Page3

GoingBroke
Bankruptcy,BusinessEthics,andtheBible
JohnR.Sutherland
ForewordbyWallyKroeker

Page4

CanadianCataloguinginPublicationData
Sutherland,JohnR.,1947
Goingbroke:bankruptcy,businessethics,andtheBible
Includesbibliographicalreferencesandindex.
ISBN0836135563
1.Finance,PersonalReligiousaspectsChristianity.
2.BankruptcyMoralandethicalaspects.3.Businessethics.
4.BankruptcyCanada.5.BankruptcyUnitedStates.I.Title.
HF5388.S81991261.8'5C910937788

ThepaperusedinthispublicationisrecycledandmeetstheminimumrequirementsofAmericanNationalStandardforInformationSciencesPermanenceofPaper
forPrintedLibraryMaterials,ANSIZ39.481984.
Unlessotherwisemarked,ScripturequotationsarefromtheHolyBible:NewInternationalVersion.Copyright1973,1978,1984InternationalBibleSociety.
UsedbypermissionofZondervanBiblePublishers.
ScriptureexcerptmarkedJBisfromTheJerusalemBible,copyright1966byDarton,Longman&Todd,Ltd.andDoubleday,adivisionofBantam,Doubleday,
DellPublishingGroup,Inc.Reprintedbypermission.
Chapter8reproducesmaterialfrom"TheEthicsofBankruptcy:ABiblicalPerspective,"byJohnR.Sutherland,originallypublishedintheJournalofBusinessEthics,
Volume7,No.12,December1988,pp.917927.Copyright1988.UsedbypermissionofKluwerAcademicPublishers.
GOINGBROKE
Copyright1991byHeraldPress,Waterloo,Ont.N2L6H7
PublishedsimultaneouslyintheUnitedStatesbyHeraldPress,Scottdale,Pa.15683.Allrightsreserved.
LibraryofCongressCatalogNumber:91070935
InternationalStandardBookNumber:0836135563
PrintedintheUnitedStatesofAmerica.
BookandcoverdesignbyMerrillR.Miller.
1234567891097969594939291

Page5

Dedicatedtomyfather
DonSutherland,
andtothememoryofmymother,
Reita,
andtomyparentsinlaw,
JakeandMarjorieMartin
Myson,keepyourfather'scommands
anddonotforsakeyourmother'steaching.
Forthesecommandsarealamp,
thisteachingisalight.
Proverbs6:20,23

Page7

CONTENTS
9

Introduction

12

Bankruptcy:TheEconomicandHumanCost

19

1.Bankruptcy:TheGrimScenario

21

2.TheEmotionalandSpiritualImpactofBankruptcy

27

Bankruptcy:WhereItCamefromandHowItWorks

40

3.TheMajorCausesofBankruptcy

42

4.TheBankruptcyProcessandItsAlternatives

53

Bankruptcy,BusinessEthics,andtheBible

65

5.Ethics:How?Why?Whose?

67

6.OutoftheIvoryTowerandintotheMarketplace

92

Foreword
byWallyKroeker

7.WhattheBibleTeachesaboutDebt

118

8.TheEthicsofBankruptcy:ABiblicalPerspective

131

Notes

147

Bibliography

155

SubjectIndex

163

ScriptureIndex

171

TheAuthor

175

Page9

FOREWORD
AmaninachurchIonceattendedlosthishome,vehicle,andsavingsthroughforcedbankruptcy.Whenheaskedthepastorforsupport,hewasurgedtostepdown
fromtwochurchboards.Itseemshisbusinessdilemmamadehimunfitforleadership.
Anothervictimtoldmeofbeingostracizedafterhelosthisbusiness.OnefellowChristianwouldleavechurchbyasidedoortoavoidhavingtotalktohim.
Suchsadcasesarenotunusual.TheChristianchurchdoesnotalwaysshineitsbestonmemberswhosufferthisdegradingfate.Itoftenofferscondemnationrather
thancompassion.Thatisbecausebankruptcyisfrequentlyseenasnotonlyabusinessfailurebutalsoamoralfailure.Sometimes,tobesure,bankruptcyincludes
moralfailure.Butnotalways.JohnSutherland'stimelybookwillhelpthechurchanditsbusinesscommunityfashionamoreredemptiveapproachtothisthornyissue.
AsSutherlandshowssowell,themaladyofbankruptcyisnotgoingaway.Wehearthelatest"bodycount"inthedailynewsoratthelunchcounter.Every
businesspersonknowssomeonewhohassufferedbusinessfailure,andintheseuncertaintimesthethreatofithangsovermanyotherslikeaswordofDamocles.
Norarenonbusinessfolksimmuneinthisageofrecklessdebt.CreditexpertssaytheaverageNorthAmericanfamilyisonlythreeweeksawayfrompersonal
bankruptcy.Soonerorlater,itcouldhappentosomeoneclose.
Thisisnotonlyabookaboutbankruptcy,however.Itisalsoabookaboutbusinessmorality,ethicaltheory,andChristiandiscipleship.Chapter5,forexample,isan
excel

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lentintroductiontotherealmofethicaldecisionmaking.Sutherlandanalyzesvariousmoralgridsandshowstheirweaknesseswhenappliedtoeverydaybusiness
problems.HeartfullyexploreswhatScripturehastosayaboutpressingissuesofjustice,propertyrights,preservationofthefamily,andcareforsociety'sweaker
members.
Anyonewholendsorborrowsmoneyoughttopaycarefulattentiontochapter7,"WhattheBibleTeachesAboutDebt."Concisebutthorough,itisasgooda
treatmentasyou'llfind.
FromhereSutherlandgoesintowhatScripturemightteachusontheethicsofbankruptcy.Clearlythebiblicalwritersexpectpeopletopaytheirdebtsbutthisis
balancedbysuchconsiderationsastheneedforcompassionandthecalltocanceldebtsatperiodicintervals(sabbaticalandJubileeyears).
"Nonoblegoalisachievedwhenscrupulousdebtorsgetoffscotfree,"Sutherlandwrites."ButtheOldTestamentpoliticaleconomydidprovideforthecancellationof
debtsasanactofmercy,withnostigmaattached."
Sutherlandpartscompanywiththosewhobelievebankruptcyisalwayswrong.Buthedoesnotclaimitisalwaysright.Manybusinessesfailbecauseof
mismanagement,lackofintegrity,greed,andabuseofcredit.Althoughtheforgivenessofdebtthroughbankruptcyisalegitimateoption,"Christianbusinesspeople
muststillseetheirbusinessinvolvementsasserviceinGod'snameandactaccordingly."
GoingBrokedeservesseriousreadingbyawideaudience.Itbelongsoneverypastor'sdeskandineverychurchlibrary.It'sgreatgristforSundayschoolorsmall
groupdiscussion.Seasonedexecutives,aswellasyoungpeopleenteringthebusinessworld,willhavetheirethicaledgesharpenedbythesolidmoralinsights,
abundantpracticalillustrations,andcontinualencouragementtolodgetheircareerfirmlyunderthelordshipofChrist.

Page11

Thoseonthebrinkoffinancialruinwillfindilluminationinchapter4,"TheBankruptcyProcessandItsAlternatives."AndanystudentofChristianbusinessethicswill
findthebibliographyaloneworththepriceofthebook.
MyhatisofftoJohnSutherlandfortacklingthisdifficulttopic.GoingBrokeisanimportantsteptowardhelpingworkingChristiansbridgetheSundayMondaygap.
ItwillhelpthechurchbecomeamorefaithfulandcompassionateagentofChristinaneedyworld.
WALLYKROEKER,
EDITOR,THEMARKETPLACE
MENNONITEECONOMICDEVELOPMENTASSOCIATESWINNIPEG,MANITOBA

Page12

INTRODUCTION
WithoutGod,everythingispermitted.
TheBrothersKaramazov,Dostoevski

Bankruptcystatisticsgrabbedtheheadlinesintheearly1980s,thenfadedfrompublicattentionastheeconomyimproved.Asofthiswriting,theeconomyisagain
weakeningandbankruptcyisagainbeingseenasamajorproblem.
Inthe12monthsendedJune30,1989,bankruptcyfilingsintheUnitedStatesrose12.8%toanewoneyearhighof725,484cases,almosttripletherecessionary
yearsof1981or1982.InCanada,thenumberofbusinessandconsumerbankruptciesisapproachingrecordlevels.Thefrighteningfactisthatonlyoneinfive
businessfailuresshowsupinofficialbankruptcystatistics.
Theethicsofbankruptcyaregreatlydebated.Itshorribleimpactisnot.ConsidertheturmoilofaMennonitebusinessmanwhoranahighlysuccessfulautomobile
dealershipfor40years.
Thateveningthebankerphones.Hewantstoseemeinmyofficeateightinthemorning.
Imeethim.Heistherewithhislawyer,thereceiver,andthebailiff.Thelawyerreadsthedemand."Canyoupayoffyourloaninthenexthour?"Howmanypeoplecouldrepay
theiroperatingloaninthattime?Icouldn't.Therehadbeennopreviousmentionofforeclosure.Thereceiverasksmetocallmyemployeestogether.Hefireseveryone.Thebailiff
changesthelock.Theytakemycar.Theyaccompanymetomyhousetopickupmywife'scar.By9:30thesameday:40yearsofhardwork,allmydreams,myfuture,andmy
retirementaregone.

Page13
Ihavenoincome.
Ihavenoplacetowork.
Ihavenostatus.
Noonewantsme.
SuddenlyIrealizeIhavenomoney.Ihavenojob.TheonlyvehicleIhaveisacarIboughtformyteenagedaughterafewmonthsago.Iwillloseourhome.
EverythingI'veworkedforisgone.
Myemployeesarepaidtheirsalariesandvacationpay.Igetnothing.
WhatwillIdo?
Iamangryandashamed.
Iamafailure.
Myprideishurt.
Iamdisappointedwithpeople,thechurch,andfriends.
IquestionGod,evenblamehim.
Iwonderaboutmyfaith.
HowmuchsufferingcanItakeandsurvive?1

Mostpeopleacknowledgethatbankruptcycantakeitsemotionalandspiritualtoll.Many,however,questionitsethicsforavarietyofreasons.Peoplewho
subscribetothe"healthandwealthgospel"questionabankruptperson'sfaithorobedience.Theyassumethatbusinessfailureisasuresignthatthebusinesspersonis
outofGod'sfavor.OtherChristiansbelievetheBibleteachesthatalldebtsmustberepaidregardlessoffinancialdifficulties.
Formanypeople,bankruptcyis,ofcourse,simplyalegitimatepartoftheworldofeconomicaffairs.Theythinkitshouldbeseenasacompletelyacceptablebusiness
tacticregrettable,perhaps,andembarrassing,butinnowayshamefulorunethical.
ConsiderTom,aconsultantwhodeclaredbankruptcyafterhisfirmfloundered,leavinghimwithdebtsof$80,000indeferredtaxesand$25,000forleasedoffice
equipment.
Tomdiscoveredthatthe"socialdisgrace"ofhisbankruptcywasn'tsuchadisgraceafterall.Foronething,hekepthismouthshut.

Page14
''ObviouslyIdon'ttalkaboutthebankruptcy.Notevenyourclosestassociatesshouldknowaboutit.Peoplewhowerenotdisadvantagedbyyourbankruptcyshouldn'tknow
aboutit.Notevenyourfamilyshouldknowaboutitifyoucanpossiblyavoidit."
Thereareaperson'sinnerreproaches,ofcourse.Bysuccessfullydeclaringbankruptcyoneis,afterall,notpayinglegitimatedebts,alapsemostofushavebeentaughtto
considerlessthanhonorable.
Tomputsitallinperspective,however."Ifyoukeepthereasonsfordeclaringbankruptcyinmind,andclearlyidentifyyourneeds,you'rehalfwaytosatisfyingyourown
conscience,"hemaintains.
The"reasons"arethatyousimplycan'tpayyourdebtsandlet'sfaceit,extendingcreditisabusinesstoo,andaveryprofitableoneforinstitutionsthatspecializeinit.(Asfor
Tom'smaincreditor,thegovernment,Tomsayssimply,"I'vepaidenoughtaxes.")
Tomdidn'tdeclarebankruptcyoutofpanic,ortocheatsomebodydeliberately."Ifyoujustwanttorunawayfromobligationsbydeclaringbankruptcy,itshows,"Tominsists.
"Butifyou'resimplytryingtoprovideabridgefrominsurmountableobligationstonewopportunities,thenyouhavetotakeitasapracticalstepthat'slegallyavailabletoyou."2

ContrastthisperspectivewiththatofwellknownChristianbusinesswriterandspeakerLarryBurkett.
Nowisn'tthatamazingtoyou,thatsomebodywouldactuallydefaultonadebtthattheycreatedlegally,morally,ethically,andthentheywoulddefaultonit?See,itoughtto
neverhappenwithChristianity,oritoughttohappensorarelythatwewouldtakethatperson,andwewouldadmonishthemaccordingtoMatthew18,andbringthembeforethe
churchtorestorethembacktothefaith.3

MypurposeinwritingthisbookistosortouttheethicsofbankruptcyfromaChristianperspective.Theissueiscomplexandcontroversial.ToarriveatwhatIbelieve
arebiblicallysolidconclusions,Iwillusethefollowingapproach.
Chapter1introducesthegrimscenarioofbankruptcyand

Page15

businessfailure.ItnotestheseemingexplosionoffilingsinboththeUnitedStatesandCanada.Alsoincludedisanexplorationofthevarietyofbeliefsconcerning
bankruptcyethics.
Chapter2discussestheverypracticalproblemofhowbankruptcyimpactstheunfortunatebankruptbothemotionallyandspiritually,andhowheorshemaybe
helped.
Afterweexaminetheextentandhumanimpactofbankruptcy,wewillmoveoninChapters3and4todiscussitsmechanics.Chapter3explainsthemajorcausesof
bothbusinessandpersonalbankruptcies.
Chapter4overviewstheevolutionofbankruptcylaw.Distinctionsbetweenvoluntaryandinvoluntarybankruptcies,aswellasbetweenbusinessandpersonal
bankruptcies,areexplained.Alternativestotheprocessareexplored.
Chapters58movetotheethicalanalysis.Beforewecancometoanyconclusionsabouttheethicsofbankruptcy,wemusttalkinmoregeneraltermsaboutethics
andhowtheyapplyinbusinesslife.
Chapter5exploresthemeaningofethicsandvariousunderstandingsofhowtoapplypropermoralreasoningtobusinessdecisions.
Chapter6triestoapplyethicaltheorytoeverydaybusinessdecisionmaking.InChapter7westudywhattheBibleteachesaboutdebt.
Drawingonthismaterial,Chapter8putsforwardanethicalviewofbankruptcywhichIfeelbiblicalteachingandethicaltheorydemand.
Thisbookwillinterestpeopleinvolvedin,orpreparingfor,thebusinessworld.Itmaybehelpfultoanyonewithageneralinterestinappliedethics.ButIamalsotrying
toprovideanimportantresourceforagroupwhomaynotknowmuchaboutbusinessbutprobablywouldliketopastorsandotherchurchleaders.
Thereislittleteachingfromourpulpitsontherelation

Page16

shipbetweentheBibleandeconomiclife.Manypreachersandchurchleadersfeelunqualifiedtoteachorgivecounseltobusinesspeoplewhoturntothemforhelp.
Moreover,gospelofofprosperity"viewshavefrightenedmanypeoplewhoarehurtingfinanciallyfromseekingspiritualsupportwheretheyshouldmostreadilyfind
ittheirchurch.Churchleadersneedresourcestogainaclearerunderstandingofthebankruptcyprocess,thecausesofbankruptcy,andtheemotionalandspiritual
impactofbusinessfailure.Thenperhapstheycanmoreeffectivelypreachtoandcounselpeopleinvolvedineconomiclifeespeciallythoseencounteringsevere
financialdifficulties.
JOHNR.SUTHERLAND
LANGLEY,BRITISHCOLUMBIA

Page19

PARTI
BANKRUPTCY:
THEECONOMICANDHUMANCOST
Hewasonlyeightyearsold.Forhim,buyingawholebagofpennycandyatoncewashighfinance.Dadwasbusy,thatheknew.Runningamanufacturingbusiness
meantlotsoflatesuppers,ornosupperatall,whilethekidsspenttheeveningwiththeirmother.Bankruptcywasnotawordinhisthirdgradespeller.
Thencamethedayhismothergavehimmoneytobuybreadandmilkatthecornerstore.Ashewalkedoutofthefrontdooroftheirnewhomewhichtheywere
soontolose,alongwiththecarandfurniturehealmosttrippedoverabagofgroceries.Ithadmysteriouslyappearedonthesteps.
Heaskedhisdadthatnightwhereithadcomefrom.Atired,discouragedfathershouted,"Bequiet!"andrefusedtodiscussthematterfurther.
Allthishappened35yearsago.Thatfatherisnowinhappyandrelativelyprosperousretirementbuthestillwon'tdiscussthatbagofgroceries.

Page21

Chapter1
Bankruptcy:
TheGrimScenario
Iguessifyouhavetochoosebetweenbankruptcyandsuicide,bankruptcyisthelesseroftwoevils.Atleastitgetsyououtofdebtalive,whichyourdeathmightnot.
MikeGrenby,financialcolumnist

Theheadlineread,"IHad228Creditors."Suchheadlineshavenotbeenunusualinrecentyears.The1980ssawratesofbusinessfailureunknownsincetheGreat
Depression.Manybusinesspeopleandotherindividualshavefacedthespecterofbankruptcyandallthatitentails.Whatistellingaboutthisheadlineisthatitdidnot
appearinthefinancialpagesorinabusinessperiodicalbutonthefrontcoverofaSundayschoolpaper.1
AgrowingnumberofNorthAmericans,includingdevoutChristians,areencounteringseriousdebtproblems.Aspartofthedrasticgrowthinpersonalandbusiness
bankruptcies,manyChristianbusinesspeoplehaveexperiencedthedevastatingeffectsofcreditobligationsandinsufficientcash.Thisphenomenonhasinvitedmuch
discussionofwhetherabankruptcycanbeaChristianoption.
SomecommentatorsareadamantthatbankruptcyisnoalternativefortheChristian.AmericanbusinessmanandauthorAlbertJ.Johnsonsuggeststhatthose
consideringvoluntarybankruptcytoresolvedebtproblemsshouldreadPsalm37:21,"Thewickedborrowanddonotrepay,buttherighteousgivegenerously."He
arguesthatapersonconsideringbankruptcyisinfinancialtroublebecauseofpastviolationsofscripturalprinciples.2

Page22

Ontheotherhand,aneditorialintheBookstoreJournal,apublicationoftheChristianBooksellersAssociation,statesthatbusinessfailure,whileembarrassing,isnot
asin.3
Thebankruptcypictureisagrimoneindeed.BusinessbankruptciesinCanadasoaredfrom2,976in1976to8,055in1981and10,765in1982.
Thefollowingtableindicatesthatthenumbersareunacceptablyhigh.AndiftherecessionthatseemedimminentasthisbookwasbeingwrittendidhitNorthAmerica,
currentbankruptcystatisticsareprobablymuchhigher.
Canadianbusinessbankruptcies
1983

10,260

1984

9,578

1985

8,663

1986

8,502

1987

7,659

1988

8,031

1989

8,664

Source:ConsumerandCorporateAffairsCanada.

ConditionshavebeensimilarlygloomyintheU.S.A.Businessbankruptcypetitionsfiledin1987exceeded88,000,anumberalmostdoublethatof1981.4
"Shocking"isnottoostrongawordtodescribethegrowthofpersonalbankruptciesinCanada.Thenumberrosefrom1,549in1967(arateof7.6per100,000
population)to12,772in1977(54.8per100,000)and17,892in1979(75.5per100,000).
Figuresfrom1980onwardagainindicatethatpersonalbankruptciespeakedduringtherecessionoftheearly1980sbutremainatatroublinglevelandwererising
duringthe"prosperity"ofthelate1980s.

Page23

Canadianconsumerbankruptcies
1980

21,025

1981

23,036

1982

30,643

1983

26,822

1984

22,022

1985

19,752

1986

21,765

1987

24,384

1988

25,817

1989

29,202

Source:ConsumberandCorporateAffairsCanada.

ThisunexpectedriseischaracteristicoftheU.S.aswell.Nonbusinessbankruptcypetitionshaveshownstartlinggrowthinrecentyears.
1980

241,431

1981

312,914

1982

311,443

1983

304,916

1984

282,105

1985

297,885

1986

401,575

1987

473,000

Source:StatisticalAbstractoftheUnitedStates,
1989.109thedition,p.527.

Page24

In1989,anestimated820,000Americansfiledforbankruptcy.Inaddition,theInternationalCreditAssociationmaintainsthat24millionconsumersareinfinancial
trouble,and3millionareonthevergeoffilingforbankruptcy.5
Thefinanciallossesassociatedwithbankruptcyareenormous.Forinstancein1986when8,502Canadianbusinessesand21,765consumerswentbankruptcreditors
claimed$3.2billionbuttheassetsactuallyrealizedwereonly$250million.Wageearnerswereowedabout$30millionbecauseofbankruptciesandreceiverships
(thetermusedwhenpropertyisheldintrustandadministeredbysomeoneappointedbythecourts,orinsomecasesbyasecuredcreditor,untilthecourtsestablish
whoownswhat).6
Bankruptcystatisticstellonlypartofthestory.Whileestimatesvary,insolvencyexpertsagreethatcountingbankruptsaloneasanindicationofhowtheeconomyis
doingwouldbelikemeasuringonlythetipsoficebergs.OneseniorofficeroftheCanadianOrganizationofSmallBusinessnotedthatonlyoneinfivebusinessfailures
showupinofficialbankruptcystatistics.
Onlyveryrarelyarethereenough[corporate]assetstomakeitworthwhileforcreditorstogoafterthecompany.Instead,smallcompaniesvoluntarilyclosetheirdoors,are
absorbedbylargerandmoreprofitablecompanies,enterintomergers,orfallpreytobanktriggeredreceiverships.7

Statisticscanshieldusfromthehumantragedywhichoftenliesbehindthem.Forinstance,TheMennoniteBrethrenHeraldreportedinearly1986thatabout10%of
thefarmersinCanadaandtheUnitedStateshadbeenbankruptedinthepastsevenyears.Another15to20%wereindirefinancialstraits,unlikelytosurviveanother
yearwithoutgovernmentassistance.TheHeraldcalledittheworstfarmingdepressionsincethe1930s.
Includedinthereportonfarmfailurewasanarticlebyan

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obviouslydeeplydevoutMennonitefarmerwhose160acrefarmhadbeeninthefamilyfor120years.Buttwoyearsofdryweatherandbadcrops,coupledwith
doublinginterestratesandapoorlivestockmarket,haddoomedthistreasuredfamilybusiness.Theauthorhonestlyrecordedthehavocthislosswasplayingwithhis
faith.
LastnightIwasreadinginMark15howJesussufferedonthecross.Ithitmeinanewway.Jesuscriedoutwithaloudvoicethatmeansheshoutedatthetopofhislungs,"My
God,myGod,whyhastthouforsakenme?"Thatsaysit.ThatcapturesexactlyhowIfeel.WhyhasGodallowedthistohappentous?Doesn'thecare?Whywouldheletusfeel
soaloneandforsaken?SometimesIfeellikeclimbingtheHarvestoreandholleringfromthetopthosesamewordsofJesus.AmIcrazy8

Atonetime,bankruptcycarriedconsiderablestigma.AlbertJohnsonnotesthatduringthecrashof1929manymenchosesuicideoverfacingtheircreditorsand
bankruptcy.
Suchguiltfeelingsseemtohavelessened,however.JohnsonquotesthepresidentofSanFrancisco'sAmericanBankruptcyCouncilassaying,"Thereisanew
morality.There'snoguilt,nofeelingofanyloss,anyshame,nothing.It'sjustdone,period."9
Somemaydisputethemagnitudeofthedecline,buteconomicobserversadmitthatthestigmaisreduced.Forinstance,acommentatorontheincreasingrateof
bankruptciesinBritishColumbiain1983saidthatbankruptciesarerisingbecausethestigmaisfalling.10
Theauthorsofthe1970ReportoftheStudyCommitteeonBankruptcyandInsolvencyLegislationarrivedatasimilarconclusion.Theystatedthattheunderlying
assumptionoftheCanadianBankruptcyActisthatthereisaneconomicandsocialstigmaattachedtobankruptcy.Theysaidthat,justafewyearsbeforetheirreport
wascompleted,notpayingdebtswasthoughtshameful.Thereportnotedachangedattitude.

