gets what pay?
Could we start everyone off at tier one and create a system of incentives whereby their pay grows to double over time according to a whole array of factors? Could diligence, efficiency, ability, teamwork, harmony and attitude be factors? Could it be a peer-review system, an anonymous check list done by peers as well as managers so as to provide the best possible perspective and incentive? Could it be a fair and equitable incentive system that gives everyone a level playing field with the possibility of periodic bonuses depending on company profitability?
There are many possibilities. This is a good place to start, but it is just that, a start of the discussion. There are other principles to consider.
The One Percent Principle
In ancient Israel a tenth of the people’s income was given to the Levites. A tenth of that was given to the high priest.[147] Notice that this was not the salary of the high priest, but the entire budget for the priest. This budgeted one percent for the executive office is a good principle of the cost of doing business at the top.
The 1% budget even included the best things for the high priest, and makes no apology about it. Is there a difference between this and the compensation paid at the widget factory? That is an open question. CEO’s are not high priests, but there are some parallels perhaps worthy of discussion.
The principle of clan-sized business
Clan-sized family businesses create within them an automatic and sustainable welfare system. All can be cared for because they are not just employees. They are family. Sacrifice for the business is not just the lot of the clan’s heads or the employees. Everyone must pull together and everyone must contribute as they are able.
One of the great crimes of our modern industrial system has been the separation of children and mothers and fathers from each other. Our families are a mess. In a family business there need be no artificial separation of family members to avoid favoritism as exists in large corporate situations. The clan model has many benefits and can be a way to at least partly heal the harm done by the industrial age.
One of the reasons that many executives love big business is because they can make a lot of money. Big businesses are often as inefficient as national governments, but top executives can extract from them enormous salaries.
The economy of ancient Israel was a model for the world to learn from. It was neither meant to be communism nor an example of greedy and destructive vulture capitalism. It was a model of righteous capitalism and was based on clan-sized, family businesses. Each clan or family was a business. They engaged primarily in farming and small manufacturing.
How do we translate that to today’s economy? Is not our economy grossly inefficient when we ship parts from all over the globe to assemble? Is it not ridiculous to buy bananas from South America and Oranges from Florida and Basa fish from Vietnam and wine from France, when maybe our bodies are designed to eat more indigenous foods and our economy would be vastly improved if most of our needs could be produced locally?
Granted, CEO’s may make less money if they broke their companies up into smaller businesses, but would the economy improve? Would the lives of ordinary people improve? Would the market be freer and less monopolistic? Would a country set up on a majority of clan-sized businesses be better off? Small business is the main driver of the economy even today, not inefficient big business. That is the model that God gave to ancient Israel. Does it have application and
merit in today’s world?
Principles of Righteous Inheritance
When the heirs of a big box retailer inherited an incredible fortune, was that a just inheritance? The heirs have not treated their employees as well as their father did, but instead built themselves opulent castles and squeezed their employees to the point of breaking. They no longer pay a just health benefit and have lowered wages to poverty levels. Such unjust CEO’s are the epitome of the vulture capitalist.
Several wise billionaires have commented that they will give away most of their fortunes before they die, leaving only a few million for their children to inherit. Whether or not their accumulation was righteous capitalism in the first place, their decision is a righteous one. Repentance later in life is better than no repentance at all.
A righteous inheritance considers the contribution of future generations to society as a whole. Business inheritance goes to the most competent to continue that business in a righteous manner. That person may not always the most closely related.
The kings of ancient Israel and the kings and queens of Britain have a similar story to tell. Most were awfully bad rulers. Inheritance does not guarantee good leadership.
The reset principle
Communism is sometimes confused with redistribution, but that is a misunderstanding. Communism was theft of private property by government, not the redistribution of private ownership. Ancient Israel had a policy of redistribution that was much different than communism.
