Productive Enterprises

1. The family farm in OT Israel

The land gift tradition – the division of the Land: Numbers 26, 34, Joshua 13-19. Note that allocations of land related to size of tribal groups, and to the quality of the land for productive purposes, so roughly equal. Land provided work opportunities for family members, and the productive returns accrued to the family to provide food, clothing and shelter (see Leviticus 25: 18-22, Deuteronomy 8: 6-9). Land was to be cared for and given its own Sabbath: Leviticus 25: 1-7. 

Protection of land holdings. Shifting of boundary markers condemned: Deuteronomy 19: 14, Proverbs 23: 10. Land grabs by the king condemned: 1 Kings 21. 

Land not to be sold in perpetuity: Leviticus 25: 8-43.  Year of Jubilee: ‘In the year of Jubilee, everyone is to return to his own property’ (25: 13), ‘The land must not be sold permanently, because the land is mine… Throughout the country that you hold as a possession, you must provide for the redemption of the land’ (25: 23, 24). Obligation on kinsman to redeem land if a family falls on hard times: but if not possible then land to be returned at the Jubilee. In the meantime, family to be provided with opportunities to work as a ‘hired worker’ (25: 39, 40). 

Limits to, and prophetic anger about, the accumulation of land: Deuteronomy 19: 14, Micah 2: 1-2, Isaiah 5: 8. Implication that landholding was a constraint on the size of farming enterprise that any one family could develop, though land could be leased until the Jubilee: Leviticus 25: 14-17. 

Provision for debt forgiveness, Deuteronomy 15: 1-7, where family had borrowed due to business failure (e.g. crops destroyed by weather or pests?)

Suggested DSPs: 1. Provision of work opportunity to enable families to provide for their own basic needs (also to contribute tithes and support the landless); 2. Returns accrue to the family – so direct reward for more productive activity; 3. Limits on accumulation and hence scale of enterprise; 4. Provision for business failure: debt forgiveness and provision for return of productive assets (land). 

2. Higher level DSPs (see A6 Higher Level DSPs for economic activity)

The natural order and work. ‘Dominion’ or ‘rule’ over the natural order is given to humanity, and expressed in work. The telos is to provide for human flourishing – food, clothing, shelter, and social interaction. The natural order should not be wasted or destroyed.

Suggested DSPs for productive enterprises: 1. Purpose is to provide goods and services that human beings need for their flourishing; 2. Provides context for work, and hence opportunity for workers to provide for themselves and their dependents; 3.  Efficient operation is required, to avoid waste of natural resources; 4. Requirement not to destroy or waste natural resources.
Need to include requirement for the owners/ managers of the enterprise to take responsibility for these activities.

Love for neighbour. Economic relations with others should be relational. Their telos is service of others, not pursuit of personal gain. [See next section.] 

3. Relations with customers, suppliers, workers and providers of finance

[The economic relationships of productive enterprises are with customers and suppliers, the workers, and the providers of finance. The DSPs for each of these areas are drawn from: A2 Transactions in markets for goods and services; A3 Work and wages; A4 Lending and borrowing. These are detailed in italics below.]

Transactions in markets for goods and services (A2)

The purpose of trade and commerce is to serve others by supplying goods and services that are necessary to human flourishing, especially food, clothing and shelter, and social interaction.

Market interactions should be motivated by service to others. 

Honesty and integrity in market transactions and economic valuations are required

Work and wages (A3)

Employers have an obligation to enter into fair labour contracts (including provision for time off), and to fulfil them e.g. pay wages on time. Equally, employees should fulfil their side of the contract with honesty and integrity. 

Workers should be valued as human beings and respected by employers. Employers should be alert to the work/ life circumstances of employees: productive efficiency is not the only thing that matters. 

Lending and borrowing (A4)

Commercial borrowing at interest permitted, subject to general requirement for honesty and integrity. Collateral permitted so long as it does not deprive borrower of essential work tools or possessions needed for daily life. 

Obligation on the borrower to repay loans when due. But there should also be provision for debt forgiveness.  

Risk and the future (A5)

Equity financing: shareholders become owners of the enterprise, so they must share in the risks, and bear responsibility for it (‘stewardship’). 

[Issues: limited liability, absence of shareholder responsibility due to disinterest or indirect shareholding.]  

4. Accumulation of wealth

The accumulation of wealth for selfish purposes damages society and does not deliver contentment to individuals.

Warnings against greed: Mark 7: 20-23, 1 Corinthians 5: 10. 

