Andy Crouch and the entire team at Praxis never disappoint, and today’s episode is no exception. At this year’s Faith Driven Investor Conference, Andy shared what a redemptive model for investing could look like, especially in uncertain times.
It goes without saying that 2020 has upended everyone’s expectations and many people’s financial security. So, what would happen if we viewed investing as an opportunity for redemption rather than selfish reward? Listen in to find out…
Episode Transcript
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Welcome back everyone, to the Faith Driven Investor podcast. The Praxis team has been so faithful about the way they think through and process Christian entrepreneurship and investing. We’re always glad to put a spotlight on their work. And today’s episode with Andy Crouch is no exception at the faith driven investor conference. He shared a redemptive framework for investing. And that’s what we’d like to invite you to listen to today. Here’s Andy now.
Andy Crouch: I’ve been thinking about the extraordinary success in our lifetimes of Islamic finance, which is based on actually one very simple, powerful and radical rule, which is that in Islam, interest is forbidden, which means that debt, as it’s practiced in Western capitalist economies, isn’t really practical. And a two point two trillion dollar industry has grown up to kind of work around this prohibition on interest and finance ventures and personal needs in the Islamic world. And of course, this has me thinking if Christian investors, the faith driven investors, were as influential and focused on what we’re aiming for as Islamic investors, how many trillions of dollars would be redirected and how would the world financial system be potentially quite reshaped? Now, this is a tricky question because there is a problem, I think, from a Christian point of view, with the Muslim approach to this, which is it’s based on a law, it’s based on a rule, and lives based on law and rules become easily become legalistic. And legalism is when you define a kind of a boundary that you’re not allowed to cross. But then everyone spends a lot of time right at the edge of the boundary looking for loopholes around the boundary and the reality of Islamic finance, in spite of the genuine good intentions of those who practice it sometimes is that it is often about just getting around this prohibition on interest through creative structuring of things that look like equity, but really function a lot more like debt with interest. And there’s actually a much deeper issue than just this legalism issue, which is that when you actually look at the structure of the economies that are controlled by people with power in the Muslim world, especially those of the Arab Gulf states, unfortunately, these are very oppressive places for many, many of their members, especially the actual labor of those economies. So usually immigrant labor who build the cities on the soccer stadiums, but really under conditions that are very close to indentured servitude or forced labor. These are not just economies. They don’t charge interest, but they’re not necessarily pieces of justice. And of course, this was exactly Jesus critique of the legalists of his time, the Pharisees, who had lots of very laws, but he said, you strain out these tiny little things. You screen for these particular things that you’ve neglected. The waiter matters of the law. So we are not out to create a Christian financing. That’s just a kind of legalism. And several everyone have to look for something that is deeper, more based on the orientation of the heart, and ultimately might be more transformative than any legalistic system will be. And our community Praxis has been thinking about this under the heading of what we call redemptive investing. And there are three themes that keep emerging as we talk with people who are doing really transformational investing out of their Christian faith here. They are redemptive. The message as we’re starting to see a practice prioritizes people, prioritizes people over money or deals or transactions, redemptive investing seeks out and takes on meaningful risk. It’s risk seeking in a in a certain meaningful way. And redemption investing takes responsibility for the nonfinancial outcomes to some extent of investments, not just looking at financial return, but all the other effects that our investing has on the systems around the companies and ventures we invest in. So to illustrate this, I thought we’d look for a moment and think about Jesus’s strangest and least legalistic parable, because this is a parable about someone who does everything wrong. He is, in fact an investment manager, but he’s a dishonest one. He breaks every rule of investing. And yet, Jesus says this story actually teaches us something essential about how to live truly righteous lives, not just superficially righteous lives with what Jesus calls dishonest wealth. So it’s found in Luke 16, and you may remember how it starts. There’s a man who as someone managing money for him and he learns that this man is squandering his property. Jesus says so he summons the man who says, What are you doing? Give me an account. Give me an audit and then you’re fired. The manager says to himself, and this is Jesus’s way of putting it. This is quite remarkable. What will I do now that my master is taking my position over me? I am not strong enough to dig and I’m ashamed to beg. And he says, I know what I will do. So that when I no longer have my position, people will welcome me into their homes. So he summons his masters debtors. One by one he asks the first one, How much do you owe my master? The guy says, I owe one hundred containers of wheat. He says, Okay, take it. Sit down and make it 50. Then he signs the next. The guy says, I owe you one hundred containers of olive oil.
