Faith & Finance

Swings in the business cycle are as psychological as they are economic. The Economist put the matter in sharp relief: “Much in modern economics is taken on trust. Even the most basic goods depend on complex links between suppliers strewn across the globe. The glue that binds the whole system together is trust—trust that suppliers will deliver the right goods on time; trust that payments will duly pass down the supply chain. That raises a question: What makes people who might not even lend to their neighbors happy to lend their life savings to unknown borrowers whom they will never meet? Put it like that, and the surprise is not that there are sometimes periodic panics, but that there are so few of them.”

As it happens, the problem of trust—of faith—appears in places beyond the current credit crisis. Most of us think of trust as an interior spiritual disposition. But, linguistically, faith and finance are closely linked: It is no accident that the word creditor in English comes from the Latin credere, “to believe.” When creditors make loans, they are acting on a belief in the trustworthiness of a client. German is even clearer: The word for belief, glaube, is nearly identical with the term for creditor, glaubiger.

A set of deep theological ideas lies behind this tight semantic joining of the disposition of trust and the act of issuing loans. And one surprising place these ideas can be put to work is in a problem that has dogged Christendom since the Reformation: the relation of faith to works. Luther taught that we are saved by faith alone and thus that no human work is of value in ­securing a place in the Kingdom of God. He was not the first to put such an emphasis on divine mercy. Some theologians insist the idea reaches back to St. Augustine and from there to St. Paul himself.

A classic text around which crystallized the theological crisis of the sixteenth century is in the fourth chapter of the Book of Daniel. Daniel has just interpreted a dream of King Nebuchadnezzar—a dream that, according to Daniel, spells out a terrible punishment that awaits the king in the near future. But this divine decree is not set in stone; should the king mend his ways, things will turn out more favorably. Daniel instructs him to “redeem his sins through righteousness and his iniquities by showing mercy to the poor.”

The problem begins with how to interpret the word righteousness. As early as the Greek translation of the Septuagint in the second or first century b.c., the term had been understood as almsgiving. This was because, in the Hebrew and Aramaic of Jesus’s day, the word for righteousness (tsedaqah) had come to mark the specific act of showing charity toward the poor. If the Greek translation is correct, it would appear that forgiveness is not completely an action done by God alone but requires some sort of human participation. To be redeemed from one’s sins requires the good work of showing mercy to the poor.

The Reformers took umbrage at this interpretation, and, ever since, this particular verse has been one of the passages that has attracted extensive and heated commentary. Only in the past few decades have commentators shown less interest in the theological problem of this verse, in large part because the importance of the Reformation debate has lessened as the guild of biblical scholars has become more and more secular in outlook.

Theologians, however, can still be moved by the question: The Lutheran Church historian Carter ­Lindberg, for instance, offers a strong defense of the classic Protestant understanding of almsgiving in his book Beyond Charity: Reformation Initiatives for the Poor. And the underlying theological issue certainly remains pressing: Just what is the role of human action in securing the forgiveness of God?

Some light on the ancient texts is shed by the financial debacle in our own time. The question, I contend, turns on recovering how the early Church understood the act of almsgiving. In modern times, Christians have tended to view charity toward the poor as an expression of social justice. Thus, when people give alms, they are contributing to a more equitable distribution of goods. Plenty of important biblical texts, especially in the prophetic writings, support such an interpretation. The emergence of modern democracies has given Christians the opportunity to have a role in the shaping of public policy, and Christian churches have used the opportunity to advocate policies that flow from what has come to be known as “the preferential option for the plight of the poor.”

But by putting such emphasis on social policy and the equitable distribution of resources, a distinctive element of charity, theologically considered, has fallen from view. Early Judaism and Christianity placed an extraordinary value on direct service to the poor for other reasons.

Consider the Book of Tobit, the earliest source we have that documents the importance of giving alms to the poor. The tale begins with a description of the piety of Tobit while he resided in the land of Israel. But then the Assyrians invaded the northern kingdom and took Tobit and many others into exile. He could no longer make the requisite journey to Jerusalem in order to offer sacrifices to his God. So how was Tobit to fulfill his obligation to serve his creator and redeemer?

