Adam Smith explained his concept of the invisible hand thusly:

[Each individual] neither intends to promote the public interest, nor knows how much he is promoting it. [He] intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

Other economists have argued that economic integration between countries fosters peaceful relations; with broken relations comes the loss of mutually beneficial exchange. And other economists argue that for similar reasons a competitive market economy fosters social cohesion in ethnically or culturally diverse societies. Milton Friedman: "The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences."

But can business human resource practices foster public virtue? A report in the Boston Globe suggests the answer could be yes. It reports on a study by Gretchen Spreitzer, a professor at the University of Michigan's Ross School of Business:

Her analysis, based on surveys taken between 1981 and 2001, shows that empowered, satisfied employees tend to live in open, peaceful societies -- and that improvements in workplace empowerment often precede social changes. Employees, it seems, can take lessons learned in the workplace and apply them to social and political life.
...
She took measures of employee satisfaction from the World Values Survey at the University of Michigan, which collected data in 65 countries, from Argentina to Slovenia to Venezuela, for 20 years beginning in 1981. The survey consisted of some 200 questions such as "How free are you to make decisions in your job?" and "Do you follow a superior's instructions only when you feel they are correct?"

She then compared this with data collected by the Economist Intelligence Unit on levels of corruption and violent conflict. Spreitzer found that countries where workers reported having little voice in decision-making had higher levels of unrest, and that as measures of workplace satisfaction improved, over time, indications of contentment with civic life rose, too.

Spreitzer uses indirect evidence of empowering practices -- measures of job satisfaction, not tallies of the number of companies that have adopted specific practices. And there are other questions to consider: Do participatory management practices result in open societies, or are the businesses that use them simply more abundant in healthy, peaceable communities? And do positive changes in society reflect enlightened business practice or the impact of politically motivated changes induced by organized labor and other social movements?

From Religion News Service:

Washington - The poorest counties in the U.S. are among the hardest hit by the subprime mortgage crisis, according to a study released Wednesday (Feb. 27) by the Christian anti-hunger advocacy group Bread for the World.

The report, titled "Home Ownership, Subprime Loans and Poverty," found a strong correlation between poverty rates and percentages of mortgages that are subprime.

In eight of the country's 15 poorest counties, which have poverty rates exceeding 40 percent, the percentage of homeowners holding subprime mortgages is even higher -- up to 60 percent, according to the study. Data in the study were compiled from a variety of sources, including the Corporation for Enterprise Development and the Federal Financial Institutions Examination Council.

The Rev. David Beckmann, president of Bread for the World, said the inequity reflects an ignorance of the biblical condemnation against usury.

"The principle underlying the biblical warning against usury was that financial contracts, as important as they are, are still less important than basic human needs," he said. "If you were lending money to a really poor person, you couldn't take his coat as security for the loan."

Read it all.

The New York Times Magazine today is devoted to "Money", and it includes an article that should be read by every parish stewardship chair or nonprofit fundraiser. Written by the New York Times economic columnist, David Leonhardt, it focuses on the efforts by two economists to discover why people give, and what works in fundraising:

Not long after the 2004 presidential election, John List and Dean Karlan formed an unusual partnership, with the idea of teaching a little-known liberal group how to raise more money. Karlan, an economics professor at Yale who spent much of his time studying global poverty, was himself a liberal and disheartened by President Bush’s re-election. He had given money to this particular group in the past.

List, however, was a political iconoclast who, if anything, tilted to the right. He taught economics at the University of Chicago, which can fairly be described as the center of conservative economic philosophy, and he had recently finished a stint as the environmental expert on President Bush’s Council of Economic Advisers. When he and I were talking on the phone last month, he referred to Karlan, who is a friend of his, as “a left-wing nut” and then let out a laugh.

But List’s interest — and, in truth, Karlan’s main interest — wasn’t to help the liberal group get more money. It was to try to find an answer to a gnawing question: What makes people give their money away?

List and Karlan considered the usual answers (to make the world a better place, to see your name printed in the back of an annual report and the like) too pat, too simple — and sometimes just wrong. Over the years, whenever one of them asked fund-raisers why they did what they did, the responses were vague and unimpressive. There didn’t seem to be much empirical evidence to support the strategies employed by most fund-raisers. So the two economists wondered whether charities were wasting a lot of effort.

Among their findings: challenge grants and "matches" work to motivate givers, but only to a point:

When Karlan and List got their results, however, they realized that the conventional wisdom about matches was only partly right. The existence of a matching gift did very much matter. In their experiment, 2.2 percent of people who received the match offer made a donation, compared with only 1.8 percent of the control group. That may not seem like a big difference, but it is — more than a 20 percent gap between the two response rates, which is certainly large enough to justify making the effort to solicit a hefty matching gift.