Page26
Inthecaseofthoseforwhomthestigmawasreal,therewasanacceptanceofresponsibilityforone'sconductandtheresultsofit.Thedisgraceofbankruptcy,morethanany
legalsanction,effectivelyremovedthebankruptfrombusinessandtherebyprotectedboththebusinesscommunityandthepublicfromtheincompetentordishonest
businessman.Inourmodernsociety...thereisatendencytogivemoreweighttothosefactorsthatencouragethediminutionoftheresponsibilityoftheindividual.Itisalso
becomingapparentthatthereisanincreasingnumberofpersonswhomorereadilyacceptbankruptcyasasolutiontotheirfinancialproblems.Tomany,whatislegallyrightis
morallyrightandindividualbankruptcyisnotadisgracebutjustsmartbusinesstactics.11

Fromabiblicalperspective,istherestigmaattachedtobankruptcy?Isthedeclarationofbankruptcyunethical?Ifso,howshouldabankruptChristianbetreated?Is
heorsheacandidateforchurchdiscipline?MustbankruptChristianslabor,fortherestoflifeifnecessary,torepaycreditorstheyhave"bilked"?Weturnnowto
possibleanswers.

Page27

Chapter2
TheEmotionalandSpiritualImpactofBankruptcy
Idon'trecommendit.Butgothroughit,and,ifyouaresuccessful,youcanlookbackwithalotofsatisfaction.
JohnZiegler,successfulbusinessmanwhowentthroughabankruptcy

TheRotaryClubmeetingatwhichIwasguestspeakerconcludedwithmyaddress.Ihadspokenontheemotionalimpactofbankruptcy.AsIgatheredmynotes,one
clubmembertoldmehehadnotonlyenjoyedtheremarksbutalsoidentifiedwithmuchofwhatIhadsaid.
ItoldhimofaconferencewhereIhadgivenasimilarspeechandbeenapproachedafterwardbyaformercontractor.Hewasabig,burlyindividual,butasheshared
hispersonalexperiencewithbankruptcy,andespeciallythewaythechurchhadtreatedhimasaresult,hebrokedownandcried.
''Yes,"saidmyRotarianfriend,softly."Iidentifywiththat,too."
Formany,manythousandsofparticipantsinbusinesslife,prosperity,security,andapositiveselfimagearejustwordsinadictionary.Oneonlyhastothinkofthe
widespreaddroughtof1988anditsterribleimpactonfarmerstorealizehowtenuoussecuritycanbe.Manypeoplegoingthroughthedevastatingeffectsof
bankruptcyhaveturnedtothe

Page28

churchforhelp,onlytobemeteitherbyrebuffsorignoranceofbankruptcy'spain.
TheoriginofthischapterisanarticleontheemotionalandspiritualimpactofbankruptcywhichIcowrotewithmygoodfriendRonToews,aChristianfamily
counselor.Hehaskindlygivenmepermissiontoincludehismaterialinthisbook.IextendmygratefulthankstoRon.
Mypurposehereistohelpchurchleadersandcounselorsunderstandhowbankruptcyandbusinessfailurecanhurttheemotionalandspiritualwellbeingof
Christians.PerhapssuchunderstandingcanhelpchurchesbecomeplacesofhealingforChristianswoundedbyfinancialtrouble.
HisnameisBernard.HearrivedinCanadafromEuropeinthe1960sto"pursuetheAmericandream"adesirebornofhisupbringinginalowincomefamily.For
severalyearshewasincreasinglysuccessfulinbusiness.Thisledtocorrespondingincreasesinincome,asenseofwellbeing,andafeelingofselfconfidence.A
separationfromhiswifewastheonlyshadowinanotherwisebrightpicture.
Thenamovefromindustrytoapartnershipwithacousinwhomhelearnedwasanalcoholicbroughtthedreamcrashingdown.Recessionrockedtheirbusiness.
Moneydrainedaway.Hiscousinmisusedhispowerofattorneytoseizetotalcontrolofthecompany'sremainingassets.
AsBernardlaterrecalled,allhisidolsmoney,success,thedreamofbeingaselfmademan,hisrelationshipswithhiscousinandwithagirlfriendonwhomhehad
becomeverydependentcollapsed.Hewasvirtuallypenniless,unemployed,hiscreditexhausted.Yethestillhadalimonyandafivefigurebankloantopay.Inthe
winterof1981hehuddledforwarmthinacamper(hisonlyremainingasset)inaparkinglot.
AtaboutthistimeBernardbecameaChristian.Throughanincredibleseriesofeventsherealizedanalmostimmediatefinancialturnaround.Bytheendoftheyearhe
wasout

Page29

ofdebtandinapositiontoinvestinasignificantbusiness.Butthisventureagainmetwithfailure.OncemoreBernardwasbankrupt.Aprofessionalman,hewas
forcedtoearnasmallincomeasaparttimeentertainer.Onlyrecentlyhashesecuredprofessionalemploymentagain.
IaskedBernardhowheviewedhisexperienceswithbusinessfailurefromaChristianperspective.Didhefeelthathenowcarriedastigma,thatGodwasjudginghim
formoralandspiritualmistakes?
Notatall.RatherthanassessinghisfailuresasjudgmentfromGod,hesawthemasdirection."Myfaithwasnevershaken,"heclaimed,"andmyselfimageisintact.
GoddideverythinghecouldtoprovetomethatIcouldtrusthim."
Amongotherthings,Bernardhasfoundthathecanbecontentinallcircumstances.Moneyandcareerarenolongerhisidols.Nowheisusinghisexperiencesto
supportothersenduringthedesperationofbusinessfailure.
Bernard'sstoryisamazingandperhapsinspiring,buthisreactiontobankruptcyandunemploymentisnottypical,evenforChristians.Studiesindicatethatmostadult
malesinNorthAmericagettheirfeelingsofselfworthfromtheirjobs.Withoutemployment,one'sselfworthisaffected.
ThiswascertainlytheexperienceofTom.AChristianbusinessmanwithanexcellenttrackrecord,hisinvestmentsunexpectedlyturnedsour,leavinghimunemployed.
UnlikeBernard,Tomsawtheexperienceasoneofdesolation.AnacutesenseoffailureledTomtoseehimselfashavingnoworth.Hefoundhewasunabletopray.
Notknowingwheretoturn,hebecameincreasinglydepressed.Morethananythingelse,heneededsomeonetoleanon,someonewhohad"beenthere."
Inourconversationhenotedthatmuchbankruptcyprotectionisavailablebuttherearefewresourcestohelpinrebuildingone'spersonallife.Churchpeoplewho
wanttoberesourcepersonsforhurtingChristiansmustunderstand

Page30

theemotionalandspiritualimpactofbankruptcy.
Therearetwoinfluenceswhichhaveaprofoundeffectontheemotionalimpactofbankruptcy.Oneisthesourcesofanindividual'sselfesteem.Theotheristhe
individual'slevelofinvolvementinthebusinesswhichhasfailed.ThespiritualimpactisoftenafunctionoftheconnectionseenbetweenrightstandingbeforeGodand
businesssuccess.
EmotionalImpact
PivotaltoaChristian'sselfesteemistherecognitionthatsheorhehasvalueasacreaturemadeinGod'simage.Thisrealizationplacesone'svaluebeyondthe
standardofpersonalaccomplishment.Further,anetworkofeffectiverelationshipsshouldgrowoutofthisnucleusofaselfworthrootedinGod'simage.Godhas
madepersonstoberelational,interdependent,andresponsivetooneanother.Anintactnucleussurroundedbyahubofrelationshipscreatesastablesenseofself
esteem.
PrestonManningwasformanyyearsaChristianbusinessconsultantandconferencespeakerfromEdmonton,Alberta.Hehashadmanyopportunitiestowitness
people'sreactionstobusinessfailure.Heoutlinesatypicalscenario.Financiallystressedpeoplesearchdesperatelyformoney,doingthingstheywouldrejectunder
normalcircumstances.Familyhomesmaybemortgagedandfriendsandrelativesapproachedaboutloans.
Thus,iftheirbusinessesgounder,theirentirefamilyandsocialstructuresareaffected.Theyareincreasinglyisolatedandlonely.Theirprideintheirentrepreneurial
abilitiesleadsthemtoconcealdifficulties,particularlyfromotherbusinesspeople.Infact,theywillcutoffcommunicationtoavoidtheawfulquestion,"Howarethings
going?"
Meanwhiletheirselfimage,rootedinaccomplishmentandnotbuttressedbyhealthyandsupportiverelationships,deteriorates.Atonetimetheysawthemselvesas
indepen

Page31

dent,selfreliant,enterprising.Nowtheyfindthemselvesatthemercyoftheircreditors.
Oftenoverlookedisthefactthatbusinessesarefarmorethancentersofeconomicactivityformanyowners.Manningtellsofthefamilyfarmwhichcouldoftenbe
liquidatedandtheassetsputingovernmentsavingsbondsatabetterrateofreturnwithoutthework!Butformanyowners,businessisastyleoflifeembodying
dreamsandhopes.Ifthebusinessgetssick,theentrepreneurmayfallillaswellphysically,emotionally,spiritually.1
EricWallhasbeenaberrygrowerfor21years,andthisisthefirstyearhehaspulledouthealthyraspberryplants.Hedidn'tlikeit,buthethinksifothergrowersplowedunder
someoftheirberries,theycouldgetbacksomecontroloftheindustryagain.
"Yesterdaymorningthiswasaberryfieldjustliketheothers.WhenIplowedthemoutIalmostcried,"hesaid.2

Selfesteemisafragilecommodity.Itisstronglyaffectedbyone'spersonalaccomplishmentplusthestatussuccessbuys.Bankruptcyusuallydevastatesthesetwo
components.Iftheyhavebeensubstitutedforthemorebiblicalfoundationofselfesteemdiscussedabove,bankruptcywillquicklydestroytheindividual'semotional
wellbeing.The"selfmademan"(or,increasingly,woman)whostandsalone,neglectingintimatepersonalrelationshipsismorelikelytobeheavilyshakenwhen
bankruptcyoccurs.
Asmentionedearlier,theemotionalpainofbankruptcyvarieswiththelevelofinvolvementinthebusiness.Formanybusinesspeople,thebusinessisatotallifestyle
involvementwhichincorporatespersonalhabitsandpossiblyfamilyhistory.
Somemaynotbequiteasabsorbedbutstillreceivetheirsoleincomefromthecompany,aswellasmuchstatus.Othersattachlittlestatustotheirbusiness
involvements,seeingthemonlyasanincomesource.Abankruptcyinthissitua

Page32

tionsimplyeliminatesthemainsourceofrevenue.
Emotionalpainwillvaryaswellwiththeowner'sexpectationsconcerningthecompany'sstability.Atoneendofthespectrumisawellestablishedbusinessseenasa
permanentfixture.Whenthisbusinessfails,itsurprisesnotonlypersonscloselyinvolvedwithit,butalsothebroadercommunityaswell.Suchfailuretypicallycarries
withithighemotionalpain.
IhadneverheardofChapter11,andIhadhadnoexperiencewithbankruptcy.Butin1957,afteryearsofbuildingthousandsofboats,wehad228creditorstowhomweowedhalf
amilliondollars,andwehadnomoneytopaythem....Duringthoseyearsontheedgeofbankruptcy,IfeltasifIweresittingintheasheswithJob.3

Attheotherendofthecontinuumisthebusinessstrugglingtobecomeestablished.Statisticssuggestthatthemajorityofnewsmallbusinessesfailinafewyears.The
emotionalimpactofbankruptcyinthesecasesisusuallymuchlower.
SpiritualImpact
Thespiritualimpactmaybeacuteifthebusinesspersonhasbeeninfluencedbythe"gospelofprosperity"doctrine.Labeledaseverythingfromaheresyoracultto
partofthefullgospel,thissuccesstheologylinksmaterialprosperityandbusinesssuccesswithdivinefavorandrightstandingbeforeGod.
ItscruderexpressionisnicelycapturedinthefollowingsegmentofasermongivenbyBobHarrington,thefamedchaplainofBourbonStreetinNewOrleans.
Moneywhenyouhavemoreofityoucanpraybetter,youcanshoutbetter,youcansingbetter,youcanbuildschoolsbetter,youcanbuildbiggerchurchesbettersodon't
youthinkjustbecauseyouhappentobesucceedingdollarwisethatthatmakesyounotrightwithGod!....

Page33
Successfulandsavedsamething!Youcan'tbesavedwithoutwantingtobesuccessful,becausethat'sGod'splanforyouandforme.

RichardDeVos,cofounderofAmway,expressessimilarsentiments.
SomehowitalwaysstruckmeintheOldTestamentthatsomeofGod'sgreatestheroesweretherichestguysintown....ObviouslyGodwasn'thunguponsomeguywhowas
rich.IthinkifyougothroughawholelotoftheOldTestamentandsomeoftheNew,you'llperceivethathepromisesyouriches."I'llgiveyoumorethanyoucaneverimagineif
youkeepmefirstandworkasIwouldhaveyouwork."4

WhenChristianbusinesspeoplewhohavebeenexposedtosuchteachinggobankrupt,theymayconcludethereissomethingwrongwiththeirrelationshipwithGod.If
povertyisoutsideofGod'sintendedwill,thentheymustbeleadingaSatandefeatedlife.RatherthanrestinginGod'sprovidentialcare,theyfeelcondemned.
Wheredoesthedoctrineofsuccessreligioncomefrom?GordonD.Fee,ProfessorofNewTestamentatRegentCollegeinVancouver,BritishColumbia,andan
AssembliesofGodminister,pointsoutthatafrequentlycitedtextis3John2,whichintheKingJamesVersionsays,"Beloved,Iwishaboveallthingsthatthou
mayestprosperandbeinhealthevenasthysoulprospereth."
OnegospelofwealthproponentsuggeststhatJohnmeansChristiansshouldprospermaterially.Feeshows,however,thatthewordprospermeanssimply"togo
wellwithsomeone."Itwasthestandardformofgreetinginapersonalletter.Headds,
ToextendJohn'sgreetingtoGaiustorefertofinancialandmaterialprosperityforallChristiansofalltimesistotallyforeigntothetext.OnemightaswellarguethatallChristians
withsickstomachsarenottoprayforhealingorgotothedoctorbutrath

Page34
ertostopdrinkingwaterandstartdrinkingwineinstead(1Tim.5:23).

Feecitesanothercommonlymisusedtext,John10:10:"Ihavecomethattheymayhavelife,andhaveitabundantly"(or,tothefull).Noallusiontomaterialabundance
ismeanthere,either.FeemaintainsthatthewordlifeinJohn'sGospelistheequivalentof"thekingdomofGod"intheSynoptics.Itliterallymeans"thelifeintheage
tocome."
ThislifeisGod'sgifttobelieversinthepresentage.Christiansaretoenjoythisgift"tothefull."Materialabundanceisnotimpliedeitherintheword"life"orinthe
phrase"tothefull."5
Paul,inPhilippians4:11,tellsusthatheiscontentinallcircumstances.HeemploystheGreekwordautarkes,animportantqualitydescribingaperson's
independenceofthings.ThiskindofcontentmentwasaselfsufficiencytaughtbytheStoics.ThephilosopherSeneca,forinstance,maintainedthat"thehappymanis
content[autarkes]withhispresentlot,nomatterwhatitis,andisreconciledtohiscircumstances."
TheStoicselfsufficientpersonfacedlifewithresourcesfoundwithin,whereasPaulfoundthesecretofhiscontentmentinhisunionwithChrist.ButPaulsharedwith
theStoicstheirdisregardformaterialcircumstances.Thusin1Timothy6hetellsthosewhohavenothingtobecontentwithfoodandclothing.Thericharetotreat
theirwealthasanopportunitytomeettheneedsofothers.ForneitherrichnorpoorwaswealthameasureofrelationshipwithGod.
Successstories
asinbusiness
asinindustry
asinacademiclife.
Success:thecriterion
bywhichwemeasureourselves
andothers.

Page35
Makingit(breakingothers).
Sittingontop(lookingdown).
Comparing(beingbetter).
Howstrangeasuccess,
thatofChristdyingonthecross.
UlrichSchaffer6

BusinesspeoplewhohavenotbeendirectlyinfluencedbythegospelofwealthmaystillconcludethatfailureresultsfrombeingoutofGod'sfavor.Thisisespeciallyso
iftheyseehumansufferingascomingonlyfromGod'sjudgment.
SeveralbankruptbusinesspeopleIinterviewedhadaverydifferentperspective,however.TheirsufferingwasmorelikeJob's.Bankruptcyleftthemfrustratedand
confused.Theyfelttheirbusinesspracticeswereaboveboard.Theirrisktakingwasappropriate,giventhecircumstances.
Typically,theyreceivedmuchmoralsupportfromChristianbrothersandsistersduringtheirbusinesscrisis.Theyconcludedthatthroughtheirtimeoffailurethey
learnedtodependonGodratherthanbusinessacumen.ButtheyinterpretedGod'sdealingswiththemasteaching,notjudgment.
ThisisnottodenythatGodmightjudgethewayanindividualhandlesbusinessorpersonalaffairs.Some"Christian"businesspeoplehavebeenguiltyofshocking
businessbehavior.Suchpeoplearecandidatesforchurchdiscipline.Butunlessoneseesbankruptcyasinherentlysinful,onewillagreethatmanyindividualswhohave
declaredbankruptcyshouldbeofferedsupportandcounsel,notrejection.
MeetingtheSpiritualandEmotionalNeeds
How,then,canchurchleadersbestmeettheneedsofChristiansfacingbusinessorpersonalbankruptcy?PrestonManningfeelsstronglythatGod'sprovidentialcare
ofindi

Page36

vidualsmustbestressed.HedoesnotnecessarilybelievethatGodwillrescuebusinessesfromfinancialtrouble.Rather,ManningconcludesthatGodisinthebusiness
ofsavingpersonsfromsuchcircumstances.
WhereGodintervenesinhumanaffairs,thefocusintheBibleisonsavingpersonsnotgardens,land,armies,vineyards,kingdoms,ships,towers,governments,businesses,
churches,politicalparties,enterprises,schoolsorprograms,butpersons.One'sreactionmightbe,"Idon'tneedsaving,it'sthebusinessthatneedssaving.I'dgladlysacrifice
myselfifGodwouldsavemybusiness."ButScriptureseemstosaythatitisyou,theinnermostyou...thesoulandspiritofyouthatGodisfirstandforemostinterestedin
saving,rescuing,preserving,sustaining....SometimesGodhasalsobeenknowntosaveafewgardens,armies,kingdoms,ships,churches,careersandbusinesses,buthisfocus
isonyou.7

ManningcallsforchurchesandChristianorganizationstoestablishsmallgroupsofChristianlaypeopletoministertobankruptsandothersinfinancialtrouble.The
groupwouldideallybecomposedofpeoplewhohavebeenthroughsimilarcircumstancesandknowsomethingabouttheministryofcomfortgroundedinGod's
providentialcare.
MiltKuyers,ispresidentofamanufacturingcompanyinMilwaukee,Wisconsin.Hewritesconcerningauniqueemploymentprograminhishometown.
Christianbusinesspersonsfrommychurchareworkingwithaninnercitychurch,LighthouseGospelChurch,whichintherecentpasthadanextremelyhighlevelof
unemployment.Lighthouse'spastor,JamesCarringtonLighthouse'smembersandChristianbusinesspersonsfromBrookfieldChristianReformedChurchworktogetherto
providetheindividualsupportnecessarytokeepfrequentlyunemployedpeopleemployed.
Togetherwehavetouchedthelivesofthirtyfivepeopleinthepastoneandahalfyears.Becauseofthisprogram,Lighthouse,achurchof250members,hasgonefrom20
percentunemploymenttofullemployment.

Page37
Thesuccessoftheprogramhasnotcomeeasily,however.PastorCarringtonspendsmanyhourscounselingtheworkersfromhischurch,encouragingthemtoperseverewhen
theyfeellikequitting.Hischurchandministryhelpthosemembersofhiscongregationwhocannotleanonasolidfamilytraditionofemployment.
Webusinessowners,inturn,makespecialeffortstoworkthroughpotentialproblemswithourLighthouseworkers.Wealsodealwithcriticismoftheseeffortsfromwithinour
owncompanies.AttimeswehavedailycontactwithPastorCarringtontodiscusshowwecanbothhelpwithaworker'spersonalproblem.Thiscloserelationshiphasaverted
potentialcrises.8

Manning'spositionisalsostronglyendorsedbyTom(mentionedearlier).Tom'sgreatestneedduringhisyearofunemploymentandselfdoubtwasforsomeonewho
couldempathizewithhisplight.Suchapersonwouldsupplybothspiritualcounselingandalogical,experiencedmind.
First,thishelperwouldprovide''ananchorindecisionmaking,"keepinghisfriendfrommakingilladvisedchoices.Tomcomparedhisexperienceofunemploymentto
thegrievingprocess.Filledwithfeelingsofshockandanger,hewasinnopositiontomakerationaldecisions.9 Acounselorwouldhelpthebankruptpersonevaluate
whathashappenedandlearnfrompastmistakes.
Second,thefriendwouldencouragethebankrupttotrustinGod'sprovidenceandmaintainasenseofselfworth.
Abroadsupportnetworkoffamily,friends,andbusinesspeerswhoremainloyalthroughthebankruptcyprocessisvitaltothebankrupt.Boththeperson
experiencinglossaswellashisorhersupportersmustberealistic,however.Theymaynaivelyassumethatwhenthelegalworkisdonetheemotionalissueswillhave
beenresolved.Onthecontrary,theemotionalissuesmaylingerforalongtime,perhapsevenafternewrevenueisflowing.
Apersonexperiencingbankruptcymustgothroughatwostageprocess.First,anemotionalunhookingfromthe

Page38

lostbusiness.Second,personalrebuildingandengagementinanotherjoborbusinessendeavor.
Thefirststageisnoteasilyachievedinmanycases.Fromthetimeapersonfirstrealizesthebusinessisintroubleuntilthebankruptcyprocessends,heorshemay
experiencetremendousemotionalturbulence.Crushedhopes,familytensions,courtbattles,andfeelingsoffailureandinadequacycantakeanalmostunimaginabletoll.
Itisimportantthatthebankruptbeconnectedtoapersonwhocanhelptheindividualdealwiththeseemotionsovertime.Itisalsoimportantthatthebankruptavoid
deepinvolvementinanotherbusinessduringthisperiod.However,astheemotionalhealingcomes,thebankruptcanturnfromunhookingtothesecondstageof
personalrebuilding.Nowpastmistakescanteachlessonsbecauseemotionalissuesarenotcloudingjudgment.Thebankruptcanassessfuturepotentialandbegin
seriouslytopursuepermanentcareeropportunities.
Manyindividualswhohavegonethroughbankruptcywillattesttobothitsnegativeandpositiveaspects.BankruptcylawyerDavidGagnon,forinstance,citesthis
testimonial.
Iconsiderbankruptcytobeapositiveprocess.Althougheveryoneviewsbankruptcywithdread,itdoesrepresentthesafetynetwhichpreservesdebtorsfromfinancial
calamity...[Concerningacoupleintheir60'swhohadoncebeenmillionairesbutthenlosteverythingwhentheirbusinessfailed,leavingthemwithdebtstheycouldnever
repay]:Debtorsinthosecircumstancesaredesperate,usuallybrokeninspirit,andoccasionallysuicidal.
Financialrebirththroughbankruptcy,evenforthoseintheir60's,canrestoretheglintintheireyes.Theycanfacethefuturewithdignityagain.10

Anothercounselorfriendofminesuggestedthreeimportantbankruptcylessons.First,itcertainlyqualifiesasoneof

Page39

life'smajorsofteningexperiences,leavingapersontransformedbyGodtodealfarmoregentlywithothers.
Second,inrebuildingone'slife,anhonestandsearchingevaluationofone'sgoals,values,skills,andinterestsiscalledfor.MyfriendpointedoutthattheChinese
ideogramforcrisisisapparentlycomposedoftwootherideogramsrepresentingdangerandopportunity.Thebankruptmayrealizethatachangetoanotherlineof
workcouldbringnewjoy.
Third,bankruptcyisanopportunitytocutoneselfloosefromoverdependenceonmaterialwealth.
WenowcometoonelastpracticalpointraisedbyTom.Hementionedtheneedforafriendwhowouldnotonlystabilizeandbuildupthepersoncopingwithbusiness
failurebutalso"daretoriskwithyouagain."
ThereareindividualsandevenchurchespreparedtoofferaChristiansisterorbrotherfinancialhelptomakeafreshstart.Whetherofferedfundsaretreatedasdebt,
equity,oranoutrightgiftwillvary,ofcourse,withindividualcases.
ButtheoperativeprincipleissurelystatedinJames2:1517:Ifoneofthebrothersoroneofthesistersisinneedofclothesandhasnotenoughfoodtoliveon,and
oneofyousaystothem,"Iwishyouwellkeepyourselfwarmandeatplenty,withoutgivingthemthesebarenecessitiesoflife,thenwhatgoodisthat?Faithislike
that:ifgoodworksdonotgowithit,itisquitedead"(JB).

