Unlike some of the leading books on accounting and money for pastors, which put the technical knowledge of finance and theology of money in separate silos, this book integrates them from the beginning. The theological reflections offered in each chapter flow from the discussions of the chapter and are integral to the whole conception of ministerial leadership in the age of finance.
We will start this exercise with a discussion on monetary policy and the rituals that pertain to its enactment and implementation. Even a brief study of monetary policy by pastors and ethicists may serve as a mind or horizon expansion exercise pressed into the service of ministerial leadership and social justice. The issuance of money, the channeling of money as savings, the power of government and banks to create credit and financial instruments to promote productive tangible investments, and the price of money as the orchestra director of inter-temporal decisions are all at the heart of economic growth, poverty alleviation, and social justice.
The ways these factors and matters are handled in any society have a huge distributional impact on people and on the spread of the fruits of growth and development to various classes. Monetary policy should therefore not only be a target of ethical analysis but also of the study of development ethics. Any theologian that takes economic development, income distribution, and poverty seriously must bring monetary policy into the sphere of theological-ethical attention.
Theology in Motion: Rituals of Masters of Washington Monetary Temple
Monetary policy is the mobilization of a people’s monetary resources for the preservation, promotion, and ordering of its work.3 Productive and reproductive work—organization and distribution of rewards thereof—maintains the structure of mutuality of life through which a people shape their lives and cope with their day-to-day problems. Work is therefore a communal moral category, which depends for its sustenance and progress not only on the moral web of interpersonal relationships but also on capacities of persons to participate and on the right relations that are to be maintained among them. The control of the money supply in the economy conditions which work prospers and which work weakens; and so determine “who shall benefit and who shall sacrifice.”4
By affecting work (that is, work and how its rewards can be shared) monetary policy affects the balance of relations arising from the “mutuality of shared being” in the web of communal bonding. This directly makes monetary policy a power or instrument for justice or injustice. “Justice presses the question of concern for the whole network of relations and persons.”5 This notion of justice rejects the impersonal view of justice which limits it to rules and principles in balancing of competing interests in a detached perspective of human relations. It adopts the biblical view of justice as right relations and “the practical unfolding of concern in our relationships and activities.”6
Monetary policy always embeds within it a vision of the moral order and a framework of moral discourse. The goal of the ethical analysis of monetary policy is to identify and expose both the philosophical foundation of that moral order and the thread that holds the framework together.
The making and implementation of monetary policy is an element of group conflict or class struggle. The struggle is not going on visibly as confrontation between bourgeoisie and proletariat, bankers and peasants, “cross of gold” and silver pitchfork, or rich and poor. It is manifesting itself especially in moral terms. The particular moral code that informs and undergirds monetary policy effectively shows on whose side monetary policymakers stand. For instance, many may have failed to notice that the significant preference of the Federal Reserve Board of the United States to fight inflation in place of unemployment has the net effect in the long run of benefiting persons and institutions whose value of financials assets is inversely related to the level of inflation. Falling levels of inflation favor lenders and holders of bonds.7 No central banker or apologist of inflation-targeting central bank would present the matter in this obviously “crude and tactless” way as I have done. He or she would couch the argument in the language of democracy, sound money, rights, and battle against inflation. As Martin Wolf, an editor of the Financial Times of London, puts it: “The inflation tax is the most covert and obscure form of taxation. It is a breech of trust. It is inconsistent with the fundamental democratic principle that taxes should be voted in parliament.”8
The monetary-policy struggle is both mooted and accented by “ceremonies of innocence” and the “rituals of struggle.” Richard Madsen defines ceremonies of innocence as rituals that integrate a wide range of different points of view.9 Ceremonies of innocence is able to unite people of diverse points of view because there is a wide range of possible interpretations that people attach to the acts or dramas performed in a ritual and thus not immediately see diversity in political, social, or economic interest. In America we are used to seeing the Federal Reserve Board make quarterly (periodic) announcements about fundamental interest rate changes; its chairman giving reports on the state of the economy to Congress every six months, and once in a while stepping out of his high temple to make public speeches like warning against “irrational exuberance.” In these acts and speeches, most Americans see a non-politician, “neutral” technocrat making decisions about the directions of the economy and view themselves as different from the other countries where matters of money supply are politicized. The Fed’s rituals is an expression of a “sharply focused sacred” free market doctrine and Americans see themselves or their representatives united on the basis of a common theme of less government. It is not obvious to them that the Fed’s monetary policies are calling them to take a well-defined moral responsibility. They interpret the Fed’s policies in flexible ways and react to them in ways that suit their economic and political strategies.
The biannual collective ritual of the Fed’s chairman before Congress only blurs the “boundaries of their different beliefs and hopes.” If this “ceremony of innocence” is not wrong, it is at best only a half-truth. Many economists have shown that the ritual of monetary policies in America is not a ritual of ceremony of innocence but a real ritual of struggles. Monetary policies “celebrate one narrow set of ideas and turn those who hold them against everyone who does not,”10 dividing Americans into sharply composed camps, those who benefit from the inflation fighting focus of the Federal Reserve Board and those who suffer in the unemployment hangover. There are differential impacts of monetary policies on classes, races, and regions. There are the bankers who share with the government the power of money creation and hence huge profits, and those who do not. Monetary policies pit the present generation (or consumption) against the future generation (investment), the environment against capitalist production. For these economists the moral center does not hold and words of William Butler Yeats rings loud for America: “The ceremony of innocence is drowned;/The best lacks all conviction, while the worst/Are filled with passionate intensity.”11
This notwithstanding, America, like many advanced capitalist nations attaches a sacred aura to its central bank, making it stand for the deepest shared symbol of highest hopes and aspirations of its economy.12 The members of the Federal Reserve Board constitute a technocratic body with individual terms running as much as fourteen years; none is subject to the election cycle and takes no order from anybody.13 It is perched at the top of the “food chain.” It is charged with the sacred duty of protecting the dream of an expanding economy that serves all people as a whole and draws them into a unified intercourse as one big family. The central bank is suspended in a web of significance and meaning which
