As a person who holds her values dear, I often run into difficulty trying to sustain my lifestyle in an unequal and capitalistic society. It has been extremely hard to establish financial security for myself while living my values fully. I believe that basic human needs are human rights. I believe that any government or society should not prevent access to any person’s basic needs, i.e. should not abuse the human rights of it’s population. Shorter version: First, do no harm. I also believe that all governments and societies have a positive imperative to ensure that the human needs and human rights of each member are met. Shorter version: Second, do good.
I have similar values regarding individual conduct. First, do no harm. Second, do good. If you cannot meet the first imperative, there is almost no point to the second. You are simply exerting effort in two opposite directions, in the end negating yourself.
I want to focus this discussion on individual conduct, and how to do no harm within the reality of the American context. The reality is that only a tiny minority of people in America can secure their future without money. The vast majority of people cannot lead a stable, safe and secure life without financial security, and so money must be discussed. But how do you achieve financial security for yourself without harming that of others, or more commonly, helping a large institution perpetuate human rights abuses against others?
For the principled person, this question is extremely difficult to answer honestly. As a matter of fact, I have no answer myself.
STOCKS & FINANCIAL PRODUCTS
Immediately, we can eliminate the option of buying stocks or other such traded financial commodities. Some would argue that we can invest in “green” stocks or “social justice” funds. No. Such ideas work in one of two ways, and both are grossly insufficient to meet the standard of “do no harm”. The first way these financial products work is by only including companies which meet certain basic issue-oriented criteria. For example, a green fund might only include investments in companies that have met certain emission or environmental standards. Or an LGBT fund might only include companies that have LGBT-friendly policies. But the flaws become clear immediately. First, the minimum standards may be very basic and insufficient to preclude all harmful activities. Additionally, it is extremely hard to ascertain whether companies are really even following these standards. Third, each fund can only focus on so many issues. It would be impossible to create a fund for investment that included only companies that exhibited absolutely zero harmful practices. Any firm competing on the national or international level, large enough to sell stocks, must ipso facto create harm. Where does surplus profit, necessary to sell and trade stocks, come from, if not from harm: to the environment, to the government, to the worker, or to the consumer?
The second type of “social justice” fund operates on almost the opposite principle. Instead of singling out the “least bad” companies for inclusion, it targets the worst. The theory is that if enough principled people invest in the worst offenders, some of the good guys can attend board meetings and advocate for change. This theory is a bit quixotic considering that large companies are strong and powerful, and efforts to create change from within by a handful of non-rich, non-powerful people do not have a great effect. Real change would mean an end to the kind of profits that allow the selling and trading of financial products, because such profits are based on abuses, and the majority of people who purchase financial products do so specifically to make a profit, and so would be incredibly adverse to any change that decreases profit. Also, as you are trying to “effect change”, your money is still being used to perpetrate abuses. There is a reason that the stock exchange has long been characterized as “a wild den where the treasure of the state and the fortune of families are stolen with impunity”. (La Ruche populaire, November 1842)
More common than investments is simpler banking. This includes everything from trust funds to CDs to savings accounts and loans. The idealized purpose of a bank is to supply community members with financial management tools that allow families to save for large and important purchases, or to lend money so that a purchase can be made now and slowly paid off according to the family’s ability.
I find nothing wrong with this ideal. My problem is with the reality.
One problem with banking is the lack of separation between commercial banking and investment banking. Investment banking takes us back to the financial products mentioned above, and is used by a small elite to create private profit out of thin air, which they then wield as political power to earn themselves a favored position in society. All the same support for abusive corporations exists, as well as the abuse of the consumers of commercial banking by gambling with their money and debt.
Commercial banks have abused consumers considerably in recent years, with the help of their close affiliation with investment banking. We have seen predatory lending, subprime mortgages, adjustable interest rates, callous foreclosures, abusive fees for services, and racially discriminatory practices. Additionally, as we recently observed, some of the largest and least trustworthy financial institutions recently received money from the common pot, i.e. tax money that all Americans contributed, as a reward for irresponsible behavior abetted by monopolistic behavior. If a commercial bank does not abuse its customers directly, it must find another way to be profitable, because as a business it exists as a money-making venture for its owners and stock holders. That brings us back to investments. The same investments that are unconscionable for the social justice-minded individual are unconscionable for a bank to make. We are back to the same problem… how does a bank make money without supporting abuse of its own customers or of (possibly) far away victims of corporate abuse? It can’t. So placing your money in a savings account or CD or whatnot doesn’t escape the problem at hand.
Credit unions are a reasonable alternative to banks. They are like a collectively-owned bank. The people who use the services of the credit union are themselves the owners, and they elect its leadership. Many problems of banks are solved with this model. By removing most of the profit motive, and placing ownership in the hands of the customers, incentive for customer abuse is eliminated.
However, in order to remain solvent and return at least a small profit to members, credit unions usually turn to investments in the same way banks do. So again, we are back at the beginning with involvement in the financial industry.
It feels like all roads of money management, aside from hiding cash in a mattress, lead back to the financial industry. And I continue to hold that not only is the financial industry thoroughly saturated with the taint of human rights abuses, but that abuse is so fundamental to the industry that it couldn’t exist without it—meaning it is un-reformable.
But without investments, banks, savings and the lot, how can a person or a family reasonably establish financial security?
Now I know your first inclination is to tell me these restrictions are too strict, or too idealistic, or too harsh upon corporations. You are welcome to your opinion, but rest assured, I have heard all of your arguments. Let’s move forward and, at least as a Gedankenexpirement, and work with me to see if we can build any solutions while adhering to social justice principles.
Because, as I have said, I haven’t figured out the answers on my own yet.