He gave alms. If all we had was the Book of Tobit, we might conclude that the religious value of almsgiving was conditioned by one’s distance from the Temple. In Israel, Tobit venerates God at the Temple; in the Eastern diaspora, he serves the poor. But another Jewish text of the time, the Book of Ben Sira, rejects this interpretation. Ben Sira was a priest who lived in Israel. Yet he contended that almsgiving was an activity that paralleled sacrifice: “He who returns a kindness offers fine flour, and he who gives alms sacrifices a thank offering.”

In Tobit and Ben Sira, we witness a dramatic new turn in theology. The hand of the poor person is imagined to be a type of altar that can transmit goods from earth to heaven. The altar in Jerusalem turns the flesh of animals into a savor that was pleasing to the Lord, and the act of generosity to the poor allows one to deposit wealth into a heavenly treasury.

The efficacy of the poor as a conduit to heaven is nicely summarized in an early Christian poem that pits the claims of the heavens against those of earth. The heavens begin with a boast that the rains on which all mortal life depends “descend from above.” The earth replies that the act of giving alms on which one’s eternal life depends “ascend from below” and fund a treasury in heaven.

In rabbinic culture, the poor expressed this conception more graphically. They would greet their potential donors with the words “Acquire a merit through me.” What they meant by this pithy phrase (only two words in Hebrew, zeki bi) was “Put a coin in my hand, and it will be as though you have funded a treasury in heaven.” Those in need functioned like a full-service ATM; they were a direct conduit for transferring funds from an earthly to a heavenly account. The safety of human vaults could be impugned (in Jesus’ words, “thieves may break in”), but the credit rating of heaven is impregnable.

It is a curious thing that Jesus returned so frequently in his preaching to the theme of a treasury in heaven. It is a metaphor that derives from the world of commerce, particularly that of placing money in a bank. In antiquity as in the present, if one entrusted money to a lender, one expected that both the money and a profit would be repaid in time. For this to work, modern banks depend on the trust of their depositors—since the bank holds only a percentage of the funds in liquid form; the rest is loaned out to other customers that the bank believes will be able to repay the money over time along with an additional payment of interest. Depositors are given a claim against future interest, and everything works well as long as the various levels of required trust are stable.

In other words, the depositors must trust the bank, and the bank must trust that its loans have a good chance of being repaid. Bankers must be believers in those to whom they issue loans. As the economist Christopher Waller has astutely noted, this element of belief makes the banking industry much more fragile than other sorts of business operations. If McDonald’s goes under, no one is worried about lunch at Burger King. But if Citicorp goes down, we immediately start to worry about the local credit union. The banking industry is embedded in a vast web of belief.

This element of economic belief was well known in the ancient world. In Akkadian, the language of classical Mesopotamia, the same word was used to express the idea of faith in God or another person and the act of issuing a loan. Ben Sira embeds one of his discussions of almsgiving (29:8–13) between a section on making loans (29:1–7) and a section on offering surety for a friend’s loan (29:14–28). What is surprising at first is the fact that Ben Sira takes special care to warn his students of the considerable risks that follow from loaning money. All such worries disappear, however, when he begins to exhort his audience to give alms. Though alms are comparable to loans, they strikingly carry no attendant risks. The Book of Proverbs provides us with a good explanation of this curious detail: “One who is generous to the poor makes a loan to the Lord; he will surely repay him.” Gifts to the poor, it turns out, are really loans to God—and we can have complete confidence in his ability to repay.

Consider this ancient Jewish midrash. A philosopher approached Rabbi Gamaliel and asked how anyone could really trust the Bible, for Deuteronomy requires that a man provide for his needy kinsman and have no regrets when doing so. Gamaliel concedes that no person could or should have such trust in another. But he then asks the philosopher whether he would loan money to someone who brought along a poor man to stand surety. There would be no loan, said the philosopher. But what if he brought along the head of the province? The money would be given instantly, came the reply. Well then, concludes Gamaliel, the answer to the philosopher’s initial question can be supplied quite simply and logically. If an ordinary mortal is sufficient as surety, how much more so for the one who spoke and created the world. For Scripture clearly states: “The one who is generous to the poor makes a loan to God” (Prov. 19:17).

