Edward Hadas

Poverty and renunciation

Edward Hadas
Apr 3, 2013 14:10 UTC

“Go into the street, and give one man a lecture on morality, and another a shilling, and see which will respect you most.” Samuel Johnson said that in the 18th century, but the general preference for money over preaching is sufficiently strong and timeless that his wry quip remains pertinent. Most economists take Johnson’s sentiment too seriously. They assume that people always want more shillings and always resist wealth-denying morality. That is a serious error.

Consider, for example, the enthusiastic response from around the world to the material renunciations of Pope Francis. The crowds cheered when the new leader of the Catholic Church said he wanted a “poor Church for the poor”. His decision to stay in simple lodgings and wear simple clothes amounted to turning down shillings for the sake of giving a morality lecture, but few observers were bothered. On the contrary, it was welcomed as a pertinent comment on the excessively materialist values of modern society.

The need to be “for the poor” is eternal and universal. In every society there will always be people who cannot thrive without help from others. Despite Dr Johnson’s comment, the need for conscience-pricking discourses on the topic, papal and otherwise, is equally timeless. Otherwise, it would be too easy to find plausible but ultimately selfish reasons not to help out.

In the modern world, the challenge of being pro-poor is particularly difficult, because there are two distinct types of poverty: of the seriously poor and of the relatively rich. In poorer countries, including Francis’s native Argentina, poverty is often absolute: not enough to eat, squalid housing, no access to education. The poor there need Dr Johnson’s shillings. In rich countries, material poverty is only relative. Those called poor generally all have life’s necessities, but fewer comforts and luxuries than most of their compatriots. As Francis’s papal predecessors often suggested, this relative material deprivation is less significant than more intangible shortages: of opportunity and noble aspirations. The socially and spiritually deprived could benefit from something like Dr. Johnson’s “lectures on morality”.

Involuntary poverty, whether material or intangible, is a bad thing, but Francis said he wanted a “poor church”. He must believe that voluntary poverty can sometimes be virtuous.

What Islamic finance can offer

Edward Hadas
Jan 9, 2013 13:53 UTC

The Islamic approach to finance was once the most advanced in the world. The period of pre-eminence ended six or seven centuries ago, but the religion’s fundamental insights into the field could help form a financial system suitable for the 21st century.

From the beginning, Muslim teaching took a religious view of commercial relations and responsibilities. There are a few injunctions in the Koran and far more in the teachings traditionally attributed to Mohammad. I am not an expert, but the basic ideas seem clear enough: merchants should be fair, risks should be moderate and understood, and God condemns all rapacious financial practices.

During the first centuries of Islam, Muslims became great traders, providing an economic bridge between Asia and Europe. Europeans adopted and then further developed the Islamic techniques of providing credit and of sharing responsibilities, risks and rewards. Christian thinkers continued the Islamic debate over what was fair and just, and church authorities copied the Islamic teachers’ practices, ruling on the legitimacy of transactions, and exhorting merchants and investors to restrain their greed.

Remembering the 1960s

Edward Hadas
Sep 19, 2012 14:28 UTC

Revolution was not on the agenda when the Second Vatican Council of the Catholic Church opened on Oct. 11, 1962, almost exactly 50 years ago. However, the gathering marked the start of a new era, not only for the world’s largest centrally-run religion. During the following years, the hope for a better, freer world led to everything from the sexual revolution to the Prague Spring, from African independence to the hippie culture of Woodstock. A half-century on, it seems a good time for an economist to take stock.

The economy was not the top concern of the ’60s would-be revolutionaries, but calls for a new society had two revolutionary economic implications.

First, like so many other parts of the established order, the economic “system” was to be overthrown. The target was clear enough in Eastern Europe – the Communist planned economy. Elsewhere, the economic villain was harder to pin down, although it was often assumed that “capitalism” was intrinsically evil – heartless corporations and excessive materialism in the West and post-colonial exploitation in the Third World. It was time for radical change; if not a return to some imagined pre-industrial communal paradise then at least a massive refusal to become cogs in the machine. It hardly seemed to matter then that dissidents in the East were longing for what protesters in the West were loathing.

Prosperity need not kill religion

Edward Hadas
Apr 25, 2012 13:57 UTC

Thomas Carlyle’s fulminations against the spiritual damage wrought by factories are almost two centuries old, but the sentiment is current wherever industrialisation is rampant. “The huge demon of Mechanism,” he wrote, “smokes and thunders, panting at his great task, oversetting whole multitudes of workmen … so that the wisest no longer knows his whereabout.”

In China, today, government leaders and dissidents alike worry that, as one commentator put it, “frenzied competition for a better life [has] lobotomized the people of inherent values like common decency, compassion and feelings of fellowship”.

A century ago, Max Weber described the process as “disenchantment”. The German sociologist thought the transition from a culture of faith and farming to the narrow-minded and bureaucratic “iron cage” of modern civilisation required the destruction of a spiritual worldview. He saw a modern society made up of “specialists without spirit, sensualists without heart”.