Funny Money and the Real Economy

As Europeans face daily updates on the fate of their economies and of the Euro, public figures appear to disagree on the detail but agree on the broad framwork of how to respond to the crisis. The assumption from all quarters is that governments must in some way guarantee European currencies - whether through the European Central Bank, the International Monetary Fund, sovereign loans or some other mechanism or combination of strategies.

This approach makes one assumption - rarely challenged - namely that the currency used by the large financial institutions must and should be the same currency used by individual citizens.

An alternative approach is that ordinary citizens use (or create) their own currencies for peer-to-peer trading, and leave the global finacial institutions to sort out their own mess. The global markets, of course, will never make this happen, as such alternative and micro-currencies necessarily undermine the power of large financial institutions.

Which is, of course, one of their appeals, at least in the real economy whch most of us live in.

 



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Financial Crisis: Time to Diversify Currencies?

Image via Wikipedia

The idea of creating, using, or producing currencies other than those officially sanctioned by the state, is gaining momentum.

This from the BBC website today:

Parliament is to debate a call for foreign currencies to be made legal tender in the UK. Such a move would protect savers by allowing them to hold the currency least likely to be devalued, Tory MP Douglas Carswell told the Commons. He said people could then "extricate themselves from the monetary masters that hold them all captive".

Ryan Grant at the Distributist Review goes further, calling on American states to exercise their legal right to mint their own currencies, in response to what Grant sees as the inevitability of the collapse of the US dollar as a credible global currency.   

The root of our system of currency and credit is not based on value, the thing money is supposed to represent, but on debt, its antithesis. .....

Among Grants five solutions to the debt crisis is that the government must 

Allow and promote local currencies based on local assets, namely to have currency which is based on value and not on debt

David Boyle at The New Economics Foundation meanwhile is critical of

The idea that every nation, or even every continent, should have just one currency to serve everybody’s needs is a piece of eighteenth century Whig ideology that we have been stuck with unthinkingly ever since.  The plight of Spain and Greece is evidence of how faulty it is. 

Boyle calls for currencies that are as diverse as human societies.

With the collapse of the Euro a distinct possibility, and calls for the drachma to be reintroduced into Greece's domestic economy, such radical measures may be forced into the mainstream whether we like it our not.

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Related articles

• Legalise foreign currencies - MP (bbc.co.uk)
• Extreme markets need extreme measures (tradingfloor.com)
• "The Euro Is Finished" (lonerangersilver.wordpress.com)

QuickQuid: 1734 Reasons to Avoid

Too much month left after the money? Need a quick cash loan?

QuickQuid can help - with instant loans of up to £1,000 for first-time applicants and money in your account within an hour of the loan being agreed.

The trouble is, the company (a UK subsidiary of American-owned Cash Euro Net) will charge you an eye-watering interest rate for the privilege.

How does a "representative APR" of 1734% sound?

Avoid, avoid - especially in light of some of the horror stories told by customers about the company's allegedly aggressive collection polices.

The company's original adverts in 2009 were banned by the Advertising Standards Authority for being misleading. The ASA judgement states that:

"because of the rate of the interest charged and the potential vulnerability of consumers likely to be attracted by the ad, we concluded that the ad was likely to mislead consumers by omission of information concerning the rate of interest."

Furthermore, several individuals who have never taken out a loan with the company claim to have received intimidating letters from Cash Euo Net demanding payment of non-existent loans.

And, while we're at it, how about asking your MP why such an iniquitous rate of interest is permitted in the UK?

  

Follow up

In September 2011, Which Magazine reported Casheuronet UK, which operates Quick-payday.co.uk and Quickquid.co.uk, to the Information Commissioners' Office for alleged malpractice. 

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Happy Birthday Terry Virgo!

The Leaders Poole: Happy Birthday Terry Virgo!

Matthew Hosier expresses appreciation for Terry Virgo. I agree wholeheartedly with everything Matthew has written.

I would add one other quality that commands my respect.

Terry is very generous. Especially with his own money. He is, to quote something I have heard him say several times, "seriously committed to hilarious giving."

Happy birthday Terry.

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Jobs for the Boys?

In a short article entitled Obama Sells Ambassadorships, Media Freedom Intenational has the following quote:

"President Barack Obama has picked three of his major campaign donors to fill diplomatic posts to Spain, Norway and the European Union. The three new ambassadors bundled more than $1 million combined toward Obama’s election efforts. Overall, they have contributed nearly $2 million to general candidates since 1989.

