This essay–originally printed in Swedish in 1994–was prompted by the 1993 pastoral letter, “On the Rich and the Poor,” from the bishops of the Church of Sweden, formerly the established church. The following was written as a letter in reply, not to attack the bishops or the church, but to clarify what has been distorted by some of the bishops’ formulations.
The bishops’ pastoral letter was given considerable attention in Sweden when it was published, as was this reply. It appears here in English for the first time. The first half appears in this issue; the second will appear in the next issue.
“Maybe the science which makes the community everything and ignores the individual, will to a future sober assessment seem as mythological and fantastic as primitive thinking.” (Archbishop Nathan Söderblom: The Living God)
A 1920s pupil in southern Sweden did not always have a packed lunch to bring to school. His friends had wealthier parents who could afford to give their children lunch boxes. He made up his mind that when he grew up he would do everything to abolish the humiliation he had suffered.
A young Swede in the 1880s was also poor. Sometimes he would go hungry and work began early. On one occasion an older worker gave him his sandwich. He felt that the youngster needed it better. The latter never forgot it. He made up his mind that he, if he ever became rich, would remember that he was once poor and how he had been treated.
The first youngster, the pupil, became a politician. As such he voted through measures to more than double the Swedish tax burden.
The second one, the worker, started up companies and became a successful businessman. He didn’t like to pay high taxes. He never forgot the poverty of his youth. He made more money than most and he gave away more than most.
There is no doubt that the experiences of youth influence each individual. But the conclusions drawn from the same kind of experiences can differ. Sometimes one event can be decisive. He who encountered generosity became generous.
The relationship between rich and poor is part of human life and promotes much thought. In 1868 Londoners collected money for the starving Swedes. This was the year when many Swedes mixed their flour with tree bark. Few could then suspect that this country, in the northern periphery of Europe, would over the next one hundred years experience the fastest economic growth in Western Europe and the second fastest in the world, after Japan.
It is positive that the bishops of the Church of Sweden have turned their attention to the theme “Rich and Poor” in their pastoral letter from the 1993 Synod. It is a letter about “justice and morality in [a] global economy”.
The bishops’ letter has started a discussion that I find valuable. But the letter, as well as some of the comments criticizing it, is to my mind vague and occasionally attempts to score simple rhetorical points. However, the problem exists. Misunderstanding real problems tends to affect reality in the wrong direction. It is, therefore, important to discuss partly the main issue, wealth and poverty, and partly the role of the Swedish Church. This letter to the bishops attempts primarily to discuss the former point. The Swedish Church has an important role to play, but on that issue I find myself an amateur. However, my experiences of business and of economic debate make me feel compelled to point out the incomplete strains of thought of the main representatives of the church and to shed some further light on them. I do not flatter myself that I am right in any absolute sense. But there are certain gaps or unclear parts of the pastoral letter, the consequences of which not only concern “the global economy” but also the attitude towards individuals as entrepreneurs in Sweden. The pastoral letter directly misunderstands and indirectly attacks entrepreneurship, not only globally but locally.
“The order of this world” is clearest seen from the perspective of the poor. This is the exact text of one of the headings in the pastoral letter, which then clarifies the heading with the following words: “The poor have insights about the nature of wealth which go deeper than the wealthy’s insights about the nature of poverty. The poor become the victims of exploitation and oppression. This gives them precedence in determining the meaning of the course of events.”
The starting point in the pastoral letter, namely that the “perspective of the poor” gives a clearer light than “the perspective of the wealthy”, can be disputed; it is impossible to prove which is better. However, it is clear that there are two further perspectives that the bishops do not mention, which makes their starting point incomplete.
The pastoral letter talks about two opposite categories; a basic approach, as when, for example, people talk about “us” and “them”. When we come to rich and poor there are two further perspectives that are of interest, namely that of someone who once was poor but has since become rich, as well as that of someone who once was rich but has become poor. It is likely that he who has seen both perspectives has more experience than he who has only seen one.
To give one group, the rich or the poor, precedence in interpreting events, when there are those who have experienced both states, is peculiar. In addition, the starting point determines which conclusions are later reached.
