C02

Wealth, profits and

private property
Morality of wealth
List the moral issues that
these three items bring up

Wealth

Profits

Private Property
Wealth
is the abundance of valuable resources
In economics, wealth in a commonly applied
accounting sense is the net worth of a person,
household, or nation, that is, the value of all
assets owned net of all liabilities
Valuable ?
1. Adjective worth a great deal of money.

2. Noun: a thing that is of great worth, especially

a small item of personal property.
What is the opposite to Wealth?

Just getting by?

Poverty?
Misery?
Destitution?
 We must be precise in our choice of words.
The language of the UN and of its agencies,
who want to suppress poverty, which they
confuse with destitution, is not that of the
Church of Christ. The Son of God did not come
to speak to the poor in ideological slogans!
The Church must banish these slogans from
her language. For they have stupefied and
destroyed peoples who were trying to remain
free in conscience.
Robert Cardinal Sarah
“God of Nothing”
I always marvel when Gaudium et spes
declares: “The spirit of poverty and charity is
the glory and witness of the Church of Christ”
(GS 88).
The personal moral questions are:

How much wealth?

Relation between wealth and luxury?
How the wealth is acquired?
How the wealth is distributed?
Apply the definition to this:

net worth
assets owned
net of all liabilities
When you put a price
on something you alter
its intrinsic properties,
and this can be morally
corrosive
The past few decades
have seen a market
economy replaced by a
"market society" in which
"everything is up for sale

Markets, he says, "are

not neutral instruments,
they crowd out values
worth caring about.”
There are many in the
world who are dying for a
piece of bread but there
are many more dying for a
little love. The poverty in
the West is a different
kind of poverty -- it is not
only a poverty of Mother Teresa Pro-Life Speech Breakfast, Washington D.C., 1994

loneliness but also of

spirituality. There's a
hunger for love, as there
is a hunger for God.”
PROFIT a financial gain,
especially the difference
between the amount
earned and the amount
spent in buying, operating,
or producing something.
Profitability ratios are a
class of financial metrics
that are used to assess a
business's ability to
generate earnings
compared to its expenses
and other relevant costs
incurred during a specific
period of time.
The moral questions are:

How much profit is adequate?

Different types of profit?
Margin?
Before tax?
After tax?
The technical issues to take into account
on profit margins:

Recover costs

Make for unforeseen events

Save for future developments

Gain on investment for personal use

PERCEPTION Specifically, participants reported
how much they perceived these
firms and industries to be
profitable and also how much
they perceived these firms and
industries to be socially harmful.
Consistently, participants linked
profit with social harm. The more
profitable people believed a
company to be, the more evil they
“Is Profit Evil? Associations considered it, and the same
of Profit with Social Harm”
by pattern was true of conservative
Amit Bhattacharjee, Jason
Dana, and Jonathan Baron
University of Pennsylvania
and liberals.
Property: something that is owned by a person,
business, etc.
Ownership: the state or fact of being an owner.
Ownership: legal right of possession; proprietorship.
My Own
What can I call my own?
Types of ownership My life?
Internal My body?
My skills?
My thoughts?
My soul?
Types of ownership
My clothing ?
External My tools ?
My land ?
My cows?
My house ?
My factory ?
My car ?
My company ?
What can I call my own?
Types of ownership My spouse ?
My children ?
External My friends ?
Property ? My colleagues
My priest, pastor, imam ?
My advisor ?
My counsellor ?
The moral questions are:
Is personal property a human absolute
need?
Is the possession of means of
production a human right ?
“The theory of the Communists may
be summed up in the single sentence:
Abolition of private property.”
Karl Marx and Friedrich Engels, "Manifesto of the Communist Party," in Karl Marx and
Friedrich Engels: Collected Works, vol. 6 (New York: International Publishers, 1976), p. 498.
Article 17.

(1)Everyone has the right

to own property alone as
well as in association
with others.

(2) No one shall be

arbitrarily deprived of
his property.
Types of ownership

My money ?

External

My shares ?
Is money bad?
From Judas Iscariot, who
betrayed Jesus for 30 pieces
of silver, to Bernard L.
Madoff to the standard
member of Congress fighting
tirelessly to further the
interests of campaign donors,
human history is full of
examples of money’s ability
to weaken even the firmest
ethical backbone.
George Bernard Shaw
Mark Twain
For the love of
money is a root
of all kinds of
evil.

1 Timothy 6:10
 Is interest bad?
Riba -- the arabic word for interest -- means any
increase, not just large amounts.
The true interest considered as Haram
(forbidden) is the amount a person has to return
in multifold of the principal taken.

