23 November 2009

never give money to a crazy person seems like a better rule than this

money of god?

I've run into the "don't use credit cards" types before. They're sort of odd people. In that they're very messianic about this sort of discovery that debt is "bad". As though they've discovered some fundamentally world shattering idea that taking on more obligations than you can handle reasonably is not the best plan.

I myself use credit to gain access to subsidized cash or extended warranties but I don't "borrow" in the sense that I'm spending money I don't have very often (other than perhaps emergencies which I haven't budgeted for and must pay out larger sums). Even so, the idea that receiving money from others as a loan is somehow evil or bad is a common thread problem to religion. Islam still has rules against interest payments while Christianity had them for many, many years. In many respects this was a common stereotype over Jewish merchants and bankers who were permitted to charge interest in either society and used frequently by merchants as a consequence to grease the economic growth of their times.

I understand it as a matter of course through economics that risk in loans and money lost value over time should be accounted for. Apparently if you spent too much time in Sunday school instead of the Chicago school, this isn't the "reality" of money. Which seems to uncut many fundamental assumptions about reality actually.

The second story referenced is even more disturbing. Perhaps it is the deistic watchmaker leanings of any understanding of god that would ever make any sense that so offend me about the idea of this (and even that so little to me that I have no interest to explore such a question for its metaphysical merits). But the idea that faith rewards people with prosperity has typically been, to me, a more dangerous idea than the idea that you shouldn't take on more debts than you could handle (or in their case, none at all apparently). There's several major problems:
1) It gives the impression that "successful" people are in that state because of their unique faith rather than other attributes, such as education, intelligence, motivations, etc.
2) That then provides the conclusion that successful people are also never "evil" or that the accumulation of wealth or prosperity cannot be faulted because of its manner. The underlying assumption there being that "god wants me to be successful or prosperous", rather than something more fundamental to humanity like say "try really, really hard to be a decent person". Which seems more in line with the actual gospels and preachings of various religious figures (despite all the discussions over money in both the Qur'an and the New Testament, especially the latter).
3) That poor people are so fated because they are bad or unfaithful, in a sort of new twist on social Darwinism (something which to me seems like a typical perverse use of scientific theory, even already perverted scientific theories like this one, for the justification of other social ends, such as those of religious institutions to acquire more followers). And that assistance and charity toward the poor should be attached to religious instruction or indoctrination rather than other more fundamental needs (see: Catholic church decision regarding gay marriage and its threat to pull its social funding for other charitable works if policy on gay unions and individual rights is changed).
4) That bad situations are an incidence of some supernatural influence or an impact of less faith rather than an internal failing (other than a lack of faith). Leading to otherwise not properly attributing the causes and effects of a situation (both internal or external).
5) Leaving such difficult and complex decisions in the hands of a spooky supernatural figure might be more comfortable for people who don't understand those decisions and don't want to take the time to understand them. But it also leaves them open to being taken advantage of by the system. It seems totally irrational to make decisions regarding thousands, if not millions, of dollars of income or wealth and presume that you are not responsible for how well those decisions function.

I think it can be said that there are some interesting effects of religious belief upon money and wealth, as well as economic development generally. I think charity and concern for the poor is a valid social good to develop, and I think it fosters a general sense of freedom that money, or rather the goods that money provides us, are best earned and divided in an environment that divides these with some relative fairness and equality of opportunities. Business owners who reward their employees for example will tend to profit more because they will attract and retain better employees. The recent study that demonstrated that belief in hell (not belief in god and not religious worship or faith itself) was somehow correlating with economic growth is interesting as well. I think it suggests that people will tend to make "better" risk management decisions when they are afraid of how such actions will work out in the long run. This tendency is sort of bad, in my view for individuals to use. In the sense that it often leads them to pass up perfectly viable opportunities because of risk aversion (particularly true in public policy discourse, see: health care "reforms"). But it's also a useful tendency to occur on mass scales because it tones down its necessary counterpart, the "irrational exuberance" sort of thinking espoused by prosperity gospel champions and others like them (such as the spend your way to wealth crowd).

There's also a curious behavioral economics question about, for lack of a better term, faith in the economy. That is, when people think it will be good, then they will make decisions which, in the long-run, tend to make the economy "good". When they fear for the security of the economy, when they see their neighbours struggle or lose their jobs, then they tend to make decisions which spiral the economy downward. There's such a thing as irrational exuberance, where large numbers of people begin ignoring actual economic realities (such as: can I actually afford a new home when I have no job or means of income), which succeed in collapsing the system. But most economic activity is made over long periods of time with many small decisions. Buying this brand of toilet paper over another, buying movies instead of watching TV, and so on. These are not those sorts of tragic decisions that so weight our system down in the way a dumb home loan and the mortgage backed securitization loan on it are, and yet if nobody makes them with a degree of certainty that they will have money tomorrow still coming in, those decisions are made differently and often dangerously, both for on a micro scale for individual people and industries and the macro scale for GDP growth and inflation considerations. I'm not quite sure where the best line fit is to put the irrational exuberance of the prosperity gospel folks, but it does appear that a tiny bit of what they say is necessary for large scale economies to function. In a game theory sense, it might seem profitable for an individual actor to attempt to horde or otherwise scale up their situation and accessible resources. But in the long run they benefit a great deal more if other people also can have access to some of those resources. A competitive enterprise like a market economy relies a great deal on a lot of commonly made assumptions that center more on cooperative tendencies as a result.
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