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New Monasticism and financial ethics

Moot is not quite there yet, but surely, at some point in time the question of community finance will be raised. By this I don’t mean just tithing. Rather, here I’m more concerned with how moot and mooters could constitute economic agents, an economic microcosm and an economic entity, and how financial relationships and transactions could be functioning between them and with external agents. These thoughts stem from different conversations with mooters and some personal reading, and are by no means either comprehensive or complete. But here a few of them – for discussion purposes only (i.e. don’t try this at home quite yet):

1)      Self-sufficiency

As a community, moot should strive for self-sufficiency but not get to a state of autarky. This would mean recognising that while it would make sense for people to share capital and human resources within the community to ensure lower costs and higher utility for everyone, reliance on external services is inevitable. Moot, both materially and spiritually, is to live with and from exchanges with “the outside world”.

2)      Ownership and use

Usually, monastic communities require people joining to give up all their possessions to the community, i.e. give up ownership of what they possess. This is unlikely to be feasible here for several reasons: (a) people do not stay for their entire life with moot, (b) giving up one’s possessions would require such a level of trust between mooters that I personally believe it is unreasonable to expect that, (c) it is actually impractical, mostly because people are scattered in different places. An alternative, though, is that people do not give up ownership but allow others to use some of what they possess. An even weaker alternative, and perhaps a first step, is the ability for people to lease their possessions for use, provided they don’t make a (significant) profit (see point 4) out of the transaction.

3)      Freedom of contract

This is more a theoretical point, perhaps, but important nevertheless. People should be free to enter financial transactions as they see fit, provided they abide to certain rules, which should protect both parties against potential economic adversity. I personally think this is a preferable approach to restricting contracts to a list of authorised transactions. In effect, this means that mooters can agree to enter any financial transaction and are not restricted in their use of financial instruments (e.g. it is possible to give a loan to another mooter and charge interest rates). This, provided all transactions remain in line with some precepts which remain to be defined.

4)      Profit making

This one ought not to be misunderstood. Moot, and mooters, should be able to make a profit. By this, I don’t mean that they should enrich themselves on the back of others, whether these are part of the community or not. But, people need to realise that if they lend money or give access to some of their possessions for use by other mooters, they should not simply charge the amortising rate, but expect to earn a certain profit on this as well. This would apply to community initiatives as well, such as the art café. The rationale is that people need to be able to make use of their capital and reinvest it to ensure self-sufficiency on the long-term. For instance, and as a theoretical example, if a family were to work in the art café, not only their current costs of living should be covered, but also, let’s say, the savings necessary for the children’s education. This said, people should not overcharge others (greediness). If an extra profit is made, which should still be possible in certain circumstance and for whatever reason, a fund for moot should be created to allow these profits to be reinvested in goods and services useful to the entire community.

5)      Relationship to the external financial and economic world

Christian financial precepts, contrarily to what is the case for instance in Islamic Finance, do not require a fundamental change in the prevailing economic system. Rather, they much more concentrate on relationships between members of a community than between individuals and an overarching system. A Christian community should be able to function in a similar way whether it is living in a free market or planned economy. While some activism for a positive change in how a particular economic system functions may be welcome, this should be pursued because that system is unjust, rather than because we are looking to overhaul the entire economic system. This is because the Bible, contrarily to the Qur’an, does not really provide any hints as to what kind of macroeconomic system is to be preferred by Christians.

All this said, two words of caution here: (1) financial transactions could potentially be the source of much discord between community members and a lot of caution has to be taken before making any steps in the directions described above, (2) my thinking tends to be influenced by free market economic theories – any alternative thoughts are welcome…

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POSTED 20.06.10 BY: Moot Archive | Comments (13)

13 Responses to “New Monasticism and financial ethics”

  1. On June 21st, 2010 at 9:00 pm artbizness said:

    Without wishing to be facetious, I’m going to wait until after tomorrow’s budget before I comment, as the current predictions by our govt. are making me wake up in a cold sweat at the moment!