Page40

PART2
BANKRUPTCY:
WHEREITCAMEFROMANDHOWITWORKS
Aftersixyearsofbankruptcy,thecreditorsagreedtoforgive80%ofthemoneywehadlostforthem.Thenabout1965Godbegantoprosperthebusiness.
Wehavelearnedtotithetheprofits.WetakewhatGodsendsinandeachyearwriteacheckfor10%ofit,whichisoverthe5%thegovernmentallowsasawriteoff
forcharitablepurposes.
IwasspeakingonaChristiancollegecampusandastudentaskedmeafterward,"Mr.Meloon,shouldItithe?Didyoutithewhenyouowedsomuchmoney?"
"Yes,sir!"Iresponded.
"Youmeanthatwhenyouowemoneytootherpeopleyoushouldstilltithe?"
"Ifpeopledon'tgivetoGod'sworkuntiltheyhavetheirhomeandcarpaidfor,Godwouldnevergetanything!Godtellsustogiveourtithesandgiftstohim,andhe
promisestosupplyallourneeds."Andhedoes.
Wewereindebt$1million.Wehavebeensystematically

Page41

payingbackeverydollarincludingthe80%thatourcreditorsforgave.
Everypaymentgoesoutwithaletterthatsays,"BecauseofwhatJesusChristhasdoneforus,we'reabletopayyouwhatyoulostwithus20yearsago."
Andyoushouldseetheletterswegetinreturn!IknownowwhyIhad228creditors:Godwantedmetobeabletowitnessto228people!
WalterO.Meloon,"Ihad228Creditors,"PowerforLiving,July3,1983.OriginallypublishedinAllianceLife(formerlyTheAllianceWitness)May16,1979.Usedbypermission.

Page42

Chapter3
TheMajorCausesofBankruptcy
Inmybusiness,'tistruethatstrengthandbustlebuildupafirm.Butjudgmentandknowledgearewhatkeepitestablished.Unluckily,Iambadatscience,Farfraebadatfiguresa
ruleo'thumbsortofman.
TheMayorofCasterbridge,ThomasHardy

BusinessBankruptcies
Attheheightoftherecessionintheearlyeighties,itwasassumedthatthelargenumberofcommercialfailurescouldbetracedtothehighratesofinterestdampening
economicactivity.
Considerthefollowingheadline,however."BusinessFailuresWorstin40Years."Thedatewas1972,wheninterestrateswerearound5%.A1976headline
declared,"BankruptciesUp33%WorseAhead."Interestratesatthattimewereabout8%.1
Economicobserversaremoreapttoviewinterestratesasacatalysttofailurethanacause.Whilemanyreasonsaregivenforbankruptcy,threeinparticularstandout.
PoorManagement
DunandBradstreetcitethefollowingreasonsforbusinessfailure:
62.1%Incompetence
16.4%Lackofmanagerialexperience

Page43

10.0%Lackofexperienceinthelineofbusiness
9.1%Lackofscopeinexpertise
2.4%Miscellaneousfactorssuchasfraudorbadluck.2
Otherstudieshavearrivedatsimilarconclusionsconcerningthedevastatingeffectsofinadequatemanagement.AccordingtoaEuropeansurvey,forinstance,
managerialshortcomingswereresponsibleforover65%ofallbusinessbankruptcies.3
LarryGreiner,inanarticleentitled"EvolutionandRevolutionasOrganizationsGrow,"4 pointsoutthatinthebeginningstagesthefoundersofabusinessconcentrate
oncreatingaproductandamarket.Theyareusuallytechnicallyorentrepreneuriallyinclined.Theyhavelittleinterestinmanagementactivities.
Thesenewbusinessescharacteristicallyincludefrequentandinformalcommunicationamongemployees,longhoursofworkaccompaniedbymodestsalaries,and
controlofactivitiescomingfromimmediatemarketplacefeedbackmanagementactsasthecustomersreact.
Suchcharacteristicsarevitaltogettinganewcompanygoing.Buttheyareinadequatewhenthebusinessgrows.Asmanufacturingbecomesmorecomplex,the
numberofemployeesincreases,ormoresophisticatedcontrolsarenecessary,theentrepreneurshrinksfromunwantedmanagementresponsibilities.Fundamentally
newrequirementsforleadershipnowappear.
Atthispointmanybusinessesfail.Theownersrefusetofacetheirlackofmanagementknowhowandexperience.Theyfailtoplanprobablythepredominantflaw
ofentrepreneurs.Theyignoremundanemattersinventorycontrol,adequatecashflowtopaythebills,orestablishingcreditandcollectionpolicies.5
BusinessmagazineeditorTomMessersuggeststhatduringtimesofeconomicexpansionmostsmallandmediumbusinessesaresuccessful.Butonly"geniuses"can
make

Page44

endsmeetduringrecessions.Genius,inthiscase,isabilitytoforeseeenvironmentalchanges,oratleastcapacitytoadaptquickly.Ownersmoreinclinedtobe"doers"
thanplannerstendtoadapttochangeslowly.Theyarethereforevulnerabletoswingsinthebusinessclimate.6
Someownersdoadjust,perhapsbyhiringacompetentmanagerorbysecuringsufficientmanagementeducation.Organizationalstructuresareoverhauled.
Communicationlinesareformalized.Appropriatecontrolsareputinplace.Morecompetentdirectionisgiven.
Onceagain,however,growthplacesnewdemandsonleadership.Lowerlevelemployees,findingthemselvesrestrictedbythehierarchy,feelshutoutofdecisions,
despitetheirexpertknowledge.Growingdisenchanted,valuableemployeesoftenleave.
Turnoverrateamongkeyemployeesisanindicationofmanagementquality.Acommonforerunnerofbusinessfailureisonemanrule.Theownerfailstoconsult
employeesorotherresourcepeople.Herefusestodelegateresponsibilityandappropriateauthoritytoemployeeswhohavedevelopedcertainkindsofexpertise.
Understandably,capableemployeesleave.
Anotherformofpoormanagementfrequentlyobservedisrefusaltotakeadvantageofresourcepersonsoutsidethefirm.Yetsuchhelpisavailable.Forexample,
Canada'sFederalBusinessDevelopmentBankhasorganizedCASE,orCounselingAssistancetoSmallEnterprises,staffedbysometwothousandretiredbusiness
people.Forafractionofaconsultant'sfee,thewisdomofyearsofbusinesssuccesscanbemadeavailabletostrugglingfirms.
UndercapitalizationandOvertrade
TheFinancialPostMagazinereportsthatwhereasinthe1960sbanksprovided17%ofcorporatefunds,bythe1970sthisfigurehadreached50%.Entrepreneurs
havebeenin

Page45

creasinglyreluctanttoputuptheirownmoney.Butbankfinancingrepresentsfixedoverhead.Thislackstheflexibilityofequityfinancing.Whileownerscandefer
dividendsinhardtimes,thebankcomescallingeverymonth!7
Manyowners,ofcourse,simplystartoutwithoutenoughmoney.Theyhavenothingtofallbackonwhentimesturntough.Theirlastdimeisinthebusiness.
Inaddition,manyentrepreneurs,valuingtheirindependence,refusetoconsiderfindingaprivateinvestorwhocouldinjectmoneyintothebusinessandreduce
dependenceonlendinginstitutions.
Thesituationisoftencomplicatedbywhatiscalledovertrading.Theownersincreasesalesandassetsatagreaterratethantheycansustain.Forinstance,theplant
maybeexpandedtomeetincreaseddemand,butthecashflowdoesnotcovertheincreasedexpenses.Theirworkingcapitalisinsufficienttomeetthedemand.8
LackofAdequateFinancialInformation
"Aninadequatefinancialreportingsystem,"saysReaGodbold,"isprobablythebiggestsinglefaultwefindasreceivers.Thecompanyhasnoideawhatitcoststo
makeormarketitsproductandconsequentlynostrategyforadaptingtochangingconditions."9
Manyanalystscitepoorrecordkeepingasthecriticalcauseoffailure.TheFinancialTimesnotesthefollowingseriousbutcommonerrors.10
a.Littleornofinancialplanningandonlyrudimentaryreportingsystems.Acompanymaybeinapoorshapeandnotrealizeitsconditionuntilthepointofnoreturn.
b.Laxcontrolofaccountsreceivableandpayable.Naturally,intoughtimesnooneisinahurrytopayhisbills.Somecompanieshaveusedadiscountpolicyasan
incentivetopromptpayment.Carefulattentiontopayablesisessentialtoretaininggoodcreditstatus.

Page46

c.Sloppyinventoryanalysis.Manysmallbusinessesarechronicallyshortoffunds,oftenbecausetheytieupmoneyinborderlineproductsandservices.
d.Costcontrolthatdoesn'tgofarenough.Thisextendsfromthedeferralofcapitalequipmentexpenditurestocutbacksinone'spersonallifestyle,asacrificewhich
posesdifficultiesforsomeentrepreneursaccordingtoamanagementconsultant.
"Therealproblemcomeswhenthedrasticstepsthatarenecessarybecomevisibletothecommunity.WhenImusttellhimhehastodriveaPontiacinsteadofaCadillac,andthat
hiswifeisnotgoingtodriveaLincoln,hisselfesteemishit.Hecannotacceptthathe'snolongerthebigspenderattheclub,andthathewon'thave50footballticketstogive
awayeveryweekend.Itreallyissad,becauseallthisispartofthewaymanypeoplehavebuilttheirbusinesses."11

e.Poorcommunicationswithbankersandothercreditors.ThefollowingquotefromatrusteeinbankruptcyIinterviewedisrepresentativeoftheconvictionofmost
experts:
"Thelastthingacreditorwantsisforaborrowertogobankrupt,asthelikelihoodofrecoveringthedebtislow.Providedtheborrowerisopen,honest,andisdialoguingwiththe
creditor,thelatterwillmakeremarkableaccommodationstokeeptheborrowerafloat."

Fortunately,moderntechnologyhasplacedtimelyfinancialinformationwellwithinthereachofeventhesmallestfirmsthroughinexpensivecomputerhardwareand
software."Straightbookkeepingistheleastofyourconcerns,"maintainsoneauthor."Whypaysome$1000amonthjusttokeepyourbookswhenyoucangetitall
putonacomputerfor$50."12
Whiletheabovethreecausesofbankruptcyarementionedmostoften,thereareotherswhichfrequentlyhelpcausebusinessfailure.Morethanonebankloansofficer
interviewedwaspreparedtoblamehisowninstitution.Onestudyofsmallbusinessfailuresrevealedthatin87%ofthe

Page47

casesexamined,thebankwastheinstigatorofbankruptcyaction,andrarelywasthebanknotfullycoveredwithclientcollateral.13
Anotherloansofficertoldmethatbanksbecametooliberalinlendingbecauseofintensecompetition.Anothersuggestedthatmanybankersarepoorlytrainedanddo
notcounselowner/borrowersproperly.ThecontroversialCanadianFarmersSurvivalAssociationmaintainedthatbanksarenotwillingtotakeanyrisk.Banks,they
say,prefertoletthefarmershoulderthatburdenalone.Banksshownocompassionduringdifficulttimes,evenifthefarmerisopenandhonestwiththebank.14
Occasionallybankruptciesaretheresultofcorruptpractices,eitherbythebusinesspersonorbysomeonewithwhomthebusinessdeals.InapreviouschapterI
introducedWalterMeloon,theChristianbusinessmanwhoseboatbuildingcompanyfacedbankruptcy.Hereishisexplanationofhowithappened.
Shortlybeforethis[runningoutofmoneytopaycreditors],thechiefgovernmentinspectoronacontractfor3,000fiberglassboatswewerebuildingfortheCorpsofEngineers
hadaskedustopayhimandtheotherinspectorsbytakingcareoftheirhotelroomsandmeals.Weknewthatthegovernmentalsopaidfortheirroomsandmeals.Wehadbuilt
36,000boatsforthegovernmentduringWorldWarIIandtheKoreanWar,andwehadneverbeenapproachedbyanyoneelsetotakecareoftheirexpenses.MybrotherandI
discussedtherequestandwedecidedthatweshouldforgetaboutit.
Theinspectordidnotforget.Wesoonhad600boatsthatfailedtomeethisspecifications.Hetoldourbankersthathewasnotacceptingourboatsandthattheyhadbetter
withdrawtheirfunds.Attimeswethought,''Whynotpaythemanoff?Itisn'tmuchcomparedtowhatthecompanystandstolose."
Itwasn'tthemoneybutsomethingfardeeper.AtnightI'dlieawakewrestlingwiththeproblem.Onenight,tryingnottodisturbmywife,Islippedoutofbedandkneltonthe
livingroomfloorwithanopenBibleonthestoolinfrontofme.Inthelight

Page48
ofmylampthesewordsseemedtoglow:"TrustintheLordwithallthineheartandleannotuntothineownunderstanding.Inallthywaysacknowledgehim,andheshalldirect
thypaths."
Ithought,"Thathastobeouranswer.TopayoffthemanwouldnotbetrustingtheLord,butrathergivingintothedeviouswaysoftheworld."
Thencamethefinalblow!Aflatcarhadjustbeenloadedwith40"approved"boatswhenthechiefinspectorsuddenlyappearedandsaid,"Idon'tliketheirlooks.They'vegotto
beunloadedandrefinished."
Thatarbitrarydecisionmadeitimpossibleforustocontinue.Thecontracthadalreadycostthecompanyonemilliondollars,andweowedhalfamilliontoourcreditors.15

Anotheralltoocommonreasonforbankruptcyinvolvesconartistswhobuylegitimatecompanieswithlongestablishedcreditrecordsandthenbankruptthem.
FinancialwriterJohnHaskettoutlinesatypicalscam.
Largequantitiesofeasilydisposablemerchandisearepurchased.Thesuppliersshouldtumbletotheplan,asordersusuallyfarexceednormalrequirements,andareoftenfor
completelyunrelatedproductsawholesaleplumbingfirm,forexample,willstarttobuylargeamountsofexpensiveofficeequipment,farinexcessofnormalneedsbuttoooften
thedesireforasalecloudstheirjudgments.
Thenthescamoperatorsstarttounloadtheexcessmerchandise,oftenthroughchannelsexpresslysetupfortherapidmovementofsuch"hot"goods.Themoneyisputintothe
companycoffersbutsoonwithdrawn,topayoffshareholders'loansandotherfictitiousclaims.
Bythetimethecreditorsstartgettingnervoustheconmenhavedrainedthecompanyofallassets.Whenthefirsthearingrollsaroundallthat'sleftisashell,andcreditorsare
luckytosalvageadimeonthedollar.16

Mostoften,however,thefaultliesprimarilywiththeborrowers,notthelenders.Manybusinesspeopledevelopsloppyhabitsinaffluenttimes.Thentheydonot
changewhenbusinessconditionsdemandamoretightlyrunship.

Page49

Marketfactorsposeanothercriticalproblem.Somecompaniesbecometoodependentononeorafewcustomers.Ortheyprovideaproductpronetodramatic
change.Inaddition,somebusinesspeoplewilljumpintoanexpensivenewventurewithoutfirstdoingapropermarketassessmentanddevelopinganappropriate
marketingplan.
Owningabusinessisrisky.Itisestimatedthatabout300,000newcompaniesareformedintheUnitedStateseachyear.Abouttwothirdsofthemfailwithinfive
years.Managementisconsistentlycitedasthekeytosuccess.Butthedismalrecordofbusinessfailureonlyprovesthetellingstatement,"Fewbusinessesplantofail
butmostsmallbusinessesfailtoplan."
PersonalBankruptcies
Acomprehensivestudyofpersonalorconsumerbankruptspublishedin1982indicatesthatthemaincauseofpersonalbankruptciesinCanadaismismanagedor
excessiveconsumerdebt.17ThisisnotsurprisingtoanyonewhoisawareoftheexplosionofconsumerdebtinNorthAmerica.TimeMagazinereports:
Nobodyadvocatesastrictlycasheconomy,ofcourse,butinacountrythatonceadmiredBenFranklin'srulethatitwasbetterto"gotobedsupperlessthanrunindebtfor
breakfast,"theaccumulationofpersonaldebtisstaggering.Installmentcreditgrewlastyear(i.e.,1981)byatotalof$20billion,to$333billion....Addinghomemortgages,the
totalismorethan$1.5trillion.Personaldebtaveragesoutto$6,737foreveryAmerican.Andmoreandmoreoftenpeoplecannotpay:personalbankruptcies,179,194in1978,
reached456,914lastyear.18

Canadianfiguresalsoindicateanincreasinguseofcreditpurchasing.Consumercreditoutstanding(exclusiveofhomemortgagesandbusinessdebt)reachedabout
$50billionin1985.DividingthisbyCanada'spopulationyieldsconsumercreditoutstandingpercapitaofapproximately

Page50

$2000.In1970Canadians'creditpurchaseswereabout$600percapita.Evenwithadjustmentsforinflation,theincreaseduseofcreditisconsiderable.Forinstance,
between1950and1985,thepercapitaincreasewasmorethanfivetimesusingconstantdollars.19
TheanalysisofconsumerbankruptsdonebyConsumerandCorporateAffairsCanadarevealsdisturbingdata.First,consumerbankruptstendtobeyoungerthanthe
adultpopulationatlarge.About63%ofthesebankruptswereunderage35,adisproportionatenumberasonly43%ofCanadiansgenerallyfallintothisagecategory.
Only8%ofconsumerbankruptswereagefiftyormore.20
Second,adisproportionatenumberofpersonalbankruptslackemployableskills.Managerialandprofessionalpeoplerepresent9.8%oftheCanadianlaborforcebut
only2.9%ofconsumerbankrupts.
Theadditionofsemiprofessionals,middlemanagers,foremen,andtechniciansbringsthetotalto27.6%ofthelaborforcebutonly14%ofbankrupts.People
employedinvariousskilledandsemiskilledoccupationssuchascraftsandtrades,sales,clericalwork,andsoonareproportionatelyrepresented:49%ofthelabor
forceand47.7%ofconsumerbankrupts.
Thelastcategoryisparticularlyunsettling.Unskilledclerical,sales,andservicepersonnelandunskilledmanuallaborconstitute23.4%ofemployedpeoplebuta
whopping38.8%ofthosewhodeclaredpersonalbankruptcy.21
Consumerbankruptsaredrawnheavilyfromthelowestskilllevels.Asmightbeexpected,giventhisdata,theincomesofconsumerbankruptsaregenerallyquite
low.22
Approximately49%ofthesepeoplegaveconsumerdebtastheirreasonforbankruptcy.Abreakdownoftheircreditorsisratherinteresting.
1.Financeandacceptancecompanies.74%owedtheseinstitutionsatleastonedebtand37%hadtwoormoresuchdebts.

Page51

2.Charteredbanks.61%ofconsumerbankruptshadonebankloanand24%twoormore.
3.Departmentstoreswereowedby46%andotherretailersby41%.
4.Bankcreditcards.Perhapssurprisingly,consideringtheireaseofuse,onlyabout30%ofbankruptsreportedmoneyowingonthesewellknowncards.
5.Creditunionshadmuchlesstroublewithborrowers.Only21%reportedowingmoneytothissource.
6.Othersourcesofconsumercreditincludedgasandothercreditcards,medicalanddentalbills,andcollectionagencyorcreditbureaubills.Thesewerereportedby
about17%orlessofthosesurveyed.23
Anumberofquestionscometomind.Whydolendinginstitutionsprovidecreditsofreelytopeoplewithlowerskilled,lowincomejobs?Additionally,whatprompts
somanyyoungerpeoplewithalackofgoodoccupationalandfinancialprospectstoburdenthemselveswithconsumerdebt?Themedianindebtednessofthoseinthe
studywas$10,865,whilemedianassetswereabout$400.24
Inresponsetothesecondquestion,atrusteewhospecializesinpersonalbankruptciessaysthat
Bankruptcyisverymuchanattitudinalthing,acommitmenttoone'sobligations.Ittakesverylittletobetechnicallyinasituationofgoingbankruptdebtsofmorethan$1000
andtheinabilitytopay.Manyusebankruptcyasatooltoavoidpayingdebts,especiallyyoungerpeoplewhobelievethattheyhavetherighttoacertainstandardofliving
withoutputtingoutforit.Theyareunwillingtosacrificetomeetfinancialobligations.Anduntilrecentlycreditinstitutionshavesupportedsuchattitudeswithliberalcredit
policies.

Inadditiontoconsumerdebt,reasonsgivenforpersonalbankruptcyincludedunemployment(15%),operationsof,orguaranteesfor,abusiness(14%),healthand
misfortune(14%),andmaritalandfamilyproblems(7%).25
TheAmericanexperienceisverysimilar.Bankruptcy

Page52

expertsciteeasycreditfromcreditcardcompanies,maritalproblems,alcoholordrugabuse,cutinpay,lostjob,risinginterestratesonadjustableratemortgages,
andunexpectedmedicalexpensesasthechiefcausesofbankruptcyfilings.
TheauthorsoftheexcellentConsumerandCorporateAffairsstudytriedtofindatleastpartialsolutionstoanincreasinglyworrisomephenomenon.First,theynote
thatmanybankruptsseemedunawareoftheprecariousnessoftheirfinancialsituationuntillegalactionwasthreatenedortaken.Fewhadpreviouslysoughtdebt
counseling.Theauthorsrecommenddebtcounselingatcriticaltimes.Theyalsoadvisemoreteachingofmoneymanagementskillsinschool.
Inaddition,theyseethecreditgrantingindustryasbearingmuchoftheblame."Inshort,gettingfurthercreditwastooeasy.Thereisaresponsibilityforcredit
grantors,especiallycashlenders,toparticipateinjointindustry,government,andvoluntarysectoreffortstodetectandhelpavertimpendingconsumerinsolvencies
requiringbankruptcyasasolution."26

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Chapter4
TheBankruptcyProcessandItsAlternatives
Goingbankruptmightprovidefinancialandemotionalrelief.Butgoingthroughtheprocesscouldbestressful.
MikeGrenby,financialcolumnist

Relationshipsbetweencreditorsandlendershavealwaysbeenfilledwithtension,hostility,suspicion,evasion,turmoil,exploitationevendeath.Overthecenturies
societieshaveattemptedtoregulatetheserelationshipssothatcreditors'claimsareprotectedwhiledebtorsarealsoprotectedwhencircumstanceswarrant.
TheHistoryofBankruptcy
Inancienttimes,thesecuritydemandedforaloanwasoftenthedebtor.Thispersonalsecuritymightextendtothedebtor'sfamilyandallpossessions.Thus,ifthe
debtorfailedtorepay,debtorandfamilyoftenhadtoenterintotheexclusiveserviceofthecreditoruntilthedebtwasdischarged.
InfifthcenturyB.C.Rome,forinstance,aborrowersignedacontractcalledanexum.Thisallowedthelendertoseizethepersonoftheborrower,withoutjudgment,
fordefaultingontheloan.Defaultersoftenweresoldabroadintoslaveryorevenputtodeathbythecreditors.1
Enlightenedrulerstriedtoalleviatetheworstabuses.Hammurabi(c.1750B.C.),inhisfamousCode,allowed

Page54

creditorstolevya"distress"or"pledge,"calledaniputum,ifthedebtwasnotpaid.However,thecreditorwhowrongfullyleviedthedistresswaspenalized.2
FourthcenturyB.C.Romanlawalteredthenexum.Beforeadebtorcouldbeseized,thecasehadtobebroughtbeforeamagistrate.3 EventuallyRomanlawallowed
adistinctionbetweenthedebtorwhoseinabilitytorepaywasforreasonsbeyondcontrolandaborrowerwhoobtainedcreditfraudulently.Intheformercase,the
debtorcouldavoidenslavementorexecutionbyturningallassetsovertothecreditor.4
AnactgoverningbankruptcyfirstappearedinItalyinthelateMiddleAges.Thetermbankruptcyhasaninterestingorigin.Italiancreditors,wishingtoshowtheir
displeasurethatadebtorhadfailedtomeetobligations,wouldvisitthedebtor'splaceofbusinessandsmashtheworkbench."Brokenbench"inItalianisbancarotta.
Englishlawdealingwithinsolvencyfirstappearedin1351.ItprovidedthatifanymemberoftheCompanyofLombardMerchantsacknowledgedbeingadebtor,the
Companymustguaranteerepaymentiftheindividualmerchantdefaulted.
Thisactandotherswhichfollowedstressedtherightsofcreditors.Debtorsweretosurrenderallpropertyifbankrupt.Fraudulentdebtorswereseverelypunished.In
fact,theActof1571restrictedbankruptcytothoseengagedintrade.Anindividualnotinvolvedintrade,whocouldnotpayoffdebts,wasthrowninprisonandkept
thereuntilsomeoneelsepaidthem.Notuntilthe19thcenturyweresuchdebtorsallowedtoavoidincarcerationthroughsurrenderoftheirassetstotheircreditors.5
ThecurrentCanadianbankruptcylegislation,whichallowsforajointcourt/creditorcontrolofbankruptcyproceedings,ispatternedsomewhatontheEnglish
BankruptcyActof1883.ItspurposescanbenotedfromthefollowingsummaryofanaddressmadebythethenPresidentoftheBoardofTrade.

