Help … the invisible hand has disappeared!

Where is this supposed invisible hand gone? Did it ever exist?


The invisible hand is a term coined by economist Adam Smith in his 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations”. In his book he states:

“Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it … He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”

Supposedly, this invisible hand will miraculously turn business which is based on self-interest into some public good.  What has happened to our free market system in which this hand seems to have diasppeared?  What happened to the economists and politicians in Greece some years ago when cooking the books in order to get into the eurozone?  What happened to our bankers who used our money to speculate using systems they didn’t understand and lose noinvisible-handt only our money but our trust? What happened to our major corporations who use people in order to improve share prices?

Where has it gone? I believe that this is Gods Spirit. We are all made in th image of God and it is only the presence of the Spirit of God on this earth which prevent us all from descending into complete disaster. God never has to punish us. He only has to leave us alone and we can do that job quite nicely.   We need to rediscover the role of Gods Spirit in turning self-interest into public good.  Only God can do that …! Continue reading ‘Help … the invisible hand has disappeared!’

Little interest

I just received a mail from my bank that the interest on my savings account was reduced  to 1.1%.  On top of that, I pay double tax on my savings. Once when earned and the Dutch government taxes all savings above €22,000! I am lucky … in Portugal they are starting to charge people for saving money!  Our interest in the financial world depends on our personal interest in our personal money. If I am told that my savings are in danger, I wake up and take note. When I hear the words ‘financial reforms’ I begin to yawn sleepily.

marble bankI read an interesting book recently by Joris Luyendijk, a Dutch journalist working for the Guardian newspaper in London. He interviewed many top- and middle level executives in the City of London, trying to understand how te financial system works, and if there have been any lessons learned from the past 7 years crisis.  The bottom line?  No lessons have been learned. It is business as usual.  He write “If you had described the effects of the crisis to anyone in 2008 and said that 7 years later nothing had changed, no-one would believe you.”  The only thing the bankers have learned is that they can get away with anything! Continue reading ‘Little interest’

MIndfulness? The secret

“In a society which is predominantly concerned with possessions, fear of nat having enough is prevalent.”  Prof. Goto-Jones of Leiden University explains that mindfulness is a widespread social movement. He continued, “these days, most problems are in our head. This brings long-lasting stress which cannot be aliened by traditional flight or fight reactions. Mindfulness brings relief.”

Accepting current circumstances and being aware of the present is a part of mindfulness and thoroughly Christian. Paul wrote concerning his material circumstances, ” Not that I am speaking of being in need, for I have learned in whatever situation I am to be content. I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need.”

Living in the present, thanking God for my circumstances sets me free and paves the way for an experience with God. Paul goes on to say “I can do all things through him (Jesus) who strengthens me.”  Experiencing the presence of Jesus at this  moment, right now, is the key to mindful living.

In his same letter to believers in Philippi, Paul writes, “Rejoice in the Lord always; again I will say, rejoice. Let your reasonableness be known to everyone. The Lord is at hand; do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus.
Finally, brothers, whatever is true, whatever is honorable, whatever is just, whatever is pure, whatever is lovely, whatever is commendable, if there is any excellence, if there is anything worthy of praise, think about these things. What you have learned and received and heard and seen in me—practice these things, and the God of peace will be with you.”

That is true mindfulness!

Household debt costs 11 billion euros in Holland!

One in six of the 1,1 million households in The Netherlands has problematic debt!  This costs the nation 11 billion euros according to a recent survey by the Netherlands Institute for Budget Information (NIBUD – October 2014).  debt-management-plans

The costs comprise of not only unpaid invoices, but also for government support and absence from work.  It has been shown that people with debt are on average 9 days longer sick off work than other employees!  According to researcher Tamara Madern, “People with debt problems are much to consumed in their heads with the stress of  financially related problems and have therefore less time to look for work or to invest in their future in other areas. ”

In a 2011 independent report, it was concluded that for every euro spent on coaching people to get out of debt using our Debt Aid Companion programme, that this yielded three euros in ‘social-economic return.’  This was calculated using parameters such as less evictions, energy facility cut-off, less work done by local government etc.

Strengthening household balance sheets is a firm priority for the EU. It should be a priority for us all!

The Bible is very clear that ‘the borrower become slave to the lender.”   (Proverbs 22:7)

Borrowing is not prohibited by the Biblical wisdom, but the dangers are that we will lose our freedom to choose.  The apostle Paul was also very clear when he stated, “everything is lawful, but not all things are helpful. Everything is permissible but I will not allow myself to be enslaved by anything!”  (1 Corinthianss 6:12).



Economy of the Kingdom

From September 18-20 we will be in Amsterdam for the very first Christian Economic Summit!

I have been asked to speak on the Economy of the Kingdom … a daunting task!  That the Kingdom of God has its own economy with its own chanacteristics  is not evident to many.

I often start with a quote from the English playwright, Tom Stoppard: ‘A door like this has opened five or six times since we got up on our hind legs. It is the best possible time to be alive, when almost everything you thought you knew is wrong.’