How can someone who is poor become rich? There are two explanations. One is that the poor takes money from others and so creates his own wealth. The more he steals, the richer he becomes. This can, using the words of the pastoral letter, be described as “[t]he poor [becoming] the victims of exploitation and oppression”. It is, of course, the case that if one person or group only can improve their lot at the expense of another person or group, then each increase of wealth for any individual will in practice become theft from another. This theft may then be criminal or legitimized by political assemblies, be they democratically elected or appointed in other ways. It nevertheless remains a zero-sum game; regardless of the efforts the sum total of all transactions thus remains zero. This is the relationship expressed in the (Swedish) half-truth “one man’s death is another man’s bread”.
In a growing economy individuals will through their work create more goods and services, which will be demanded by others. This means that he who produces becomes richer than he (or she) was. Society as a whole also becomes wealthier. He who does nothing does not become poorer in absolute terms but does become relatively poorer.
The bishops quote St. Paul to say that “the love of money is the root of all evil”. The love of money is indeed a symptom of spiritual poverty. But not loving money need not be the same as not recognizing the value of money. St. Paul did not write that “money is the root of all evil”, but that the love of money is the root of all evil.
This love of money can after all express itself in different ways. It can express itself in a limitless care for one’s own money. Or in equally limitless care for other people’s money. The latter–which the bishops’ letter does not touch upon–can either be such as the work of the plain thief, or it can be such as that of the politicians who accuse others of materialism, but who themselves only propose ways of redistributing money from one group to another by state intervention. Materialism is probably not the root of all evil. But the preference for materialism–one’s own money and that of others’–can indeed be a root.
The pastoral letter talks about the good and the evil impulse. “The good impulse is to use what life gives according to God’s will. The evil is to use it selfishly and to attempt to gain more than is proper at the expense of others.” Here it is indirectly said that gaining at the expense of others is not wrong, only to gain “more than is proper”. Can this really be thought through? Is it in any case “proper” to attempt to gain anything at the expense of others? While on the other hand–to gain any amount without it being at the expense of others, should that not be “proper”?
It is probably often the case that many confuse appearance and reality. He who has not made himself a great fortune is assumed not to have gained “more than is proper at the expense of others”. He who has become very wealthy, is, however, assumed to have done it “improperly”. But reality is not so simple or so cruel. Ingvar Kamprad, the founder of Ikea, has made billions from the people of Sweden. But that is as nothing compared to how the Swedes have profited from Ingvar Kamprad and his Ikea. Another businessman who starts a furniture store runs it badly, sells dear, goes bankrupt and becomes a burden to himself as well as to his environment. He does not gain “more than is proper at the expense of others”. But he loses and others lose.
It is in fact the case that a person or a group may lose on a deal without anyone else profiting from it.
The pastoral letter also makes references to the past, to the earliest days of the Bible. “The Patriarch Jacob with his sons, wife and herds left his part of the country when famine threatened. After a long period in Egypt it was possible to return to a land that had recovered and now flowed of milk and honey. Precisely because of the expected surplus it was important to set limits to how much the rich could profit at the expense of the poor and indebted.”
But it does not say why the land now “flowed with milk and honey”. The bishops’ letter continued: “The miracle of the manna in the desert during Israel’s wanderings from Egypt to Canaan is probably the most basic Biblical picture for the relationship between community and assets. Every day enough manna fell so that each one could collect for the needs of those dwelling in his tent, but no more. For those who tried to stock up, anything above the daily need rotted.”
In a desert life it is of course difficult to produce, and meaningless to save, if the daily ration is anyway provided. “The relationship between community and assets” is reasonably different among individuals wandering in the desert than among individuals who have come out of the desert. One characteristic of societies outside the desert is that manna does not fall from the heavens but that, on the contrary, one must work, if necessary by the sweat of one’s brow.
The pastoral letter also says that “there is an experience gathered in the Biblical revelation and the tradition of the Church through the centuries. It says that the threat of living under the cold star of scarcity does not emanate from a lack of resources at creation but from the lack of a fair distribution.” But is it not the case than an ever so fair distribution won’t help if an excess of resources is not taken care of?
The bishops write: “When loans and interest rates in an economic system exceed fair proportions–when loans are taken for more than actual needs, when interest rates exceed the compensation for labor input and risk–it leads to speculation and pure hazard with the money and property of others. Such lending wheels and interest rate merry-go-rounds eventually come to a halt. It turns out that the less affluent and the poor must take the losses but are left outside the profit. This holds true both for individuals, local communities and for countries.” Sweden’s central government deficit is currently (1994) 1,000 crowns per worker and week. That is equivalent to 8,000 crowns per month and family if both parents are working. The absolute increase in the Swedish taxpayers’ indebtedness is probably higher than in almost any other country. The pastoral letter has here commented on a matter which probably lay closer to home than may have been the intention.