Page55
HeaskedtheHousetokeepinmindthetwomain,and,atthesametime,distinctobjectsofanygoodBankruptcylaw.Thosewere,firstly,inthehonestadministrationofbankrupt
estates,withaviewtothefairandspeedydistributionoftheassetsamongthecreditors,whosepropertytheywereandinthesecondplacetheirobjectshouldbe,followingthe
ideathatpreventionwasbetterthancure,todosomethingtoimprovethegeneraltoneofcommercialmorality,topromotehonesttrading,andtolessenthenumberoffailures.His
nextpointwasthat,withregardtothosemostimportantobjects,therewasonlyonewaybywhichtheycouldbesecuredandthatwasbysecuringanindependentandimpartial
examinationintothecircumstancesofeachcase.6

Canadaintroduceditsfirstinsolvencylegislationin1869.TheBankruptcyActof1919providedfortheliquidationoftheassetsandreleasefromfurtherobligationof
thehonestdebtor.Itdidnot,however,protectthefraudulentdebtor.
CurrentBankruptcyLaw
Changessincehaveclarifiedandstreamlinedproceedings.Nomajorchangeshaveoccurredsince1966,althoughanewacthasbeenindiscussionforsometime.The
U.S.hasmorerecentlyreviseditsbankruptcylegislation.ItpassedtheBankruptcyReformActof1978,withafurtherrevisionin1984.
Ifacompanyisexperiencingseriousfinancialproblems,anumberofvoluntaryalternativesmaybeavailabletoowners.Forinstance,ifthebusinesscontinuestobe
viable,theownerscouldreorganize,refinance,ormakeaproposaltotheircreditorswhichwouldresultinabetterpayoffthanbankruptcywouldprovide.Ifviabilityis
indoubtbutthecompanyisstillsolvent,thenstatutoryliquidationispossible.Iftheownersfaceinsolvency,theymayconsideravoluntarybankruptcy.
However,acompanymaynotbeabletotakeadvantageofsuchvoluntaryinitiatives.InCanada,forinstance,asecured

Page56

creditorcansendinareceivertotakeoveracompanywhenthelenderisworriedaboutthesafetyofitscollateral.And,ofcourse,one'screditorsmaypetitionafirm
(oranindividual)intoinvoluntarybankruptcy.
Spacedoesnotallowdiscussionofalltheaboveconcepts.WhatfollowsisanoutlineoftheusualstepsinthebankruptcyprocessinCanadaandtheUnitedStatesfor
companiesandindividuals.Ifyouwillallowalittlepatriotism,IwilloverviewCanadianbankruptcylawfirst.
TheBankruptcyActisadministeredbyaSuperintendentofBankruptcy.Hismajorresponsibilitiesincludetheappointmentandsupervisionoftrustees,whoadminister
bankruptestates,andtheinvestigationofpossibleviolationsoftheAct,especiallywherefraudissuspected.
TheActdesignatesaparticularcourt,usuallythehighesttrialcourtineachprovince,astheagencytodealwithbankruptcymatters.Eachcourthasofficialreceivers
whosedutiesincludeacceptingandfilingassignments,appointingtrustee's,andexaminingdebtorconduct.
Letusfocusfirstoninvoluntarybankruptcy.Oneormorecreditorswithclaimstotalingatleast$1,000mayfileincourtapetitiontoplaceapersonorcompanyinto
bankruptcy.Thepetitioningcreditorsmustprovethatthedebtorisinsolvent,thatthedebtsowedtothepetitioningcreditorsareatleast$1,000,andthatthedebtor
hascommittedwhatiscalledanactofbankruptcy.TherearetensuchactivitiesdefinedintheBankruptcyAct.Thefollowingfivearethemostcommon.
1.Debtorsnotifycreditorsthattheyhavesuspendedorareabouttosuspendpayments
2.Debtorsshowcreditorsastatementofassetsandliabilitieswhichindicateinsolvency
3.Debtorsfraudulentlytransfertitleofalloranypartoftheirproperty
4.Debtorsfailtosatisfyanexecutionserveduponthembya

Page57

sheriff(anexecutionordersacourtofficialtotakeadebtor'spropertytopayacourtdecideddebt)
5.Debtorsceasetomeettheirliabilitiesgenerallyastheybecomedue.
Ifthecourtissatisfiedastothelegitimacyofthepetition,andifthedebtorconsentstoordoesnotopposethepetition,areceivingorderisissueddeclaringthedebtor
bankrupt.
Thereceivingorderactsasastayofproceedingsagainstallexceptsecuredcreditors.Thusunsecuredcreditorscannotnowtakeanyactionagainstthedebtor,such
asalandlordseizingassetsfornonpaymentofrent.
Italsopermitstheappointmentofalicensedtrustee(usuallyanaccountant)toadministertheestateofthebankrupt.Whileatrustee'sservicesmaycostaslittleas$50
fortrulydesperateindividuals,theyarelikelytocostmuchmore,oftenseveralthousandsofdollars,dependingonthecomplexityofthecase.
Thetrusteehastherighttoobtainallbooks,recordsandassetsofthebankruptandtocarryoutafullinvestigationofthebankrupt'saffairs.Oneofthetrustee'sfirst
stepsistocallameetingofthebankrupt'screditors,atwhichtimehisorherappointmentastrusteeisconfirmedbythecreditorsorasubstitutionismade.
Atthismeetingthecreditorsappointamaximumoffiveinspectorswhosupervisethetrustee'sactivitiesonbehalfofthecreditors.Themainresponsibilityofthe
trustee,then,istocollecttheestateofthedebtor.Thepurposeistoconvertitintocashandtodistributetheproceedstothecreditorsaccordingtoalegislated
''peckingorder,"unsecuredcreditorscominglast.Thetrusteemustfollowthedirectionsofthecreditors,providedthoseinstructionsarenotcontrarytothe
BankruptcyAct.
Abankruptdebtorfoundtohaveactedfraudulently(suchasbyfalsifyinginformationgiventothetrustee)ispun

Page58

ished.Penaltiescanincludefine,imprisonment,orhavingfraudulenttransfersofpropertydeclarednullandvoidsosuchpropertyisavailableforexecutionby
creditors.
However,ifnofraudisestablished,thebankruptmayapplytothecourtforadischargefromdebtobligations.Thecourthasawidediscretionhere.Forinstance,it
canimposeconditionssuchaspayingcertainamountstocreditors,oritcandenyadischargeentirely.Butthehonest(althoughunfortunateorincompetent)bankrupt
willnormallybereleasedfromallclaimsofcreditors,withcertainexceptionssuchasalimonypaymentsandcourtfines.
Abankruptisnotreleasedfromdebtsuntildischargedbythecourt.Thusanyincomethebankruptreceivesbeforedischargemaybeusedtopaycreditorsifthecourt
sodecides.Inaddition,thebankruptmaynotengageinanybusinesswithoutdisclosingundischargedbankruptstatus,norbecomeadirectorofalimitedliability
corporation.Thebankruptcannotpurchasegoodsoncreditexceptforpersonalnecessities(food,forinstance).
Voluntarybankruptcyproceedingsdifferlittle.Aninsolventdebtormayfilewiththeofficialreceivertheassignmentofpropertyforthegeneralbenefitofcreditors.The
receiverselectsatrusteetoacceptthepropertyandthetrusteecallsameetingofthecreditors.Thevastmajorityofpersonalbankruptciesarevoluntary.
Ifadebtorobjectstoacreditor'spetition,themattergoesbeforeajudge.Thedebtormaythenattempttoproveheorsheisnotbankrupt.Ifsuccessful,thejudgewill
dismissthepetition.7
TwoalternativestobankruptcyareparticularlyimportanttothediscussionwhichfollowsinChapter8.Thefirst,anorderlypaymentofdebts(OPD),isapplicableto
anindividualseekingtoavoidpersonalbankruptcy.
UnderOPD,aqualifyingdebtormayobtainacourtorderwhichallowsconsolidationofeligibledebts.Theconsolida

Page59

tionorderalsosubstantiallylimitstheactioncreditorscantakeagainstthedebtor.Fullpaymentofthedebtswillnormallybemadewithinthreeyearsbymeansofone
periodicpaymentatareducedrateofinterest.8
Thesecondalternative,theproposal,isavailabletobothindividualsandbusinessesfacingbankruptcy.Theproposalisaplanthedebtorsubmitstocreditorsfor
payingsomeoralldebts.Tobesuccessful,itmustobviouslyofferabetterreturntocreditorsthanifthecompanywentbankrupt.
Theprocessisasfollows.Thebankruptcytrusteeworkswiththedebtor,andusuallythedebtor'slawyeroraccountant,todraftaproposaltheyfeelisattractivetothe
creditors.Theproposalisdepositedwiththeofficialreceiver.
Thetrusteethennotifiesthecreditorsofameetingtoconsidertheproposal.Beforethemeeting,thetrusteewillprobablysoundoutthesecuredcreditors,whoareina
positiontoseizetheirsecurityandunderminethewholeprocess,toavoidunexpectedopposition.
Withinaboutthreeweeksthepartiesmeetagainandthecreditorsvoteontheproposal.Itpassesifthoseinfavorconstitute75%ofthetotaldebt,and50%ofthe
totalnumberofcreditors.
Ifthecreditorsaccepttheoffer,thetrusteesanddebtorappearinbankruptcycourt.Ifthejudgealsoapprovestheproposal,itbecomesbindingonallparties.Should
eitherthecreditorsorthejudgerejecttheproposal,theindividualorcompanyautomaticallygoesintobankruptcy.
AnexampleofafairlyelaborateproposalisprovidedbywhatwasonceBritishColumbiaoldestdailynewspaper,theNewWestminsterColumbian.The
Columbian'sdebtsatthetime(May1983)were$7.3million.Thepaper'snetdeficitwasanother$2.07million.Itsproposalincludedthefollowingprovisions:
1.Anoffertoits209employeestobuyupto25%ofthecompany'sstock

Page60

2.Therepaymentofits500unsecuredcreditorsattherateof162/3centstothedollarannuallyforthreeyears
3.Therequirementthatitstradecreditorsprovidewithinamonthuptoanother$275,000ofcredit,repayableonanormal30dayterm.
Thesuccessrateofproposals,accordingtoaseniorofficialwiththeSuperintendentofBankruptcy,isbetween70and80%.However,comparativelyfewproposals
areevermade(in1989,only570proposalswerefiledinCanada).
Anumberofreasonsforthislownumberaresuggested.First,manydebtorsdonotrealizeuntiltoolatethatsomethingmustbedone.Second,somecreditors,asa
matterofprinciple,mayrejectaproposaleventhoughtheystandtogainoverthedebtorgoingbankrupt.Theydonotwanttosetaprecedentofbeingeasyinmatters
ofcredit.Third,bankruptcyoffersanindividualthemostrelieffromdebt,withlittlestigmaattachedinmanycases.Thustheincentivetomakeaproposalisminimized.
Itisunfortunatethatmoredebtorsdonottakeadvantageoftheproposalroute.Someconsultantsfeelthatonehalfofpotentialbankruptscouldturnaroundtheir
affairsusingthismethod.9
AnumberofchangestotheBankruptcyActwerebeingseriouslyconsideredbythefederalgovernmentatthetimeofwriting.Theseinclude:
1.Helpinginsolventcompaniesworkthemselvesoutoftheirproblemsbyrequiringthatthesecuredcreditors(typicallythebank)giveacompanytendays'noticethat
itisgoingtoclaimassetsorappointareceiver.Duringthetendaysthecompanycouldputforwardaproposalforreorganizingitsaffairs.Itwouldthenhavethirty
daystoputtogethertheplan.Creditorswouldhavetwentyonedaystoacceptitbyatwothirdsmajorityofeachclassofcreditor.
2.Providinggreaterprotectiontoemployeesoffailedfirms.Theproposedplanwouldguaranteethatworkerswouldreceiveunpaidwagestoamaximumof$2,000.
Theywould

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alsobeentitledtoreceiveunpaidexpensesupto$1,000.Underthecurrentlawemployeescanclaimjust$500,andonlyifmoneyisleftoveroncesecured
creditorshavebeenpaid.
3.Automaticallydischargingabankruptindividualfromhis/herdebtsafterninemonthsunlessacreditorfilesaformalobjection.
Americanlegislationissimilar.TheBankruptcyCodeconsistsofeightoddnumberedchapters.Chapters1,3,and5aregeneraladministrativeprovisionswhichapply
toallbankruptcyproceedings.Chapters9and15areofaspecializednatureandareofnoconsequencetothisoverview.Thisleavesthefollowing.
Chapter7Liquidation,alsoknownasstraightorordinarybankruptcy.
Chapter11Reorganization,whichprovidesforreorganizationofbusinesses.
Chapter13AdjustmentofDebtsofanIndividualwithRegularIncome,whichparallelsCanada'sOrderlyPaymentofDebtsinmanyrespects.
ThebankruptcyproceedingsareliketheCanadianonesinseveralrespects.Abriefoverviewfollows.
1.Voluntarypetition.AvoluntarypetitionforbankruptcymaybefiledunderanychapteroftheBankruptcyReformActbyanypersonwhohasaccumulateddebts
whichheorsheisunabletopay.Certainorganizations(banks,insurancecompanies,etc.)areprohibitedfromfilingavoluntarypetition.Thepetitionmustincludethe
namesandaddressesofallsecuredandunsecuredcreditorsandtheamountowedeach,aswellasalistofallassetsandpropertyownedbythedebtor.
2.Involuntarypetition.Thecreditorofadebtorwhoisnotpayinghisorherdebtsmayforcethedebtorintobankruptcybyfilinganinvoluntarypetition.Thepetition
mustbesignedbythreeormorecreditorswhoseclaimscollectively

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amounttoatleast$5,000ifthenumberofcreditorstotalstwelveormore.Iftherearefewerthantwelvecreditors,thenumberwhomustsigndropstooneormore
whoseclaimstotal$5,000.
3.Automaticstay.Onceapetitionisvoluntarilyorinvoluntarilyfiled,thedebtorisprotectedagainstanyattemptmadebycreditorstocollectadebtowed.Thedebtor
isdeclaredbankruptbyacourtorder.Thebankruptcycourtacquiresjurisdictionoverthedebtor'sassets.
4.Trustee'sappointmentandduties.ThecourtappointsatrusteeinallbankruptcyproceedingsexceptforChapter7,wherethetrusteeisselectedbyavoteofthe
creditorsattheirfirstmeeting.Inthelattersituation,thecourtmayappointareceivertobeatemporarytrusteeuntiloneiselectedatthefirstmeetingofthecreditors.
Thetrusteetakesoverthepropertyofthedebtor,inventoriesit,hasitappraised,setsasidetheportionexemptfromexecutionunderstateorfederallawas
appropriate,andrecoversanyillegalandfraudulenttransfers(suchaspropertytransferredtoanunsecuredcreditorwithinninetydaysprecedingthedatethe
petitionwasfiled).Finally,heorshereducestheestatetocashtopaythecreditors.
Individualsareallowedtokeepexemptassetssothattheyhaveachancetostartover.Forinstance,ifamarriedcoupleownstheirhome,theymaykeepupto
$45,000equityinthehouse,plustheirfurniture,clothing,andotherpersonalitemsuptoacertainamount.
Inreorganizationproceedings,thetrusteemustkeepthedebtor'sbusinessoperational,andinvestanddistributeanyincomeearnedfromthecontinuedoperationof
thebusiness.
5.Firstmeetingofthecreditors.Thecourtwillnotifythecreditorsofthetimeandplaceoftheirfirstmeeting.Beforethis,thecreditorsmusteachsubmitaclaimstating
theamountowedtothem.
InChapter7proceedings,thecreditorswillelectatrustee.Thedebtormustattendthismeetingasarequirementforhavinghisorherdebtsdischargedin
bankruptcy.Thecreditorswillposequestionstothedebtortodiscernwhetherthedebtorhasconcealedorfraudulentlytransferredanyassets.
6.Rightsofcreditors.Afterthefirstmeetingallcreditorsmustfileproofoftheirclaims.Thelegitimacyofaclaimdisputed

Page63

bythedebtorwillbeevaluatedbythecourt.Asecuredcreditorisassuredofcollectingthemoneyowedtohimorheroutofspecificassetswhichhadbeen
providedbythedebtorascollateral.
Thereisnoguarantee,ofcourse,thattheproceedsfromthesaleoftheseassetswillbesufficienttosatisfythedebtowed.Unsecuredclaimsfollowthesatisfaction
ofsecuredones.
7.Denialofdischarge.Adischargefromdebtsmaybedeniedundercertaincircumstances,suchasconcealingassetstodefraudcreditors,falsifyingrecords,and
havinghadapriorvoluntarydischargewithinsixyears.
Chapter13providesforanindividualtoberehabilitatedwithouthavingallassetsliquidatedasunderChapter7.Chapter13isadebtconsolidationprogramwhich
allowsforafullorevenpartialrepaymentofdebtsoveraperiodofuptofiveyears.Itcanonlybefiledbyindividualswhohavetotalunsecureddebtsoflessthan
$100,000andtotalsecureddebtsoflessthan$250,000.
OnceaChapter13planhasbeenapproved,allcreditorsmuststopcollectionefforts.Theymustsuspendinterestandlatechargesonmostdebts.Eachmonth,the
debtorturnsoveraspecifiedsumofmoneytoacourttrustee,whointurndispensesittocreditorsaccordingtotheplan.
Ifthedebtorrepaysatleast70%ofthedebts,theusualsixyearperiodforfilingagainforbankruptcyiswaived.Paymentofclaimsmaycomeoutoffutureincome
only,oroutofsomecombinationoffutureincomeplustheliquidationofcurrentlyownedassets.
ConsiderableabuseofChapter7proceedingsfollowingtheirrevisionin1978ledtoafurtherrevampingin1984.Forinstance,indeterminingwhetheradebtor's
financialsituationdictatesaChapter7filingoraChapter13debtrepayment,bankruptcyjudgescannowconsidermorethanjustadebtor'sassetsandliabilities.They
mayalsoconsiderhisorhercurrentincomeandexpenditures.
Inaddition,tighteningoftheprovisionsforexemptionsof

Page64

assetsfromliquidationhasmadeChapter7farlessattractive.ThusmanymoredebtorsgotheChapter13route.
InCanada,afirmfacinginsolvencycanattempttorefinanceinoneoftwoways.
1.Inreceivershipitcanattempttopersuadeitscreditors,orotherinvestors,toprovideadditionalfinancing,or
2.itcanmakeaproposalsuchastheColumbiandidintheillustrationabove.
Butthecompany'ssecuredcreditorscanforecloseatanytime.
IntheU.S.,firmsattemptingtoreorganizearegivensomebreathingroomunderChapter11oftheBankruptcyReformAct.ThepurposeofChapter11istokeepthe
firmoperatingandtoprotectthevalueofitsassetswhileareorganizationplanisworkedout.Theplancouldbetopaycreditorslessthanthefullamountoftheir
claims,ortopayoveralargerperiodoftime.
Companiescanbegranted120daystopresenttheplantocreditorsandanother60daystogettheplanapproved.Duringthisperiodotherproceedingsagainstthe
firmarehalted.Theplanisacceptedifmorethanonehalfofthecreditors,holdingatleasttwothirdsofthevalueofallclaims,voteinfavorofit.10
Whilebankruptcyproceedingshaveprovidedconsiderablerelieftomanydebtplaguedindividualsandcompanies,aftereffectsmustbenoted.InCanada,for
instance,bankruptcyremainsasamarkonone'screditratingforsixyearsafterthedischarge.Chapter7filingsintheU.S.remainonthecreditrecordfortenyears,
Chapter13forseven.
Bankruptcycanalsonegativelyaffectone'sabilitytogetajobwheretheemployeemustbebonded.Certaindebtsmustbepaidevenifadischargeissecured,suchas
alimony,childsupport,andtaxes.WhilegoingthroughtheOPDprogramonecannotobtainfurthercredit.

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PART3
BANKRUPTCY,BUSINESSETHICS,ANDTHEBIBLE
GeorgeJelksmaretiredlastAprilfromthehomeconstructionbusinesshehadstartedfortyyearsagowithaprayerand$2,000.
Athisretirementdinner,Georgereflectedonhiscareer."Wealwaysworkedhardtoprovidegoodquality,behonestwithourcustomers,chargereasonableprices,
andtreatemployeesfairly,"hesaid."Godhasbeengood.Wecouldprovideforourchildren,supportthechurch,andretirecomfortably.I'msureasmysonJohn
takesover,he'llcontinueourChristianstandards."
AyearlatersonJohnassessedhisfirstyearincharge:"Ididn'tknowhowtoughthiswasgoingtobe.Ihadtakensomecollegecoursesinaccounting,marketing,and
personnelsupervision....
"Butthatwastheeasypart.Youwouldn'tbelievethehardquestionsI'verunintothispastyear.Weneededbetteraccountingrecords,soIplannedtobuyasmall
computer.Butourbookkeeperissixtyandsayshecan'tlearntouseapersonalcomputerathisage.Ican'twaityearstoimprovethissystem.SodoIlethimgo?
"Inourarea,thehomeconstructioncompetitionisfierce.

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Weneedbetterconnectionswithlargescalehousingdevelopers.Lastmonthadeveloperinvitedmetolunchandagreedtogetussomecontractswithherfirmifwe'd
cutherinprivatelyfor1%ofourtake.
"Iwasshocked,butshesaysthat'showbusinessconnectionsarebuiltaroundherenow.Isthereanythingwrongwiththis?I'munderpressure.Salesandprofitsare
down,andI'vegotapayrolltomeet.
"Wealsoneedmoreadvertising.Mysisterrunsasmallagencythatcoulddothework.ShouldIgiveittoher,oristhatnepotism?
"Ourcompanydoesn'tcarryanemployeehealthinsurancepolicy.Insuranceisterriblyexpensive,butmanyworkersdon'thavepersonalcoverage.It'slegalnotto
coverthem,butisitright?
"Ialsoreallywonderifsomeofourcustomersaren'tborrowingovertheirheadstofinancetheirnewhouses.ShouldIfigurethat'stheirproblemandkeepmynoseout
ofit?
"I'msupposedtocontinueourChristianstandards?I'minovermyhead,andIfeelallalone."
ShirleyJ.Roels,"Ethics,Loneliness,andBusiness,"TheBanner,May14,1990,p.10.Usedbypermission.

