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Appendix
Notes

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The baby is pitiful; no more than nine months old, he is already dying. His bony, starved body is so emaciated that his head looks oversized, too large a burden for such frailty. A baby-bottle is lying by his side. The caption on the picture reads: "This is wrong."

Distribution of this heartbreaking picture was a typical tactic of the Infant Formula Action Coalition (INFACT), which during its boycott of Nestlé products had the support of the Presbyterian Church U.S.A., various Catholic orders, the National Conference of Lutheran Women, the Unitarian Universalists, the National Council of Churches, and agencies from most major denominations. Ten million Third World babies were starving because of the heartless, moneyhungry activities of powerful multinational companies, INFACT charged.
Thanks to the aggressive, greedy advertising tactics of Nestlé, INFACT claimed, poor women who knew no better bought infant formula and misused it for babies like the one in the picture. They mixed it with dirty water, or otherwise created death and disease because they did not understand hygiene. Or they spent their small incomes unnecessarily. Worse, Nestlé infant formula stopped mothers from breast-feeding, a practice that everyone knows is healthful and one of the few benefits of being born poor in the Third World.
Due to the intensive campaign against Nestlé - which is only one of the infant formula companies operating in undeveloped countries - the Swiss firm was thoroughly humiliated. That, as we shall see, was a major point in INFACT'S, and the church's, campaign. If the anticorparate activists had only been working to stem an evil which they believed harmed helpless babies, they could be commended. But churches not only used anticorpostate. Since the free enterprise system has notate activism irresponsibly, but as a weapon to punish the free market system. The real mission of anticorporate activists was not only to save babies, but to replace the free market with socialism or a welfare succeeded in providing every person with material comfort, much of church leadership has apparently decided that it must be discarded for something which it considers superior.
It is important to understand this attitude because it is one of the primary foundations of Religious Left thought. This is not to say that disapproval of free enterprise is the reason the Religious Left originally developed or persists. But disapproval of free enterprise is a primary component of its political thesis.
A preference for government intervention in economic life is a legitimate political opinion worthy of debate. Corporations sometimes do act irresponsibly, from greed or ignorance, and cause harm. It is therefore one of the necessities of democratic capitalism that political parties, organizations, and labor unions force the government and business to compromise, or to correct their course. Without these opposing bodies even the most democratic of governments, and wellmeaning of companies, would become tyrannical or mendacious. But it is not a proper function of the church to attempt to force a change in democratically established economic systems. It is, especially not proper when facts are distorted in order to serve a political bias.
Further, it is not only improper, but extremely harmful to the church for its bureaucrats to back causes a great majority of its membership does not support. Most American Christians, as we shall see, overwhelmingly support free enterprise. A great many mainline church bureaucrats and the anticorporate activists they support, do not.
Moreover, Religious Left attitudes completely overlook how well free enterprise works. Democratic capitalism is generally a condition of political liberty and creates prosperity where it is genuinely practiced. It is also possible that with its emphasis on welfare (or socialism) as a necessity for economic equality, the church has obscured and hindered the real debate on the causes and cure of poverty.

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Capitalists Attack Capitalism

Statements made by INFACT chairman Douglas Johnson and a United Church of Christ study group on economics reflect both the real motives of many anticorporate activists and the Religious Left's feelings about the free market. Johnson admitted he was using the Nestlé issue to hurt the "profit system." He said he saw the issue as a precedent for legislative control of multinational corporations.1 The study group document, originally drafted in 1984, declares that the "U.S. is launched on a love affair with death and destruction. . . . We are, in a fundamental sense, necrophiliacs . . . choosing life means choosing new economic and political systems."2
These are not lone statements and lonely ideologues. It may be one of the world's great ironies that some of America's wealthiest institutions are some of the system's greatest enemies. The total wealth of all churches in the United States, as of 1982, was estimated at $200 billion. About three hundred and sixty thousand Protestant churches hold approximately $22 billion in securities and about 5 percent of the churches' annual income is from the earnings of endowment funds, a source of important income. The Episcopal Church alone owns approximately $1 billion in corporate securities, and the United Methodist pension fund assets were reported in 1983 as about $1.5 billion. The churches are so financially well-off that they are second only to the federal government in monies received and distributed annually.3