Let us return, for a moment, to the problem that Daniel 4:27 presented the Protestant Reformers. Daniel had said that by giving alms to the poor the king could be redeemed from his sins. Our understanding of how that might work depends on how we see the notion of redemption. As the etymology of the term in both Latin and Aramaic would suggest, Daniel is told to purchase himself out of his condition. Redemption means “to buy back,” and in this case the underlying metaphor is that of a debt slave. Nebuchadnezzar’s sins, conceived of as debts, have risen to such a level that his creditor, God, is about to demand repayment in the form of ­punishment: He is calling in the bond he holds over this unfortunate debtor. Nebuchadnezzar is in danger of spiritual foreclosure.

But the king can make good on his debt by making a significant deposit to his heavenly treasury. In making such a payment, Nebuchadnezzar is not “redeeming himself,” as the Reformers thought Catholics were claiming. Rather, by making a loan to God, he was ­giving visible expression to his status as a believer (credo—“I believe”; creditor—one who issues a loan).

The close nexus between belief and deed in the act of giving alms was noted by the fourth-century ­theologian St. Ephrem, who wrote in a Christian dialect of Aramaic known as Syriac. Praising the ­generosity of St. Abraham Kidunaya, he declared: “You listened [to the divine command] in order to act. You acted in order to issue a loan [alms to the poor]. You issued the loan in order to believe.”

The logical progression is striking: Through almsgiving, one enacts one’s faith. It is as though faith remains an inchoate matter that requires an action to generate its existence. Everything turns on the notion that almsgiving is the preferred means of delivering goods to God. Just as the banker shows that he believes you when he offers you a loan—the belief and the loan are logically inseparable—you show God that you have faith in him by offering a loan in the form of alms. Faith and works in the context of charity toward the poor are inseparable.

All of this might seem more clever than true—were it not for our current economic crisis. For as commentator after commentator has noted, everything boils down to the need to believe. James Surowiecki, writing in the New Yorker, observes that the crisis arose because a number of players misused our trust and made loans to individuals who were not qualified and then pawned off those loans on other buyers, who mistakenly believed them to be low risk. “This culture of credulity,” Surowiecki writes, “did plenty of damage to the economy, but now it has given way to something even more corrosive; namely, endemic mistrust.” And then comes the important conclusion: “If there’s one thing worse than too much confidence, it’s not enough. Fraud impoverishes a few; fear impoverishes the many. As long as mistrust prevails, people will be pulling money out of the system”sometimes even at gunpoint.”

How should we respond to the collapse of confidence? A striking proposal was offered by Floyd ­Norris in the New York Times, who suggested the government should force banks to lend. But can we really make someone believe? Parents pray that the gift of belief is given to their children at baptism, but belief cannot be forced or even willed; it is a divine gift. And so for our economy: We can’t force bankers to become ­believers.

Early Christian preachers had a similar crisis. The fall of Adam and Eve in the garden had bequeathed to human nature the impulse to seek self-interest first. But the burden of the gospel was to show humankind that only in losing one’s life could one gain it. Or, as Jesus told the rich young man who asked how he might be saved: Give all that you have to the poor, and you will acquire treasure in heaven.

This was no ordinary treasury, for it promised not only eternal life in the world to come but a handsome return in this world as well. For a preacher such as Augustine, the trustworthiness of this heavenly treasury had to be emphasized time and again. In one homily he wrote:

Study the money lender’s methods. He wants to give modestly and get back with profit; you do the same. Give a little and receive on a grand scale. Look how your interest is mounting up! Give temporal wealth and claim eternal interest, give the earth and gain heaven. ‘Whom shall I give it to?’ did you ask? The Lord himself comes forward (in the form of the poor person) to ask you for a loan, he who forbade you to be a usurer. Listen to the Scripture telling you how to make the Lord your debtor: ‘Anyone who gives alms to the poor is lending to the Lord.’