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Chapter5
Ethics:
How?Why?Whose?
FinallyUndershaft[acapitalistmunitionsmaker],asks''Well,isthereanythingyouknoworcarefor?"Hissonreplies,Iknowthedifferencebetweenrightandwrong.""Youdon't
sayso!"exclaimsUndershaft."What,nocapacityforbusiness,noknowledgeoflaw,nosympathywithart,nopretensiontophilosophy,onlyasimpleknowledgeofthesecretthat
haspuzzledallthephilosophers,baffledallthelawyers,muddledallthemenofbusiness,andruinedmostoftheartists?Thesecretofrightandwrongat24,too!"
MajorBarbara,GeorgeBernardShaw

Beingamemberofapublicschoolboardrequiresagreatdealofreading,normallyofaratherprosaicnature.Thewinterof1985broughtadecidedchangetothat
aspectofthisschooltrustee'slife,however.
Isatattheboardtablewithmysixcolleaguesandoursenioradministratorsstaringinamazementatapictureofoneofourfemalejuniorhighteachers.Shewas
picturedinamen'seroticmagazine,dressedonlyinstockings,highheels,andagarterbelt.Equallydistressingwasthefactthatthephotographwasidentifiedas
havingbeensubmittedbyherhusband,alsooneofourteachers.
Theboardconductedhearingswiththeteachers,suspendingthemforsixweekswithoutsalaryonthegroundsofprofessionalmisconduct.Theteachersappealedtoa

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threepersonBoardofReferenceundertheBritishColumbiaSchoolAct.Themajorityofthatboardorderedthemreinstated.Itlabeledtheiractivitiesanappalling
lackofjudgmentbutnot,strictlyspeaking,misconduct.TheSchoolBoardtookthecasetotheSupremeCourtofBritishColumbia.Thedecisionwasreversedinthe
SchoolBoard'sfavor,andsubsequentlyupheldintheB.C.CourtofAppeal.
Theepisodearousedconsiderablecontroversyinthecommunityindeedaroundtheprovince.TheVancouverSunwasparticularlycriticaloftheSchoolBoard's
decisiontosuspend.
Whenitcomestoinappropriatebehaviour,thatkindofhypocriticalpruderyismoresuitedtoHarperValleyinthe1950'sthantheFraserValleyinthe1980's....Lawfulprivate
activitiesofteachersthatareunrelatedtoteachingarenoneofaschoolboard'sbusiness.1

Asithappens,ourschooldistrictencompasseswhatpassesfortheBibleBeltinBritishColumbia.Consequently,manylocalpoliticianshavestrongJudeoChristian
values.Thedecisiontosuspend,then,wasunanimousdespitethepublicdebate.
Butascontroversialasthatparticularissuewas,itrepresentsonlyoneofthemanyvaluejudgments,manywithsignificantethicalovertones,whichboardmembers
mustregularlymakeastheycollectandspendtaxdollars,andprovidefortheneedsofstudentsandemployees.Businesslifeisnodifferent.Ethicsandvaluesplaya
keyroleindecisionmaking.WilliamsandHouck,authorsofafinecasebookinChristianbusinessethicsentitledFullValue,notesevenkeyvalueladenbusiness
decisionareaswhereabiblicalworldviewcouldhaveadecidedimpact.
1.howweusepoweroverindividuals
2.howweunderstandouruseofnatureandnaturalresources

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3.howweunderstandwealthandproperty
4.howwehopetoachievehappiness
5.howweunderstandjustice
6.howwerespondtoourdrivetogratifymaterialwants
7.howweunderstandtime.2
Itwouldnotoccurtomany,however,thatbusinesspeoplewouldcareabouttheethics,biblicalorotherwise,ofbusinessdecisionmaking.Infact,thetermbusiness
ethicshasoftenbeenconsignedtothesamecategoryas"jumboshrimp,""cruelkindness,"oreven"armyintelligence."Itisseenasblatantcontradictioninterms.
Thispessimisticviewofthemoralityofthetypicalbusinesspersonisillustratedagainandagaininpublicopinionandotherpolls.Forinstance,amajorityofChicago
areabusinessexecutivessurveyedin1987agreedthatgoodethicsaregoodbusiness.Butmorethan20%saidthattheywouldbewillingtobribeapublicinspector.
About73%consideredpracticesintheirownindustrytobeunethical.3
EightysevenpercentofthemanagerssurveyedbytheNationalAssociationofAccountantsindicatedthattheywouldbewillingtocommitfraudincertaincases.
Thirtyeightpercentadmittedtheywouldpadagovernmentcontractifgiventheopportunity.4
A1983GallupPolldonefortheWallStreetJournalreportedthat49%ofthepublicthoughtbusinessethicalstandardshaddeclinedinthepastdecade.Only9%
thoughttheyhadrisen.Greedandselfishattitudeswerecitedbythegeneralpublicasthemostlikelycausesofthedecline,althoughbusinessexecutivesthemselves
mostcommonlyblamedthedeclininginfluenceofreligiousandmoralvalues.5
TherehasbeenaseemingexplosionofethicaldebatesoftheIvanBoeskyinsidertradingsortinthe1980s.Thusitisnotsurprisingthattherehasdevelopedaparallel
growthininterestinbusinessethics.Forinstance,in1988only11%ofAmericanM.B.A.programsdidnothaveanethicscourseinthecurriculum.6

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Isthisnewemphasislikelytoturnthetide?ConsidertheresultsofasurveyconductedbytwoColumbiaUniversitybusinessprofessorswhichattemptedtoevaluate
theeffectivenessofbusinessethicscourses.
Slightlymorethanathousandalumniwhograduatedfrom1953through1987responded.Fortypercentsaidtheyhadbeenrewardedbytheircompaniesfordoingthingsthey
found"ethicallytroubling."Only20%saidthereversethattheyhadbeenrewardedforrefusingtodosuchthings.
Ofthosewhorefusedtodowhatwas"ethicallytroubling"tothem,31%saidtheyhadbeenpunished.Punishmentrangedfromapenaltytothesubtlemessagethattheywereno
longerimportanttothecompany.7

Consequently,thecommercialmediaarepronetodisplayamostunflatteringpictureofcorporatelife.In200episodesof50topnetworkseries,accordingtoaMedia
Institutestudy,businesspeopletypicallywereportrayedinanegativemanner.Theywerepicturedascriminals,fools,orgreedyormalevolentegotists67%ofthe
time.8
Manybusinesspeopleandwritersofbusinesstextsrejectthislowviewofthestateofbusinessethics.Oneauthor,forinstance,entitledhisbookBeyondtheBottom
Line:HowBusinessLeadersAreTurningPrinciplesintoProfits.9 InithecitesmanyexamplesofthehighethicalpracticesofsuchwellknowncompaniesasLevi
Strauss,IBM,JohnsonandJohnson,andDaytonHudson.
Youmaybewonderingifthisisreallynecessary,abookonbusinessethicswrittenforaChristianaudience.Ohyes,wewillallagreewiththeVancouvertheology
professorwho,inobservingthemodernethicalscene,remarked,
Recentscandalsseemtobemakingpeoplerealizeit'snolongerclearthatweknow,orcanagreeonwhatweexpectofeachother....Nooneknowswhat'scricketanymore.10

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Butsurelysuchquotesareapplicableonlyto"theworld,"nottothosewhopracticebusinesswhileprofessingChristianbeliefs.
Canwebesosure?ConsiderthefollowingChristianbusinessleaderswhohavealldonewellineconomiclife.
1.ThechairmanoftheboardofoneofAmerica'slargestdrygoodscorporations,knownforhavingreadtheBiblethroughatleast70times,wasinterviewedbya
biographicalstorywriterforamajorevangelicalpublication.Heexclaimed,"InevermixtheBiblewithbusiness.Goodbusinessisgoodbusiness.There'snoChristian
wayofdoingbusiness."11
2.Amidwesternrealestateinvestortalkedabouttheprofitshehadmadeonarecentdeal.Whilehiselderlymotherseemedcontentwithgettingan81/2%returnon
theirmoney,helaughed."Idon'tgointoanydealsunlessIcanmake5002000%profit!"heboasted.
Hewentontoexplainhoweasilythiscanbedone.Simplyfindpeoplewhodon'tknowthevalueoftheirpropertyorareanxioustogetridofitforfinancial
reasons.Nevertellthesellerthepotentialsforthepropertyorthedealyouareplanning.HethenboastedthattheLordhadbeengoodtohiminseveralrecent
deals.12
3.AbusinessmaninDePere,Wisconsin,wasfounderandpresidentofaninvestmentfirm.HehadfrequentlybeenfeaturedinvariousWisconsinnewspapersand
periodicalsforhisuniquelyChristianapproachtobusiness.Heandhisassociatesbeganeachdaywithprayeranddevotions,whichthepresidentcitedasthe
foundationforhissuccess.Atthesametimethesepeopleweredefrauding800investorsof13.5milliondollars,thelargestsecuritiesfraudcaseinWisconsin
history.13
4.ThefollowingareexcerptsfromaninterviewdonebyFaithTodaymagazinewithmillionaireCanadianbusinessmanJimPattisonwhileheservedaschairmanof
Expo'86,thehighlysuccessfulworld'sfairheldinVancouver,B.C.
Q.WhatroledoesyourChristianfaithplayinyourwork?
A.Faithhasalwayshadamajorimpactonmylife.Butasfarasthefairisconcerned,we'verunitaswewouldourbusiness.
Q.IsityourkindofChristianwitnessyourcorporation?

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A.Notatall.Irunmybusinessonaverybusinesslikebasis...onwhatIconsidertobesoundbusinessprinciples,aswouldbenormal.Mybusinessismybusiness.Ineverlet
politicsorreligionaffectmybusinessknowingly.14

5.Thisfinalanecdoteisslightlydifferentfromtheaboveexamples,whileillustratingthesamepoint.AChristianinthedevelopmentbusiness,whomIknowwell,had
builtanumberofattractivecondominiums.Hemarketedthemtothelargeretirementsectorofmyowncommunity.Theadvertisedpriceatthetimewas$70,000.
Arecentlywidowedelderlyladyapproachedthedeveloperandofferedhimtheadvertisedprice.Myfriendsensedherinexperienceatthissortofthing.Heasked
ifshehadevermadesuchapurchasebefore.
"No,"shereplied."Myhusbandalwayslookedafterourfinances."
"Ifyouhadeverpurchasedahome"hesaid,"youwouldrealizethat$70,000isjustastartingfigure.Wewouldexpecttosellthecondominiumforaround
$65,000."
Needlesstosay,thewidowwashappytoreduceherofferandbuythehome.
Whenwordofthisincidentgotout,otherdevelopersinthecity,manyofthemChristians(infact,mostlyMennonite),ridiculedmyfriendfornottakingthefull
$70,000.Theycalledhimafool.
Apparentlytheneedforadistinctivelybiblicalapproachtobusinessdecisionmakingandpracticeisnotnecessarilyobvious(ordesirable)toallChristian
businesspeople.Doessuchanapproachexist?
Theplacetobeginisbyasking,whatdoesthetermethicsmean?Apparentlythisisnotobvious.ManuelVelasquezcitesaclassicstudyoftheethicsofbusiness
managersdonebyRaymondBaumhart.50%ofbusinesspeopledefinedethicalas"whatmyfeelingstellmeisright."25%defineditinreligioustermsaswhatis"in
accordwithmyreligiousbeliefs."18%definedethicalaswhat"conformstothegoldenrule."
OnetypicalreplytoBaumhart'sinterviewwentlikethis:

Page73
Ethicalmeansacceptedstandardsintermsofyourpersonalandsocialwelfarewhatyoubelieveisright.Butwhatconfusesme...isthepossibilitythatIhavebeenmisguided,or
thatsomebodyelsehasbeenpoorlyeducated.Maybeeachofusthinksheknowswhatisethical,butwediffer.Howcanyoutellwhoisrightthen?15

Theterm"ethics"isdefinedinvariousways.Onebookonthesubjectsuggeststhat:
Ethicsis,firstofall,thequestfor,andtheunderstandingof,thegoodlife,livingwell,alifeworthliving.Itislargelyamatterofperspective:puttingeveryactivityandgoalinits
place,knowingwhatisworthdoingandwhatisnotworthdoing,knowingwhatisworthwantingandhavingandknowingwhat'snotworthwantingandhaving.16

ThisunderstandingofthetermappearstobesharedbytheJournalofBusinessEthics.Itstatesthat"ethicsiscircumscribedasallhumanactionaimedatsecuringa
goodlife."17
Otherdefinitionshaveamoreexplicitmoralquality.Onewidelyusedtextbookinthestudyofbusinessandsocietysaysthat:
Ethicsisasetofrulesthatdefinerightandwrongconduct.Theseethicalrulestelluswhenourbehaviorisacceptableandwhenitisdisapprovedandconsideredtobewrong.
Ethicsdealswithfundamentalhumanrelationships.Ethicalrulesareguidestomoralbehavior.18

ChristianphilosopherArthurHolmesemploysasimilarapproach.
Ethicsisaboutthegood(thatis,whatvaluesandvirtuesweshouldcultivate)andabouttheright(thatis,whatourmoraldutiesmaybe).Itexaminesalternativeviewsofwhatis
goodandrightitexploreswaysofgainingthemoralknowledgeweneeditaskswhyweoughttodorightanditbringsallthistobearonthepracticalmoralproblemsthat
arousesuchthinkinginthefirstplace.19

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Holmes'definitionwillbetakenasanadequaterepresentationofthevariousonesconsulted.Alldefinitionsputforwardindicate,eitherexplicitlyorimplicitly,that
ethicsisconcernedwithmakingmoraljudgments,includingmoraldecisionsastowhatconstitutes"thegoodlife."20
Howoftendoethicalchallengespresentthemselvesinthecourseofeverydaybusinesslife?Theaveragebusinesspersondoesnotregularlydealwithquestionsof
bribery,falsificationofdocuments,sexism,orcollusion.Mostbusinessessurvivefromyeartoyearwithoutchargesofimmorality.Areethics,then,aneveryday
concern?
Ibelievetheyare.GobacktothesevenbusinessdecisionareasIearlierquotedfromFullValue.Thereitisimpliedthatethicsare(orshouldbe)apartofregular
businessdecisionmaking.Ethicsshouldinformbusinesspersons'relationshipswithemployeesandotherindividuals,theiruseofnaturalresources,andtheirattitude
towardthegratificationofmaterialwantswhichconsumersmayexpress.
Thereishardlyanareaofbusinesslifewherevaluejudgmentsandtradeoffsinvolvingconflictingdemandsarenotregularlymade.Thisistruewhetherdealingwith
outside"constituencies"suchasgovernment,suppliers,consumers,labormarkets,andsocietyatlargeorinside"constituencies"'suchasemployees,directors,and
shareholders,
Considerthisscenario.Aplantmanagerholdsstronglytoallofthefollowingvalues:
a.Pollutioniswrongandshouldbeavoided.
b.Consumersdeservehighqualityatfairprices.
c.Employeesshouldbewelltreatedandfairlycompensated.
d.Shareholdersdeserveanadequatereturnontheirinvestment.
Supposethesevaluescomeintoconflict.Forinstance,tighterpollutioncontrolstandardsmayrequireahugeadditionalcosttoimprovepollutioncontrolatthe
manager'sfac

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tory.Themanagercouldlobbytheregulatoryagencytoloosenthestandards,exceptthatsheagreeswiththem.
Butwheredoesshecomeupwiththemoneytopayfortheexpensiveequipmentneededtocomply?Doessheincreaseherproducts'prices?Orlessenthequality?
Doesshereducethewageincreaseshehonestlybelievesheremployeesdeserve?Doesshereducethecompany'sprofittomaketheownersshoulderthewholecost?
ThissimplifiedscenariopalesincomparisontosuchcomplicateddecisionmakingprocessesaswerepresentwhenthedeadlygasleakatUnionCarbide'splantin
Indiakilled2,000people,orwhentheExxonValdezoilspillcausedincrediblepollutionoffAlaska'scoast.Butitillustratesthateveninlessdramaticsituations,value
judgmentsmustbemade.Questionsofrightandwrong,goodandbad,mustbeaddressed.Compromisesamongvalues,alldearlyheld,mustoccur.Thequestionis,
howshouldethicaldecisionsbemade?
Askthepersononthestreethowsheorhethinksbusinessdecisionsaremadeandtheresponsewilllikelybe,"Onlyifthere'salsoabuckinitforthebusinessperson!"
Suchaconclusioniscertainlytempting.ConsiderthereasonsgivenforethicaldecisionmakinginarecentissueoftheCanadianBusinessReview.
Ethicsaredefinitelyimportanttobusinessforseveralreasons.Ethicalbehaviourisnowanecessityifyouwanttodobusinesswithsomegovernments,banksandother
corporationsthatrequirecompliancedisclosuresfromsuppliers....Inaddition,opportunitiestoprofitfromethicalcorporatebehaviourarebecomingevident.Examplesinclude
Loblaw's(asupermarketchain)greenproductsandDofasco(alargesteelcompany)findingthatrecyclingwastewateractuallyproducesareasonablepayback.

Thearticledoesadmitthatsuchselfinterestedreasonsforbeingethicaldofallshortofidealism.

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However,thesearerelativelycrassreasonsfordeclaringbusinessethicstobeimportant.Therearealsoaltruisticbenefitsfromgoodethicalperformancethatshouldnotbe
minimized,aswellasbenefitstosocietyingeneral.21

Itisdifficult,however,toarriveatanyotherconclusionthanthatselfinterestguidesbusinessethicaldecisionmaking.
JustrecentlyIreceivedliteraturefromanorganizationofethicalconsultantswhosepurposeitistoassistcorporationswiththemanagementoftheiractivities.Iwill
leavethefirmunnamed,butwhatfollowsisarepresentativesampleofreasonsforsubscribingtotheirservice.
Today'slegislatorsarezeroinginonyou.They'retryingtoholdyoupersonallyliablefortheactionsofyourcorporation.Andnotjustfiduciarymatters.They'readdingthe
environment,hiringpractices,productliability,andothersocialconcernstothelist.
Yourresponsibilitiesarebeingsteadilyexpandedtoembraceindividualshareholders,employees,government,creditors,andeventhecommunityatlarge.
Makenomistakeaboutit.Alleyesarefocusedonyou.
Thispioneeringnewslettergivesyoutheinformationyouneedtokeeplegaltrapdoorsfromsnappingshutonyou.[Emphasisisthatofthecompany.]

Ihavenoquarrelwiththeirpurposeortheservicetheyareselling.Iamonlyillustratingthepointthatthemotivationisnotthatethicsarerightinsomefundamental
way,butthatafirmwillbepunishedorloseacompetitiveedgefornotfollowingthem.Butisselfinteresttheonlyethicalapproachthatbusinesspeopleuse?
TypesofEthicalReasoning
Thereseemtobeasmanyframeworksforethicalanalysisastherearewritersonthesubject.Ihavenodesiretoaddtothelist.Whatfollowsisasummaryofthe
primarywaysin

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whichbusinesspeopleappeartothinkaboutethicaldecisions.
UtilitarianEthics:WhatBenefitstheMostPeopleisRight
Thefirstmajorethicaldecisionmakingorientationofbusinesspeopleistiedupwiththeconsequencesofone''sactions.Itisusuallyreferredtoasutilitarianism.
Thosewhoaffirmutilitarianismwanttomaximizebenefits(orutility)forthegreatestnumberofpeople.
Ifthebenefitsthatresultfromadecisionoutweighthecosts,thentheactionissaidtobe"good."Ifabusinesspersonisconsideringanumberofoptions,theoptionwiththe
highestnetbenefitwouldbethe"right"onetopursue.Topursueanyothercourseofaction,evenifit,too,hadapositivenetbenefit,wouldbe"wrong."22

Utilitarianism,then,isgoalorconsequencebased.Inapproachingethicalquestionsitasks,"Whatactionorpolicymaximizesthebenefit/costrelationship?"Inso
doing,itseeksthegreatestgood(orlowestcostwhereonlycostsresult)forthegreatestnumberofpeople.
Moralrulesabouthonoringcontracts,promisekeeping,collusion,andsoonarepromotedasmaximizingbenefits(orutility)inthelongrun,ratherthanbeing
inherentlyright.Toaccomplishthis,onemustsomehowreducetomeasurableunitsthequantityofbenefits(bothdirectandindirect)producedbyone'sactionsand
subtracttheunitsofharmtheactionproduces.
Inmakingthesecalculations,oneconsiderstheimpactofanactiononallaffectedparties.Onethenchoosestheactionwhoseoverallbenefitsaregreatestin
comparisontoanyalternativeaction.Ideally,oneistorefrainfromanyselfinterestinmakingone'scalculations.
Withrespecttomoralrules,then,autilitarianwouldnormallyrejectlyingbecauseofthenegativeeffectslyingtends

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tohaveonhumanwelfare.Butifaliecouldbeshowntobeamorebeneficialchoiceinacertainsituation,onewouldresorttolyingonthatoccasion.
Thus,utilitarianphilosopherJ.J.C.Smartreasonsthat
Moralrules,ontheextremeutilitarianview,arerulesofthumbonly....Ifwedocometotheconclusionthatweshouldbreaktheruleandifwehaveweighedinthebalanceour
ownfallibilityandliabilitytopersonalbias,whatgoodreasonremainsforkeepingtherule23

Thefinalappealwithrespecttoethicaldecisionmakingisthis:dotheconsequencesofadecisionshow,throughappropriatemeasurements,thepromotionofthe
greatestgoodascomparedtoanyotherpossibledecision?Astowhatconstitutes"thegood,"utilitariansdiffer.Oneofthetheory'soriginators,JeremyBentham
(17481832),sawthegoodaspleasure(versuspain).JohnStuartMillarguedforthedignityanddesirabilityofwhatisdistinctiveabouthumans.Amorerecent
philosopher,G.E.Moore,understoodthegoodasanintuitiveconceptwhichincludesagreatvarietyofculturalandsocialsatisfactionsonewoulddesirefortheirown
sake.
Suchanapproachhasobviousappealtobusinesspeopleinvolvedinamarketsystem,sincethemarketis,forahostoftypicalbusinessdecisions,theultimate
determinerofthecost/benefitrelationship.Questionsconcerningproductionanddistributionofgoodsandservices,pricing,effectiveadvertisingandpromotion
techniques,wages,andfinancingareallansweredbytheimpersonalforcesofthemarketplace.Thereislittleconcernwithabsolutestandardsotherthantheabsolute
ofmaximizingnetbenefitforthemostpeople(includingoneself,usually!).Oneethicstextseesthisliberationfromabsolutesasadecidedimprovement.

