[1]When Christ was made flesh in this world through the Incarnation that meant that no facet of human existence was to be set apart from God’s redeeming grace. This message is needed now more than ever, particularly in the West, in the area of economics and finance. A Catholic outlook on economics necessarily does not extend only to tithing on Sundays or giving to charity. We can, as I will argue, even invest like Catholics and contribute to the flourishing of others.
There has been much talk in the past few years about the economic recession, faltering currencies, corporate mismanagement, or the lack of opportunities for young people to find gainful employment. These are, to be sure, serious issues and Catholics must play a role in solving the financial crisis. But get past all the talking heads, the antagonistic rhetoric, or the fearmongering, what we have is what Pope Francis [2] has characterized as essentially a deep metaphysical crisis:
[T]he financial crisis which we are experiencing makes us forget that its ultimate origin is to be found in a profound human crisis. In the denial of the primacy of human beings! We have created new idols. The worship of the golden calf of old (cf. Ex 32:15-34) has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal.
It doesn’t have to be this way: the Church and individual Christians are meant to forge a third way. We are called to be salt, light, and yeast in this world. In inverting the current focus on money and utility as the primary end of economics, we can bring it back to the goal of supporting authentic and integral human development. Yes, a Catholic view of economics can even see it as a good thing insofar as it can help us accomplish this.
Here’s what I’m not arguing for: “one-size-fits-all” policy changes or giving specific solutions to implement in different nations. After all, Catholics of good will can and do disagree on such things while providing legitimate alternatives. This also does not mean that we will change the status quo or even solve all of our material problems. What I do want to encourage, though, is for Christians to see that they do have meaningful ways to engage and contribute to the discussion and participate in the building up of the common good. A Catholic economics should provide us with a starting point and a foundation for further development.
For the purposes of this discussion, I will focus specifically on the topic of investing, particularly as it pertains to young adult Catholics who are just able to start investing. First off, why should we invest? Anytime I hear someone talking about bank bailouts, quantitative easing, or securities regulation, my eyes are tempted to glaze over. Wall Street, to the young person, seems like a morass of complexity and confusion. But this does not mean that you should not be concerned with the status of our markets or eschew investing altogether. Inevitably, what happens there will affect you here.
One of the oft-repeated lamentations is the seeming financial illiteracy of today’s youth. Gone are the days when young adults were expected to know basic finance or accounting skills by the time they graduated high school. Catholics by and large, in my experience, are no exception. Investing early, even a little amount consistently, can teach Catholics practical skills that they will take with them into the rest of their lives: how to create savings, the value of compounding and interest, why the business regulatory environment is important, responsibility of shareholders, etc.
Of course, aside from the practical life skills gained, Catholics must also be concerned with the “how” of investing. There is a deep connection here between our faith and where we put our money and our resources. That will reveal our true priorities. As much as naysayers would seek to argue otherwise, the financial sector and economic markets are not morally neutral vacuums. Economic decisions, ultimately, come back to particular persons whose decisions are suffused with values — good or bad.
That is why informing our investment patterns with Catholic principles can make a difference and (hopefully) be a catalyst for positive economic transformation. There has been substantial growth in the past few decades of a new class of investors who are not only concerned with the bottom line, important as that is, but also how to reach their financial goals in moral and ethical ways.
Although quite diverse, the general names for these investment methods are called “Socially Responsible Investing” (SRI). SRI investors, for example, do not invest in companies that harm the environment, participate in the arms trade, that do not support fair labor practices, or that distribute tobacco and alcohol. Another similar class and subset of the SRI movement is “Morally Responsible Investing” (MRI). People that participate in this class of investing often share similar goals as SRI investors but go even farther, often in line with their particular faith views.
For example, there has been appreciable expansion of Catholic Mutual Funds in recent years that choose to invest in pro-life companies that do not support abortion or aren’t involved in embryonic stem cell research. They also might shun investing in companies that distribute pornography or those that don’t support the Sacrament of Matrimony. Ave Maria Mutual Funds [3] and the LKCM Aquinas Funds [4] are some examples. Of course, this is not only a Catholic-driven movement but one that also includes those of other faiths too. For Protestants there are mutual funds such as the Timothy Plan [5] or Thrivent Investment Management [6]. Islamic investing is also becoming popular with the Amana Mutual Funds [7].
The development of these movements and unique investment strategies are very encouraging. Too often people complain about unethical business practices or companies merely concerned with profit over people. Again, it doesn’t have to be this way. Whether you buy individual shares, invest in your employer’s retirement plan, or simply save up money in the bank, where we put our money does matter. You can help do good by investing in companies that do good, by supporting business practices that are good, by being a good businessperson or entrepreneur. The last part is particularly relevant if you are a Catholic working in the financial sector: the Church needs you! Do not give up and get discouraged. You have a role to play in the sanctification of the world too.
We don’t have to choose between our faith and our financial goals. Be responsible and do your research. A good place to start would be to read the USCCB’s Socially Responsible Investment Guidelines [8]. Although an investment or business venture of any substance always carries some risk and it might seem insurmountable and very complex right now, if you do it right you can work towards your financial goals while still supporting economic development that is good for the human person.
In all of this, we must remember that money is not an end in and of itself. It must not be, as Pope Francis said, our “idol.” It is to serve our families, our communities, the poor, and our Holy Mother Church. It is to do good with. We must remember the parable of the wise manager: “To whom much has been given, much will be required” (Luke 12:48). Let us then use our talents wisely, steward them well, and give back to the same God who has given us so much. Freely you have received and freely you shall give.
[Disclaimer: The information in this article represents my own opinions and does not contain a recommendation for any particular security, investment, or financial advice. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Any investment necessarily carries some risk. Additionally, I hold shares in three of the funds mentioned within the Ave Maria Mutual Fund family.]