Alan D. Solomont, nursing home industry entrepreneur and former lobbyist is slated to become the newest U.S. ambassador to Spain. Barry B. White, a partner at the law firm Foley Hoag, will be the new ambassador to Norway. William E. Kennard, Carlyle Group executive and former Federal Communications Commission chairman is Obama’s choice to be U.S. representative to the European Union, a position that carries the rank of ambassador.

Solomont along with his family has donated about $1.8 million since 1989 all of which has gone to Democrats. White has contributed about $103,000 since 1989, of which 98 percent has gone toward Democrats. Kennard has contributed about $67,000 to Democrats since 1989. The president’s ambassadorial announcements come after a relative lull in news of ambassador picks with money-in-politics connections."

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Consumerism

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Following the Money

An influential group of international asset managers, representing around US$ 2 trillion in assets under management, are arguing that integrating environmental, social and governance (ESG) considerations into investment decisions is no longer a luxury, but a legal responsibility.

The case is set forth in a new report compiled with the United Nations Environment Programme (UNEP). The report stresses the central role held by the world's largest institutional investors - pension funds, insurance companies, sovereign wealth funds, mutual funds - in helping the global economy effectively make the transition to a low-carbon and resource-efficient Green Economy.

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MP's Expenses and the Culture of Acquisition

I've resisted blogging about the current scandal surrounding MP's expenses for several reasons not least of all lack of time.

One simple observation that has come through loud and clear, however, is that there are a minority of individuals in the UK, both inside and outside Parliament, who simply earn vast amounts of money.

For instance:

• LibDem MP and Home Affairs Spokesman Chris Huhne, is a millionaire and owns seven homes in Britain (according to the Telegraph)
  
• BBC news reporter Carrie Grace (until this week a relatively unknown reporter) is paid £92,000 a year and gets defensive about it here.
  

My wife and I have never and will never earn a fraction of these amounts of money, despite having good university degrees and being professional people beyond our middle years. When writing this statement, it will be assumed by many that we are jealous or that we should in fact aspire to approximate these levels of salary. Neither assumption is true and that, in fact, is exactly my point.

The dominance of unrestrained capitalism post-Thatcher has created a culture in the UK that sees unlimited individual earnings as either morally neutral or a positive good - a state we should all aspire to.

I don't agree with that. I believe it can be harmful to the common good of a society if some within it earn vastly more than some others.

In my opinion, the story over MP's expenses is just a sideshow that misses the point. The big picture is entrenched economic inequality in Britain on a vast scale.

I think that's the real problem.

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Thomas Aquinas on the Credit Crunch

To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality, which is contrary to justice.

Thomas Aquinas,
Dominican friar and theologian (1225-1274).

source

I Couldn't Have Put it Better Myself

“Citibank, the nation’s largest bank, has received a $20 billion bailout, along with government guarantees for $300 billion of shaky assets; in addition to giving the bank an enormous amount of money, the public assumes all of the risks of being a banker, while Citibank gets to keep all the profits. That is to say, the profits are privatized, but the risks are socialized, combining the worst features of capitalism and socialism in a toxic combination."

John Medaille

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Millennium Communists?

A group of "heretics" arrested near the city of Turin in 1030 are reported by their captors as claiming that "All our possessions we have in common with all men."

Three centuries later, by contrast, Pope John XXII died having amassed a fortune of 25,000,000 florins. Based on the current price of gold, and the fact that the medieval florin contained 3.5 g of gold, the Pope's personal fortune might be compared to a value of about £400m million in today's currency.

The Church and Money - a Historical Perspective

Following an occasional series on the issue of money in the church portrayed in the new testament writings, I now take a slight historical detour to look at "Christian attitudes to finance in the first four centuries" - the title of an article by Frances Young of Birmingham University. I am grateful to Early Church for the heads up on this article.

Frances Young highlights three key themes in her essay:

1. The Ban on Lending Money with Interest

Young outlines the growth and consolidation of this teaching from its roots in the Old Testament commands (Exod 22.25; Deut 23.19; Ps 15.5; and Ezek 18.8) to its application to, first church leaders, then all Christians by the ninth century.