“Allah destroys interest and gives increase for

charities. And Allah does not like every sinning
disbeliever.” Sura 2276
Deuteronomy 23:19 Thou shalt not lend upon
interest to thy brother: interest of money, interest
of victuals, interest of any thing that is lent upon
interest.
Deuteronomy 23:20 Unto a foreigner thou
mayest lend upon interest; but unto thy brother
thou shalt not lend upon interest; that the LORD
thy God may bless thee in all that thou puttest thy hand
unto, in the land whither thou goest in to possess it.
 Is interest bad?
Usury The illegal action or practice of lending
money at unreasonably high rates of interest.

Pope Sixtus V (1305- 1314) condemned the

practice of charging interest as "detestable
to God and man, damned by the sacred
canons and contrary to Christian charity."
Early Protestant Reformers, beginning with
Luther, had essentially endorsed the long
established Scholastic usury doctrines. The
one major exception was Jean Calvin

The first, in 1540, was an imperial

ordinance for the Habsburg
Netherlands permitting interest
payments up to 12%, but only for
commercial loans.
Usury
English-speaking world seems to
have come with lawful rights to
charge interest on lent money,
particularly the 1545 Act, "An Act
Against Usurie.” Henry VIII's
Parliament permitted interest
payments up to 10% any higher
rates constituted usury.
 Why is usury, interest bad?

Taking advantage of people’s misfortunes

Earning money on money, nor on goods

More technically by an economist

Paul Mills economist reasons why interest is bad news, 1993,

1.It is unjust and destabilising.

Unjust, because the lender gets no reward for lending

to a successful business and (generally) suffers no harm
from lending to an unsuccessful business.

Destabilising, because lending at interest encourages

further borrowing and investment during a growth
period and places high burdens (causing bankruptcies)
when profits are low.
2. It encourages the
allocation of finance
to the safest
borrowers (e.g., large
firms and wealthy
individuals) rather
than to the most
productive
borrowers. This is a
consequence of the
first point.
3. It encourages
financial speculation in
assets and property.
"When the price of an
asset in relatively fixed
supply begins to rise,
buyers borrow to
purchase more of it,"
and I think we know
what happens next.
4. It leads to an
inherently unstable
banking system.

Banks can guarantee

the savings they hold
only through the
possibility of
government bailouts.
5. It encourages a "short-
termist" investment
strategy. "[T]he pervasive
influence of interest tends
to bias business investment
towards quick-return, short-
term projects even though
longer-term, more risky
ones may offer greater
benefits in the long run."
6. It concentrates wealth
into fewer and fewer
hands. "Interest
automatically acts to
transfer wealth from net
borrowers to net lenders.
Not surprisingly, the
former tend to be the less
well-off and the latter tend
to be the richer members
of society."
7. It leads to a rapid flow of financial capital
across regions and countries.
 THE RELATION OF WEALTH TO MORALS
BY THE RIGHT REVEREND WILLIAM LAWRENCE, EPISCOPELIAN BISHOP OF
MASSACHUSETTS
THERE is a certain distrust on the part of our people as to the
effect of material prosperity on their morality. We shrink with some
foreboding at the great increase of riches, and question whether
in the long run material prosperity does not tend toward the
disintegration of character.
History seems to support us in our distrust. Visions arise of
their fall from splendor of Tyre and Sidon, Babylon, Rome, and
Venice, and of great nations too. The question is started whether
England is not to-day, in the pride of her wealth and power,
sowing the wind from which in time she will reap the whirlwind.
Experience seems to add its support. Is it not from the ranks
of the poor that the leaders of the people have always risen?
Recall Abraham Lincoln and patriots of every generation.

Source: William Lawrence, "The Relation of Wealth to Morals." The World's Work, 1 (January, 1901): 289-292.
The issues is how one
acquires wealth, property

The issues is how one

uses wealth, property
THE ISSUES IS HOW ONE ACQUIRES WEALTH, PROPERTY

Taking it from others without their consent

saving from earnings
Getting it: illegally
immorally
entrepreneur
business
investing
Investing it:
speculating
THE ISSUES IS HOW ONE USES WEALTH, PROPERTY

pleasure
For personal selfish use luxury
miser

business
For development entrepreneur
investing
For charity
It’s worth noting, as The Atlantic does in their
current issue, that the lowest-earning 20% of
Americans donated 3.2 percent of their income to
charity in 2011, while the highest-earning 20%
donated only 1.3 percent.

And of the 50 largest charitable gifts in 2012, none

went to organizations focused on social service or
poverty. The big winners: elite universities and
museums. Because, really, holding a charity gala in
your honor at a soup kitchen is just so… déclassé.
 Get, multiply and use profits,
property and wealth honestly to
do good becoming happy by
making others happy