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The Nestlé Campaign

Yet the same institutions who profit from the system characterize it, or its components, as exploitative, unfair, and unjust. The Nestlé boycott is a typical case-in-point. Company profits were not affected, but INFACT succeeded in unfairly painting Nestlé as a greedy monster who was unconcerned that its product was a baby-killer. The controversy reached such proportions by 1978 that when Egyptian health minister Dr. Mamduh Gabr asked the U.S. Agency for International Development for $5 million in infant formula - for Egyptian babies who could not breast-feed - his offer was rejected. The U.S. government explained that the donation could "subject the entire U.S. AID assistance program to undeserved debate and criticism."4
INFACT's charges subsequently led to Senate hearings hostile to Nestlé. When Nestlé executive Oswaldo Ballarin, a Brazilian, told Senator Edward Kennedy's subcommittee on health that the whole infant formula issue was "an indirect attack on the free world's economic system," he was "all but laughed out of the room."5 Ballarin, however, was just repeating Nestlé's conviction that the objectives of the organizations involved in the boycott were "only a cover for conflicts and goals distinctly different from the issue of infant health."6
American understanding of Third-World problems could have been broadened had there been a reasoned public debate. But INFACT's charges were so inflammatory that the media become more interested in repeating the charges than they were in judging the issues. In the first six months of 1981 The Washington Post ran ninety-one stories, editorials, or columns critical of Nestlé, including a Brazilian study which alleged that the company was responsible for the deaths of thousands of Brazilian children. After Nestlé deluged the paper with scientific studies about infant formula, the Post backtracked and ran an editorial stating that the controversy had been overblown. It is a fair assumption that more people read the stories than read the editorial.7
During the same time period, The New York Times and other newspapers, magazines, and television stations also ran stories or editorials condemning the company. Nestlé's public relations office began to measure its pile of anti-Nestlé clippings "by the pound."8
The constant publicity, fueled by INFACT, was so far-reaching that it had repercussions beyond the infant formula controversy itself. Ernest Lefever, director of the Ethics and Public Policy Center in Washington, believes that his defense of Nestlé hurt his chances of being confirmed as assistant secretary of state for human rights in 1981. Lefever's think-tank had reprinted a Fortune magazine article critical of INFACT and had written an article on the issue for The Wall Street Journal. Because Nestlé had previously given the Policy Center $25,000 dollars, Lefever said he was accused of acting as a paid company representatives.9

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The Case For Infant Formula

Had INFACT and its supporting groups been interested in examining the issue on an unbiased basis, they would have found that infant formula is needed in the Third World. Poor mothers in developing countries often do not produce enough milk for complete nutrition. Numerous Third-World pediatricians have warned that additional feeding is needed after the third month and to withhold it produces babies with poor growth and the possibility of severe malnutrition.10
As for disease, there is more possibility of severe diarrhea and gastrointestinal infections when mothers use native weaning or supplementary foods than when they use infant formula. The most common native supplementary-weaning food in developing countries is cereal gruels of millet or rice, but the nutritional value of native gruels is low and microbiological contamination of the traditional foods is a fact of life in most poverty-stricken, Third-World homes.11 The research studies on which these statements are based were made in African settings where commercial baby food had not been used.
Further, studies have proved that infant death rates are generally higher in undeveloped, rural areas of developing countries where infant formula sales are at a minimum. Breast-feeding has dropped "dramatically" in Singapore, and its infant mortality rate is lower than that of the United States.12 It is true that Third-World mothers have misused the formula, but it is also true that Nestlé had tried to offset that possibility by a staff of about two hundred Nestlé nurses (worldwide) whose job it was to teach mothers how to use the formula correctly. Nonetheless, INFACT charged that the company solicited customers by giving doctors and hospitals samples to distribute and claimed the nurses' sole function was to act as sales representatives.13 The nurses did act as sales representatives, as well as performing their other functions. Nestlé may not have gone far enough in emphasizing the correct usage of, and possible dangers in, the use of infant formula. But INFACT did its best to portray the company as completely indifferent to both and mercenary to the exclusion of all other considerations.
One of the most ironic aspects of the situation was that INFACT and supporting church groups assumed they knew what was best for Third-World women, despite their never having been consulted. This sort of-patronizing is closely akin to racism. When women in developing countries were asked by Nestlé Audit Commission staffer Jack Greenwald what they thought of the boycott, they were outraged. Greenwald said that the women were angry that "Americans assumed they understood the situation and would try and control whether or not they breastfed their children."14 The commission is an independent organization chaired by former senator Edmund Muskie.
Many women in developing countries now work and are unable to breast-feed, Greenwald said, and the formula is a blessing for them.15
At one point, spokesmen cooperating with the antiformula campaign declared they wanted to "demarket" infant formula. In testimony before Congressman Jonathan Gingham's subcommittee on foreign trade, in 1979, Edward Baer, a staffer with the Interfaith Center for Corporate Responsibility (funded by the churches), explained demarketing by citing Socialist Algeria. Algeria is a country in which the importing and distribution of infant formula is in the hands of a state monopoly, and there is no brand competition. Baer did not disclose that imports of infant formula in Algeria rose from two and a half million half-pound cans in 1976 to twelve million in 1979.16
According to author Herman Nickel, when asked about the rise in imports, Baer said that it did not bother him because it took place under government control. "This reduces the controversy to the absurd but revealing proposition that capitalist formula kills babies, but socialist infant formula does not," Nickel wrote."17

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Nestlé Boycott Ends

On January 26, 1984 the Nestlé boycott was ended when the company agreed to strictly abide by the World Health Assembly code (to which they had already been adhering for some years) and:

  • curtail free infant formula promotions in Third World countries;
  • stop providing benefits to doctors who promote the product;
  • place warning labels on infant formula packages;
  • include warnings and explanations on the benefits of breastfeeding in promotional literature.