  2. On June 23rd, 2010 at 8:30 am Nicolas said:

    Mike, how is the new budget going to affect you? I know they’ll cut child benefits and freeze others… (nevermind VAT)

  3. On June 23rd, 2010 at 1:45 pm artbizness said:

    We’ll were actually slightly better off on that front, as we are officially Working Class™! However, whether we get clobbered by VAT on our shopping bills from January remains to be seen. It may well swallow up the extra dosh we get. Waiting to see…

  4. On June 24th, 2010 at 11:05 am Grace said:

    Nic, what are your thoughts on monetary transactions outside a new monastic community? I don’t have skills I see myself trading with community members any time soon, although I think what you’re saying is very valuable and I also think the concept of moot enterprises is a wonderful one. But I do look at my finances and feel incredibly powerless to be acting as ethically as the standard you set here, when applied to where my money comes from and goes.

    I’m getting a bit obsessed with fairtrade wine at the moment (this may say a lot about where my spending goes – or at least would like to go…. if George Osborne wasn’t intent on VATing the hell out of me come january). My dilemma is this – air miles and carbon footprint, or support fairtrade growers etc abroad? – with food, the UK isn’t a country with either the climate or the land space to be a big farming producer. So I am content to buy food as much as possibly British produced, but shipped in if necessary and then I try and buy Spanish or Morroccan rather than Brazilian or New Zealander. But wine – there’s hardly any British vineyards and they don’t sell in mainstream London stores. I think we’re not in a new monastic community of the kind your describing yet – if it ever takes on this form – and I’m not sure I’ll ever be very transactional with my fellow mooters. But as a community commited to justice I’d love us to be able to make some headway in the outward-looking ethics too. (Outward-looking being one of my favourite things to turn our thoughts to as well)

  5. On June 25th, 2010 at 5:21 pm Nicolas said:

    Grace – this is a very important question you ask. I’m not certain that a normative approach (i.e. only buy fair trade or organic) is always best (see my post on normative v.s. positive thinking). Yes, I personally tend to prefer both fair trade and organic to conventional products, same with local products. Sadly, supermarkets and other chains have understood that people’s willingness to pay for such product is much higher than for conventional ones (i.e. they are more demand inelastic), and the result is that supermarkets have higher margins on them (and effectively cross-subsidisenon-fair trade and non-organic products, which in turn increases demand and thus supply of non-ethically produced goods).

    For many people, keeping a tight and balance budget should be central – this is the primordial thing in my view. Even though I’m earning enough money myself, I would not be able to have end meets if everything I bought was fair-trade/organic. Frankly, I prefer to give the money to people who need it that have supermarkets make profits. So let’s not set a normative standard here.

    That raises another point on which you touch upon: I see economic relationships as not purely transactional. They should be relational also. This sounds odd perhaps (since our culture separates the two… why?), but I believe that one of the root causes of crises such as this one is that there is a decoupling of the financial and the relational. At the end of the day, you do not know how your money is used when you put it in a bank or invest it in a fund. It would be preferable for you to know how it is used from a risk management perpsective, but also from a relational point of view.

    I had once a good conversation with a mooter who felt that (s)he had to help people dying of hunger in Africa first, rather than support more local initatives (such as moot) for instance. While a very honourable thought, having worked and still working in development, I am skeptical of this approach. I do not believe in aid. Or more specifically, sending money to some country and leave with a good conscience (I’m oversimplifying here…). I think it’s better to help someone you know and also give that person as much advice as you can. Again, this is better not only from a risk perspective (you keep an eye on how the money is spent and can make a judgement whether it is well used – as much as the person being helped feels a responsibility to use that money well), but also from a relational point of view.

    This is obviously an ideal that cannot be fulfilled in many cases. The world is too globalised for that (though not necessarily a bad thing).

    My “advice” on wine is buy French / Spanish / Italian. It tastes better anyway 🙂 Fair trade is a good thing, but what those countries need, more than demand for such products, are social and environmental standards at the national level and passed into law, together with the necessary state institutions to make sure these are enforced.

  6. On June 25th, 2010 at 5:40 pm artbizness said:

    This is an interesting discussion. I know that its not possible to be completely in control of how your money invested, but let me tell you a story.

    I worked for a company for a while who offered me a pension. I was quite annoyed by it at the time, as I think pensions are a very strange use of money ofr various reasons. The company wouldn’t let me have it as cash for me to invest as I wanted, so I was forced to take it as a pension. Naturally their pensions guy was quite taken aback when I asked him what funds were available and could I invest in certain places and refuse to invest it in others. In the end I put it in to track their ethical portofolio, as it was the best option available to me at the time. I certainly wasn’t going to let it be managed by the company and see the whole thing underperform. In fact even he was quite surprised by how well it had done a year later.