Although not opposed to banking as such, the early church did protest against the growing consolidation of wealth in the hands of a powerful few and the use of their economic power to lend money with interest.

2. The Use of Money to Care for the Poor

Young also provides some fascinating statistical data to illustrate the nature of the church's concern for the poor during this period. In the third century, for instance, the church in Rome is recorded as supporting 1,500 widows and other poor persons at an annual cost of between 1/2 and 1 million sesterces.

Just after 400 AD, the church in Antioch was supporting 3,000 virgins and widows, and the Church in Constantinople financed the care of 50,000 poor people.

It was during this period that some of the more well known quotations by outsiders commenting on the church's practice were noted and written down. The pagan satirist Lucian, for instance, notes of the Christians that "their original law-giver taught them that they were all brothers."

Tertullian, meanwhile, describes the varied use of the church common fund:

• feeding poor Christians
• providing for orphans both inside and outside of the church
• paying for the funeral costs of poor Christians
• supporting Christians in prison and those sent to the mines as punishment for their faith

Against this backdrop, Tertullian quotes outsiders as saying of the Christians, "Only look how they love one another!"

At a later date, the Emperor Justin expresses frustration in his attempts to revive the fortunes of the pagan cults. Forming imperial charitable institutions to rival those of the Christians, Justin writes, "It is disgraceful that all men should see our people lack aid from us, when no Jew has ever had to beg and the impious Galileans [i.e. Christians] support not only their own poor but ours as well."

3. The Support of Church Leaders

The church in Rome in the third century is reported as having 150 paid "clergy" exercising a variety of serving/leadership functions.

Many of the church's salaried workers during this period were, in fact, appointed to administer the church's communal charity funds - a development anticipated in the narrative in Acts 6 concerning the appointment of the "seven" to care for the daily distribution of food to widows in the Jerusalem church.

Conspicuous for its absence until the 4th century is any reference to the use of money to buy or maintain buildings. By the fifth century, however, as Christianity became the official religion of the empire and started to receive government allowances, the proportion of the church's finances directed towards the poor dropped to about one-fifth, the rest being spent on the clergy and the upkeep of buildings (pictured).

Where Does the Money Go in Church - Part 2

We've seen that one of the ways money was used in the New Testament church was to provide the necessities of life for oneself and one's family.

Beyond this, early on in Acts, we see money being used to help other believers in the local church. The key passages are well known and both describe life in the Jerusalem church:

All the believers were together and had everything in common. Selling their possessions and goods, they gave to anyone as he had need. (Acts 2:44-45)


All the believers were one in heart and mind. No one claimed that any of his possessions was his own, but they shared everything they had. With great power the apostles continued to testify to the resurrection of the Lord Jesus, and much grace was upon them all. (Acts 4:32-33)


Both passages begin with a description of a state of mind and finish with a description of certain activities that arose from that state.

In chapter two we are told by Luke that this group of believers "devoted themselves" to four things:

1) the apostles' doctrine
2) the fellowship
3) the breaking of bread
4) prayer

This devotion then found expression in a way of life in which "all the believers had everything in common" and in which they "gave to anyone as he had need."

Evangelical commentators have sometimes got their proverbial knickers in a twist over this passage. Prompted, perhaps, in the mid-20th century by a fear of communism, many of that century's commentaries go to considerable lengths to argue that this "common life" was extraordinary, experimental and non-binding on believers in every age.

Presumably, these helpful commentators would not take such a view of being devoted to the apostles' doctrine, but would see that as an excellent example to be followed by Christians today.

Actually, devotion to the four things that the Jerusalem believers were devoted to will tend to produce similar ways of thinking in believers of all ages.

Apostolic doctrine

• Apostolic doctrine was soteriological - focused on God's act of salvation in Christ - and tended to produce worship and thanksgiving.

• Apostolic doctrine was also eschatological - focusing on the coming of the Kingdom of God and the passing away of this present evil age - and tended to loosen ties to the things of this world.

• It was also communitarian - emphasizing God's plan to bring Jew and Gentile together into one new man in Christ - and tended to produce unity and equality

• Finally, this doctrine was ethical - love being the fulfillment of the law and the greatest command - and highlighted one's moral responsibility to one's fellow man

The fellowship

In a similar, but perhaps more direct way, the church's devotion to "the fellowship" was an obvious way in which their mind set was shaped with regard to the sharing of possessions.