Nestlé has been so eager to prove the worthiness of its intentions that it has given a block grant of between $100,000 and $500,000 dollars every year since 1982 to support the Nestlé Infant Formula Audit Commission. The Commission was created to check NestIé's continued compliance with the agreement it made with INFACT. The commission has no plans to discontinue its work as of 1986.
Nestlé claims its sales have dropped since making the changes. They believe several infant formula companies have taken advantage of its pacifism and are busy trying to corner the infant formula market in developing countries. As much formula is being sold, Nestlé believes; just not by them.
And what is INFACT up to these days? Although many companies who market in developing countries are not living up to the World Health Code standard, INFACT is not declaring boycotts. They claim that low-level pressure is more useful against American Home Products, Roth Laboratories, Bristol-Myers, and seventeen infant formula companies which are not based in the United States. INFACT's primary interest now is crusading against the nuclear arms race; for which they blame . . . corporations.18
The Religious Left does not always use confrontational tactics against free enterprise. A commission established by the National Council of Churches recently helped mediate an end to a farm dispute involving Campbell Soup. The dispute involved workers' health conditions, wages, and the recognition of workers' rights to collective bargaining. The NCC subsequently called off a threatened endorsement of a boycott against Campbell products. This victory for moderation might signal a permanent change in attitude. However, the church's more familiar stance has been one of condemnation and confrontation: although the seven-year Campbell boycott was called off, it had had the endorsement of seventeen major religious organizations. These negative attitudes have most often been acted out by the Interfaith Center for Corporate Responsibility, a sponsor-related movement of the National Council of Churches.

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The Churches Sponsor Anticorporate Activism

The Center takes a very dim view of multinational corporations. Formed in 1974, the Center is a coalition of twenty-two Protestant boards and agencies and twenty-two Catholic religious communities and archdioceses. It has seven subgroups, some of which focus on "militarism," international justice, and domestic equality. Ironically, churches which belong to the Center's coalition have over $7 billion invested in the same institutions which they regularly take to task.
Among the member agencies are the Mission Responsibility Through Investment committee of the Presbyterian Church U.S.A.; General Assembly Mission Council, the American Baptist Churches in the U.S.A.; the Church of the Brethren Pension Board; the Committee on Social Responsibilityin Investments of the Executive Council of the Episcopal Church; the Reformed Church in America; Church Women United; and one hundred and seventy Catholic orders, provinces of orders, congregations within provinces, dioceses and archdioceses.
Four United Methodist agencies are involved, including the General Board of Church and Society and three divisions of the General Board of Global Ministries. The Methodist Church thus has sixteen representatives on the Interfaith governing board.
Although the number of religious organizations which are members of the Center seems impressive, it would be a mistake to believe they truly represent U.S. churches. Most local congregations have no idea their representative agencies are members of the Center, or are even seriously involved with anticorporate activities.
This is especially true of the Catholic orders because the Catholics are fragmented organizationally. Most orders are divided regionally and into separate congregations. Thus, it is possible for the Dominican Province of St. Albert the Great, based in Chicago, to belong to the Center but for most Dominicans in the United States to be completely unaware of corporate activism and the Interfaith Center.19
Despite the lack of knowledge about corporate activism among a majority of church members, Interfaith income comes principally from annual contributions of member agencies; the minimum for voting privileges is $1,000 or $1,500 for coalitions. The 1982 budget was $478,839, $326,967 of which came from member agencies, $45,000 from foundations, and the remainder from individual gifts and other sources. The United Methodist General Board of Global Ministries gave, from 1981 through 1984, $248,887 dollars.
The Center does not own stock and files no shareholder resolutions; it claims it is only an arena for ecumenically coordinating strategies. Members send representatives to Interfaith working groups, and on the basis of mutual agreements the Interfaith staff does research and drafts shareholder resolutions. It also assists in arranging delegations to discuss or negotiate with management in the solicitation of proxy support for resolutions or the coordination of presentations at annual shareholder meetings.

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Anticorporate Tactics And Attitudes
The Center initiates and coordinates strategy on behalf of its members, and it is also responsible for researching issues: therefore it directly influences member response. The research may sometimes be flawed, but its political instincts seem to work well. After the Center became involved in an antinuclear energy campaign, Scientists and Engineers for Secure Energy (SE2) (an organization which includes five Nobel Laureates) charged that the Center was presenting an "inaccurate picture of the safety and long-term feasibility of nuclear energy." It recommended that the Interfaith Center base its conclusions on scientific data instead of on "transient political pronouncements."20
The Center uses the same tactics with subjects other than nuclear energy. The North American Congress on Latin America, one of the most radical church-funded organizations (see Appendix), wrote a report in 1976 on the Del Monte corporation; it was titled "Del Monte: Bitter Fruits." Being entirely compatible with the Center's philosophy, it was soon incorporated in its Agribusiness Manual. The report claimed that "Del Monte and the banana multinationals . . . will certainly be a major obstacle to the socialist revolution necessary to meet people's needs in the Third World . . . finally, whatever economic benefits producer countries do obtain are not likely to benefit the majority of people, but rather the ruling class groups that control the government."21
In the manual, however, a Center representative admitted that Del Monte wages are "almost always above the minimum," and that it is commonly held that Del Monte is one of the better places to work in developing countries. But the representative complained that although the company provided housing, schools, stores, recreation facilities, and hospitals, Del Monte did not provide food or clothing. In what must be one of the decade's more glaring ideological contradictions, the representative then complained that "the worker and family become wholly dependent upon the corporation to provide their livelihood."22
Further, Interfaith staffers are not exactly unbiased in their individual viewpoints. Sister Marilyn Uline of the Adrian Dominicans, who worked for reform of infant formula companies, related an encounter with Leah Margulies, the Interfaith Center's director of the infant formula campaign. "But, Marilyn," Margulies reportedly said of businessmen, "they're all bastards. If they weren't they'd be living like we're living and doing what we're doing."23
The Center, which is also antidefense, coordinates strategy with organizations such as the Institute for Policy Studies and the American Friends Service Committee (see Appendix). At a three-way conference of these groups held in Washington in 1984 (and paid, in part, by grants from churches), they meditated on "Meeting the Corporate Challenge." As expected, transnational corporations were labeled "the most dynamic, yet destructive agents in the world economy." The triad then laid plans to establish a worldwide clearinghouse on corporate activities at Policy Studies headquarters.24

