What about Enron?

As we have been stating the Bible teaches the principles of capitalism as a godly economic system but includes the many safeguards we have been teaching here to govern it and keep it from spiraling out of control. The Moravians were able to keep these safeguards in place but this is not always the case as is evidenced by the Enron Scandal.

Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded in 1985 as the result a merger. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world’s major electricity, natural gas, communications and pulp and paper companies, with claimed revenues of nearly $101 billion during 2000. Fortune actually named Enron “America’s Most Innovative Company” for six consecutive years.

At the end of 2001, it was revealed that its reported financial condition was sustained by systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption.

The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm, which was one of the top five accounting firms in the USA at the time. In effect Arthur Anderson was complicate in the cover up of all the accounting fraud. As an outside auditor they helped to cover up the fraud and went out of business because of it…because no one could trust them to do an honest audit. Honesty is very important in the auditing world and the business world for that matter.

Chairman Ken Lay was indicted by a grand jury and was found guilty of 10 counts of securities fraud. Lay died while vacationing, three months before his October 23 sentencing. A preliminary autopsy reported Lay had died of a heart attack caused by coronary artery disease. Lay left behind “a legacy of shame” characterized by “mismanagement and dishonesty. Other top Enron executives were prosecuted as well.

Lay’s company, Enron, went bankrupt in 2001. It was the biggest bankruptcy in U.S. history. In total 20,000 employees lost their jobs and in many cases their life savings. Investors also lost billions of dollars. Enron employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices. Sad. 

So critics of capitalism would like to site Enron as an example of why capitalism is a failed economic system. However we find the Biblical safeguards meant to govern capitalism were not followed. Just a few follow and speak for themselves:

Exodus 20:16 You shall not bear false witness (lie) against your neighbor.

Mark 8:36 – For what does it profit a man to gain the whole world, and forfeit his soul?

Proverbs 13:11 – Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.

Proverbs 22:16 – He who oppresses the poor to make more for himself or who gives to the rich, will only come to poverty.

Posted in Uncategorized | 1 Comment

The Basel Mission Trading Company

The Basel Mission Trading Company started as a training school for missionaries called the Basel Evangelsitic Mission Society sending missionaries. One of those missionaries to India was an able and experienced businessman by the name of Gottlob Pfleiderer who made a noticeable difference in the success of the missionary venture. Under his experienced guidance both trade and industry prospered as well.

This led in 1859 to the founding of a separate Mission Trading Company. General mission offerings could not be used for commercial enterprises so capital was needed (capitalism). So 100 shares in the company were sold bearing 6% interest. After the interest was paid any remaining profit was divided between the investors and the mission, however any loss was born by the investors. It was recognized that this was an experimental approach to funding missions so a ten-year trial period was set. Success bred another ten-year charter and their mission statement became:

“to promote the work of the Basel Evangelistic Mission Society by supplying its stations and workshops with needed European provisions, by introducing the converted Christians and heathen to Christian commerce, and through financial support”

As stated another major focus for the Basel Mission was to create employment opportunities for the people of the area where each mission is located. To this end the society taught printing, tile manufacturing, weaving and employed people in many fields using the local resources available.

The mission trading company continued to provide very substantial income for the mission treasuries. The original 100 shares had been sold at 2000 Swiss Francs each. When the Trading Company celebrated its 50th anniversary in 1909, it contributed out of its annual profits 354,760 francs to the mission treasury that year, plus a special Jubilee gift of 150,000 francs for the pension fund, from which retired or invalid missionaries and widows were supported. Astonishingly…the mission society received 15 million Swiss Francs from the trading company in the company’s first 100 years of existence (not corrected for inflation).

Sometimes the Trading Company paved the way for the establishment of mission stations. It was able to use its economic leverage at times to persuade African chieftains to keep peace so that Moravian missionaries could safely come. Sometimes when the Mission Society could not afford to open a mission station, the company would open a trading post, where its employees would witness to the gospel. Amazing.

Profit for the Lord – Economic Activities in Moravian Missions and the Basel Mission Trading Company (1971). Prof. William J. Danker

Posted in Uncategorized | 4 Comments

Communism, Socialism or Capitalism – The Moravian Answer

I do plan to take a more in depth look at these three economic systems and how they were expressed in history and currently around the world, but for now lets take a quick look at what the Moravians found and applied. We are again quoting from Prof. William J. Danker book, Profit for the Lord – Economic Activities in Moravian Missions and the Basel Mission Trading Company.