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Ethicsisn'tasetofabsoluteprinciples,divorcedfromandimposedoneverydaylife.Ethicsisawayoflife,aseeminglydelicatebutinfactverystrongtissueofendless
adjustmentsandcompromises.Itistheawarenessthatoneisanintrinsicpartofasocialorder,inwhichtheinterestsofothersandone'sowninterestsareinevitablyintertwined.
Andwhatisbusiness...ifnotpreciselythatawarenessofwhatotherpeoplewantandneed,andhowyouyourselfcanprosperbyprovidingit?Businessesgreatandsmall
prosperbecausetheyrespondtopeople,andfailwhentheydonotrespond...Ethicsistheartofmutuallyagreeabletentativecompromise.Insistingonabsoluteprinciplesis,ifI
maybeironic,unethical.24

AsrepugnantastheaboveperspectivemayseemtomanyChristians,utilitarianismisanimportantavenueforethicalanalysisinNorthAmericanbusiness.For
instance,ChristianbusinessmanJimPattison(mentionedearlier)cansaythat
Ineverlet...religionaffectmybusinessknowingly.IfIdid,Iwouldn'tdistributeCommunistbooks(oneofhiscompaniesdistributesbooksandmagazines)...Idon'tagreewith
Communistideas,butifpeopleinafreesocietywanttowriteaboutCommunists,thenwedistributeifthepublicwantsthem.Soyouletthemarketdecide.[Emphasisismine.]25

ItshouldbementionedthatPattison'scompanywasalsoamajordistributorofpornographicmagazines,includingtheoneinwhichappearedthepictureofthenude
teacher(discussedabove).
Thissamedesiretoavoidthornyquestionsconcerningabsoluterightandwrongappearsinanarticleaboutswimsuitmagazines.Mostofusareawareofthefamous
(orinfamous)SportsIllustratedswimsuitissue.SInormallysells3millioncopiesofanyoneissue,withrevenuesamountingtosomethingunder$7million.The
swimwearissuerealizesnearlydoublethecirculationandmorethantripletherevenue.
Acompetitorandimitatorofitsbathingsuitpublication,

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InsideSports,achievessimilarsalesimprovementswithitsversion.Thepublisher,whenquestionedabouttheethicalissueofsexploitation,replied,"Idon'tthinkin
termsofsexism.Ithinkintermsofwhatourreaderswant."26
Evenasesteemed(insomecircles)atheologianasHaroldLindselllendsinadvertentsupporttothisnotionthattheamoralmarketshouldbethefinalarbiterofgood
andbadbusinessbehavior.Whilecastigatingsocialistenemiesofthemarketsystemwhowouldimposeabsolutenotionsofwhatpeopleneed,hemakesthefollowing
remarkable(naive?)statement.
Freeenterpriserecognizesman'sselfinterest(aqualitywhich,whenbalancedbyaltruismisnotillegitimate)andusesitforthegoodofthemany.Hewhobecomeswealthyby
makingavailabletopeoplewhattheywantcanhardlybeanenemyofsociety[emphasisadded].27

ThetobaccocompaniesshouldemblazonthissentimentontheircigarettepackagestocounterbalancetheSurgeonGeneral'swarnings!
Noteveryoneiscomfortablewithanethicalsystembasedsolelyonwhethertheconsequencesofdecisionscanbeshowntomaximizebenefitsforamajority.
Lockedasweareintoamarketeconomy,thetendencytoseeeveryissueintermsofcostsbecomesoverwhelming.Butoneshiesawayfromtheideathatmoralbehaviorisa
functionofdollarsandcents.28
Businesspeopleareusedtothinkingaboutbenefit/costanalysisintermsofthenetbenefittotheclientortheirownfirmethicalanalysismustgobeyondthat.29

ObjectionstoUtilitarianEthics
Objectionstoutilitarianismtypicallyrunalongtwolines.Thefirsthastodowiththemeasurementofutility(orbene

Page81

fit,orhappiness).Justhowdoesonecalculateutility?Andforwhomdoesonemeasureit?Canselfinterestbeavoidedindecidingwhichistheappropriategroup
whoistobenefit?Businessdecisionmakersareultimatelyaccountableforhowtheirownfirmsbenefit.Howaretheythentomakeanobjectiveappraisalofsocietal
benefitfromactionstheyarecontemplating?
Thesecondobjectionconcernstheminoritywholoseoutinthecalculation.Dotheyhaverights?Doesthemajoritybecomeatyrant,withissuesoffairnesslostinthe
shuffle?
Velasquezbeautifullysetsoutthedifficultiesinactuallymakingcalculationsofbenefitsandcosts.Heraisesfourobjections.
1.Howcantheutilitiesthatdifferentactionshavefordifferentpeoplebemeasuredandcomparedasutilitarianismrequires?SupposeyouandIwouldbothenjoy
gettingacertainjob.HowcanwefigureoutwhethertheutilityyouwouldgetoutofhavingthejobismoreorlessthantheutilityIwouldgetoutofhavingit?Eachof
usmaybesurethatheorshewouldbenefitmostfromthejob,butsincewecannotgetintoeachother'sskin,thisjudgmenthasnoobjectivebasis.
2.Somebenefitsandcostsseemvirtuallyimpossibletomeasure.How,forexample,canonemeasurethevalueofhealthandlifeindecidingonpollutionissues?
3.Becausemanyofthebenefitsandcostsofanactioncannotbereliablypredicted,theyalsocannotbeadequatelymeasured.Whatarethelikelybenefitsof
investmentsinthespaceprogram,ormedicalresearch?
4.Itisunclearexactlywhattocountasa"benefit"andasa"cost."Howwoulddifferentculturalgroupsviewabankloantotheownersofanxratedtheater,for
instance,oragaybarasabenefittosocietyoracost?30
Beyondtheseconsiderations,ArthurHolmesasksjustwhichconsequencesshouldbeconsidered.Onlytheintendedconsequences?Otherpredictableconsequences
as

Page82

well?Orjusttheactualconsequences(whichcanbemeasured,ofcourse,onlyafterthefact)?
Doestheaveragepersonhavesufficientaccesstotheneededinformation(ifitexistsatall)tomakethecalculations?Isitenoughtotakethesumofallthesurplusof
goodoverbadforallthepeopleinvolved?Shouldonecalculateanaverageacrossanentirepopulation?Orshoulddifferentsegmentsbeconsideredseparately?31
Themeasurementdifficultiescouldbeelaboratedon.ButfortheChristian,perhapsthegreaterobjectionisthatutilitarianismdoesnotfinallyrecognizeindividualrights,
nordoesitdealadequatelywithdistributivejustice.
Ihaveoftenheardargumentsbetweenthosewhoopposepornographyandthosewhoeitherprofitbyoratleasttolerateit.Theargumentscenterontheallegationthat
pornographyiswrongbecauseitharmssocietyinsomeway(say,throughincreasingtheincidenceofrapeandchildsexualabuse).Thisisautilitarianapproach.It
arguesamoralcaseonthebasisofcalculationsofthevirtuallyincalculable.Itcouldinsteadarguealongsomeotherline,suchasthatpornographyisanattackonthe
inherentdignityofapersoncreatedinGod'simage.Itturnsthefullorbedindividualintoaonedimensionalsexobject.Autilitarianapproach,byitself,overlooksthe
notionthatsomethingisinherentlyrightorwrongregardlessofconsequences.
ConsequencesareimportanttotheChristianofcourse,asweknowfromsuchpassagesasJohn15(JB).
Everybranchinmethatbearsnofruithecutsaway(v.2).
Whoeverremainsinme,withmeinhim,bearsfruitinplenty(v.5).
ItistothegloryofmyFatherthatyoushouldbearmuchfruit,andthenyouwillbemydisciples(v.8).
Icommissionedyoutogooutandtobearfruit,fruitthatwilllast(v.16).

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Certainlyoneindicationoftheexcellenceofourspirituallivesistheconsequencesofouractions.Infact,PaultellsusthatwearecreatedinChristJesustodogood
works(Eph.2:10).AndJameswarnsthatanyclaimtoalivingfaithwithoutoutwardevidenceisfalse(James2:1417).
ButatothertimesweseespiritualgiantspluggingawayatdoingGod'swillevenwhennogoodconsequencecanbedetected.Jeremiah,whoearlyinhisministry
referredtoGodas"thespringoflivingwater"(Jer.2:13),lamentsthathiseffortshavecometonothingandhislotseemsundeserved.
ThinkofhowIsufferreproachforyoursake...
OLordGodAlmighty.
Ineversatinthecompanyofrevelers,nevermademerrywiththemIsatalonebecauseyourhandwasonmeandyouhadfilledmewithindignation.
Whyismypainunendingandmywoundgrievousandincurable?
Willyoubetomelikeadeceptivebrook,likeaspringthatfails?(15:1518).

Jeremiah,asweknow,diedinobscurity,withlittletoshowforhis40yearsofprophesying,althoughhiscommitmenttoGod'scallingseldomwavered.Heputupwith
everysortofindignityandthreat,includingrejectionbyhisownfamilyandneighbors(11:2112:6).Certainlyitwasnotthefavorableconsequencesofhisactionsthat
kepthimgoing(althoughgreatbenefitfortheJewishnationiswhathesought).Hewasinsteaddrivenbybeliefintheinherentrightnessofhiscause,aconviction
groundedinGod'swordtohim.
DeontologicalEthics:SomeThingsA.reInherentlyRight
Otherframeworksforethicalanalysisfocusonthisnotionthatsomethingisinherentlyrightorjust,regardlessoftheconsequences.Suchapproachesare
deontological.This

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comesfromtheGreekwordfor"obligation."Ratherthanbeneficialresultsdeterminingmoralduty,certainactsare,inthemselves,worthyofrespect.Thisistrue
whetherornotadheringtothemwouldmaximizethegoodforthegreatestnumber.
Onesuchapproachemphasizestherightsofindividuals.Accordingtoutilitarianthinking,ifanactionbenefitsthegreatestnumberitisethicalevenifthisaction
deprivesaminorityofthosebenefitsorofanyrighttoanalternativecourseofaction.Anapproachbasedonindividualrightsaccordsrespecttoeachandevery
individualwhomaybeinfluencedbyanaction.
Theconceptofarightcanbedefinedinvariousways.Forinstance,itcanrefertoapersonbeingauthorizedorempoweredtodosomethingonhisorherownbehalf
oronbehalfofothers.Forexample,privatepropertyrightsallowtheownertodowhatheorshewisheswiththeproperty.
Orthetermcanbeusedtoindicatethatotherpeoplemaynotrestrictindividualsfrompursuingtheirownselfinterests.Thisuseofthetermcouldbeillustratedby
constitutionalguaranteesoffreedomofassociation.
Aclosedunionshopmightbeseen,forinstance,asaviolationofone'sfundamentalrighttoassociate(ornotassociate).Agroupofworkerswhobandtogetherina
closedshopwithcompulsorymembershipmayreceivematerialbenefitsfromthis.Butsuchbenefitsdonotjustifydenyingtheindividual'srighttofreeassociation.Thus
theUnitedNations'UniversalDeclarationofHumanRightsdeclaresthatnoonemaybecompelledtobelongtoanassociation."32
EighteenthcenturyphilosopherImmanuelKanthasprovidedoneofthebestknownbasesforestablishingmoralrights.CalledtheCategoricalImperative,itputs
forwardthefollowingprinciples,assummarizedbyVelasquez.

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1.Anactionismorallyrightforapersoninacertainsituationifandonlyiftheperson'sreasonforcarryingouttheactionisareasonthatheorshewouldbewillingto
haveeverypersonacton,inanysimilarsituation.
Thisprincipleaccordsequalrightsandrespecttoeachindividual.Itarguesthatwhatismorallyrightformetodomustbeequallymorallyrightforanyotherperson.
2.Anactionismorallyrightforapersonifandonlyif,inperformingtheaction,thepersondoesnotuseothersmerelyasameansforadvancinghisorherown
interests,butalsobothrespectsanddevelopstheircapacitytochoosefreelyforthemselves.
Thisprinciplerespectstheinherentdignityofeachandeveryindividual,demandingthatpeopleneverbeexploitedforone'sownselfinterests.33
AsattractiveastheseprinciplesaretoChristianswhobelieveinthegoldenruleandtheinherentvalueofindividualsasGod'simagebearers,theystillleaveuswitha
question.Whatparticularmoralrightsdohumanbeingshave?
Holmessuggeststhat"theclueistoknowwhatisessentialtobeingahumanperson."HeseesjustificationforphilosopherJohnLocke'sthreenaturalrights:life,liberty,
andproperty.
1.Therighttolifeobviouslyisprerequisitetoallelse.
2.Therighttolibertyrespectstheselfdeterminationofoneendowedwiththecapacityfordeliberationandfreechoice.
3.Therighttopropertyisconcernedthatthefruitsofone'slaborshouldmeetbasicneedsandsustainahumanqualityoflife.
TotheseHolmesaddstherighttowhateverisnecessary"forlifeandgodliness,"suchasfreedomofinformation,freedomofassociation,freedomofreligion,andso
on.Henotesthatineverycaseone'sparticularrightsmustbelimit

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edbytheequalrightsofothers.34
Dependingonone'sreligiousorphilosophicalpresuppositions,conclusionsconcerningwhatconstitutesinherentmoralrightsmaydiffer.ButmostNorthAmericans
shareacommonviewofabroadrangeofindividualmoralrights.
Problemswith"RightsBased"Ethics
Weareleftwiththreedifficulties.First,howdoesonechooseamongconflictingindividualrights?Thisconcerncomesuprepeatedlyintheprolifeversusprochoice
debate.Onesideputstherighttolifeofafetusovertherighttoprivacy.Anotherputscontrolofthemother'sbodyfirst.
Second,humanrightsconsidertheindividualattheexpenseofsocietalwellbeing.Utilitarianism,ofcourse,doestheopposite.Buttherearetimeswhentheinterests
ofsocietyasawholemayrequiredenyingindividualrights.Anexampleisthedenialofcivilrightsduringtimesofwarorotheremergencies.Whendoestheneedfor
majoritybenefitoverwhelmanindividual'srights?Argumentsovertheappropriateamountofintrusionintotheprivatesectorbythegovernmentturnonthispoint.
Third,rights,aswellasutilitarianism,ignorequestionsofthejustorfairdistributionofsociety'sbenefitsandburdensamongallpeople.
Justice(orfairness)existswhenbenefitsandburdensaredistributedequitablyandaccordingtosomeacceptedrule.Forsocietyasawhole,socialjusticemeansthatasociety's
incomeandwealtharedistributedamongthepeopleinfairproportions.Afairdistributiondoesnotnecessarilymeananequaldistribution.Thesharesreceivedbythepopulation
dependonthesociety'sapprovedrulesforgettingandkeepingincomeandwealth.Theseruleswillvaryfromsocietytosociety.Mostsocietiestrytoconsiderpeople'sneeds,
abilities,efforts,andthecontributionstheymaketosociety'swelfare.Sincethesefactorsareseldomequal,fairshareswillvaryfrompersontopersonandfromgrouptogroup.35

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Theabovedefinitionreferstothatcategoryofjusticecalleddistributivejustice.Thisreferstothefairdistributionofsociety'sbenefitsandburdens.Current
controversialexamplesincludetheissueofequalpayforworkofequalvalue,andthedifferenceinwageratesbetweenmenandwomen.
Othercategoriesincluderetributivejustice,thejustimpositionofpenaltiesonwrongdoersandcompensatoryjustice,thefaircompensationforwrongfullossof
somethingtoanother.
Incapitalisticeconomiestheprevailingviewisthatsociety'sbenefitsshouldbedistributedprimarilyonthebasisofaperson'scontributiontosociety'swellbeing,
measuredintermsofsuchthingsaseffortandproductivity.Socialistsaremoreinclinedtoseebenefitsgoinginthedirectionofneed.
Justice:TheBible'sContributiontoEthicalReasoning
JusticeisanimportantOldTestamenttheme,oftenlinkedwiththeword''righteousness."JusticeisrightnessrootedinGod'scharacter,andoughttobeanattributeof
humanbeings.Wisepersonsspeakit(Ps.37:30)andthinkit(Prov.12:5).Godrequiresitofhumankind(Mic.6:8).Therighteousenjoyit(Prov.21:15).36
WemodernNorthAmericanstendtothinkintermsofgettingjusticeinacourtoflaw.ButinOldTestamenttimesonedidjusticeinavarietyofarenas,including
economic,social,family,andreligiouscontexts.
JeremiahoffersinsightintowhatitmeanstobeafollowerofGodandseekjustice.Beginninginchapter22ofhisprophesy,wereadaseriesofassessmentsofvarious
Judeankings,eachasonorgrandsonofthegreatandgodlyJosiah.AllfeelthelashofJeremiah'stongue,nonemorethanJehoiakim,thekingwhosoughtJeremiah's
life.

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Woetohimwhobuildshispalacebyunrighteousness,
hisupperroomsbyinjustice,
makinghiscountrymenworkfornothing,
notpayingthemfortheirlabor.
Hesays,"Iwillbuildmyselfagreatpalace
withspaciousupperrooms."
Sohemakeslargewindowsinit,
panelsitwithcedar
anddecoratesitinred.
Doesitmakeyouaking
tohavemoreandmorecedar?
Didnotyourfatherhavefoodanddrink?
Hedidwhatwasrightandjust,
soallwentwellwithhim.
Hedefendedthecauseofthepoorandneedy,
andsoallwentwell.
"Isthatnotwhatitmeanstoknowme?
declarestheLORD.
Butyoureyesandyourheart
aresetonlyondishonestgain,
onsheddinginnocentblood
andonoppressionandextortion(22:1317).

Atthetimethisprophecywasuttered,JudahwasavassalkingdomofEgypt.ThustheimpoverishedJudeanspaidtaxestoboththeirownandtheEgyptianrulers.
Josiah,Jehoiakim'sfather,didjustice,definedasdefendingthecauseofpeopleonthemarginsofsociety.Jehoiakim,ontheotherhand,furtherexploitedthe
poor,buildinghimselfapalaceattheirexpense.
Justice,usedinthisway,goesbeyonddispassionatefairness.Itisfairnessplusmercy.Justiceisloveinaction.37AsimilarunderstandingistaughtinJames1:27.
"ReligionthatGodourFatheracceptsaspureandfaultlessisthis:tolookafterorphansandwidowsintheirdistressandtokeeponeselffrombeingpollutedbythe
world[emphasisadded]."
AnevenmoregraphicexampleofthisOldTestamentdepictionofjusticeatworkinthekingdomofGodisprovidedbyJesusinresponsetoJohntheBaptist'squery.
"Areyou

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theonewhowastocome,orshouldweexpectsomeoneelse?"(Luke7:19).OurLordreplied,
GobackandreporttoJohnwhatyouhaveseenandheard:Theblindreceivesight,thelamewalk,thosewhohaveleprosyarecured,thedeafhear,thedeadareraised,andthe
goodnewsispreachedtothepoor(Luke7:2223).

ArthurHolmeshasseizedontheOldTestamentnotionofjusticeasthekeytodevelopingaChristianethic.Henotes,
Weneedanindependentprincipleofjusticetoensureanequitabledistributionofgood,inadditiontotheprincipleofloveorbenevolencethatmaximizesgoodconsequences.38

Holmesgoesontonotethatjusticeandlovedonotconflictbutrathersupplementandreinforceoneanother.
Asloveisobligatedinjusticetodistributeitsbenefitsequitably,ratherthanplayingfavoritesorpracticingdiscriminationandunfairness,sojusticeismotivatedbylovetokeep
itsrelentlessquesttirelesslyalive.39

Howdoesjusticedifferfromutilitarianreasoning?Bothtakeabroadsocietalview.Bothfacethechallengeofmeasuringcostsandbenefits.
Considerthistruescenario.Afamousbusinessmanwhogothisstartasanautomobiledealerusedtoaddupthesalesvolumeofeachofhissalespersons.Thenhe
firedthesalesmanproducingthelowestvolumeforthatmonth,unlessthevolumewasparticularlygood.40
Utilitarianthinkingtriestocalculatetheeffectofadecisiononallaffectedpartiesandchoosetheactionwiththegreatestnetbenefit.Thusfiringthesalesmencouldbe
seenasethicalprovidedthatthenetbenefittocustomers,shareholders,othersalespersons,andsoonwasthegreatest.Standardsofjusticemightleadoneto
questionwhether

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thelowmanonthetotempolewasbearingafairshareofmakingthedealershipasuccess.Thefirstapproachisinterestedinthenetsum.Thelattercaresaboutjust
orfairshares.
Outlinedthusfararetwobasicframeworksforethicalanalysis.Thefirst,calledteleologicalfromtheGreekwordforaimorgoal,includesutilitarianism.Ithastodo
withthebeneficialorharmfulconsequencesofbehavior.
Thesecond,referredtoasdeontologicalfromtheGreekwordforobligationorduty,includesapproachesbasedonfundamentalhumanrightsandstandardsof
justice.Theseemphasizetheinherentrightnessofactions,orduty,withouttakingconsequencesintoconsideration.
AMixedEthicalFramework
Noneoftheseapproachesseemssufficient,byitself,toguidethebusinesspersonthroughthedifficultethicaldecisionsheorshefacesinthemarketplace.Therecould
betimeswhensocietalbenefitsarethepreeminentconcern.Onotheroccasionsquestionsofrightsandjusticemaydominate.
Todealwiththisdifficulty,someethicistshaveproposedamixedframeworkforethicalanalysiswhichblendstherespectivepositions.
WithinboththeJudeoChristianheritageandthatofIslamthedivinecommandtheoryisdominant.
Forthisframework,thecriterionortestofrightandwrongisthewillofGod,expressedeitherthroughnatureorthroughrevelation.Itisamixedframeworkbecausethedutiesor
commandmentsassociatedwithitarealmostuniversallyheldtoincludeelementsofbothteleologicalanddeontologicalthinking.Oftenthismixtureisexpressedbypointingto
suchattributesofGod'snatureasbenevolence,justiceandmercy....Thedivinecommandtheoryimpliesthatactionsandnormsgettheirlegitimacyfrombeinginaccordwith
God'swillandfromnoothersource.41

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Holmes'approach(whichwasdiscussedearlier),involvingtheweddingofjusticeandbenevolence,isagoodexampleofsuchamixedframework.
Wehavesurveyedthreeavenuesforethicalanalysis.Arewenowleftwithinterestingtheories,safelystoredinanivorytower?Isanyoneframeworkadequateto
meettheneedsofeverydaybusinessdecisionmaking?Orisamixedframework,suchasthedivinecommandtheorytraditionallyemployedbyChristians,thebest
responsetoethicalchallenges?Answerstothesequestionsaretheobjectiveofthenextchapter.

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Chapter6
OutoftheIvoryTowerandintotheMarketplace
Asuccessfulmissionaryhastomakehistheologywalkinthegutter.
KurtRuby,formermissionarytoColombia,SouthAmerica

Asbothauniversityprofessorandalaypreacher,Ioccupytwofieldsoftencriticizedforbeingwalledofffromthe"realworld"(whateverthatis).Ethicistsoftenface
thesamecharge.Thischapterwilltrytoscalethatwallaroundtheivorytowerandbringethicaltheorytobearontherealworldofeconomiclife.
TheconclusioninChapter5wasthatvariousframeworksforethicalanalysishavebeendevisedbutnoneissufficient,byitself,totackleeverydaybusiness
problems.
CombiningConsequences,Rights,andJustice
Mostbusinessethicistsagreethatsomekindofcontingentapproachisnecessary.1 Inotherwords,amethodmustbefoundwherebyallthreemajorwaysofdoing
ethicalthinkingconsequences,rights,andjusticecanbeappliedeithersinglyorinsomeappropriatecombination.
AmagnificentattemptatmakingethicspracticalappearsinanarticlebyProfessorLauraNash,thenofHarvardUniversity'sGraduateSchoolofBusiness.She
providesa

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numberofquestionswhichcouldbeaskedinanysituationinvolvingbusinessethics.Nashfeelsthattheanswerswouldhelpdecisionmakerscometosoundethical
conclusions.Asamplingofherquestionsindicatesherconcernforconsequences,rights,andjustice.
1.Haveyoudefinedtheproblemaccurately?Onemustbecarefultodefinefullythefactualimplicationsofadecisionwithoutlettingone'sloyaltiesswayone's
objectivity.
2.Howwouldyoudefinetheproblemifyoustoodontheothersideofthefence?Thisquestionprovidesafurthercheckondefiningaprobleminasolelyself
interestedfashion.
3.Howdidthissituationoccurinthefirstplace?HereNashisadvisingdecisionmakerstodistinguishbetweensymptoms(amanagerbeingruthlesswith
employees,orfudgingthebooks)andtheactualdisease(suchasintenseprofitpressuresimposedonthemanager).
4.Towhomandtowhatdoyougiveyourloyaltyasapersonandasamemberofthecorporation?Nashadmitsthattherearefewautomaticanswerstothis
question,althoughshenotesthatmanyyoungmanagersaregivingmoreweighttoindividualratherthantocorporateidentity.
5.Whatisyourintentioninmakingthisdecision?
6.Howdoesthisintentioncomparewiththeprobableresults?Thereasonforacompany'sactionswillhavewiderangingeffectsbothinsideandoutsidethe
corporation.Itcouldaffectsuchthingsasattitudestowardemployeesandthecommunity,wagespaid,andsoon.Inaddition,highflownintentionsmayfalterquickly
iftheprojectisunrealistic.
7.Whomcouldyourdecisionoractioninjure?Answerstothisquestioncouldleadtoadecisionnottoact,forinstance.
8.Canyoudiscusstheproblemwiththeaffectedpartiesbeforeyoumakeyourdecision?Suchanapproachcouldprovideimportantinformationinanswering
question7above.
9.Areyouconfidentthatyourpositionwillbeasvalidoveralongperiodoftimeasitseemsnow?Timealterscircumstances,andfewcorporationsare
immunetoshiftsinfinancialstatus,externalpoliticalpressure,andpersonnel.Nashadvisesthatonemustask,arehardtimestheultimatetestofastatementof
objectives,Oraretheyaclearindicationthatacorporationhastobeableto"afford"ethicalpositions?