For Augustine, doing business with the Lord is not a zero-sum affair. The heavenly economy works to the advantage of both the giver and the recipient. When one makes a loan to the poor, both sides are enriched. But the giver gains even more so, for his gift is deposited in a heavenly treasury where the interest compounds his investment.

There is, of course, a significant difference between the life of the Church and the structure of our economic system. Though both depend on faith, we see the necessity for faith in the markets only when a crisis occurs. We are accustomed to believing that financial instruments such as dollars or euros are real. But how real is money? A dollar bill is nothing other than a promissory note. If the government prints too many of them, the value will sink. In accepting a dollar as payment, one is showing considerable faith in the secretary of the treasury.

In the religious life, however, the sense of crisis is always with us. In part, this is because of our fallen nature; our default position is to seek our own self-interest and to hoard what we own. Consider the rich fool in Luke 12:13–21 who is not unlike the many Americans who believed that a well-funded 401(k) could secure their future. Don’t store up treasures for yourself, Jesus declares, but be rich toward God.

However rational the hoarder’s strategy may appear in the moment, it has a terrible effect on the body politic over time. Just as in the early Christian world it took compelling preachers such as St. Augustine to propel Christians toward charitable behavior, so our contemporary policymakers are using every rhetorical and congressional tactic they possess to restore faith in the markets. In all things, one must have faith for the flourishing of human life.

For St. Thomas Aquinas, faith was one of the three theological virtues (faith, hope, and charity), and unlike the four cardinal virtues (prudence, justice, temperance, and fortitude) it had no correlate in everyday, secular life. Because it is wholly a divine gift, it must be infused directly by God.

This description might be worth reconsidering. It is quite clear from the current economic debacle that the flourishing of our civic life depends on faith as well. When the evening news shows rioting in the streets of Reykjavik in response to the failure of Iceland’s banks, we can see that a loss of faith threatens the social order. At a more mundane level—but quite serious just the same—the flight to safety in this country has dried up all of our resources for venture capital, which, in turn, shuts down any hope of economic innovation. And if economic innovation stops, so does any hope that American living standards will continue to rise as they have in past generations.

According to the Bible, however, one should not leave the matter of personal faith solely in the hands of an earthly treasury. To be sure, it is good to have a job and the security that comes from the knowledge that one will be cared for in retirement. But humankind will not flourish by bread alone. As Benedict XVI has reminded us, even in the most just societies there will always be a need for charity. And in his 2007 encyclical Spe Salvi, he argues that the measure of any culture is the degree to which it can identify with the suffering of the downtrodden.

Probably no atheist would disagree with this approach to charity. But what sort of argument could an atheist give that would make this form of giving intelligible? The conversation between Rabbi Gamaliel and the philosopher returns with a vengeance: Why would we believe that giving our hard-earned wealth to the poor is to our own advantage? Tobit’s declaration that funding one’s heavenly treasury is the only sure way to secure hope for a day of distress seems to be little more than wishful thinking.

The key to making sense of Tobit’s faith requires a deeper theological view of the world. Belief in God, we can say, boils down to a belief in a certain form of economy. When Jesus speaks about a treasury in heaven, he is describing an economy that works solely on the principle of grace. The rich young man, told to give up all that he had to fund a treasury in heaven, was asked to place his trust in an economic system that appears radically skewed to the benefit of the charitable. Jesus promises not only rewards in the world to come but also blessings in this world—and at a hundredfold increase. It is an investment opportunity that no rational person would pass up.

Historians of religion in the nineteenth century referred to the sacrificial system of ancient Israel as a form of do ut des, which could be paraphrased: “I am putting this small animal I have reared on an altar as a gift for you in hopes that you will bestow your blessing on me.” In the age of Tobit and the New Testament, that form of exchange underwent a significant transformation. Now the coin placed in the hand of the poor man was believed to fund a heavenly treasury that would bestow blessing on the charitable soul in the years to come. Almsgiving, the Bible promises, will deliver one in the day of necessity.