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The Real Agenda

The reform of corporations is only part of the anticorporate agenda. According to Methodist theologian Thomas Oden, a professor at Drew University, the principal aim is the "creation and intensification of a sense Of guilt.25
This attack against corporations, Oden said, seeks to make "Westerners feel guilty about production and profit, to make corporations feel guilty about bigness and technology, to make church members feel guilty about their political impotence, to make the rich feel guilty about their wealth, to make whites feel guilty about their whiteness, to make males feel guilty about the plight of females, and so on."26
Of course, cultural guilt is psychologically useful to people who desire radical change. The less confident a people feel about their system, the less resistant they are to those who seek to replace it. One of the primary ways in which this guilt is inserted into public discourse is through claims, from both Religious Left leadership and its corporate activists, that the poor in America are getting poorer and nobody cares and that the First World's wealth is based on the exploitation of the Third. Presbyterian, Roman Catholic, and United Church of Christ officials have used this technique, not only through their support of corporate activism, but by producing papers on free enterprise which claim precisely these things.

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Christianity and Free Enterprise

"Christian Faith and Economic Justice," produced by the Presbyterian Council on Theology and Culture in 1984, expressed "solidarity" with Third-World revolutions, stating the developing world is poor because its people have been "colonized, dominated, drained of their surpluses, locked into bondage in which they are poor. . . ." The denomination's General Assembly agreed to distribute copies of the document to all Presbyterian congregations.
Authors of the United Church of Christ paper - which as of 1986 is still in the draft stage and has not yet been submitted for church approval - complain that the Presbyterians have not gone far enough. The first draft of their study document states that the hope that basic human needs can be met by the U.S. and world economy, as it is, is a "dying dream."27 They also suggest that all affluent Americans who profit by the free enterprise system are committing a sin.28
The paper claimed that the premodern economy was a better one because it was an extension of the decision-making process of individuals. The modern economy, it said, is based on scarcity and is left to the workings of the market. There is no mention of the fact that the economic condition of people, even those in the Third World, has dramatically improved in the last two hundred years precisely because of free enterprise.
United Church of Christ authors believe that "God and economics must be brought together," but reject the view that individuals can be God's agents. They assert that the word "steward" is "an outworn word." The authors maintain that the economy must be managed like a "household," include everyone, and provide everyone with the "necessities of life."29
In other words, we return to the familiar Socialist philosophy that people cannot care for themselves and society itself is responsible, not the individual. More alarming is the author's assertion that God does. not endow people with humanity, but people endow themselves by fulfilling a "task." This philosophy denies, by inference, that humanity is created in God's image.
As part of their recommendations for change, the authors urge that United Church of Christ seminaries be transformed to assure that its clergy emerge with similar economic views. They also suggest developing exchanges with such well-known economic successes as Nicaragua, the Soviet Union, China, Cuba, North Vietnam, Eastern Europe, and North Korea, countries which the authors obviously believe would help America to "envision a more equitable economic order than now prevails."30
The first draft of the 1984 Catholic Bishops' "Pastoral Letter on Catholic Social Teaching and the U.S. Economy" was more moderate than the United Church of Christ paper, but it endorsed the welfare state. It endorsed the concept of "economic rights," the right of every person to food, shelter, and employment of what is otherwise "necessary to live with dignity." The letter further stated that the "distribution of income and wealth in the United States is so inequitable that it violates the minimum standard of distributive justice." In exploring how all these needs could be fulfilled by the government, without bankrupting the nation, the bishops suggested that employees buy out firms, especially those that are scheduled to be closed. But they also suggested that the government subsidize the takeover.31
Blaming an "Atlantic-denominated" economy for the ills of the Third World, the bishops suggested that the profits of transnationals be "reconciled with the common good that governments and the multilateral agencies they have created must seek." The bishops apparently believe corporations have only profit at heart and governments only good.32
Contents of the pastoral letter came as no surprise to those who" followed the process in which it was created. Only left-of-center economists addressed the bishops directly on issues concerning the creation of wealth. Gar Alperovitz, codirector of the National Center for Economic Alternatives, told the bishops that America has what it takes to provide a decent life for all its citizens, but it does not choose to do so. Alperovitz argued for a more planned economy as a way of making such decency possible.33
Although the pastoral letter was produced by the Catholic bishops and their staffs, it was heavily influenced by Protestant bureaucratic staff members. Rev. J. Oscar McCloud, director of the Presbyterian Program Agency, Rev. Fred Allen, former associate general secretary of the United Methodist Board of Church and Society, William Diehl, a management consultant to the Lutherans, and representatives from the Episcopal and United Church of Christ all testified in committee hearings.
McCloud told the bishops that the Presbyterian Church "has turned significant energy to ideas such as shared ownership, community control of industry, and the hope of a social and political process that would do as many European countries have already done." Allen read a statement which he had earlier presented to the United Methodists in the form of a resolution which they had rejected - a fact that he did not disclose at the hearing. It vigorously criticized capitalism as it exists in the United States.34
The letter's second draft, released in October 1985, was generally considered less radical in its condemnat ion of free enterprise than the first and placed more emphasis on community and individual responsibility. Nonetheless, it did not retreat from its basic belief that it is the government's "moral function" to bestow economic rights on its citizens. Archbishop Weakland of Milwaukee made the most accurate comment on the second draft when he said, "The language has been toned down a bit, but the ideas haven't."35

