Does Finance Have a Soul?

By Satins, Antoine de | Review of Business, Summer 1998 | Go to article overview
Save to active project

Does Finance Have a Soul?

Satins, Antoine de, Review of Business

Christianity has always been suspicious of the world of finance and money. Part of this comes from an incomplete understanding of the role of finance in a modern market economy. However, part of it comes from the ethical neutrality of finance. Finance is at best a means to an end and gets into trouble when it becomes an end in itself The Catholic social thought tradition suggests valid ends -- solidarity, the common good, universal destination of goods - which can provide finance with a meaningful end to strive towards.

To frame in this way the question of relating the Christian and financial worlds can seem provocative, since the Christian and financial worlds often look to each other with suspicion. We are still molded by a culture where the financial world is considered by definition one of immorality: "No one can serve two masters; God and Mammon," the Scriptures tell us. I believe we must move beyond this attitude of distrust or instinctive rejection in order to attempt to understand the functioning of this new economic world in which we all live to varying degrees, the world of globalization, marked notably by the developments in the financial sphere. But understanding also means bringing to light the underlying ethical stakes created by this new world's emergence. The growing awareness is that financial developments do not happen without posing ethical and moral questions. Financial markets have shown their influence in devaluing currencies. We've seen this in Europe and South America in recent years, and in Southeast Asia most recently. We have realized that an isolated "trader" has the power of modem finance techniques to ruin a financial institution, as seen in Singapore two years ago with the "Barings scandal." This growing awareness explains why we need to find some criteria of individual and collective judgment that can guide behavior.

I would thus frame my speech around three stages: I would try to show firstly that modem finance must not be subject to global condemnation but that, secondly, we must have a sharply sensitive conscience of the ethical risks associated with the modem financial world. I would propose to you, thirdly, and finally, some elements to answer the most difficult part of the question: what must we and can we do, as individuals, in the capacity of our different levels of responsibility, whether in finance or not?

Understanding the Role of Finance

I should begin with a comment on methodology: finance and money are two different realities. It is clear that when one speaks of finance one immediately thinks of money and of the relation we all have with money. The two subjects are connected, money being the raw material of finance, but modem finance presents recent characteristics that have greatly changed its nature and its influence.

The traditional role of finance is rather simple: imagine a kind of black box that allows the intermediation of, on one side savings, that is disposable capital, and on the other side investments, that is, the needs of the same capital. The role of finance is to ensure that the savings resources go to the needs of investment.

What has happened in the past twenty years? First, the size of the box has completely changed since the movement of capital has greatly increased, notably at the international level. Second, the composition of the box has also changed. It went the way of what happened previously in commerce. We went from retail commerce, with complicated networks (wholesaler, partial wholesaler, retailer), to the hypermarket. A whole series of intermediaries have been suppressed. In finance, we have been following the same process to a financial system without intermediaries. Savings and investment are face to face, more directly through what we call the "markets." Before, it took place essentially through banks. Of course finance intermediaries remain, but the weight of markets has greatly increased.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Does Finance Have a Soul?


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?