Friday, March 12, 2010

Economics: the three uses of money

Leonardo Boff's weekly columns are available in Spanish from Servicios Koinonia. Some of his older columns are available in English at LeonardoBoff.com.

by Leonardo Boff (English translation by Rebel Girl)
3/12/2010

This year's Fraternity Campaign, which is now ecumenical, proposes that the thousands of Christian communities, both parish and base communities, discuss the topic: The Economy and Life, an important subject due to the global economic crisis that has left more than 60 million people unemployed.

It's about recovering the original sense of economics as an activity designed to ensure the material foundation of personal, social and spiritual life. It can not take up all the space as has occurred in recent decades. Global society became a market society and everything from sex to the Holy Trinity became merchandise with which to make money. The economy is part of a larger whole.

To facilitate understanding, I distinguish three areas of human activity, one of which is occupied by the economy. First, we are creatures of necessity: we need to eat, drink, have health care, housing, and other services. In these cases, we all depend on each other to address this infrastructure. It is the field of economics. Secondly, we are relational beings: we work with others, introduce rights and duties, obey laws and together build the common good. It is the place of politics. Finally, we are creative beings: everyone has skills, they not only reproduce what's there but create, exercise their freedom and make society progress. It is the field of culture. They all interlock, although there are conflicts that do not invalidate this basic structure.

Let's focus on a fundamental aspect of the economy which is the use of money. At first there was not money but barter: I give you a kilo of rice and you give me three bottles of milk. There was direct relationship and confidence that the swaps were fair. But when society grew sophisticated, money emerged as a medium of exchange. And there arose a danger, because money means power that reflects this logic: "the one who doesn't have, wants to have; the one who has, says: I want to have more; and the one who has more, says: it is never enough." Then the possibility of earning money without working, money making money, arose. But money has three legitimate uses that are: buying, saving and donating. The money to buy is necessary for consumption of what we need. Yet we must always ask: am I buying it because I need it or am I following advertising or fashion? Does the manufacturer exploit workers? During production, do they respect human rights and nature or do they use too many pesticides? This money is for today.

The second use is to save money. It's for tomorrow. We do not know the twists of life: illness, unemployment, inadequate pension. Many do not even manage to save, they consume everything in their survival. But if there is any to spare, where should that money be put?

Money left under the mattress is dead money that produces nothing. So banks arose, which keep the money. They make it yield, by loaning it to whoever wants to produce and has no equity. This person gets the money as a loan but makes it yield in production, pays interest to the bank and a part is passed on to the owner of the money. A conscientious person wants to know to whom he is lending his money: is it to build weapons, to support companies that destroy nature? The decision of Bangladesh and Brazil to create microcredit to support the poor who want to produce, was extraordinary.

The third use of money is donation. Money is not for hoarding but for circulation. If I have attended sufficiently and decently to my needs, if I have some savings that give me some reassurance for the future, if I have guaranteed the well-being and a secure future for the family, donation is a gesture of great generosity. It expresses gratitude for the gift of life, health, love received from others. It is highly ethical to donate to the downtrodden in Haiti, to support projects to combat child prostitution, or day care for outlying villages. And here we feel that in giving we receive the priceless joy of having done good and having loved each other.

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