Says, Okay, make it 80. And then Jesus says something quite unsettling and strange. He says the master commended the dishonest manager because he had acted shrewdly, because the children of this age, Jesus says, are more shrewd in their dealings with one another than are the children of light. So you two should make friends for yourselves with dishonest wealth so that when it is gone, they may welcome you into eternal homes. So how do we see the three principles I listed very quickly there and the choices of this dishonest steward? Well, first he prioritizes people, he prioritizes people. He knows that his access to the money that he’s been a steward of and his position are very temporary. But those people will still be around. And if he can develop relationship, friendship with them, they’ll welcome him into their homes long after the money is gone. Transactions are temporary. Money is temporary, but people and relationships can last a long time. In fact, this guy is just looking for a place to stay after he loses his job. But every person we interact with is someone who if we really were to be Christ for them, if they were to see Christ in us. And if they were to trust in Christ, they would actually be our brother or sister eternally. Money is very temporary. Our access to whatever’s been entrusted to us is so temporary. Every single person we meet is potentially our eternal friend.
Second thing that this guy does. He takes meaningful risks with the money entrusted to him. Now he had a low risk option. His master has asked just for an audit and he should turn in as clean and audit as he can tell the whole truth. Hope to get away with at least not a negative recommendation, maybe just a no comment. When someone calls for a reference, but instead, this guy who Abdulnasser has seemingly been totally thoughtless and lazy, suddenly has a very clear reason to take risks with the owner’s money. How do we think about risk? I think we have a complex relationship with risk as we ourselves manage money and as we manage other people’s money, because every single Christian is called to take incredible risk in order to join God’s adventure. God’s call on their life for the sake of justice and the repair of the world. And there are some risks that are not meaningful. Inflation risks, currency risks, concentration risk, sector risk. These are not particularly meaningful risks. And we’re right to prudently hedge them and and limit them in appropriate ways. But the point of having resources is to deploy them in meaningful ways, and that’s always going to mean risk. And it’s so tempting when you have resources to make the point. Safety and preservation, rather than setting ourselves up for the maximum risk we could take. For God’s call in our lives. And then the third thing he does is he. He has a non-financial outcome in mind for the money. He’s not great on the financial side as M. ends up with a 20, 50 percent haircut on the debt. But there is something this Masterda, this manager does, right.
He sees there’s something good available that isn’t just about money that the proper use of money can obtain. And I think this has a parallel to us, too, because we cannot look at our investments only in terms of what they return financially. These are this is ultimately God’s money. And all all resources are gods as we know. So what is God after? God’s interests are ultimately not financial. God is not going to be auditing our lives for our IRR. What is God seeking? He’s told us. I’ve told you people what I desire of you. To do justice and to love mercy and to walk humbly with God. So any money that we are entrusted with needs to be invested in ways that do justice. Instead of furthering exploitation, they create environments of mercy, rather environments of legalism and punishment. And that encourage humility rather than feeding human pride, because that’s the accounting God is going to ask for for our whole lives, including how he’s stewarded, whatever was entrusted to us. So the crazy thing is the owner commends him. He recommends him. He’s going to get a positive reference. That seems like why why in the world? I think there are two things going on here. One is it said that he was squandering the owners money before. He wasn’t doing anything with it. He’s wasting it. He wasn’t paying attention. And now he starts paying attention. I think the Masters just impressed the final. He started actually being shrewd in what he was doing with it. But there might be something deeper going on here. It could be that not just the manager, but the owner actually benefits from these acts of voluntary debt write downs. How would you feel about a creditor whose servant came and voluntarily had you write down your debt? I mean, you’d be grateful to the servant for sure, but you might well feel grateful to the owner as well. And it may be that this wealthy man’s relationship with his neighbors and the whole economy that he’s part of is going to change for the better because of what this servant does. He’s going to be known as a generous, merciful man. And maybe in the end, that matters more to this particular master than the hundred percent return of principal. Now, the dishonest manager was not a faith driven investor. Jesus tells us that his motivation was fear. He was a fear driven investor. And yet he prioritized relationship over transaction. He took meaningful risks. And he seeks non-financial outcomes that may not just benefit him, but benefit his master in the bigger picture. If a fear driven investor does that. What’s it, faith driven investors Bedi? Imagine if Christian finance was defined by loving people, taking meaningful risk and pursuing real justice and repair in the world with money as the instrument of those ends.
We would end up with a lot of friends who would welcome us, perhaps even the eternal dwellings and the master we serve, who is not in the money business, but in the redemption business, we’ve got so much glory and we’ll get to welcome so many more people into his house because of the way we steward what was his all along.