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10.Couldyoudisclosewithoutqualmyourdecisionoractiontoyourboss,yourCEO,theboardofdirectors,yourfamily,orsocietyasawhole?Disclosure
isawayofsoundingoutone'sconscienceandsearchingoutloyalties.
Nashgoesontoaddressthequestionofwhatconditionswouldallowforexceptionstoone'snormalethicalstand.Sheconcludeswithadiscussionoftheproper
moralstandpointofacorporation.2
Ashorter,butalsothoughtprovokingscheme,issuggestedbyWalterKiechelinFortunemagazine.Startingwiththeutilitarianperspective,Kiecheltellsthedecision
makertolistthedifferentpeopleorgroupswhichwillbeaffectedbythedecisionunderconsideration.Hethenchallengesthebusinesspersontoassesshowpossible
differentchoiceswillaffectothers.
LikeNash,Kiecheladvisesustoaskthepotentiallyaffectedpartieswhattheythinkofthealternatives.Kiecheldoesnotsayso,butpresumablythesegroupswill
respondinaselfinterestedfashion(mostdo!).Thisstillleavesthedecisionmakerresponsibletodecidewhichresponseshavethegreatermerit.
Assigningprioritiestothepartiesisthenextstep.Onewouldmakeadecisionafteraskingtwoquestions:(1)Howmuchwilleachpartybeaffected?(2)Whatdutyis
owedtoeachparty,dependingonwhethercustomers,shareholders,employees,orsocietyatlargeareinview?
Baseduponthisseriesofrathersubjectiveassessments,decisionmakersnowdecidewhatactiontotake.
Recognizingthatutilitarianconsiderationsontheirownareinsufficient,theauthorsuggeststhatthecompetingchoicesbemeasuredagainstsomestandardofjustice.
Hecitestwogeneralstandardsofjustice:(1)Acttomaximizethebenefittotheleastadvantagedinsociety,oratleasttodothemnoharm.(2)Actsothatother
people'sabilitytoleadtheirlivesastheywishisenhanced,notlimited.3

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Onefinalexamplewillillustrateboththevalueandthecomplicationofusingthecontingentapproach.Frederickandhiscolleaguessuggestthatifonewantstoknow
whetheradecisionisethicalorunethical,oneshouldanswerthreequestions:(1)Dobenefitsexceedcosts?(2)Arehumanrightsrespected?(3)Arebenefitsand
costsfairlydistributed?
Iftheanswersareunanimously"yes,"thedecisionisprobablyethical.Iftheunanimousansweris"no,"thedecisionisprobablyunethical.Theauthorsarerealistic,
however,inassessingtheirownrecommendedmethod.
WhathappensiftheUnanimityRuledoesnotapply?Whatiftherearetwo"yes's"andone"no,"oranothercombinationofthevariouspossibilities?Inthatcase,achoiceis
necessary.Theanalyst...thenhastoassignprioritiestothethreemethodsofethicalreasoning.Whatismostimportanttotheanalyst...utility?rights?orjustice?What
rankingshouldtheybegiven?Ajudgmentmustbemade,andprioritiesmustbedetermined.Unfortunately,therearenoeasywaystodothis[emphasisismine]...Thereisa
naturaltendencyformanagers...toassignahighprioritytothosethingsthatbenefittheircompanyandpreservetheirjobs.4

FindingGuidancebeyondSelfInterest
Thegreatamountofsubjectivityinallthesystemswehaveexaminedleavesdecisionmakerswithnofinalassurancethattheyaremakinggoodethicaldecisions.
Wheresomanygrayareasexist,businesspeoplearethrownbackontheirownconvictions.Howdoesonedealwiththetemptationtomakeawhollyselfinterested
finaldecision(assuming,ofcourse,thatselfinterestmayattimesbeinappropriate)?
InthissituationChristianbusinesspeoplehaveadecidedadvantage.Theirbeliefinahighersourceofmoralrulesandunderlyingprinciplesgivesthemasound
foundationformakingvaluedecisions.Thisadvantageisfranklyadmittedinonebusinessethicstext.

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Thegreatreligionsderivetheirmoralpreceptsnotonlyfromhumanexperiencebutfromdivinerevelation.Ethicsmustrelyontheunaidedhumanreason.Becauseofthis,the
conclusionsofethicsoftenfallfarshortoftheethicalimperativesfoundinbothJudaismandChristianity.Yet,thereshouldbenoconflictbetweenethicsandmoraltheology,for
ethicsadmitsitsincompletenessandsendsreligiouspeopletotheirfaithforthecompletionofmoralequipment.5

ArthurHolmesablydemonstratesthesignificanceofthisassertionashediscussesthestructureofethicaltheory.Ethicsarestructuredutilizingfouringredients:(1)
particularcases,suchaswhetherafirmshoulddeclarebankruptcy(2)moralrulessuchasthosewhichwouldapplytothepaymentofdebts(3)underlying
principles,includingthosehavingtodowithtruthfulness,faithfulnessinmeetingobligations,andactingjustlytowardlendersandemployeesand(4)one'stheological
orphilosophicalbasesorpresuppositions,whichinthecaseoftheChristianarethecommandsofGod.6
WhetherornotoneisChristian,thefactualanalysisofaparticularcasecouldbedoneinasimilarmanner,usingathoroughsystemsuchastheNashapproach
(discussedearlier).Butprinciples,alongwiththespecificmoralrulesdrawnfromthem,maydiffer,dependingonone'spresuppositions.
Moralprinciples,themostinclusiveandultimateethicalconcepts,applynotjusttoparticularkindsofactivitiesbutuniversallytoeverykindofinvolvement,whateveritmaybe.
Theyarethereforeexceptionlessprincipleswhichcannevergivewaytosomethingmoreinclusiveandwhichmustnevergivewaytoexpediency."WhatdoestheLordrequire...
buttodojustice,andtolovekindness,andtowalkhumblywithyourGod?"(Micah6:8).Weareneverexemptedfromactingwithjusticeandlove.7

UncoveringtheBible'sBusinessPrinciples
Aswaspreviouslydiscussed,notallChristiansbelieve

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thattheBiblegivesbusinessdecisionmakersspecificguidance.PerhapstheirviewofScripturelimitsitsapplicationtospecializedareassuchaschurch,missions,and
aspectsoffamilyliferatherthanthecomplicatedaffairsofthebusinessworld.SuchaviewseriouslyunderestimatesthescopeandpowerofGod'sWord.
YetIbelievefewChristianswouldbaldlyassertthattheBibleislimited.Isuspecttheproblemliesinalackofteachingonhowtoextracttimelessbiblicalprinciples
fromthevariousformsinwhichbiblicalmaterialiscast.
ManyoftheprinciplesofhumanrightsandjusticeweholddeararenotspelledoutinScripture.Rather,theyhavetobeinducedfromthemanyapplications,case
studies,analogies,andfiguresofspeechemployedbythebiblicalwriters.
WhatprincipleswasPaultryingtoteachaboutappropriatesocialconductinhisdiscussionofmeatsacrificedtoidols?(1Cor.8,10).Whatdowelearnaboutthe
transformationofawoman'sroleinchurchandsocietyfromPaul'sdiscussionofherhat?(1Cor.11).WhatdidJesusmeanconcerningradicaldiscipleshipwhenhe
toldhisapostlestohatetheirparents?(Luke14:26).WhereintheBibleisslaveryexplicitlytaughtaswrong?Ormonogamyasright?Ordemocracyasworthfighting
for?Orabortionasunacceptable?Nonearereadilyapparentbutwebelievetheyarethere,nonetheless.
Concerningcomingtoethicalconclusionsaboutbusinessdecisions,IbelievetheBiblefunctionsinatleastthreeways.First,itgivesusaworldview,alifeperspective.
InaclassicarticleinHarvardBusinessReview,HaroldL.Johnsonmakesthispointwell.
Theapplicationofreligion'sultimateinsightstospecificsituationsis,ofcourse,atremendouslydifficulttask.Therearenoblueprints,nosimplerulestogoby.Christianitydoes
notpresenttheexecutivewithatoolkitofeasytouserulesandpre

Page98
ceptsbywhichproblemscanbesolved.Thedoctrinesarenotboundupinasimplelistof''do's"and"don'ts"somewhatinthestyleofabookofetiquette,whichiffollowedwill
resultinharmonious,gentlemanlyrelationswithinandwithoutabusiness.Butitdoesofferaframeofreference,auniverseview,whichinsteadofgivingpeaceofmindandeasy
successinhumanrelationsoftenbreachesthebarricadeofselfassurance,focusesondifficulties,anderasesnaivehopesofbusinessprogresseveronward,everupward.8

TheBibleteachesustoviewsocietyasGoddoes,withabird'seye,aboveandoutsideourculture(noeasytask,weallagree)ratherthanwiththeworm'seye,
insideandimmersedinourculture.TheNorthAmericanperspective,believeitornot,isnotalwaysthesameasthebiblicalone.Anyonewhohastraveledtoother
countries,ortalkedtovisitorsfromothercultures,quicklyrealizeshowboundupwegetinourparticularculturalpointofview.TheBible,ifweletit,forcesusto
breakthroughculturalconditioning.
Thedifficulty,ofcourse,isthattheBibledoesnotofferusnakedbiblicalprinciples.Theyareinsteadwrappedintheclothingoftheirownancientcultures.
Thetaskofthepreacher/teacheristounderstandthecultureinwhichanOldorNewTestamentprincipleisapplied,stripoffthatoldculturalexterior,andextractthe
biblicalprinciplelurkingunderneath.ToapplytheScripturestothemodernphenomenonofbankruptcy,thisiswhatIwillhavetodoinsucceedingchapters.
ThesecondfunctionofScriptureistoteachusvalueswhichapplytobusinesslife.Valuesrepresentouridealsconcerninghowthingsoughttobe,orshouldbedone.
Theyareinextricablyboundupwithethics.
Itispossible,aswediscussedearlier,thatequallyvalidvaluesmayconflict,callingustosetprioritiesorcompromise.Ethicaltheorytriestohelpdecisionmakers
assignthosepriorities.Nevertheless,alargenumberofrelevantvaluescanbefoundinScripture,asweshallsee.

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Third,theBibleprovidesuswithgeneralethicalprinciplescomprehensiveandfundamentallawsordoctrineswhichgoverntheChristian'slife.Wemayvaluegood
government,lawandorder,andtolerance,butsometimesafundamentalbiblicalprinciplemightforceustochallengebothgovernmentandlaw.
Then[theSanhedrin]called[PeterandJohn]inagainandcommandedthemnottospeakorteachatallinthenameofJesus.ButPeterandJohnreplied,"Judgeforyourselves
whetheritisrightinGod'ssighttoobeyyouratherthanGod.Forwecannothelpspeakingaboutwhatwehaveseenandheard"(Acts4:1820).

Valuesandmoralrulesarerankedaccordingtotheircentralitytounderlyingbiblicalprinciples.
NowIwanttoconsidersevenJudeoChristianvaluesthatstandinstarkcontrasttotypicalNorthAmericanfreeenterprisevalues.ThenIwillputforwardwhatIthink
isafundamentalbiblicalprinciplehavingtodowiththekeypurposesofeconomicactivity.Ihopethiswillofferawaytostartdevelopingathoroughgoingbiblical
worldviewwhichcanhelpsortoutbusinessethicalproblems.
Inourculture,certainvalueshavedevelopedovertime.Becausetheyarebroadlyaccepted,theirpracticeiscontinuouslyreinforcedholdingthemwillnormallymeet
withtheapprovalofothers.AsIwrite,FranceiscelebratingthetwohundredthanniversaryoftheFrenchRevolution,withitscommitmenttofreedom,equality,and
brotherhoodvaluesWesterndemocraciescontinuetocherish.Manyofoursociety'svaluesderivefromourJudeoChristianheritageaswell.
Valuesarenotnecessarilyfixed,ofcourse,althoughtheychangeslowly.Insomeareasofthinkingandconduct,valueshavebecomeincreasinglyrelative.The
reasoningoftheSupremeCourtjusticeinupholdingmyschoolboard'ssus

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pensionoftwoteachersItoldofearlierisanexcellentexample.
Ateacherisanimportantmemberofthecommunitywholeadsbyexample.HeorshenotonlyowesadutyofgoodbehaviourtotheSchoolBoardastheemployerbutalsotothe
localcommunityatlargeandtotheteachingprofession.Anappropriatestandardofmoralconductorbehaviourmustbemaintainedbothinsideandoutsidetheclassroom.The
natureofthatstandardwillofcoursevaryfromcasetocase.Moralstandardsarethoseofthecommunitywheretheteacherisemployedandlivesnotthoseofsomeothercityor
municipality.Inmostinstancestherewillbelittledifference,butwhatmaybeacceptableinanurbansettingmayoccasionallybemisconductinaruralcommunityandvisaversa.
Forexample,asmallreligiouscommunitymightfinditunacceptableforafemaleteachertolivewithamanoutofwedlock....Ontheotherhand,thesekindsofrelationshipsmay
betoleratedinaurbansettingwherethetwopeoplearelostintheanonymityofthecrowd,becausetheylivefarawayfromtheschoolorbecausethevaluesofthecityare
differentfromthevaluesofthecountry[emphasisadded].9

IrecommendtheethicscasebookFullValue,byWilliamsandHouckofNotreDameUniversity.They,likemyself,areconvincedthatthereisasetoffixedbiblical
valueswhichrepresentadesperatelyneededcorrectivetomanycommonlyheldbusinessvalues.
ThesevaluesshapethewayaChristianseesbusinessissuesandalsoprovidestandardstoguidedecisionmakers.10

JudeoChristianValue

ContrastingValue

1.Valueofpoweroverin
dividualsasserviceto
helpothersdeveloptheir
uniquegifts(Phil.2:1
18John13:114).

Valueofpoweroverindi
vidualsasdominationandcontrol
ofothers.

Page101

2.Valueofpoweroverna
tureasastewardshipby
personsoverGod's
world.Personsarecalled
totransformnaturein
harmonywiththewhole
ofcreation(Gen.1:26
31).

Valueofpowerovernature
asamandatetoproducea
maximumofconsumergoodsand
creaturecom
forts.

3.Valueofwealthand
propertyasanopportu
nityforincreasedservice
forhumankind,yetasapossible
obstacletosalvation(Luke
16:193112:1321Mark
12:41
44).

Valueofwealthandproper
tyasthemeasureofaperson's
worth.

4.Valueofhappinessasachieved Valueofhappinessasachieved
throughfol
throughacquiringpossessions.
lowingGod'sintentions
forhumankind(Mark
8:36).
5.Valueofjusticeasthe
rightofeachpersonto
themeansofleadinga
humanlife(Acts2:42
47Lev.25:155Gal.
3:2728).

Valueofjusticeasthepro
tectionofpropertyalready
possessed.

6.Valueofdeferringgrati
Valueofimmediategrati
ficationofwants(John12:2326 ficationofwants.
Luke14:27
Matt.16:2410:39).

Page102

7.Valueoftimeasreverencefor Valueoftimeasmoney.
God(Luke12:2232).

Ifimplementedinpersonalandcorporatepolicies,thesevalueswouldaffectmanyareasofbusinesslife.Amongthesewouldbehumanrelations,whetherinvolving
employees,unions,customers,suppliers,lenders,shareholders,orsocietyatlargemarketingstrategies,includingwhatproductsandservicestoofferandappropriate
advertisingcontentenvironmentalconcernscorporatestrategysocialresponsibilityandthegeneralpursuitofprofit.
ApplyingJudeoChristianValues
FollowingarefourexamplesoftheadoptionofJudeoChristianvaluesandtheirimpactonnormalbusinesspractices.Threearefromthemanagementsideandthe
otheroneisfromlabor.
In1978,businessmanDavidSimmondsfelloutwithhispartnersovertheissueofrewardingcertainkeyemployees.Simmonds,aBaptist,feltthatseniorpeoplewho
hadmadeasubstantialcontributiontothecompany'ssuccessdeservedtoshareintheownershipofthecompany.Hispartnerspreferredacloselyheldstructure.
Accordingly,Simmondspulledoutofthecompanyandstartedhisownfirm,nearToronto,takingthosekeyseniorpeoplewithhim.Hiscompanyhasgrownfrom42
to150employees,withsalesincreasingfrom$5.12millionin1979to$34.6millionin1987.Truetohisoriginalprinciples,14oftheemployeesownshares.
Simmondsattributeshissuccesstopeople.
Inourapproachtobusiness,relationshipsarethemostimportanttousrelationshipswithoursuppliers,staffandcustomers....We'llgothesecondmileinaccommodatingstaff
oraccommodatingcustomersincreditdecisions.Therearetimeswhenourheartsruleourheads.11

Page103

AnotherexampleoftheimpactofbiblicalvaluesonthemissionandpoliciesonabusinesscomesfromChicago.ServiceMasterwasfoundedbyanotherdevout
Baptist,MarionE.Wade,asacleaningserviceforhomesandofficesinthe1950s.Todayundertheleadershipoftwooutstandingevangelicals,ChairmanKennethT.
WessnerandPresidentC.WilliamPollard,thecompanyearnsrevenuesinexcessof$1billionperyearwhileprovidingextensiveservicestomorethan1,000
Americanhospitals.ServiceMastercanoutfitahospitalwithvirtuallyeverythingitneedsexceptdoctorsandnurses.12
Inanunpublishedpaper,Pollardnotesthatthereareavarietyofreasonswhypeoplework.Forsome,itissimplyanecessaryevilforothers,itisameanstosome
end,suchasmaterialisticaccomplishments,power,orsocialstatus.Butsomepeoplevalueworkasaspecialcalling,aChristianministry.This,hesays,is
ServiceMaster'sview.
ServiceMasterprovidesauniqueopportunityforourworktobebothanindividualandcorporatecallingandministryinthemarketplace....TohonorGod,tohelppeople
develop,topursueexcellence,togrowprofitablyisallpartofGod'swork....Ourprimarycallingisaministrytopeople,thepeopleweworkwithandthepeopleweserve.God's
ultimatemeasureofoursuccess,andthegreatesttestimonytoHisname,isthechangedlivesofpeoplewhoaretouchedthroughourefforts.Anenvironmentthatincitespeople
toknowGodthroughHisSon,JesusChrist:thisistheultimatelitmustest.Thisistheultimatereasonwhygrowth,andtheinvolvementofmoreandmorepeople,isnotanoption
forus,butamandate....WemustrecognizeourresponsibilitytobestewardsofallthatGodhasprovidedforus.13

ServiceMaster'sannualreporteachyearliststhecompany'sfourobjectives.Theyare:tohonorGodinallwedotohelppeopledeveloptopursueexcellenceto
growprofitably.Pollardsaysthatthefirsttwostatementsdefinethe

Page104

company'sgoalsthelattertwoconcernthemeansofreachingthosegoals.
Unusuallysensitiveenvironmentalconcernscomeoutofanothercompany'scommitmenttobiblicalvalues.AppliedEnergyServices(AES),basedinArlington,
Virginia,ownsandoperatesseveralpowerplantsthroughouttheUnitedStates.In1986itrankedtwelfthinalistofthefastestgrowingprivatelyownedcompaniesin
America.Onecompanyofficerassertedthattheyplaceahighervalueonenvironmentalprotectionthanprofitmaking."Wetellourshareholdersoutrightthatourjobis
nottomaximizethevalueoftheirshares.We'reinbusinessforotherreasons."14
Thiscommitmenttoenvironmentalismgoesbeyondstateoftheartpollutioncontrolsystems.In1987thecompanyvoluntarilyspent$29,000torelocatetwo100
yearoldoaktreesataplantsite.Theycould,instead,havemerelycutthemdownandreplacedthemwithsaplings,asthelocalcountyordinancesrequired.
ExplicitlyChristianintheircompanyliterature,thecompanyincorporatesJudeoChristianvaluesintoeveryareaofcorporatelife.Examplesinclude:
1.PlantingthousandsofacresoftreesindevelopingcountriestooffsettheCO2greenhouseeffect.
2.35%ofemployeeshavestockoptions.
3.Offerstoreducetherateoncontractswhichhavealreadybeensigned.
4.OperatingcommitteemeetingsareopentoallAESemployees.
Thecompanyliststhefollowingastheprimaryobjectiveofthemanager:thecreationofanenvironmentwhereotherpeoplecanusetheirgiftsandacquiredskillsto
achievetheorganization'sobjectivesstewardshipofpeople.15
Onefinalexamplecomesfromorganizedlabor,perhapsanunexpectedsource.TheChristianLabourAssociationof

Page105

CanadaestablisheditsfirstlocalsinOntarioandBritishColumbiain1952.IthassincebeencertifiedbyprovinciallaborrelationsboardsinOntario,BritishColumbia
andAlberta(1963),Saskatchewan(1985),Manitoba(1986),theYukonTerritory(1987),andthefederallaborrelationsboardin1978.
UnlikeanyotherlaborunioninCanada,itbasesitsactivitiesonthebiblicalteachingsofsocialjustice,cooperation,sharedresponsibility,andhumandignity.Members
donothavetobeChristians(andoftenarenot).ButtheymustadheretotheCLAC'sprinciplesandvalues.
Theimpactofbiblicalvaluesonthisunion'spoliciesandpracticesisprofound.ParticularlynoteworthyistheCLAC'srejectionoftheadversaryrelationshipbetween
managementandlabor.
Labourrelationsarehumanrelations,thatis,theyarefirstofallaboutpeople,peopleatwork.Therefore,unionsandtheworkerstheyrepresentfindthemselvesatthecutting
edgeoflifeandhumanactivity.Itishere,whereworkerstoiltoproducethegoodsandservicesforsociety,thatthevaluesorbeliefsbywhichtheylivefromdaytodaycomeinto
focus.Unionsmustbepreparedtograpplewiththesevalues,testandconfrontthebeliefsthatshapethethinkingofworkersandmanagersalike,andsearchforanswersthatwill
leadtowardjusticeandharmonyintheworkplace.16

TheCLACiscommittedtoofferingvoluntarybindingarbitrationpriortoanystrikeaction.Infact,sinceitsinceptionin1952theunionhasstruckonlytwice,both
timesbecausetheownersrefusedbindingarbitration.Ontheotherhand,itbelievesthatworkersdeservemoreparticipationindecisionmakingthanworkersusually
receive.ThisisbasedlargelyontheCLACbeliefthatpeoplearecreatedtobefreebeings,andthatthecorporationisaworkcommunitywhereallpeopleare
equallyvalued.