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Free Enterprise In Christian History

As politically biased as the letter seemed, it was probably just a logical extension of Catholic economic thought. The Roman Catholic Church has traditionally favored mercantilism and has frowned upon free enterprise as a system which is subject to abuse. Weakland, commenting on the second draft, said that endorsing unfettered capitalism would violate Catholic teaching because "the glorification of rugged individualism can often lead to a neglect of the common good, that the profit motive of self-interest can often lead to greed and exploitation. . ."36 There is nothing wrong with this idea. There is a lot of truth in it. It needs, however, to be balanced with the recognition that free enterprise also encourages freedom among peoples. When the balance in ideas is absent, the bishops' pastoral letters are politically useful to those who are more dedicated to politics than they are to charity.
Michael Novak believes Catholic social teaching errs in that it is closer to a "mild form of socialism, than to democratic capitalism. It has little to say about markets and incentives, the ethics of production, and the habits, disciplines, and organization necessary for the creation of wealth. It seems to take the production of wealth for granted (as if wealth were as limited and static as in medieval times) and preoccupied itself with appeals for redistribution. The discoveries of modern economics seem to have affected it hardly at all."37
Novak gently points out that Catholics could be "more modest in speaking of development" because the record of wholly Catholic countries in the "history of economic and social development is not entirely laudable." Novak did not list these countries, but the most typical examples are in South and Central America, regions not known for their modern economic advancement.38
Protestantism, however, does not have the excuse of historical distaste for capitalism. Instead, Protestantism was partially responsible for the rise of capitalism, and capitalism, in turn, was responsible for much of the Protestant success in Europe. When Catholicism, and its emphasis on mercantilism, was discarded in Northern Europe, capitalism flourished. The loosening of social ties as a result of Protestantism created a drive in humanity to prove itself by work, and not simply define itself by its relationship with God or social level.
The Protestant approach to economics, therefore, was based on the assumption that if business is not perfect, it is a legitimate and necessary part of the social order. Sometimes sectors of the Protestant church have supported labor's efforts to improve conditions, sometimes they have not. However, Protestantism has never before questioned the legitimacy of free enterprise. Only in this century have Protestants begun to question that assumption. Unfortunately, both the assumption and the doubt have rarely been examined logically or on a theologically sound basis.
Now most church social thought is based on advocacy for the poor and the rejected (seen in terms of "Christ's standing beside us as intercessor. . ."), self-determination and self-development of peoples (the precursors of liberation theology), and "enablement, or later empowerment." These ideas generally imply that systems are basically evil and must be changed, rather than the older belief that systems need to evolve and people to change.39

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The Polemical Church

Not only do churches now produce papers on economic matters which claim free enterprise is evil (or at least not a positive system), but church speakers, church literature, and resolutions often claim the same thing. They almost never offer proof of their claims, but depend on emotional rhetoric about the poor, and use Biblical references about Christian responsibility which are taken out of context.
A typical example involves remarks made by a Garrett Evangelical Theological Seminary professor to a preaching clinic in Nashville, sponsored by the United Methodist Publishing House in cooperation with Vanderbilt University Divinity School, Rosemary Radford Ruether charged that the affluent (capitalists) "can no longer run to the private worlds of therapy and health food . . . for the time of exploitation is running out. . . ." In another address she said that "Redemption overturns the present world order. It changes social systems which create and perpetuate inhumanity."40
Much church literature does not even bother with Scriptural references. It proceeds directly into political pronouncements. 3rd World Sermon Notes, a Presbyterian publication which offers sermon suggestions for ministers, published "Stones of Violence" in 1984. Written by United Methodist minister Jim Sessions, the article maintained that "Like colonies of the Third World, Appalachia was appropriated by economic interests in Europe and the Northeastern U.S. for use with the active collaboration of the government. . . . The antidote for all this is not distance, or even charity for the poor but active solidarity with the poor." Presbyterian ministers were urged to tell their members not to waste their time on charity but to work against "systemic" evils.41

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The World Council Combats Free Enterprise