    And Grace – you may not think you have transferrable skills, but I’d happily trade you a painting for some of your wikkid marketing and fund-raising ninja time!

  7. On June 28th, 2010 at 5:18 pm grace said:

    Thanks Nic and Mike 🙂 I had never thought about this Nic but I definitely fall into normatives / rule for myself to try and save my money going bad places – I shop obsessively at co-op, check labels like my life depended on it, etc. In fact, describing it like this I’m thinking it’s probably just an analness outlet. (another one…!)

    Mike – I’ve never even thought about pensions! I was just feeling bad recently for not setting one up as I have a vague idea they’re ‘a good thing’. tell me what your views are on them?

    Nic – I totally agree about relational / transactional. I do not understand how we allowed this split to be taught to us. International development, however, I think is a good thing as an intelligently implemented stepping-stone to a fairer global economy. (hopefully). I totally take the point that it can easily and dangerously become an end in itself – a dead-end black-hole comsumption of red-herring multiple mixed metaphor money-eating. But I think if intelligently maintained as empowering, it also uses and encourages generosity and relationality from rich(er) populations. eg. I work for a global network of 4 million mums and grandmas and a few dads grandads and non-parental types. They are all in relationship although they don’t know one another. They all commit to pray at midday, every day, for a few things (family life is their major love) but particularly a rotating prayer for specific areas of the world that the network is in. And they give to very grassroots work out of the same motivation of care and empowerment. I quite like it. (Admittedly its more development and less aid). But it is fundamentally relationship, not transaction, and some money moves around as a result of those relationships and the care in them. I think the trouble is that a lot of development and charity has become very shut down and two-dimensional – flat pictures on a website telling you about a bunch of kids needing a well or a country several thousand square miles across needing agriculture. It’s quite top down too – the decisions get made at an office in the affluent initiator country, rather than with the ‘beneficiary’. Plus, I think (but this may be changing as people like Oxfam, Tearfund and Christian Aid have all moved away from this to more ‘partnership’ styles) if the funding all comes from affluent donors, not only is it dangerously transactional and nothing else, but where is the local ownership?

    Ps. You should know thus far in my life and until I have resolved the carbon footprint dilemma, I only drink South African wine as a point of half-national pride. 😉

  8. On September 9th, 2010 at 5:37 pm Martin said:

    I recall when i lived in community in Liverpool(12 yrs ago now so I am showing my age) we had great discussions about how we spent community money. (we all shared everything and volunteered in projects etc)

    It ended up with the question which coffee to buy – nescafe, fair trade, or kwik save no frills (as it was then)

    We spent months arguing the pros and cons of all the three options and it did become quite heated at times – you would not think coffee could arouse such passions. There were may pros and cons of each option!

    I would be intrigued as to what coffee Moot uses and why – and i’ll share our community decision later. No judgement issues just intrigue!

    I don’t post often but i regularly follow with interest.

    Martin

  9. On September 12th, 2010 at 4:09 pm Nicolas said:

    Martin, thanks for your post. There is no straight answer to your question, and to be honest with you, I feel a little bit uncomfortable as there is no need to have people take side on such a small issue. I do not know what coffee moot uses and I trust the person responsible for purchasing coffee has given it sufficient thought and I’m happy with that.

    Now, working as a development financier, I would argue several things. First and foremost, yes, fair trade coffee is a good thing and we should encourage it. But it’s really only a drop in the ocean. More important is for instance lobby work at government and corporate level to ensure that social standards are enforced in countries and firms that produce coffee; that is much more effective. Second, it should not put pressure financially on a community like moot; also the money saved could potentially have a larger impact than by buying fair trade coffee (i.e. marginal social utility is larger for another project than for coffee). Bottom line is, as long as the purchase does not have a negative impact, i.e. that particular brand is substandard in comparison to other coffee makers, it is in most cases acceptable. But this is my opinion only.

    Again, whether moot purchases fair trade coffee or not is of little actual effect (other than being symbolic, and that only makes people feel better about themselves) and there are, maybe, other priorities in the functioning of a community that can be debated.