The first twenty years after its founding in 1742, Bethlehem had a thorough communal economy. Even the meals were taken together; instead of by families…these communal practices were adopted because they implemented spiritual objectives, especially the mission to the heathen. Interestingly, while Russian communism had an avowed program of moving through socialism to pure communism, the Bethlehem Moravians moved in the opposite direction. After twenty years of pure communism, they dropped back to socialism, and eventually assimilated themselves to the economic development of the surrounding capitalistic culture.

Bethlehem became a beehive of activity and in pre-revolutionary Pennsylvania a craft center of no small significance. They were clothed with textiles their own hands and machines had woven, among them no less than eleven qualities of linen. Outsiders eagerly sought the products of their large pottery at standard prices. Their brewery was able to supply their neighbors with plenty of good beer. The tannery was particularly profitable. They knew that their labors at Bethlehem were part of a general Moravian mission effort supporting missionary endeavors in the West Indies, Nicaragua, Greenland, Suriname…and in many other regions and countries of the world.  

The followers of Zinzendorf sought to develop economic bases to support the Moravian community life and a large number of missionaries.

And next week we will take a closer look at the Basel Mission Trading Company that became a financial engine to fund the Moravian missionary movement and help it become the greatest missions movement of all time.

Posted in Uncategorized | Leave a comment

Why Do Millennials Think Communism is Cool?

Why do millennials think communism is cool?

Millennials are one of history’s luckiest generations. They were born around the end of the Cold War a quarter century ago, when the tyrannical Communism embodied in the Soviet Union came tumbling down, also knocking socialism down a few pegs along the way. But a Gallup poll in June 2015 found that almost 70% of U.S. millennials would be willing to vote for a socialist presidential candidate. Even more shocking, barely half of millennials believe “Communism was or is a problem.”

The same poll found that a quarter of millennials hold favorable opinions of Vladimir Lenin, while 18% think favorably of Mao Zedong. More than 10% even have positive feelings about Joseph Stalin. Never mind that these men were responsible for the deaths of tens of millions and the impoverishment of hundreds of millions.

These polling numbers are frightening—especially when the Communist-ruled and socialist nations in the world today, from North Korea and Cuba to Venezuela, show so clearly how such systems invariably lead to repression and declining standards of living for their populations.

Millennials who wish to see a socialist or Communist Party-ruled nation in action should look to Venezuela, Cuba and North Korea. Venezuela’s current troubles make daily headlines. The country is crippled by inflation and shortages of basic goods, and the government takes more control over the economy each day. No wonder even millennials want to get out. A poll conducted in September found that 69% of youths there wanted to emigrate.

Millennials have grown up in a world where, for the most part, economic and personal freedoms are the rule rather than exception. So it is understandable that communist and socialist leaning university professors find them to be a willing audience. However, as Michael Novak is fond of saying, “ Capitalism is a bad system of economics, except when compared to all the others. Young people living in Communist and socialist countries today need our prayers not our admiration. There was nothing to admire about the Soviet Union, and there is even less to admire in countries that seek to perpetuate its failed philosophy at the expense of the Biblical truth that holds a high value for liberty and prosperity.

The content of this blog is taken from the article Is Communism Cool? Ask a Millennial by Andrew Clark that appeared in the Wall Street Journal on Dec. 22, 2016.

 

 

Posted in Uncategorized | Leave a comment

Profit for the Lord

Anyone who studies world missions will find one of the most significant missions movement of all time was the Moravians. They were known for a deep spirituality (calling Jesus “the Savior”), praying around the clock and for sending many missionaries to foreign nations. However, the Moravians did not find a conflict between their deep spirituality and their fervor for making money to finance the mission of world evangelism. They called it “profit for the Lord”.

Prof. William J. Danker documented their passion for both world missions and business in his book, Profit for the Lord – Economic Activities in Moravian Missions and the Basel Mission Trading Company. The Moravians created an essential and honored role for the craftsman and especially the businessman in its worldwide mission. The latter was able to do more than keep the accounts of mission’s expenses. He was given free scope for what a businessman ultimately needs to do if he is to stay in business – make a profit.

Early on some Moravians urged that all profits could best advance the cause of the Lamb by being directly devoted to missionary activity, but other, more capitalistic, Moravians saw that if some of the profits were ploughed back into the business, they could then multiply financial support for missions in the future.

As well the Moravians felt that demonstration was as important as proclamation in world missions. The Christian businessman practicing “faith in love” in the daily affairs in the market place rather than hidden away in the monastery became a powerful audiovisual aid in their Christian missions. They felt every Christian is a missionary and should witness through their daily vocation. In the context of a Moravian missionary endeavor, a businessman was essentially elevated to the honored place of preacher, teacher and physician in world missions.