The World Council of Churches is blatantly and unashamedly opposed to the free market and makes full use of its U.S. funds to combat the free enterprise system. It channels money from U.S. churches to the Christian Conference of Asia, the Urban Rural Mission, and other foreign programs. The Conference and Mission share offices in Hong Kong. They evidently do not stress trade union values.
A meeting of the Christian Conference-Urban Mission committee in February 1983 in Bangladesh discussed the "economic domination and exploitation by TNCs (transnational corporations)." They also approved an annual budget of $345,000 for 1983 and the same for 1984, to be provided by non-Asian churches.42
The World Council's Program on Transnational Corporations in 1982 adopted a report which states that "This system (world market system) and TNC's operation within it are incompatible with our vision of a just, participatory and sustainable society. . . ." The document was accepted at the 1983 Vancouver World Council of Churches Assembly.43
Yet, when the literature is examined in depth, it is clear that the World Council feels as much enmity toward the U.S. as it does transnational corporations. The World Council almost always links transnational corporations with America despite the fact that American corporations make up only 44 percent of the world's largest firms and Third-World transnationals are becoming much more common. For example, South Korea's Samsung Group, a general trading company, operates in twenty-nine countries in products such as hotel construction and sugar refining. Hindustan Machine, an Indian company, sells machine tools to Algeria, and SGV, a Philippine firm, does public accounting and provides management services in every Asian capital.
In its battle against free enterprise, the World Council and the denominations have sometimes called for a world economic order or have advocated some sort of international control of the earth's economies. Typical was the U.N. Law of the Sea Treaty, a project for which the United Methodist Board of Global Ministries alone spent $203,449 between 1981 and 1983. Had it been signed by the United States, the treaty would have authorized the U.N. to equally distribute sea products (minerals, oil, etc.) regardless of who did the work or made the investment. Poor Third-World countries would have undoubtedly found this a profitable treaty; however, it is not a fair treaty and it is unlikely that a bureaucratic, totally political institution such as the U.N. could have been impartial or efficient.
Why the World Council and mainline denominations advocate such quixotic schemes is not really a mystery. Every ideology needs an appealing belief system or it cannot gather adherents to its cause. Therefore, the Religious Left puts forth the notion that the fortunes of the world's disadvantaged would improve if the world's economic system were under a gigantic bureaucracy. Another such assumption - which is constantly repeated - is that America's poor face a deteriorating economic situation. It is also asserted that the free enterprise system is not fair to the poor and they need more help from the callous U.S. government. The former assertion is false, and the latter is highly debatable.

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The Plight Of The Poor Improves

First, the economic situation is not deteriorating for a majority of America's poor. Author Ben Wattenberg has pointed out that there has been a definite improvement during the last thirty years for Americans on the lower economic scale. In 1950 the U.S. Social Security Administration found that 22.4 percent of Americans were below the poverty level. Thanks to massive efforts by the government to improve the situation, and to a growing economy, by 1979 only 11.6 percent were below that level.44
Although the U.S. Census Bureau said in 1983 that there were about eleven million more in poverty than in 1979, a report issued bv the Joint Center for Political Studies declared that the increase was due to a downturn in the economy and not the cutting of government programs, as has been claimed by the Religious Left.
The Center's claims were verified in the summer of 1985 when it was announced that 1.8 million people climbed out of poverty in 1984 - nearly a full percentage point - thanks to economic recovery. The drop in poverty, the Census Bureau said, was the largest since 1976. Those in poverty now (1986) comprise 14.4 percent, and that figure should improve if the economy continues in a growth pattern.

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Hidden Costs In Government Welfare Spending

There is an often repeated claim that America (and its government) cares less about the poor than in former years. The figures prove differently. The United States now spends about 5 percent more on its social welfare expenditures as a percentage of its Gross National Product than it did in 1950. In 1970 a total of $1,354 dollars per person was spent on social and welfare spending, but the figure rose in 1980 to $2,140, a total amount in 1980 of $492 billion.45 Overall, "civilian social welfare costs increased by twenty times from 1950 to 1980, in constant dollars." During the same time period, the population of the United States only increased by half.46
Poverty figures are also suspect because statisticians do not include benefits received from government agencies. In 1982 the federal government spent $10.2 billion dollars for food stamps for over twenty-one million people, but the value was not included in poverty statistics. The same is true for Medicaid and public housing, legal services, day-care programs, transportation programs, counseling, energy assistance, educational programs, and earned income tax credit.47
In-kind transfers, such as the ones just mentioned, went from $5.8 billion per year in 1965 to $98.5 billion in 1982, in constant 1982 dollars. Federal statisticians did not count those transfers in deciding how many were over and under the poverty line. When a Congressional Budget Office study counted in-kind benefits in 1976, the poverty rate dived from 11.8 percent to 6.4. Further, the social programs have not been cut from 1979 levels, but have only had their planned increases cut. Social spending is still going up. In 1970, 6.8 percent of the GNP went to social "safety net." In 1985 the total was 11.3 percent.48
Everyone does not agree on the poverty figures or why there is less poverty. Author Charles Murray claims that 30 percent of the population was in poverty in 1950 and it declined to 18 percent by 1964, It dipped to 11 percent in 1973, but then began rising again. Poverty figures, he said, stopped declining during the years in which the government spent its greatest amount of money.49 No matter which argument is correct, there is less poverty and there is no evidence that a great many people will slide under the poverty line in the foreseeable future. And it is clear that American society, through its government, has done what it could based on the knowledge it has.

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What Causes Poverty?

