Morality of the Markets 2.0

So, based on the interest I received on my last post, I thought I'd take a deeper dive.

If you haven't already, read that one first.

It has been said to me many times that "money is the root of all evil." That, however, is only a partial quote, and an out of context one at that (Sorry 'G'!)
The true quote is from a book of the Bible, First Timothy.  It't in the sixth chapter, and is part of verse ten:

"For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs."
From that quote, the 'love of' part is often left out.  Money itself, I would argue, is amoral - it's just an instrument. Loving money, however, is no good. We aren't supposed to love stuff, just God and people.

Anyhow, with that out of the way, let's look at other parts of 1 Timothy 6; earlier in that paragraph, Paul cites "unhealthy interest in controversies" as problematic - something that I definitely can struggle with. Do things like the debt ceiling, healthcare reform, calvinism vs. arminianism, etc. really matter as much as we make them out to? Probably not.
  
For example: I got in a pretty heated debate on the 4th of July with some guy I had never even met about Utilitarianism vs. Kantianism, the validity of John Stuart Mill's 'end justifies the means' philosophy against Kant's categorical imperative - which unraveled to relativism in general. Robust moral relativism, the nuclear attacks on Hiroshima and Nagasaki, the Holocaust, etc... you get the picture.  Needless to say I am doubtful that anyone else found our "conversation" (read: debate) enthralling besides the two of us, and maybe a third who joined in.  And the two of them probably even less so than I; it wasn't really a fair fight in that I love this stuff - but need to be reminded frequently not to get tied up in such 'hollow and deceptive philosophies' referenced in Colossians 2:8 (also written by Paul):

"See to it that no one takes you captive through hollow and deceptive philosophy, which depends on human tradition and the basic principles of this world rather than on Christ."

Basically I'm quite sure that both John Stuart Mill and Immanuel Kant weren't Christians - and that their philosophies were based on human tradition rather than Christ.  But as far as the predestination vs. free will debate I mentioned, that may be more worthwhile somehow.  
Perhaps I will post more on my philosophical musings later; I've gotten quite off track.



Back to 1 Timothy 6, verses 7-9 have some good advice going back to the financial piece:

"...we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction."

So food and clothing - we should be content with that. To be fair, I guess they didn't have as many expensive options for status symbols as we do today. Instead of that fresh car, I suppose one could go with a shiny white mare? Or perhaps a strong donkey. Haha.

As far as the food and clothes go, take a loot at Matthew 6 if you get a chance. Especially vv 19-34; they have a lot to do with what I am thinking about here. I won't paste them all, but here are some excerpts:

"do not worry about your life, what you will eat or drink; or about your body, what you will wear
Is not life more important than food, and the body more important than clothes?"

" Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them... And why do you worry about clothes? See how the lilies of the field grow. They do not labor or spin.
Yet I tell you that not even Solomon in all his splendor was dressed like one of these."

Again with the theme of food and clothes - the premise being that God takes care of wild animals, even the not-worth-much-to-sacrifice birds (not some big unblemished bulls, or something), which don't work away and store away in fear, and that God clothes the lilies which are so temporary. He will definitely take care of us, even more so.

However, this verse reminds me of the various places in the Bible where people are chided for storing up things in barns.  And that has always seemed to be exactly what saving up in a savings account, retirement vehicle (Roth IRA in my case), even the stock market could become.  If it is better to take care of the poor with our excess money (and not just the 10-15% or whatever number our tithes might be), should we be saving it up for our kids, or our retirement?

There I go, raising more questions when I was aiming at answering more from last time.  Let's drop back to that for a bit.


I got some great insights from a friend who is into the legal side of all this (eg shareholders' rights, etc) so he had a lot to say - some of his good points on why the stock market really isn't a zero-sum game:

  "the company can distrubute dividends, cash out to shareholders, merge, etc

  aka, there are 'limiting events' at which point a share may be cashed out at a higher value than the sum total of initial purchases

  thus making it not a zero-sum game"

So while the initial argument was that options markets were a zero-sum game, it's pretty clear that there definitely are cases where the equity markets (read: stock market) are not zero-sum.  Mainly because someone else doesn't have to lose for you to win, and vice versa - if Johnson & Johnson, a popular example of a high dividend-paying stock, pays you (the investor) every quarter, it's because more people are buying their products and thy're profitable, not because anyone is selling.

Also, the big difference, as he also pointed out, may be between those who 'buy and hold' such as Warren Buffett, believing in the value of the underlying company, the 'fundamentals', and those who day-trade, try to time the market, and are basically gambling, trying to 'ooze out gains from suckers' as he put it.

So I'm a bit more at ease now about the morality of the stock market in general, but I'm assured that the greedy are clearly not in the right - those investors that are partnering with the companies they buy stock in, saving for worthwhile causes, etc. should do well to invest, however.


I may write more on this in the future but I think the random philosophy tangent, along with the 'storing up in barns' tangent have piqued my interest.  Probably more to come on those soon!


Thanks for reading.