Danker says, “While faith and love for the Savior were the fuel, these business enterprises were the rockets that hoisted pioneer Moravian satellites in to the missionary heavens in an age when other Protestants were doing next to nothing.

In later posts we will learn about the amazing Moravian mission funding engine – The Basil Mission Trading Company.

 

Posted in Uncategorized | 2 Comments

God Created Us to be Producers

As stated in last week’s blog, James Jerome Hill was one example of someone who produced economic activity that benefited many beside himself. Biblical capitalism is intended to reward personal initiative, encourage personal responsibility, provide for the personal ownership of property and allow for personal freedom in decision-making and choices. The Bible condemns laziness, but exalts productivity. This is clear when we look at Proverbs 21:5:

The plans of the diligent lead to profit as surely as haste leads to poverty.

Jim Morrison in his book God Gave Capitalism to You says it like this, “God commends making an honest profit just as he commends generosity. Apparently it was acceptable for Jesus’ disciples’ (Peter, James and John) to own their own boat and be fisherman (businessmen, entrepreneurs), by which they provided for their families.

Keynesian economics, which have been employed since the new deal, tells us that we are first and foremost “consumers.” News Flash: You are not meant to be a consumer first; you are meant to be a producer. God built you to be a producer. In Genesis 1:28, He mandated that you be ‘fruitful and multiply.’…Why wouldn’t God want us to produce good for our fellow man via economics? It is true that we all consume, but the Biblical capitalist does not look at consuming as his economic duty, he looks at producing as his economic duty.”

As I have stated in these blogs, capitalism is not perfect but must be governed by God’s principles. Just so you know I do plan to continue to sight the critiques and failures of capitalism because anything based on truth, if it is true…will withstand criticism. I do this because I am teaching that God gave rules to govern capitalism and when it has failed it is because these rules have been violated.

How about Enron? A failure because God’s principles were violated. But wait until you hear how entrepreneurial the early Moravian communities where in the USA. Amazing info to come…

 

 

Posted in Uncategorized | Leave a comment

Meet James Jerome Hill

Consider the following example of how capitalism is supposed to work from Rabbi Daniel Lapin’s book, Thou Shalt Prosper:

James Jerome Hill was born in log cabin in Ontario, Canada in 1838. His father died while the boy was young, and he supported his mother by working in a grocery for $4 a month. Through great energy and hard work, Hill came to build a railroad across the Northwest. His concept was to build the line slowly and first develop the economy of the area before continuing on further. To attract European immigrants, Hill offered to bring them to the Northwest for a mere $10 each if they would farm near his railroad. He organized farming instruction classes that taught the newly arrived farmers all about local conditions and such techniques as diversifying crops. He imported 7,000 head of cattle from England and handed them over free of charge to settlers near his rail line.

Hill told the immigrants who worked near his railroad that he and they were all in the same boat together. He explained to them that they would all prosper together or all be poor together. To make sure that they prospered, he also set up experimental farms to test new seed, livestock and equipment. He sponsored contests and awarded rich prizes to those farmers who most successfully produced meat and wheat in bounty.

Was he doing this out of selfless altruism? No…he did these things to build up the future customers who would ship goods on his railroad. By helping them prosper he prospered as well. But for sure…those pioneers who received $10 passage from overcrowded tenements to a land of opportunity, and farmers who received gifts of 7,000 English cows and bulls and all the others who build new lives along Hill’s railroad felt only gratitude toward this man. Though not without faults, Hill was a generous, Christian man who genuinely governed the principles of capitalism and helped to elevate many around him to prosperity.   

So in addition to this example, what has capitalism really done you might ask? For one thing life expectancy in the past 150 years has more than doubled, from fewer than 30 years in 1870 to 72 years in 2015. Meanwhile billions of people have risen out of poverty…150 years ago more than 75% of the world’s population lived in extreme poverty, consuming less than $1 a day, in 1985 money. This year the World Bank expects extreme poverty to fall below 10% for the first time in history.

Economist Milton Freidman says it this way, “The only cases where the masses have escaped poverty is where they have embraced capitalism and largely free trade. Where are the masses the worst off? Where capitalism is not practiced! The record of history is crystal clear. There is no alternative way to lift people out of poverty. It is the productive activities that are released by a capitalistic, free enterprise system.”

Posted in Uncategorized | Leave a comment