The upside down economics of the Kingdom is illustrated by some Bible verses such as the words spoken to Joshua on entering the promised land, “So I gave you a land on which you did not toil and cities you did not build; and you live in them and eat from vineyards and olive groves that you did not plant” (Josh 24:13); and the invitation given by God Himself to “Come, all you who are thirsty, come to the waters; and you who have no money, come, buy and eat! Come, buy wine and milk without money and without cost. Why spend money on what is not bread, and your labor on what does not satisfy?”  (Isaiah 53:1,2)

And the early church illustrated the coming of the economics of the Kingdom where we read in Acts 4 “After they prayed, the place where they were meeting was shaken. And they were all filled with the Holy Spirit and spoke the word of God boldly. All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had. With great power the apostles continued to testify to the resurrection of the Lord Jesus. And God’s grace was so powerfully at work in them all hat there were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.  Joseph, a Levite from Cyprus, whom the apostles called Barnabas (which means “son of encouragement”), sold a field he owned and brought the money and put it at the apostles’ feet.”

Provision for needs, the meaninglessness of money, elimination of poverty, sharing liberally, asset distribution … sound good?  Well, we pray every day for God to “give us our daily bread, and that His will be done on earth … as it is in heaven.”  Therefore the standards in heaven should also become applicable to our earthly economy! Continue reading ‘Economy of the Kingdom’

Towards a new economic paradigm

Nobel Laureate Joseph Stiglitz made the case for creating a new economic paradigm in a 2010 letter to the Financial Times. “Today, not only is our economy in a shambles,” Stiglitz writes, “but so too is the economic paradigm that predominated in the years before the crisis – or at least it should be.”

“Changing paradigms is not easy. Too many have invested too much in the wrong models. Like the Ptolemaic attempts to preserve earth-centric views of the universe, there will be heroic efforts to add complexities and refinements to the standard paradigm. The resulting models will be an improvement and policies based on them may do better, but they too are likely to fail. Nothing less than a paradigm shift will do.”

He goes on to note deficiencies in the current economic paradigm and models, and ends the letter with “a new paradigm, I believe, is within our grasp…”

From September 18-20, we are co-organising the first christian Economic Summit in Amsterdam.

I will be leading an afternoon discussion on “New Economic Paradigms” and we have a very impressive line-up of International contributors.  For us, as Christians, it is not a matter of ‘thinking up’  a new paradigm, but of seeing why God is revealing to us. It is said in the Bible, “Surely the Sovereign Lord does nothing 
without revealing his plan
    to his servants the prophets.”  (Amos 3:7). To believers in exile in babylon, Jeremiah wrote these encouraging words, ” For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.”  

Join us in Amsterdam for these inspiring days! 

Nationalism < > patriotism

Last month, I participated in the “State of Europe Forum”  in Athens, organised by the Schuman Centre, and the European Christian Political Movement.

One of the fabulous quotes was from a Polish priest Father Piotr who said, ‘Nationalism is a pathological overemphasis on the nation, and patriotism correctly understood is the antithesis of nationalism. Characteristic of nationalism is the fact that it recognizes only the good of its own people and seeks only its own fulfilment, neglecting the rights of others. Patriotism, however, as love of one’s own country, recognises the same rights of every nation, and is therefore a good tool to set social love in order. It seems that the difference between patriotism and nationalism can be clarified by recalling the difference between self-love and selfishness.’

This reflects Jesus’ words to ‘love your neighbour as yourself’.

Continue reading ‘Nationalism <> patriotism’

Lessons from the crisis

(Excerpt from a speech at the Hilton Hotel, Budapest – March 28)

What lessons can we learn from the financial crisis of the past 5 years? How can we avoid making the same mistakes in the future? Einstein famously quoted, “we cannot solve problems using the same thinking that originally caused the problems.”  How can we think differently about personal and corporate finance in a vulnerable economy. It is also said that money will not solve financial problems  – only alleviate the symptoms for a short time – and that the financial crisis is, at its core, a problem of the human heart, not a technical problem. We need a new way of thinking, both collectively and individually, which changes our behaviour.

But how can we change in the midst of a crisis?  And I think we are still right in the middle.

Last month in Prague, I spoke to Bruno Roche, chief economist of Mars Inc., one of our speakers, recently and asked him what he thinks of the economic recovery we seem to be in and does he think that it will last? His answer: This recovery cannot last. He, and others who he knows, are expecting another downturn. This will most likely occur in 2015. He then went on to say that this next downturn is going to make what happened in 2008 look like peanuts because the world is much more in  debt now than it was then.”

Continue reading ‘Lessons from the crisis’

Teaching finances – a great tool for you …

Compass- finances God’s way

Check out the 64 Compass animations, categorized by topic. Use for your church, presentations, etc. A great tool!

A new Christian paradigm for our economy

Watch a short TED talk on a Christian paradigm for our economy, given in London on November 16, 2013.