Therefore, the real argument about poverty does not lie in whether it is getting better or worse, but what causes poverty in the first place. The Religious Left has either ignored this question or attributed the cause to the government or the free enterprise system. In ignoring the, real causes of poverty, the church has done the poor a disservice. Sociologists are now charging the very welfare system which has done its best to defeat poverty in this country with creating a system of dependency. This dependency has allegedly led, in turn, to the creation of a poor underclass of about three million blacks who have had no incentive to improve themselves.
In Losing Ground: American Social Policy 1950-1980, Charles Murray argues that the welfare programs created in the 1960s have made it easy for the poor to behave in ways that are destructive to their character and their lives. One vivid example lies in the damage done to black families. In 1980, 48 percent of all live births among blacks were illegitimate, and that figure has continued to rise. This compares to only 17 percent in 1950. Among black teenagers from ages fifteen to nineteen, 82 percent of all births are illegitimate. This is one of the highest illegitimate birthrates in the world.50 Let us not forget what illegitimacy means. It means that some child does not have a father. Many babies born to these poor teenagers are also underweight and tend to have medical problems. It also means that the mother will have a much more difficult time climbing out of poverty and giving her children the ability to do so. Almost 70 percent of the black poor live in homes in which there is no responsible adult male.51
Respected black scholars such as Thomas Sowell, Walter Williams, and Glenn Loury agree with Murray. They believe the welfare system is responsible for a growing class of people who are chronically dependent, many of whom are children. There are also very few black scholars among the group concerned with welfare dependency who believe it is free enterprise that is to blame for poverty. Robert Woodson, head of the National Center for Neighborhood Enterprise, has called the welfare system "welfare colonialism." His answer to the problem is to "rekindle the entrepreneurial spirit" in black communities.52
Arguments for and against welfare are obviously worthy of debate. However, nothing that Murray or any other social critic has said concerning welfare has had an effect on the views of church leadership and bureaucracy-they have not even been considered. It is simply taken for granted that the poor must be supported and the public is selfish if it does not do so. This obdurate attitude can either be attributed to lack of flexibility, or to people who find their arguments too politically useful to consider change. Whatever the reason, it does not help the poor to ignore the real debate concerning their problems. Moreover, the Religious Left has yet to explain why they believe in a socialism from which Great Britain, Ireland, France, and China are retreating.
As for the claim that free enterprise is to blame for poverty, that claim is wrong. But the Religious Left is not totally to blame for its antipathy for capitalism. American enterprise must take part of the blame on itself that so many of those who participate in the system do not believe in its moral legitimacy. The system has not taken the time to defend itself or to produce an apologia for its existence. It has left ideology to the Marxists.

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The Spirit Of Democratic Capitalism

That situation recently changed when theologian Michael Novak produced The Spirit of Democratic Capitalism - a well-reasoned defense of a system Novak explains as a merger between a market economy and a political system respectful of individual rights; a system of "cultural institutions moved by ideals of liberty and justice for all." Novak asserts that a political democracy is compatible in practice only with a market economy because both systems spring from identical historical impulses: to limit the power of the state, and to liberate the energy of individuals and communities, both of which are nourished by a pluralistic liberal culture.53
Economic liberties without political liberties are inherently unstable, Novak maintains, because citizens with one soon demand the other. But on the other hand, he says, "the state which does not recognize limits to its power in the economic sphere inevitably destroys liberties in the political sphere." Novak also points out that "democratic polities depend upon the reality of economic growth.54
"No traditional society - indeed, no society in history - has ever produced strict equality among individuals or classes," Novak writes. "Real differences in talent, aspiration, and application inexorably individuate humans. Given the diversity and liberty of human life, no fair and free system can possibly guarantee equal outcomes. A democratic system depends for its legitimacy, therefore, not upon results but upon a sense of equal opportunity.55
"Such legitimacy flows from the belief of all individuals that they can better their condition. This belief can be realized only under conditions of economic growth. Liberty requires expanse and openness."56

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Capitalism Improves Living Conditions

Capitalism, Novak maintains, has rescued the world from the poverty in which it was captive prior to 1776. Until two hundred years ago the world practiced mercantilism, based on national policies of accumulating precious metals, establishing colonies (which were exploited for their natural resources) and merchant marines, and developing industry and mining to attain a favorable balance of trade.57
Instead of prospering, most of the world was trapped in poverty. Every generation famines descended on the civilized world; in the 1780s, four-fifths of French families devoted 90 percent of their incomes to buying bread (and only bread) to feed themselves. Life expectancy in 1795, in France, was 27.3 years for women and 23.4 for men. In 1800, fewer than a thousand Germans had income as high as $1,000. In 1800, there were more private business corporations in the United States than in all of Europe combined.58
Noting that under mercantilism society was so static that there had been few advances in conveniences, Novak cited the almost unknown state of hygiene in both the civilized and uncivilized world prior to the market society. People excreted wherever they could, and the streets were used as public sewers. Successful medicine did not exist, and entire populations were illiterate. In Africa, the wheel had never been invented."59
"The invention of the market economy in Great Britain and the United States more profoundly revolutionized the world between 1800 and the present than any other single force," Novak wrote.60
Yet this is the system that church leadership finds profoundly flawed.

