How a Bible Written Before Stock Markets Can Guide Stock Investing

We want our investing to be guided by the Bible. But the Bible doesn’t talk directly about modern markets, because they didn’t exist when it was written. What do we do?

In part one, we saw that the common practice of relying on the Bible only for broad, general principles leaves us with a lot of gaps. An alternative approach is to see the Bible as a window into an “implied world.” The story of that world is told in the Bible, and that same story is also played out in our own lives, because the Bible’s story of the world is the true story of the real world, and we are part of that story.

Here in part two, we’re going to look at one example — stock investing — for how this can work in practice. Of course an article of this length can’t outline all the ways the Bible might reshape investing. The point, though, is to demonstrate how it can do so, in order to encourage the development of a more robust biblical-theological framework for investing.

Wealth and What to Do with It: Giving and Lending

Let’s start on a very broad level. To be an investor, in addition to having some kind of access to financial markets, you need one specific thing: regular and stable possession of some level of wealth over and above your subsistence needs. Unlike today,  relatively few people in the biblical world met that qualification.  But the biblical authors do sometimes speak either to or about such people.

If asked what the Bible has to say about how people should use their wealth, most people’s first answer will be some variation of “be generous to those in need.” Most people think of generosity exclusively in terms of giving. There has been a wonderful work of God in the past half-century drawing increased attention to the biblical theme of giving.

But alongside giving, the Bible also commends lending money as a form of generosity. Consider just a few examples: 

• “It is well with the man who deals generously and lends; who conducts his affairs with justice.” (Psalms 112:5)
• “You shall not harden your heart or shut your hand against your poor brother, you shall open your hand to him and lend him sufficient for his need, whatever it may be.” (Deuteronomy 15:7-8)
• “Give to the one who begs from you, and do not refuse the one who would borrow from you.” (Matthew 5:42)

The person-to-person lending commended in these passages is the closest thing we find in our Bible to stock investing. Similarly to lending,  the essence of stock investing is to make our financial capital available to others who want to use it,  in exchange for future returns produced by their use of the capital. So the Bible’s commendation of lending represents an especially rich biblical resource for getting beyond broad ethical generalities in our application of the Bible to stock investing.

Investing for the Benefit of Others

In verses like those quoted above, we can see that lending is as much a part of God’s  story of justice as giving. They show that the primary purpose of lending should not be our own gain. It should be the benefit that lending can provide to others, extending economic flourishing — directly and indirectly — to people who need it.

In the same way, when we invest in stocks, we do not need to view the stock market merely as a competitive field of individual gain-seekers. We can see it instead as an opportunity to make our financial capital available to productive and life-giving enterprises that bring flourishing to the world. And we can prioritize investments that serve the common good rather than only asking how much we personally will make.

Seen in this light, the many biblical injunctions against hoarding – such as  Jesus’ parable of the rich fool – take on a new significance. It is tempting to read these merely as a concern that hoarded goods will go to waste instead of being used for a good purpose. Since the money we invest in the stock market isn’t going to waste, we’re in the clear. Right? But the next question should be: How much good are our investments actually doing? And what kind of good, and for whom? Could my portfolio be something like the big barns of the rich fool?

Investing as Assuming Risk for Good Reasons

How can lending be a form of generosity – as the Bible verses above assert – when the money is not given as a gift, but is expected to be returned? Because the lender is still giving something: the assumption of the risk that the loan won’t be repaid. When someone can’t repay us, we should cheerfully count the loan as a gift, and move on without holding a record of the loss against the person we lent to. (This helps us make sense of the seemingly paradoxical command in Luke 6:35 to “lend, expecting nothing in return.”)

Similarly, stock investing is a way we can make our money available to others for their flourishing by assuming risk. Good enterprises that serve human flourishing need capital to operate, yet there is always some risk that the enterprise will fail and the capital will be lost. This means someone has to take on financial risk if these good enterprises are going to do their work. Taking wise, prudent risks to bring life to the world is a gift we can give through our portfolios.

This idea that the assumption of risk for the sake of the common good is a form of generosity sheds new light on the parable of the talents and the parable of the minas. The “wicked and slothful” financial steward in each parable withholds money from investment for fear it will be lost. The Theology of Work Project  comments that “the parable suggests if we choose to accept Jesus as king, we must expect to lead risky lives.” Willingness to take on financial risk would seem to be an obvious application!

Investing to Destroy Material Poverty

The Bible passages on lending quoted above focus on lending to the poor. In the ancient world, that was easily the predominant mode of lending. In modern stock investing, however, we are not usually working directly with the poor.

It is worth stating very clearly that stock investing is not a substitute for personally serving people in need,  including by lending them money. There are also companies and funds we can invest in that focus on things like business creation in underserved communities, as we feel led to make that a priority in our investing.

However, it is also the case that ordinary stock investing serves the poor in vitally important ways, if we do it wisely. When we invest in stock, we are providing money to enterprises that will use it to carry out their activities. If we choose to invest in enterprises that do good, productive work that serves communities and helps God’s world to flourish, we are helping to fuel the kind of authentic, sustainable economic growth that is  absolutely essential for lifting the poor out of material poverty in the long term and on a mass scale.

As underdeveloped nations around the world have gained their first real access to modern markets, fueled by stock investing, they have experienced dramatic economic growth, and the result has been a precipitous drop in material poverty. A  study published by the National Bureau of Economic Research found that the number of people living on $1 per day or less dropped by 80% between 1970 and 2006; measurements of living standards more than doubled in the same period. Other researchers’ estimates yield different numbers, but all estimates agree that the drop in global poverty has been very large.

Of course, many problems remain, and markets are not a cure-all. The end of material poverty does not necessarily bring with it the end of social and relational poverty, to say nothing of spiritual poverty; and  economic growth also introduces wholly new kinds of problems that societies living at subsistence level simply didn’t have. But economic growth and the stock investing that makes it possible must be at least one indispensable element in any serious strategy to extend wealth and opportunity to others.

Investing for the Life of the World

With  the benefits of economic growth in mind, we can see that even making a return can be part of the good we can do through investing. Our primary purpose should be to serve others and bring life to the world. However, if we invest in enterprises that are doing genuinely good and life-giving work, then the growth of our portfolios is not only good for us, it’s good for the poor and for the common good. It reflects the fruitfulness that God has infused into his good world.

Ultimately, this is an important way we can participate in the biblical story of  God’s creation of the world as a dynamic, growing and changing project entrusted to human stewardship. God did not just put Adam and Eve in the garden to maintain the world as it was. His intent was that we develop creation’s potential, so it would glorify God more and more over time. The modern stock investment system makes it possible to create new things and develop the world,  taking our place in the biblical story of the growth of God’s world.

On the one hand, we are summoned to overcome the self-centered focus on returns for ourselves that dominates our cultural investing paradigm. On the other hand, we need not embrace – we actually ought to avoid – approaches that deprecate ordinary stock investing as having no moral value and no intrinsic place in God’s story of justice, or that recognize stock investing as valuable only in highly specialized contexts or only if certain very specific demands are met. Instead, we should explore how our portfolios can bring life to the world.

This is only a first step. But it does show that even a small dose of God’s word has the power to catalyze a dramatic transformation in our decision-making, no matter how great the historical gap between its times and ours. And so, let us be doers of the word and not hearers only – it’s time to reevaluate our investments with the big story of the Bible in mind.