Warnings against pride in personal achievements and wealth: Deuteronomy 8: 10-18, Ecclesiastes 2: 4-11, 5: 10 – 6: 6, Luke 12: 16-21.

Condemnation of wealth gained at the expense of others: Jeremiah 22: 13-17, Amos 5: 11-12, 6: 4-6, James 5: 1-6. 

Suggested DSP. Telos of productive enterprises should not be the pursuit of wealth per se. If wealth does result, then pride in achievements (hubris) and reliance on wealth are wrong.

5. T=>DSPs: provisional DSPs for productive enterprises

Summary of previous sections. 

Productive enterprises have three purposes (telos):

A. To serve others by providing goods and services that human beings need for their flourishing.

Market interactions for goods and services should be motivated by service to others, so honesty and integrity are required

B. To enable human beings to exercise their calling to work productively, not least by working together and using their skills and experiences to the best effect: 

  • workers should be respected and valued as human beings by employers

  • employers have an obligation to enter into fair labour contracts, and to fulfil them; equally employees should fulfil their part with honesty and integrity

C. To use resources wisely and effectively, avoiding waste and/or the destruction of the environment. 

Ownership and finance

The owners of a productive enterprise must take responsibility for its activities, both organization and risk

  • The focus of the enterprise should be on service to customers, fairness in dealings with the workforce, and avoidance of environmental damage – and not solely on the growth of assets and wealth

  • Borrowing to sustain production and trading activities is permitted, but active and responsible equity participation is to be preferred

  • Borrowings should always be repaid, but provision should be made for debt forgiveness

  • Success in the accumulation of assets and wealth may result in the evils of pride (hubris) and greed.

[Donald Hay, November 2014]

BIBLE STUDY

[This topic cannot easily be addressed directly from the biblical text, as in general the biblical cultures did not have any institutions to compare to productive enterprises in the modern economy. The one exception is the family farm in the OT, related to the allocation of the Land. This is considered first in the outline below. The alternative approach is to explore the biblical materials that consider work and the natural order, transactions for goods and services, work and wages, and financial transactions, all areas that are relevant to firms.  We will also consider biblical materials relating to making plans and taking risks, which are central to entrepreneurial activity in productive enterprises.

Please note that there is enough material here for several sessions in a group study. It would therefore be best to allow for a series of studies: if only one session is planned then the number of passages to be studied must be drastically pruned. It might, for example, be best to leave out section A.]

1. The family farm in OT Israel

What were the implications for the Israelite economy of the following:

  • Allocation of land to every extended family according to its numbers of people? (Numbers 26 especially vv52-56, Joshua 13-19)

  • Allocation of land in perpetuity to a particular family? (Leviticus 25: 8-43); and warnings against accumulation, not least by the king? (Micah 2: 1-2, Isaiah 5: 8, Deuteronomy 17: 16-17)

  • Provision for debt forgiveness? (Deuteronomy 15: 1-7)

What are the principles at work in this organisation of the Israelite economy? Could any of these principles be applicable to a modern economy?

2. The natural order and the role of work

Review: (a) Genesis 1: 1 – 2: 3, especially focusing on 1: 26-30; (b) Genesis 2: 15-20; and (c) Genesis 3: 17-19, and then consider the following questions:

  • What is the purpose of the natural order?

  • How is the human race intended to use the natural order?

  • What difference does it make to the relationship between humanity and the natural order that human beings are fallen?

  • What principles for economic life can be derived from these passages? Are any of these principles applicable to the purposes and activities of businesses/ firms in the modern economy? 

3. The business enterprise and its relations with customers, suppliers, staff and suppliers of finance

C1. Transactions in markets for goods and services

Biblical themes:

  • Ambivalence about trade and commerce (Isaiah 23, Ezekiel 27: 1 – 28: 10). What are the reasons for the condemnation of the trading activities of Tyre in these passages? What might be the modern parallels?

  • Market behaviour (Luke 19: 35-36, Deuteronomy 25: 13-16). Why is dishonest behaviour in markets so offensive to God?

  • The command to love neighbours (Luke 10: 27 and parallels). How can the firm show ‘love for neighbours’ in markets for goods and services?

Discuss:

  • Imagine that you (or a friend) are involved in marketing a product or a service in a medium sized business (say 50 to 200 employees). What guidance, if any, can be derived from this study for how to go about your work ethically?

  • Are long term relationships in the supply of inputs and services to a productive enterprise always preferable to short term contracts?