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Latin America's Political Mythology

Luis Burstin, a Costa Rican doctor and journalist, calls claims that the northern nations are responsible for the poverty of Latin America "political mythology." Burstin points out that hunger, political turmoil, instability, terrorism, and corruption are the oldest stories in Latin America and did not begin with American investment in the region.61
"Why is it," Burstin wrote, "that the so-called Fourth World, the least developed countries of the Third World such as Afghanistan, Chad, Bhutan, Burundi, Nepal, and Sikkim, did not until very recently have-any external economic contacts, and how is it that most of them were never Western colonies?"62
Burstin also pointed out that while Latins have claimed that Latin American dependency on the United States has produced backwardnegs, in Canada, a country more "dependent . . . to a degree that has no equal in this world, this relationship has not produced backwardness but a modern, progressive, and rich country?" Hong Kong, Taiwan, Singapore, and South Korea were poor and backward nations three decades ago, Burstin said, but they are now some of the most prosperous and vital in the world.63
"They were invaded by foreign capital and technology; they became dependent on Western imperialism and markets; and yet in just three decades they left all their backwardness behind and are now jumping into the era of the highest technology," he wrote.64
Bishops, denominational groups, and ecumenical bodies who plan to write papers on our economic system would be advised to find out what people want, instead of telling them what they need. When the world is actually asked what it wants, the evidence suggests it wants a free market. Gallup conducted a poll in 1976 to find out what mankind thinks of itself. The study concluded that people in developing countries want more industry by ratios exceeding 20 to 1. In short, they want to develop like Western societies and need jobs and investment capital to do so.65

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The Opinion Gap About Free Enterprise

The real questions concerning contrasting political views, however, are not whether the Interfaith Center is truthful in its claims, or whether the anticorporate activists are also anticapitalists, or even whether church leaders are Socialists at heart, but whether grass-roots church members approve of their activities and approve of funding organizations which are determined to replace the present economic system. Presbyterian membership, for one, does not approve of all that is done in its name, although it does not seem able to curb its bureaucracies and leadership. A Presbyterian Task Force investigated the church's attitudes toward corporate activism and admitted in its report that the church's general assembly had not affirmed the legitimacy of the U.S. economic system and had "dwelt at length on the flaws and imperfections of our system and its institutions."66
The task force report concluded that the Presbyterian Church's anticorporate activities revealed a serious imbalance in the church's mission activities; that they had challenged and condemned the legitimacy of "necessary" economic activity and thus weakened the church.67 ". . . this imbalance oversimplifies the world of ambiguous choices and trade-offs found in all economic life, and forgets that all economic development carries significant costs . . . when the church's approach to the transnational corporation loses its sense of balance, it risks the constant polarization that leads to counterproductive alienation. We acknowledge that faithful action requires criticism and conflict, but the church must not separate the prophetic action demanded by the gospel from the support and affirmation that are also demanded."68
The report further stated that according to a poll taken of Presbyterian membership in 1981, the clergy and church members disagreed to such an extent on economic matters that more than a majority - up to 60 percent - of all Presbyterians had passed beyond disagreement to "genuine polarization." They also significantly disagree on the approach the church should take when dealing with questions of economics and transnational corporations. Church professionals "by training and inclination" focus primarily on the just distribution of wealth, the report noted, while membership is occupied with the tasks related to its production.69
About one-fifth of Presbyterian pastors and one-fifth of the lay members are at opposite poles on economic issues, the report said. "This is not surprising when we note that thirty-nine percent of members believe that corporations are overly regulated by government, while only sixteen percent of pastors do."70
As a whole, poll findings "further illuminated the increasing tension among us," pointing out that most Presbyterian pastors approved of using pressure tactics, such as stockholder initiatives and boycotts, and membership disagreed to the point that the issues had become "visible opposition."71
It is a telling point that when church membership does become involved with issues involving corporate activism, there is often a Predictable halt in the propaganda. The United Methodists sensibly set up a task force to study the Nestié boycott after several of its agencies had indicated support for INFACT. The task force report recommended that the United Methodist Church, its boards and agencies, not endorse the boycott.72
They went further than that, however. While endorsing church involvement in social issues deriving from corporate policy, they pointed out that two of their general boards and agencies had persisted in the boycott despite cooperation by Nestlé in ending alleged abuses. They recommended that the church work with business instead of immediately resorting to sanctions. They stated that the church could not let itself be used in these issues by "persons and groups who may not fully share the church's deeper theological and ethical commitments."73
Finally - and most importantly - the task force decided that it could not "resolve issues on a purely ideological basis. . . . As a Task Force we recognize that the great debate between capitalism and socialism is important . . . at the same time, it seems clear that multinational corporations, such as the ones with which we have been in dialogue, will be a part of the international scene for a long time to come."74
The Task Force report was a victory for Nestié and for democratic capitalism in general.

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The Betrayal of the Church Copyright © 1986 by Edmund W. Robb and Julia Robb. Published by Crossway Books, a division of Good News Publishers, Westchester, Illinois 60153

All rights reserved. No part of this publication may be reproduced, stored in retrieval system or transmitted in any form by any means, electronic, mechanical, photocopy, recording, or otherwise, without the prior permission of the publisher, except as provided by USA copyright law.




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