The economy was set up on an agrarian model very different than any in history. Everyone except the religious class had an inheritance in the land of approximately equal value. When people lost their farms due to debt or war, the system was designed to reset the economy back to its default mode. There was no opportunity for people to accumulate ever larger parts of the national pie. Every 7 and 50 years, the reset button was pushed and the land was redistributed back to its original owners.
How do we apply the reset principle to today? We are not an agrarian society? Might we need to consider something along the lines of equal access to education? Is taxing the super-rich fair so as to make sure they do not take an unfair percentage of the economy? What is too rich? Should we mandate the breakup of businesses if they become too large? What is too large? The reset principle is actually two principles in one: relief and restoration.
Principles of Relief and Restoration
In loving our weaker neighbor, the main goals are relief and restoration. Let’s discuss this in a little greater detail this time. These two words summarize the great economic principles that God gave to ancient Israel.[148] How can we today relieve and restore those who have fallen on hard times? To what should we restore them? Is restoration to a previously held low level of existence all that is needed or would the righteous capitalist be expected to restore them to a higher ideal of what life should have been like?
Does this mean that the righteous capitalist will consider ways that employees can be helped to find decent housing and affordable health care? Ought righteous capitalists to be engaged in the education business either on site or elsewhere? Ought apprenticeships to be something that a righteous capitalist creates? How can we help employees become all that they can be? How can we serve others in such a manner that they can become fully contributing members of the community?
The Principle of Sacrifice
Ought righteous capitalists to think about making the ultimate business sacrifice by finding ways to help their own employees become their competitors? Now that is the hardest question of all.
However, every human being is called to make sacrifices for others. That is what civilized society is all about. Righteous capitalism is what makes the difference between a society that operates on the laws of the jungle and a truly civilized society. Without self-sacrifice we are not better than beasts. With self-sacrifice we live like God.
Real Efficiency
When we speak of efficiency, we are often concerned only with the bottom line, money. Money is only one of many considerations. What is real efficiency? Ought real efficiency to also consider the employees’ family lives? For the sake of the almighty dollar, are we ruining marriages and harming the environment? Can a business be truly efficient if it is not efficiently contributing good in every facet of society?
Is not real efficiency a macro-study, rather than a micro-study of just economic factors? Must not real efficiency then begin with love of God and love of neighbor, relieving and restoring those in need? May we then and only then say that we have begun to understand righteous capitalism?
Endnotes
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[1] http://www.investorwords.com/694/capital.html#ixzz2BpqKzHAo
[2] http://www.huffingtonpost.com/2012/11/27/best-education-in-the-wor_n_2199795.html
[3] Matthew 25:31-46
[4] Rynell, Amy. CAUSES OF POVERTY: Findings from Recent Research. The Heartland Alliance. Mid-America Institute on Poverty. 2008.
[5] http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-destruction-of-the-1-percent.html?pagewanted=all&src=ISMR_AP_LO_MST_FB&_r=1&
[6] Mark 12:28-34
[7] Butler, Smedley. War is a Racket. Booklet. 1933
[8] War is a Racket
[9] War is a Racket
[10] Butler, Smedley. Interventionism. Speech. 1933.
[11] Barrera, Albino. Economic Compulsion And Christian Ethics. n.p.: Cambridge University Press, 2005. eBook Collection (EBSCOhost). Web. 23 Nov. 2012. P. xi.
[12] Economic Compulsion and Christian Ethics. p. xii.
[13] Hebrews 11
[14] Romans 15:1
[15] Economic Compulsion and Christian Ethics. p. 56.