C2. Work and wages

Biblical themes:

  • The purpose of work. (Look again at the passages from Genesis 1-3 listed in section B above, and add Ecclesiastes 2: 4-11, 17-23.) What is the purpose of work? Is there an appropriate distinction to be made between ‘good’ and ‘bad’ work? What are the responsibilities of a business owner or manager for the employees/ workers in respect of the kind of work they are required to do?

  • Labour contracts and wages. [Review Luke 17: 7-10, 1 Timothy 5: 18, Deuteronomy 15: 12-18, 24: 14-15, 25: 4, Colossians 4: 1.] What do these verses tell us about the nature of wages? In Catholic Social Teaching, employers are required to pay attention to the actual circumstances of the employee (married/ single, number of children, housing costs, special family needs…) in determining wages. Do you agree?

  • Payment of wages. [Leviticus 19: 13, Deuteronomy 24: 15, and on the importance of fulfilling contractual arrangements, Genesis 29: 14-30, 30: 25-43.] Why is the payment of wages as contracted so vital to the wellbeing of an economy/ community? If a business is in financial difficulties, should the payment of wages be the first call on the business’ resources?

  • Slavery. [Deuteronomy 15:12-18, Exodus 21: 2-6, Leviticus 25: 39-55, Ephesians 6: 5-9.] Modern Christians find the OT and NT passages that address slavery deeply problematical and even offensive. What, if anything, can we say to the critic of the church who argues that the Bible condones slavery?

C3. Borrowing and finance

[Note. Almost all the biblical materials on lending and borrowing refer to loans made to the poor to enable them to survive, rather than for productive or commercial purposes: these materials should not therefore be used to derive principles for the latter. However there are some texts that may have a wider relevance than lending to the poor. Deuteronomy 23: 19-20, Proverbs 22: 26-7, Proverbs 22: 7, Romans 13: 8.]

Discuss what Biblical principles might be relevant to the following questions:

  • What conditions should be attached to borrowing and lending for commercial or productive purposes?

  • ‘Shareholders become owners of the enterprise, so that they must share in the risks, and carry personal responsibility for it’. Do you agree? If so, should shareholders be liable for losses incurred by the enterprise, or is limited liability acceptable?

 A. Making plans and taking risks: the role of the entrepreneur

Biblical themes:

  • Making plans and taking action where outcomes are uncertain (Psalm 37: 1-11, 23-26; Proverbs 16: 1-3, 9; James 4: 3, 13-17 contrasted with 1 Samuel 13: 8-14).

  • Stewardship of resources necessitates action and exposure to risk, not passivity (parable of the talents, Matthew 25: 14-30).

  • Mitigating risks. Part of wise stewardship (Matthew 7: 24-27, though note the nature of the risk being considered, 1 Samuel 27: 1-4), but also potentially materialistic and self-regarding (idolatrous?) if part of a strategy to secure one’s personal future (parable of the rich fool, Luke 12: 13-21).

  • Bearing risks to help others (parable of the good Samaritan, Luke 10: 25-37).

  • Not creating risks for others (implicit requirements to pay wages on time, provide continuity of employment, use fair weights and scales, and be trustworthy in markets, as indicated in passages listed in sections C1 and C2 above).

Discuss:

  • What virtues should characterise the disposition of a decision maker when taking risks?

  • Is entrepreneurship (willingness to take business risks) a genuine vocation?

  • How should the owner or manager of a productive enterprise seek to secure its future? Are there better and worse ways of doing this?

  • Are there circumstances in which the owners/ managers of a productive enterprise should take personal risks to secure the future of a firm?

  • When firms get into financial difficulties, the first step is often to lay off workers, so as to protect the value of the assets for shareholders: is that a proper priority in the circumstances?

B. The accumulation of wealth

Successful business in the modern economy is often associated with the accumulation of personal fortunes, not least when a firm is first listed on the stock market. 

Biblical themes: 

  • Warnings against greed. (Mark 7: 20-23, 1 Corinthians 5: 10)

  • Warnings against pride in personal achievements and personal wealth. (Deuteronomy 8: 10-18, Ecclesiastes 2: 4-11, Luke 12: 16-21)

  • Condemnation of wealth gained at the expense of others. (Jeremiah 22: 13-17, Amos 5: 11-12, 6: 4-6, James 5: 1-6.)

Discuss: 

  • Why is the biblical material so often critical of the accumulation of personal wealth?

  • Is the accumulation of wealth by the owners of a successful enterprise unequivocally a good thing? [Ask: does it serve others or not?]




Donald HayComment