How can we be assured of a handsome return on our charitable behavior? By understanding that we are really making a loan to God and he is altogether dependable (believable, credible) to make good every coupon of the bond we hold against him. Religious faith, in other words, grants an ability to give a coherent account of the charitable principle on which the world was founded and continues to run. Put another way: Practicing random acts of kindness, for the believer, is not really random. It is the act of tapping into the deep ontological structure of the universe.

Why, one might wonder, has this classic approach to almsgiving fallen from view in our era? Surely one cause has been the rise of the modern state, which has allowed laypersons to shape public policy in a way unimagined in the patristic period. As a result we have developed a larger interest in redistributing income legislatively than in providing a rationale for sacrificial giving on the part of the laity.

But this transformation of almsgiving into a form of redistribution of income has also allowed a crucial aspect of this theological virtue to fall from view. Service toward the poor becomes a means of rectifying social inequities rather than a theological claim as to how the world is ordered. There is, of course, much to be commended in these legislative efforts. Breaking the back of structural poverty should be the desire of every Christian. But it is worth recalling that many Catholic laity were already worried about the increasing role of the state in the sixteenth and seventeenth centuries. Echoing the theology of Daniel, they complained: “If the state assumes responsibility for feeding the poor in place of us, how will we be redeemed?” Almsgiving was not just a Lenten discipline; it was the backbone of Christian identity.

The credit market might consider what it can learn from the biblical view of redemption. As Cardinal Ratzinger wrote in 1985, the economics profession

holds that the market is incompatible with ethics because voluntary ‘moral’ actions contradict market rules and drive the moralizing entrepreneur out of the game. . . . The market’s inner logic should free us precisely from the necessity of having to depend on the morality of its participants. The true play of market laws best guarantees progress and even distributive justice. . . . This determinism, in which man is completely controlled by the binding laws of the market while believing he acts in freedom from them, includes yet another and perhaps even more astounding presupposition, namely, that the natural laws of the market are in essence good (if I may be permitted so to speak) and necessarily work for the good, whatever may be true of the morality of individuals.

If we have learned anything from the credit crisis, it is that the things of this world are inherently uncertain. The market is not a computer that automatically spits out the correct answer. Sloth, gluttony, and vanity can distort the perception of market participants—creating the illusion of value where there is none and obscuring underlying values when fear and panic prevail.

In the marketplace, as in all other aspects of life, there is no mechanism that substitutes for morality. Who can deny that if our politicians and bankers had displayed greater trustworthiness—if they had humility before the uncertainties of valuation and greater concern for the effect of their actions on others—then this crisis would be less painful? Now that faith has disappeared from the markets we know not only what a precious commodity we have lost but also how difficult it will be to recreate. For this reason some commentators advocate legislation that would force the banks to become believers and loosen their hold on the availability of credit. Religious persons will know by instinct that such belief cannot be mandated but only nurtured. Without belief that both government and the market will act in a good rather than an evil fashion—that they deserve our trust—we cannot have faith in the future. Consider how much of what we do in our daily lives depends on faith. Just agreeing to be paid in banknotes is one of them. Replacing those banknotes with electronic records is yet another. (The state of California is now proposing to issue payments in the form of IOUs, a desperate appeal for our belief that has not pleased the bond markets.) On such acts of faith our economic livelihood depends.

Religious faith takes this form of activity one step further. If modern political flourishing requires us to believe in corporations to return liquidity to the credit markets, then religious flourishing means distributing our earthly investments to the poor, since, in extending charity to our neighbor, we participate in the act of charity that brought creation into being. By doing this good work, we enact the faith that our lips profess.

Just as important, we make claims about what the world essentially is and about the character of the God who created it. Though the streets of our cities may appear cold and cruel places where only the self-interested thrive and prosper, the gospel asserts that acts of kindness toward the marginalized directly fund a treasury in heaven.

Gary A. Anderson is a contributing writer for First Things and professor of Old Testament at the University of Notre Dame.