[16] Economic Compulsion and Christian Ethics. p. 74
[17] Economic Compulsion and Christian Ethics. p. 110
[18] Luke 3:7-18
[19] http://abcnews.go.com/WNT/story?id=2743456&page=1#.UNHt1W88CSo
[20] Freeland, Chrystia. 2012. Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. New York: Penguin Group. p. 221
[21] Plutocrats. p. 141
[22] Plutocrats. p. 267
[23] http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-destruction-of-the-1-percent.html?pagewanted=all&_r=0
[24] http://www.nytimes.com/2012/12/06/world/europe/oligarchs-play-a-role-in-greeces-economic-troubles.html?emc=eta1&_r=0
[25] Plutocrats. p. 127
[26] Plutocrats. p. 96
[27] Plutocrats. p. 205
[28] Plutocrats. p. 250
[29] Plutocrats. p. 45
[30] Plutocrats. p. 256
[31] Plutocrats. p. 226
[32] Plutocrats. p. 134
[33] Plutocrats. p. 189
[34] Proverbs 28:25
[35] Psalm 10:1-4
[36] http://www.newadvent.org/fathers/1801010.htm
[37] Proverbs 1:19
[38] http://www.biblestudytools.com/commentaries/matthew-henry-concise/ecclesiastes/4.html
[39] Ecclesiastes 4:7-8
[40] http://www.sacred-texts.com/bib/cmt/clarke/pro015.htm
[41] Proverbs 15:27
[42] James 5:1-3
[43] Proverbs 29:4
[44] http://www.biblestudytools.com/commentaries/wesleys-explanatory-notes/isaiah/isaiah-56.html
[45] Isaiah 56:11
[46] Jeremiah 22:16-18
[47] Ezekiel 33:30-32
[48] Matthew 23:24-26; Luke 11:37-41
[49] Luke 12:14-21
[50] Mark 7:20-23
[51] Romans 1:29
[52] 1 Corinthians 5:9-11
[53] Ephesians 4:19
[54] Ephesians 5:3-6; Colossians 3:4-6
[55] 1 Timothy 3:3, 8
[56] Luke 3:14
[57] Micah 3:10-12
[58] http://www.cauxroundtable.org/
[59] Plutocrats. p. 50
[60] Plutocrats. p. 82
[61] Plutocrats. p. 91
[62] Plutocrats. p. 125
[63]
Matthew 22:34-40
[64] Matthew 25:31-46
[65] Genesis 4:9
[66] Matthew 22:39
[67] Matthew 22:34-40
[68] Ecclesiastes 11:1-3
[69] Matthew 25:31-46
[70] Rynell, Amy. CAUSES OF POVERTY: Findings from Recent Research. The Heartland Alliance. Mid-America Institute on Poverty. 2008.
[71] Proverbs 21:25-26
[72] Matthew 19:16-28
[73] Hagner, D. A. (2002). Vol. 33B: Word Biblical Commentary: Matthew 14-28. Word Biblical Commentary (562). Dallas: Word, Incorporated.
[74] France, R. T. The Gospel of Matthew New International Commentary on the New Testament. NICNT, Wm. B. Eerdmans Publishing Co., 2007
[75] Matthew 19:21
[76] Luke 3:1-6
[77] Luke 12:13-21
[78] John 10:10-18
[79] John 10:11-18
[80] 1 Timothy 6:17
[81] 1 Timothy 6:17-18
[82] Acts 10:35
[83] Exodus 22:25
[84] http://www.christnotes.org/commentary.php?com=mhc&b=3&c=25
[85] Leviticus 25:35-38
[86] Deuteronomy 23:19-20
[87] Nehemiah 5:1-11
[88] http://www.mbda.gov/node/438
[89] Psalm 112:4-6
[90] Ezekiel 18:12-14
[91] Luke 6:30-36
[92] Proverbs 22:7
[93] Exodus 21:2–6; Deuteronomy 15:12–18
[94] Economic Compulsion and Christian Ethics. p. 115
[95] Economic Compulsion and Christian Ethics. p. 116
[96] Proverbs 3:13-18
[97] Proverbs 16:16
[98] Proverbs 11:28
[99] Numbers 35:31
[100] 1 Samuel 8:2-4
[101] Proverbs 11:1
[102] Proverbs 10:16
[103] Proverbs 13:11
[104] Habakkuk 2:8-13
[105] 2 Pet 2:3