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[personal profile] mellowtigger
It's a topic that I've pondered many times over the course of my life. I suppose it's good to see others addressing the issue in a more scientific way. Specifically, a new study announces that conservative protestants are financially poor.

"The direct influence stems from conservative Protestants’ unique approach to finances -- in particular the belief that people are managers of God’s money and excess accumulation of wealth should be avoided.

In addition, conservative Protestants have tended to be less educated and have large families beginning at younger ages; and fewer conservative Protestant women work, all of which indirectly contribute to slow asset accumulation, Keister said."
I have, over the years, made financial decisions that I knew would leave me poorer than my contemporaries, but I made those choices anyway in an effort to live my ethical beliefs.  For instance, I canceled my savings account about 15 years ago because I didn't like the answers I gave myself concerning where that "interest money" was coming from.  It wasn't money that I had earned; it was money that somebody else once earned (other people paying interest on their home loans) and that somehow ended up in my bank account by methods that seemed rather shady to me (poor people using their paychecks to cover exorbitant fees on bounced checks).  I decided that I would stop participating in that system of finances as much as I was able to extricate myself.  I still have a checking account, but it "pays" no interest (meaning, it doesn't take money from somebody else to give it to me for reasons that I don't quite understand and certainly don't justify ethically).

Similarly, it took me a few weeks of pondering during an incident about 8 years ago to finally decide that 401k was not something I would participate in at my workplace.  I even considered playing stocks like I would a computer game, enjoying the mathematical complexity in trying to find maximum achievement.  Still, it wasn't enough to soothe my worries about where all this stock "value" was coming from, which seemed like children playing with trading cards whose "value" had nothing to do with their indication of work produced.  I can understand and approve a system in which stocks are issued with a fixed amount of "return" on the investment.   Suppose a company could sell stocks at a value of $100 with promise of a total $200 return to the investor, then after the $200 is paid off, the stock simply "disappears".  The company can continue to pay dividends as they are able, essentially making such stock into a very flexible loan.  But stocks last forever, near as I can tell.  Why should a stock I purchase on the market (where my money does not go to the company needing the cash for its own use) and I continue to siphon off funds that should be going to the workers who produced the real value?  How much total money is being paid in dividends on stocks today in America?  Dividends which should (by my logic anyway) belong to the people who made the company profitable, not to me who gets dibs on the profit because of some stupid piece of paper.  I can see why the initial stock sale can benefit the company and its workers, but I can't see how stocks should ever be allowed to siphon off funds in perpetuity.  It seems plainly unethical to me.

So no 401k "investments" for me.  That money belongs to somebody else, and I'm not going to take it even though I could.

I understand that Muslims have even more strict standards on financial involvements than Christians do.  I've thought more than once that I wish I knew where they did their banking here in America so I could examine it to see how it matched up to my own standards.  It should be possible to create "ethical banking".  I wish I knew where to find it, though.

Date: 2008-03-26 04:44 pm (UTC)
From: [identity profile]

Gosh, I don't even know where to begin.

Stocks ultimately represent ownership of assets that generate wealth; whether that generated wealth is rolled back into the stock or paid in dividends doesn't much change what it is. When I own a stock, I think of it as, say, owning a machine that produces nails, and because it's really good at producing nails, I get to keep some of the nails it produces in return for having helped build the machine in the first place. Because if I didn't fund the machine, there would be fewer nails in the world. Just because a 401K represents tiny fractional ownership of millions of such things doesn't change that essential scenario. And I see absolutely nothing unethical about it; people pay you for your investment money because, by and large, they do useful things with it and consider the cost of the money (the interest) to be worth the benefit of having the money up front. If you deny them that money, you deny people the opportunity to create useful things; it's a lose-lose decision.

I think that the preponderance of melodramatic reporting on how the economy gets "gamed" tends to overshadow the fact that the bulk of the economy still concerns the production of real things that have real value. If you choose not to participate in that, fine, but unless you explicitly wish for the economy to shrink (not an unreasonable position, but another subject entirely), funding a nail-machine is surely more ethical than trapping people in less-productive work by withholding the opportunity for improvement.

The problem is that the web of ownership is so complicated that it seems totally abstract and divorced from reality, when in fact it is the foundation of the extreme efficiency and super-intelligent allocation of resources that drives industrial economies. Again, dramatic stories of where this system fails overshadows its extraordinary power to generate wealth.

Muslims are forbidden to charge interest on loans, but in practice they have different financial instruments that have pretty much the same effect. Instead of paying a mortgage, for example, you just buy the house bit by bit from the bank. I don't see how this promotes social justice in today's world; many of those same countries sit on huge amounts of oil, yet remain mired in poverty and suffer tremendous inequality. Not a very positive example in my mind.

Date: 2008-03-26 11:36 pm (UTC)
From: [identity profile]
That's like asking, when does the deed to a piece of land get shredded? Well, never. A stock is not a loan, generally speaking. The stock is a certificate of (partial) ownership for some collection of property, such as nail-making machines or issued patents. Your ownership of the stock exists so long as the property exists, and the stock pays dividends so long as the property generates money (and the board decides to pay it out). There is no reason a stock can't continue paying dividends for arbitrarily long periods of time.

Date: 2008-03-26 04:57 pm (UTC)
From: [identity profile]
The Koran has strict prohibitions against usury, which conservative muslims have interpreted as any kind of profit on the lending of money. Naturally this means banks as we know them cannot happen for those people. Indeed "paper money" itself should not, since it is based on a system that involved all sorts of usury. So there is everything from that position, to the large numbers of muslims who use banks because they must, but try not to involve themselves directly in the usury. And the even larger number who ignore the prohibition altogether when dealing with anyone they don't know personally. There are banks, mostly set up by arab states, that follow some middle-road compromise. It's a very interesting topic:


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