Encountering beggars in poorer parts of the world is heart-rending for the visitor. The pastoral letter reminds us that nine hundred million of the world’s almost six billion inhabitants can neither read nor write. One of three children born alive suffers from malnutrition at some stage during its first five years. At least fourteen million of these children die of famine every year. Let me add that this fact shows that we, despite moon travel, computers and much else, still retain many of the circumstances of the early twentieth century. Masses of humans still live like animals or worse. This is of course a moral problem. But is it correct to write, as the pastoral letter does, that “the problem is not economic but moral”. Isn’t it both?
We can hardly understand how the world will emerge from this condition without only looking at rich and poor. We must learn from those individuals and countries who were once poor but have become rich.
The leaders in the new nations accepted the view that “economic development is the primary goal of the state,” according to the bishops. “The nation was to be mobilized to increase production. Wide-ranging development plans were produced. The idea that man was to be judged by what he produces, not by what he is, became dominant.”
If development is the same as growth, then economic development is the same as economic growth. If the supreme goal of the state is economic growth, then other aims such as freedom, improved working conditions, and the like, become subordinate. In poor countries people work for survival. In other countries they do so for other reasons. There is nothing in the market economy per se which makes it necessary to combine it with the state setting economic growth as its primary aim. According to the principles of a market economy, the state should rather set freedom of contract and legal security first. This brings on the most benign environment for raising standards of living. He who chooses to take out a higher standard in the form of more leisure time, is then able to do so.
The main problem in the relationship between rich and poor countries is probably not the balance sheet but the profit and loss statement. That is to say: it is not assets and liabilities that are the most important but rather the wide gap in production capacity. “Better breadless than clueless” says an old Swedish proverb. The Swedish poor knew what was more important in the long term.
“When Joseph, through his trusted position, was able to plan the economy of Egypt and its assets, the system was based on food for everybody,” the bishops’ letter notes and adds: “Not through growth, taking the expected future scarcity into account, but through sharing.”
Here the issue was seven good years, seven years of growth, which would be followed by seven bad years, according to a revelation Pharaoh received in his dream. During these seven good years manna did not fall from heaven but record harvests were reaped through hard work. During seven good years one fifth was set aside and stored, in order to be consumed during the expected seven lean years. The conclusion drawn by the pastoral letter is: “This was a responsible planning of the economy to benefit the whole population which saved the country in a situation where free market forces would have been disastrous for the majority, albeit certainly very rewarding for a few.”
This is one of many examples of the pastoral letter’s vague jibes against the market economy and individual enterprise. It can, of course, be argued that this is irrelevant for today’s Sweden, the example was about Pharaonic Egypt. But it is relevant, because the bishops are opinion shapers and are discussing economic principles. Further, if production in a country of one good for a few years is higher than normal, it is usual for the average price to fall. It is then good to save some for the future. You never know if there will be a bad year. In the bad years the price of the stored will be much higher than if it had been sold during the good years. This promotes savings during good times; it is called the market mechanism. It is unnecessary if there is a Joseph who knows how supply and demand will develop. But Joseph is unique.
The bishops quote the Prophet Jeremiah who “pronounced the verdict of God on businessmen who did not pay fair wages”: “Woe unto him who forces his neighbour to serve him for nothing and does not give him his wages.” The pastoral letter adds: “These words naturally also apply to the modern, transnational corporations that look for countries with the lowest wages.”
Naturally? There is a decisive difference between a slavedriver who can force and an employer who can offer employment. Consumers buy products produced by companies who sell the best product at the lowest price. This bears a certain relationship with how the production is organized and how expensive it is. Some of the consumers may be very poor. Should poor consumers pay more because the Church wants to stop poor workers in other countries from working at wages lower than in Sweden? Judging economic matters, too, should be done “with all understanding”. To believe that all the poor are poor without cause is probably as wrong as believing that all the rich deserve their wealth. To succeed in business you need both luck and skill, or at least not bad luck.
The pastoral letter eventually moves on to man’s ability to create. It writes: “What man inherits, generation after generation, is not a finished work of creation...It is creation in being with the possibility to be completed and be good.” The Bible begins with the story of creation, not with its result, the pastoral letter does the reverse. It begins by saying that it is the viewpoint of the poor that best explains poverty and wealth. Only in the latter half of the letter does it deal with “Divine Creation”.
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