  10. On September 15th, 2010 at 1:29 pm artbizness said:

    Hi Martin, and thank you for your comment.

    It’s always good to have your voice here. 🙂

    I have been thinking about this since you posted it, but have held off commenting for a number of reasons:

    Firstly a disclaimer. I don’t like coffee! I know, I am a philistine, and I do wish I liked it. I love the idea of all the paraphernalia – cafetieres, espresso makers, coffee grinders and those big esspresso machines you get in cafes. Not to mention all the different varieties of coffee you can get. It’s all so tactile and exciting! 😀

    But alas, the very smell of it has an adverse reaction on me. The merest whiff of it is enough to make my tastebuds spasm. There are not many of us, but we non-coffee drinkers are social pariahs, destined to wander the wilderness (Can you hear the violins yet?)

    Tea however is a different story. I love tea. Could drink gallons of the stuff.

    It’s funny that there are very few options for ethical tea drinking. There’s Tea Direct and that’s about it. And trying to find an ethical Herbal tea is like trying to find a daisy in a chamomile field! I’m sure there are some out there that I could doubtless google, but the ready availability is not there, sadly.

    I think the reason I haven’t posted about it before, is that Like Nico, it seemed a small matter to me in the scheme of things. However, the more I think about it, the more it seems a bit of a minefield. I can well see why you had such heated debates about it!

    Whether it be tea, coffee, or anything else the ethical sourcing of stuff is clearly a live issue, and it’s hard to know where to begin. Things that appear to have great ethical value can be scuppered by simple thing such as how far it’s travelled to get to our coffee mugs, I suppose.

    I also understand that often there’s an inverse ratio between how fairly traded these things are and how good they taste! Though not being a coffee drinker, I’ll have to take people’s word for that…. 😀

    I think when we first decided on moot’s coffee table, we just automatically said:”…it’ll be fair trade coffee, of course.” and left it at that. I can’t remember who was in charge at the time, but it was all down to trust, and I don’t think we’ve thought about it since. Next time I’m there, I’ll check. 🙂

    So go on then, what did your mates decide on in Liverpool, Martin? 🙂

  11. On September 16th, 2010 at 11:16 am Grace said:

    Hello all
    Mike, I never you knew this coffee aversion thing about you! Maybe you play it down. I don’t blame you. It shocked me a bit, I won’t lie.
    It is very interesting that this discussion has taken this turn because I was just thinking yesterday, as I attempted to find an ethically sourced duvet to buy, that it might make an interesting post… I’ll save the glamour and gore of my journey into togs and quilt weights, but I’m encouraged this chat is going on.
    I must say Nic, two things: firstly, credit to you for raising the issue of financial ethics to such prolific response!
    And secondly, I completely disagree with you about coffee! 🙂 Let me explain. I used to be of your mind, not about buying fairtrade but about recycling – I used to say, and still feel it’s a danger, that people can spend endless energy beavering away on tiny, domestic things that make them feel they’re making a difference but in fact it just appeases their sense that something is wrong and deflects them from using that energy to lobby governments.
    But I expressed this to a colleague once, some months ago, and she said that actually, the pyshological mobilisation of believing you can do something is immeasurable. She said people need things they can apply to their own daily ethics, and she pointed me to the rise in awareness of both fair trade issues and recycling and the environment as evidence. And I was converted. And that is my testimony 🙂 looking forward to having you back in the country sometime Nic, to have these discussions in person. What did your community conclude, Martin?!

  12. On September 16th, 2010 at 4:16 pm Nicolas said:

    Grace – I actually do buy into your argument. That’s definitively another approach from mine (I had to be brainwashed to become an economist), but as always, I very much value it when you don’t agree; there is always something to learn! And I don’t mean to be facetious – I mean this seriously. We can discuss it at the November retr… social (Ian keeps telling me it’s not a retreat) in Littlehampton, or every Sunday evening starting January – I’ll just make sure to pour Fair Trade coffee in your mug.

  13. On September 30th, 2010 at 2:02 pm Grace said:

    cool…. you’re coming back! (sorry I didn’t check back here after I wrote my last post til now, not very responsible) We should definitely discuss this more – because if you do buy my argument, I think you could agree with me! (heheheh)
    Really enjoyed this discussion everyone, thanks