Fellowship, at its most basic level, means "sharing" or "common-ness" , the word (koinonea) being the root of our English words common, community and communism. These early believer were, according to Luke, "devoted" to this practical idea of sharing/participating together/being community.

Sharing their possessions was a natural outworking of this devotion.

The breaking of bread

There is not a consensus among scholars as to the precise meaning of this phrase and, in particular, the extent to which it refers to the "Lord's Supper" of bread and wine.

The phrase is used by Paul in his Corinthian correspondence with reference to the remembrance of the death of Christ through the act of eating bread and drinking wine. I have also argued elsewhere in this blog that the early church did in fact share the bread and wine in the context of an actual meal with real food present. This was certainly the case when the original meal was eaten by the Lord and the disciples the night before his arrest.

What is clear is that the phrase "the breaking of bread" does refer to eating food together and that it was a practice that the Jerusalem church was devoted to.

Prayer

So much has been written and said about prayer in the early church that I feel there is little I could add to the wealth of understanding on the subject.

Perhaps there is just one perspective that may be relevant. It is that the devotion to prayer enjoyed by these believers was present in the context of community life - in fact, perhaps the most extraordinary and beautiful community life recorded in Scripture.

Perhaps you're different, but personally I find it more natural to pray (even for long periods of time and into the night) when I am living in community with brothers and sisters who are devoted to the apostles' doctrine, devoted to the shared life and devoted to eating together often and remembering the Lord's death and resurrection.

I would go so far as to say that were you and I to be living in such a community, prayer would flood out of us. The healthy peer-pressure would be irresistible!

This began as a post about sharing possessions. It is still about that, but as an expression of devoted lives.

Christians sometimes get very nervous about sharing possessions with those in need. Sometimes it's because we don't see it as the overflow of a life devoted to sharing the truth of the gospel, sharing food, sharing the Lord's supper and sharing prayer.

Where Does the Money Go in Church?

Have you ever stopped and thought about what the early believers did with their money?

We know that the Lord had some challenging things to say about money and possessions and that he practiced what he preached. We also know that the early church tried to put this teaching into practice to some extent. The question is, where did this money go? What was it used for? Who managed the process and who benefited from it? I offer the following posts as a reasonable summary of the way that money was used in the New Testament churches. Any thoughts, responses or disagreements, please leave a comment.

1. To provide the necessities of life

Obvious, I know, but not always highlighted. It's worth noting that in some churches, teaching on "money" often takes the form of teaching on "giving", which of course is only one aspect of the subject area.

The Old Testament background makes it clear that God provided materially for his people in order that they may be clothed, fed and sheltered from the elements. The New Testament writers insist on the duty of adult believers to provide for themselves and their extended families. Relevant verses include 1 Timothy 5:8 and Titus 3:14. Paul reminds the churches he planted of his own example of working to provide his needs and implies that those in the local church who live otherwise are not following sound doctrine (2 Thes 3:6-8). The neglect of such personal and family duty was severely criticized by the Lord Jesus when he rebuked the Pharisees for their super spirituality In Matthew chapter 15:

Jesus replied, "And why do you break the command of God for the sake of your tradition? For God said, 'Honor your father and mother' and 'Anyone who curses his father or mother must be put to death.'But you say that if a man says to his father or mother, 'Whatever help you might otherwise have received from me is a gift devoted to God,' he is not to 'honor his father' with it. Thus you nullify the word of God for the sake of your tradition. You hypocrites! Isaiah was right when he prophesied about you: " 'These people honor me with their lips, but their hearts are far from me. They worship me in vain; their teachings are but rules taught by men.'"

Here's a question: when a church is holding a gift day (towards a building project, for instance), is it ethical to encourage members, explicitly or implicitly, to give away money that they have set aside for food? Or, what about money that they would otherwise have put into a saving fund for their children's education? Or a pension fund to cover the costs of their retirement? I know this happens. I also know that some believers later come to regret having acted in this way. The latter group do not always get the chance to publicly testify to God's provision in their lives. As a result, sometimes church members are only hearing some of the outcomes of acting in this way.

Is it right? And should not our teaching on money begin with these more mundane principles of provision for self and family before we start encouraging extravagant giving (a subject I will return to in a future post)?