But the size of the match in the experiment didn’t have any effect on giving. Donors who received the offer of a one-to-one match gave just as often, and just as much, as those responding to the three-to-one offer. That was surprising, because a larger match is effectively a deeper discount on a person’s gift. Yet in this case, the deeper discount didn’t make an impact. It was as if Starbucks had cut the price of a latte to $2 and sales didn’t increase.

But the ultimate issue is what these two are really interested in, why do people give:

The results of the matching-gift experiment provided List and Karlan with precisely the sort of subtlety that they hoped to uncover. It also spoke to that fundamental question about philanthropy: Why do people give? Is it really to make the world a better place, to give back to the community as a token of gratitude? Or is giving instead about something less grand, like seeing your name on a building, responding to peer pressure or simply feeling good about yourself? To put it bluntly, is charitable giving a high-minded form of consumption?

In the late 1980s, an economist named James Andreoni argued that the internal motives for giving were indeed more important than many people had acknowledged. He came up with a name for his idea — the “warm glow” theory — and it stuck. In the warm-glow view of philanthropy, people aren’t giving money merely to save the whales; they’re also giving money to feel the glow that comes with being the kind of person who’s helping to save the whales.

. . .

Andreoni’s argument was a merely theoretical one, but the experiment by List and Karlan suggested that it was correct. Donors did not, in fact, seem to do a rational analysis of how they could best help promote liberalism. And there was one more layer to their results that made the findings even more striking. In blue states — defined as those that voted for John Kerry — even the existence of a matching gift had only a minor effect. It lifted the response rate by about 5 percent. In red states, though, a matching gift increased donations by about 60 percent. For isolated liberals living in states that had just voted for Bush’s re-election, the glow that came from joining up with another liberal seemed to be much stronger. “Giving is not about a calculation of what you are buying,” Karlan said. “It is about participating in a fight.” It is about you as much as it about the effect of your gift. As much as fund-raisers say that they understand these mixed motivations, charities often continue to behave as if donors were automatons. Thus the existence of big matching gifts.

Along similar lines, Jonathan Gruber, an economist at the Massachusetts Institute of Technology, has conducted a mischievous experiment on the relationship between religious giving and religious observance. . . .

To see how typical his father was, Gruber dug into surveys that ask people about how they spend their money and their time. Sure enough, his dad was typical. When the tax code changed in the early 1990s and made the deduction for charitable giving more valuable, the average churchgoer gave more money — and attended services less often. Gruber called his research paper “Pay or Pray.”

Read it all here.

Lisa Keister has scanned the Bible and found nearly 2,000 verses in the New Testament that touch on the topic of money. It's those very verses that may be keeping many conservative Protestants from building up long-term wealth, she says.

Keister was surprised that when demographic factors -- such as education, age and race -- were held as constant, religion still proved to be an influential factor in wealth accumulation. Conservative beliefs had a larger impact among black Protestants, she found, but also remained significant among whites.

Read it all.

Drake Bennett of The Boston Globe writes:

In the community of people dedicated to analyzing poverty, one of the sharpest debates is over why some poor people act in ways that ensure their continued indigence. Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work.

To an economist, this is irrational behavior. It might make sense for a wealthy person to quit his job, or to eschew education or develop a costly drug habit. But a poor person, having little money, would seem to have the strongest incentive to subscribe to the Puritan work ethic, since each dollar earned would be worth more to him than to someone higher on the income scale. Social conservatives have tended to argue that poor people lack the smarts or willpower to make the right choices. Social liberals have countered by blaming racial prejudice and the crippling conditions of the ghetto for denying the poor any choice in their fate. Neoconservatives have argued that antipoverty programs themselves are to blame for essentially bribing people to stay poor.

Charles Karelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn't apply to the poor. When we're poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated.

Read it all.

Episcopalians for Global Reconciliation are asking people to use all or some of their economic stimulus checks to make a gift to something that will help others around the world. According to their press release:

Episcopalians for Global Reconciliation invites you to become part of a movement for economic sanity and moral accountability.

Join others across the nation and give 100%, 10% or even 0.7% of next month's so-called "economic stimulus" check to an organization of your choice working to acheive the Millennium Development Goals.

Just visit Give it 4 Good to find out how.

At Give it 4 Good, you will find resources for deciding where to give, advocacy actions, how to spread the word, resources for starting conversations about consumerism in your congregation and family ... and much more.

Once you have taken the pledge, spread the word. Email your friends and family and tell them you have taken this important step. Let the people at the nonprofit you have designated know so they can encourage others to Give It 4 Good. Put a button on your website and a flier in your congregation.

Go to the site -- and take the pledge. Then keep checking back to see who has Given it 4 Good, how much has been given and where the money is going to Make Poverty History.

Episcopalians for Global Reconciliation (EGR) is a small organization of Episcopalians ... a grassroots movement of connection and collaboration for creative ministry following Christ by heeding his call to seek & serve him in the extreme poor around the world. Focusing on the Millennium Development Goals as a vehicle for this ministry EGR offers resources for action for individuals, churches and communities.

See the MDGs below:

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