Page106
Ownersandmanagersofcompanieswillhavetochangetheirattitudestowardunionsandrealizethattheiremployeesarenotmerelycostfactors,orcommoditiesthatmustbe
boughtonthelabourmarket.Unionsshouldbegiventheopportunitytobemorethannegotiatorsofcontractsandthefilersofgrievances.Unionsshouldbeacceptedasthe
spokesmenoflabour,tobeconsultedanddrawnintotheplanninganddecisionmakingoftheenterprise.17

TheseorganizationsprovideuswithstartlingproofthatthereisaChristianwayofdoingbusiness.Whatisstrikingineachcaseisthattheorganization'spoliciesand
practicesarebothspokenandmodeledbytopmanagement.
Ethicalleadership,ratherthanelaborateethicalcodes,isthekeytorunninganorganization,branch,ordepartmenttoachievedesiredvaluesandpractices.Coupled
withsettingtherightexampleisaparticipativemanagementstylewhichallowsemployeestodialogueconcerningcorporatevaluesandtheirimplementation.
Incontrast,somewellintentionedbusinesspeoplehavemadepatheticattemptsatbringingChristianityintotheirorganizations.
Ithink,forexample,oftheBuickdealerontheeastsideofDetroitwhorecentlybroughtinevangelistMarthaJeanSteinbergandchoirfromtheHomeofLoveChurchforafew
hoursofgospelsingingandpraying.Afterward,Steinberginvitedfiftyorsopeopleintheshowroomtopickoutanewcar."We'regoingtoprayaprayeroffaithforallthosewho
wantcars,"shesaid."I'msayingtoGMAC[GM'sloanagency]thatyourcreditwillpass.Comebacktomorrowandclaimyourcar."Thoughmanypeoplepointedtothevehicles
theywanted,noonecamebackthenextdaywithadownpayment.18

NowIwanttoaddressoneofthemostimportanteconomicprinciplesintheBible.Itprovidesafoundationforthesevenkeyvaluesdescribedabove.Itclarifiesthe
ultimatemissionofalleconomicactivity.Itsuggeststheethical

Page107

approachthatshouldbeparamountwhenethicaldecisionsmustbemade.
OutofthisprinciplewillcomeanumberofrelatedprincipleshavingtodowithmanyfacetsofaChristianbusinessperson'slifeandactivities.Anditdirectlyaddresses
thecornerstoneoftheprivateenterprisesystemtheprincipleofprivatepropertyrights.
SeveralyearsagoIattendedapoliticalmeetinghostedbyanewCanadianpoliticalpartycalledtheWesternCanadaConcept.Thisshortlivedpartywascommitted
totheseparationofwesternCanadafromtherestofthecountrytoachievegreatereconomicprosperityforwesterners.Thisoutrageousgoalmadeitimpossiblefor
mostwesternCanadianstotaketheW.C.C.seriously,althoughmanyempathizedwithitsfeelingsofalienationfromthecentersofpowerinOntarioandQuebec.
Themeetingwasattendedbyabout1,500people,includingmanyevangelicalChristians.Anumberoftheparty'splanksstirredconsiderableapplause,nonemore
thanthecallforprivatepropertyrightstobeentrenchedintheCanadianconstitution.BecausetheW.C.C.wascommittedtofreeenterpriseastheonlyacceptable
economicmodel,itsawsuchenshrinementasfundamental.
TheW.C.C.wasnotaloneincallingfortheinclusionofprivatepropertyintheconstitution.Virtuallyalltheprovinceswereurgingthefederalgovernmentofthedayto
dothis.ManyChristianvoiceswereraisedinsupport.Infact,thebeliefinthesacrednessofprivatepropertyrightsisoftencitedasthereasonwhyChristianstendto
voteforprivateenterprisepoliticalparties.
BiblicalVersusCapitalistViewsofPrivateProperty
Capitalismrecognizesarelativelyunrestrictedrightofprivateownershipofproductiveproperty(whichcanincludeland,buildings,technology,andsoon).Ownersare

Page108

entitledtouse,orevenabuse,thispropertyastheyseefit.Amongotherthings,theownermaywithholdtheservicesofhisorherpropertyunlessheorsheis
remuneratedadequately.Forthevastmajorityofowners,thepurposeofownershipistomaximizeprofitsinthelongrun.19
Whatofthebiblicalperspective?Toobtainit,wewillhavetoplungeintothemurkywatersofOldTestamenteconomicteaching.
InEgyptalllandbelongedtothePharaoh(Gen.47:2026).InotherancientEasternlands,thekingsandtemplesownedlargeestates,althoughsomelandstillrested
inprivatelands.ThefeudalsystemprevailedamongancientIsrael'sneighborsapieceofpropertywasgrantedbythelargelandownertoanindividualinreturnfor
theobligationtorendercertainservices.
AlthoughitwascommonthroughouttheNearEastinthesecondmillenniumB.C.,Israeldidnotexperiencethefeudalsystem.EachIsraelitefamilywasapportioneda
plotofland,tobemaintainedbythefamilyforever(Lev.25Num.27:11136:112).Inatheologicalsenseafeudalsystemexisted,howeverYahweh20claimed
ultimateownershipoftheland,andgaveIsraelitesdominionovertheirprivateacreagessubjecttoahostofrestrictions.''Thelandmustnotbesoldpermanently,
becausethelandismineandyouarebutaliensandmytenants"(Lev.25:23,emphasisadded).
Theserestrictionsincluded:
1.SabbaticalYearandJubilee.Thesabbaticalyear,knownbyseveraldifferentnames(seventhyear,Exod.21:223:11sabbathofrest,asabbathtotheLord,Lev.
25:4yearofrelease,Deut.15:118),providedfortheautomaticreleaseofHebrewslaves.Everyseventhyearthelandwastoremainuncultivatedandthevineyards
andolivegrovesuntended.Debtsweretobecanceled,andthepoorlentwhatevertheyneeded.
Jubileewasheldeveryfiftiethyear(aftersevensabbaticals).

Page109

Itwastoconsistofthereturnofanyalienatedlandtoitsoriginalownersortheirheirs.Sowing,vintage,andharvestwereprohibited(Lev.25:817).Onlyland
obtainedbyinheritancewaspermanent.Landobtainedbyothermeansrevertedtotheoriginalfamily.
2.RedemptionoftheLand.IfanIsraelitewasforcedoutofdireneedtosellland,anearrelativecalledthekinsmanredeemer(seeLev.25:25,4749Ruth2:20,
3:9,4:112Jer.32:6,7)wastobuythelandthekinsmanhadsold.
Thekinsmanredeemerhadpriorityoverallotherpurchasers.Itwasbothhisrightandhisobligationtopurchasethepropertytoretainitinthefamily.
3.RestrictedLandTransfers.TotheIsraelitelandwassacred,GodbeingitsultimateOwner.Themanagementofthefamilyacreagewasasignificantmoral
responsibility.Evenmovingalandholder'sboundaryworkerwasacriminalact(Deut.19:14).Nofreemarketinland,suchasexistsinWesternnationstoday,was
allowed.
ThusanIsraelitecouldonlydisposeoflandinlimitedcircumstances,primarilythatofpoverty(Lev.25:2526).Thepriceofthelandwasalsolegislated.Thevalue
ofthelandwasbasedonanestimateofthevalueofitsyielduntilthenextJubilee.Atthattimethelandrevertedtotheoriginalownerortheheirs.Inaddition,the
sellercouldrenegeonthedealatanytimeandrepurchasethelandifhecouldaffordtodoso,withthepricecalculatedonthesamebasis(Lev.25:2428).
Tosummarize,allpropertybelongstoGod.TheIsraeliteswerenottocreateafreemarketforproductiveproperty.Rather,individualfamiliesweredelegatedthe
responsibilitytomanageGod's"estate,"overwhichtheLordretainedultimateownership.Landcouldnotbesoldformoneywhichwouldbeusedforcurrent
consumptionwhilepossiblydeprivingfuturegenerationsoftheirrightfulinheritance.
TheBible'sConcerntoPreservetheFamily
AnticipatingthatsomeIsraeliteswouldfallintoneedandpossiblyhavetoselltheirlands,thelawprovidedsuchmechanismsasthekinsmanredeemerandtheJubilee
toretainthelandwithinthefamilyorclan,andtoeventuallyre

Page110

storeittotheoriginalowners.
ThisconcernforthewellbeingofthefamilyunitbothinthepresentandthefuturecontrastswiththatofIsrael'sneighbors.Thatthetypicalpeasantwasgreatly
oppressedisaconsistentpicturefromancientdocuments.Priestsareshownasillegallyinvadingthepropertyofpoorfarmersandtakingtheircrops.Richpeople
regularlyexploitedlessfortunateneighbors.
Amongthemostpitiableofthepoorwasthedebtor.Heandhisfamilycouldbesoldintoslaveryandremaininthisstateforlife.ASumerianproverbaptlybrings
hometheoppressedstateofmanyofthepoor:"Thestrongmanlivesoffwhatispaidforhisstrength,andtheweakmanoffwhatispaidforhischildren."
Oftenthesecuritydemandedforaloanbythelenderwasthepersonofthedebtorhimself.Thispersonalsecuritymightextendtohisfamilyandallhispossessionsas
well.Thus,ifthedebtorfailedtopay,heandhisfamilyoftenhadtoenterintotheexclusiveserviceofthecreditoruntilthedebtwasdischarged.Oftenthefamilywas
dividedamongvariouscreditors.
Itseems,then,thatakeyOldTestamentprincipleisthepreservationofthefamilyunit.Thelargescaleaccumulationoflandbyafewwhowouldthenbeableto
exploitthelandlesswasavoided(seeIsa.5:8).Individualfamiliesweregivenastakeintheeconomicwellbeingofthenation.Theeconomicsecurityoffuture
generationswasthusassured.Economicbalanceandeconomicjusticewereachieved.
WhatistherelevanceofthisformodernWesternfamilieslivinginafreemarketeconomy?Theaccumulationoflandandotherproductivecapitalisnottobeanendin
itself.Itisameanstoseveralimportantgoals:thesolidarityofthefamilyunit,theeconomicsecurityoffuturegenerations,andeconomicbalanceandjusticeinsociety
generally.
Twoimportantrestrictionsmustbenoted.First,private

Page111

holdingsarenotforourselfindulgentuse.Second,exploitationmustnevermarkeconomicdealingswithothers.Theirfamiliesareasimportantasours,andas
deservingofeconomicjusticeandsecurity.
Finally,economicactivitymustnevercontributetobreakdownwithinthefamily.Thisisalessonmanybusyentrepreneursandharddrivingprofessionalsneedtolearn.
Workaholismwhichrobsthefamilyofitsdeservedunityiswrong.Israelitestookafullyearoffeverysevenfromnormaleconomicactivity.Manybusinesspeople
havetroubletakingoffaweekendamonth.
TheBible'sConcernforAllNeedyPeople
Buttheobligationplacedonprivatepropertyownersbyholdingproductivecapitalextendsbeyondtheirimmediatefamilies.Thereisnoquestionthattherighttoown
propertyisalegitimatebiblicalconcept.NotonlydoesthePentateuchexplicitlyteachit,buttheeighthcommandment("Youshallnotsteal')reinforcesit.Ibelieve,
however,thatthisrighttoownpropertyissubordinatetotheobligationtocareforsociety'sweakermembers.
ThreeOldTestamentteachingsstronglysuggestthisfurtherrestrictionontheselfcentereduseofprivateholdings.
1.ThePoorTithe(Deut.14:2223,2729).TheIsraelitesorganizedyearsincyclesofseven,culminatingintheSabbaticalYear.Ineachofthoseyearsafirsttithe
asimple,proportionaltaxleviedoneachfamily'sflocks,herds,andcropswascollectedtosupporttheLeviticalsystem.
Butasecondtithewasalsorequired,foradifferentpurpose.Inyearsone,two,four,andfive,asecondtaxintheformofatithingofone'soutputwastobe
consumedbyeachfamily"inthepresenceoftheLordyourGodattheplacehewillchooseasadwellingforhisName"(Deut.14:23).Ratherthanbeingplacedat
thedisposaloftheLevites,itwasconsumedbytheproducerinthecontextofworshipinJerusalem.

Page112

Inyearsthreeandsix,thesecondtithewasatthedisposalnotonlyoftheLevites,butofthealiens,fatherless,andwidows(alltypicallylandless)whocouldnot
provideforthemselves.
2.TheGleaningLaws(Lev.19:910Deut.24:1921cf.Ruth2:27,1517).LikethePoorTithe,thismeansofredistribution,wheretheedgesofthefieldswereto
beleftunharvestedforthebenefitofthepoorandthealien,issketchyindetail.Noamountorpercentageoftheharvestisdictated.Presumably,generosityofthesort
BoazexhibitedtowardRuthwastoguidethereaper'sdecision.
3.TheCapitalMarket(ortheusurylaws,Exod.22:25Lev.25:3537Deut.23:1920).Thelawinterferedinthefinancialcapitalmarketbyforbiddingthecharging
ofinterestonloanstopoorbrothers.Obviouslythislegislationprovidedaperfectdisincentivetolending.Thusthelawencouragedanopenhandedattitudetowardthe
needydespitetherebeingnofinancialbenefitfrommakingtheloan(Deut.15:711)21
Redistributionofcapital,then,isanormalresponseforthosewhoacceptbiblicalteaching.Thosewhohadtheoppositeimpulses,selfindulgentlycenteringeconomic
prosperityonthemselvesattheexpenseoftheneedy,wereregularlycondemnedbytheOldTestamentprophets(see,forinstance,Amos8:48Isa.5:810,10:1
3).
HowMuchWealthDoestheBibleLetUsKeep?
Butjusthowfardoesthisattitudetowardourprivateholdingsextend?Manyofuspreferblueprints,specificpercentages,explicitdirection,sothatweknowwhen
we'vereachedthemagicnumberthatpleasesGod.ForthiswewillveerforamomentintotheGospels.
LukehasthemosttosayontheproperChristianattitudetowardmaterialpossessions.Letmerestrictmyselftoabriefoverviewofthreemotifsfoundinthegospel.
1.Thecalltorenouncepossessionstotally.AgainandagainLuke16recordsJesusasdemandingrenunciationofone's

Page113

possessionsasaconditionofdiscipleship.
ThiscanbeseeninthecallofSimonPeter,James,andJohn(5:11),thecallofMatthew(5:2732),thestoryoftherichyoungruler(18:1823),Jesus'teachingon
thecostofdiscipleship(14:33),thewidow'spennies(21:14),thecommissioningofthetwelve(9:3),andthefurthercommissioningoftheseventy(10:14).
Innearlyeverycase,LukeusesaparticularGreekword(panta,abandonment)tounderscoretherenunciationofpossessionsandthetotalityofthecall.
2.Thedangersofwealth.AtatimewhenJewssawmaterialblessingasacertainindicationofGod'sfavor,Jesuswarnshisfollowerstoavoidthesnareofwealth.
Referencesincludewoespronouncedontherich(6:2426),theparableofthesower(8:14notethattheseedischokedbylife'srichesandpleasures.InMark's
accountthewordis"choked,"butinLukeitistherichwhoarechoked.Theyareseducedbytheirwealth),theparableoftherichfool(12:1321),therichman
andLazarus(16:1931),andthefamouscamelgoingthroughtheeyeoftheneedle(18:2430).
Jesus'warningsinthislastcaseweresoseverethattheJews,accustomedtolinkingwealthwithGod'sblessing,asked:"Whothencanbesaved?"Richesand
faithfuldiscipleshipseemednowtobeincompatible.
3.Therightuseofwealth,orthediscipleshipofpossessionsintheserviceoflove.TheoutstandingexamplehereisthestoryofZacchaeus,thetaxcollector(19:1
10).ZacchaeusprovidesLuke'sanswertotwoquestionshowcantherichbesaved,andhowdoesoneuseone'spossessions?
Zacchaeuswasachieftaxcollector(hehadunderlingswhocollectedtaxesforhim).HelivedinprosperousJericho.Heisonerichmanwhodidpassthroughthe
eyeofaneedle.Henotonlymaderestitutionofillgottengainsaccordingtorabbinicteaching(fourfold),butwentmuchfurther,givinghalfoftheremaindertothe
poor.Thishedidfreelyandjoyfully.Assuch,hestandsinboldcontrasttotherichyoungruler.
Butisn'ttithingsufficient?DoInotmeetmyobligationstoredistributemyincomewhenIhavehitthetraditional10%mark?

Page114

Apparentlysuchthinkingislegalistic,atleastinLuke'sview.HerecordsJesusassayingthatthePharisees'scrupulousrecordoftithingwastooeasy(11:42a),that
beyondthiswemuststriveforjusticeandtheloveofGod(11:42b).
InthenextchapterJesusurgeshisfollowerstoseekhiskingdomthrough,amongotherways,sellingalloftheirpossessionsandgivingthemtothepoor(12:3033).
Obviouslyourattitudetowardmateriallifemustbeasacrificialone.One'spossessionsaretobeusedforraisingthedowntrodden.
AmIthenbuyingmywayintothekingdom?Weknowbetter.TheonlyentrytothekingdomofGodisthroughsavingfaithinChrist(Eph.2:89).Onemanwho
attemptedthefinancialroutetospiritualsuccessfoundhimselfheadinginaverydifferentdirection.
WhenSimon(theSorcerer)sawthattheSpiritwasgivenatthelayingonoftheapostles'hands,heofferedthemmoneyandsaid,"Givemealsothisabilitysothateveryoneon
whomIlaymyhandsmayreceivetheHolySpirit."Peteranswered,"Mayyourmoneyperishwithyou,becauseyouthoughtyoucouldbuythegiftofGodwithmoney!"(Acts
8:1820).

HowismateriallifeconnectedwithourChristianwalk,then?Obviouslytheamountofourwealthisnotwhatmatters.Thewidow'spenniescountedforfarmorethan
therichJews'largeofferings.Amorelikelyexplanationisthatweasgratefulbelieversplaceallourpossessions,smallorlarge,whollyattheLord'sdisposal.We
regardthemasultimatelyGod's,tobeusedasGodseesfit.
InaccordancewithPentateuchalteaching,thereisnoroomforselfindulgence.Rather,GodblessesuswithmaterialresourcesasmeanstoGod'sends.Theseends
maytakeavarietyofforms,buteconomicjusticeandstabilityareprominentamongthem.Theimplicationsofthisforthebusinesspersoncontemplatingpersonaland
corporatere

Page115

sponsibilitiestowardemployees,customers,andsocietyatlargearehighlysuggestive.
TheKeyBiblicalPrinciple:
Justice
ThisstudyfrombothTestamentsseemstopointinthedirectionofstandardsofjusticeasbeingtheprominentavenueformakingethicaldecisions.22Good
consequencesaredefinitelybeingsought,butnotonastrictlycostversusbenefitbasis.Rather,allsociety'sfamilyunitsmustbetakenintoconsideration.
InancientIsrael,themajoritydidnotwinoutattheunfortunateexpenseoftheminority.Infact,inseekingjusticethemorewelltodoexperiencedsignificantpersonal
loss,suchasintheforgivingoflegitimatedebtsandthereturnofalienatedland.Butthistheydid(orweresupposedtodo)joyfullybecausetheyknewGod
ultimatelyownedtheirproductiveproperty.ThisrecognitionofGod'srightfulplaceattheheadofalleconomicactivitycanbeillustratedthroughtwofinalOld
Testamenteconomiclaws.
1.FallowYear.Asmentionedpreviously,bothSabbaticalYearandJubileelegislationprovidedforthelandtobeleftfallowfortheyear.Thecropsthatgrewontheir
ownwereassignedtothepoorfortheirpersonalbenefitand,oddlyenough,eventothewildanimals(Exod.23:10,11Lev.25:517).Allnormallaborceasedfor
thisyear.
2.TheWorkLeisureDecision.Withcomparableamountsoflandandazeroreturnonfinancialcapital,anIsraelitegotaheadbyworkinghard.Butsignificant
restrictionswereputonhislabor.First,allmen,women,children,servants,hiredlaborandanimalswereforbiddentoworkontheSabbath(Exod.20:810).Even
thelightingofafirewasprohibited(Exod.35:23).Thisamountedto52daysperyearofenforcedleisure.
Inaddition,theIsraelitesweretoceasetheirworktocelebratethethreegreatPilgrimageFestivalsPassover(Exod.12),PentecostorWeeks(Deut.16:912),
TabernaclesorBooths(Exod.23:16,1734:22,23)plusNewYear's(Num.

Page116

29:16),andtheDayofAtonement(Lev.23:2732Num.29:711).Thisenforcedleisuretimewastobeemployedlargelyforspiritualpursuits.
Iseconomicactivityandowningprivatepropertybiblical?Definitely.Diligenceineconomicpursuitsisencouragedoverandoveragain.Therighttoprivateholdingsis
buttressedbynolessprestigiouslegislationthantheTenCommandments.
Isthepursuitofprofitillegitimate?Notatall.NowhereistheaccumulationofwealthdenouncedinScripture.MaterialresourcescanevenbeasignofGod'sfavor
(seeDeut.28).
Areprofitsanendinthemselves,asthetypicalfreeenterprisepositionholds?Absolutelynot.Materialresourcesaremeanstofurthergodlyends,notendsin
themselves.
Howdoesoneusetheseresources?ToseekjusticeandtheloveofGod.EconomicbalanceandjusticeweredesiredgoalsforancientIsrael.Paulsuggeststhatsuch
goalswerestillappropriateforbelieversinhistime.
Ourdesireisnotthatothersmightberelievedwhileyouarehardpressed,butthattheremightbeequality.Atthepresenttimeyourplentywillsupplywhattheyneed,sothatin
turntheirplentywillsupplywhatyouneed.Thentherewillbeequalityasitiswritten:"Hethatgatheredmuchdidnothavetoomuch,andhethatgatheredlittledidnothavetoo
little".(2Cor.8:1315,quotingExod.16:18)

HolmesappearstoberightinchoosingjusticeandloveasthekeyelementsinconstructingaChristianethic.Thebiblicalteachingswelookedatsuggestthatindividual
humanbeingsretaincertainrightsasGod'simagebearers:tobetreatedwithdignityandrespect,toenjoyeconomicsecuritywithinastablefamilyunit,andtobe
treatedwithjustice.Wemustdesiregoodconsequencesforallpersons,andpursuejusticesothatthesegoodendsarerealized.

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Humanrightsareamatterofjustice,then.Butloveaswellasjusticemustbeourconcern.Lovewillseekjusticeandconcernitselfwithothers'rights.Butlovewillalsogothe
secondmile,deferringandevenwaivingsomerightsattimesinlovingservicetoothers.Marriageandparenthoodrequirethisofbothpartners,andtheycanteachushowto
combinejusticewithloveinotherareastoo[emphasisadded].23

Oneareawhereethicsmustbeexploredisbankruptcy.IhopeinmytreatmentoftheissueIcanmodeltheexplorationethicaldilemmasthebusinesspersonfaces.
IknowIhavenottiedupalllooseends.Ihaveplacedtheemphasisonstandardsofjusticeasapreeminentbiblicalprinciple.Individualmoralrightsandsocietal
welfarealsodemandtheChristian'sattention,however.
Greatspiritualsensitivityisnecessaryindecidingamongthevariousapproaches.Godlyvaluesmayclash,leavingthedecisionmakersomehowtoprioritizethem
accordingtotheappropriatebiblicalprinciple.Andbeyonddevelopingbiblicaldiscernment,theinevitabletemptationtomaximizeone'sownselfinterestsatthe
expenseofothersmustberesisted.

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Chapter7
WhattheBibleTeachesaboutDebt
Havinglostitsvalue,moneymaynolongerbetherootofallevil:credithastakenitsplace.
DaltonCamp,SaturdayNightMagazine

Ourtasknowistodeterminethebiblicalteachingconcerningdebtsandtheirrepayment.TheEnglishworddebtappearsinfrequentlyintheOldTestament.Thewords
debt(1Sam.22:22Kings4:7Neh.10:31),debts(Prov.22:26),anddebtor(Ezek.18:7)togetherappearonlyfivetimesinStrong'sConcordance.
ThreeHebrewwords(orrelatedderivatives)arerepresentedbythesefiveinstances.Inthreecasesdebtisconnectedtotherootideaoflendingoninterestorbeinga
creditor.Theothertwoareonetimeusagesofmoregeneralwordswiththerootideaofanopenhand,andtotieortoowe,respectively.IntheNewInternational
VersionoftheOldTestament,thesamewordsappearonlyadozentimes.
IntheNewTestament,theworddebtisusuallyemployedfigurativelyasapictureofsin,suchasinthephrase''Forgiveusourdebtsasweforgiveourdebtors."New
Testamentwritersknewoftheveryrealproblemsdebts,aswellasthegreatdisparitybetweenrichandpoorcausedintheirtimes(seeMatt.18:2335Luke7:40
4316:19Philemon18).ButthespecificeconomicteachingconcerningdebtsismostfullydevelopedintheOldTestament.
Fortunately,OldTestamentpassagesdogiveusanexcel

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lentpictureoftheroleofdebtinthebroadereconomyofGod'speopleinancienttimes.Thechallengeforusisonceagaintouncoverthebiblicalprincipleswhich
theseancientteachingsimply.
WhattheBible'sViewofUsuryTeachesUs
ApromisinglineofdoctrinetopursueisthemostlyignoredOldTestamentoneofinterest(orusury)onloans.CombiningthiswiththediscussionofPentateuchal
economicteachinginChapter6willprovideuswithmuchofwhatweneedtoevaluatetheethicsofbankruptcyinChapter8.
Thebiblicaluseofthetermusurycorrespondstoourmodernwordinterestratherthantothenotionof"excessiveinterest"towhichweapplythetermusurytoday.
FewNorthAmericanswouldeverquestionthemoralityofprofitingfromaloanatnormalinterestrates.YettheTalmudquotesanancientrabbiassaying:"Itisbetter
tosellyourdaughterintoslaverythantoborrowmoneyoninterest."
ThebiblicaldoctrineofusuryrestsprimarilyonthreePentateuchaltexts:Exodus22:25Leviticus25:3537andDeuteronomy23:1920.Thefirsttwoprohibitloans
ofmoneyorfoodwithinteresttoaneedybrotherorsisterorevenaresidentalien.Thethirdtextforbidstakinginterestfromanyperson,ratherthanfromjustone's
poorbrotherorsister.Butitexplicitlyallowsthelendertotakeinterestfromtheforeigner.
OtherOldTestamenttextsmentioningusurydonotdevelopthedoctrinefurther.Buttheydounderlineitsimportance.Psalm15:5characterizesarighteousmanas
onewho,amongotherthings,"lendshismoneywithoutusury"(seealsoEzekiel18:8).BothEzekiel22:12andNehemiah5:911condemnlendingmoneywith
interest,especiallytothepoor.AndEzekiel18:13liststhetakingofinterestamongsinsworthyofdeath.

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ItisimportanttokeepinmindthatcharginginterestwasacommonpracticeinthecommercialMesopotamiancivilizationofearlybiblicaltimes.Babyloniancontract
tabletsfromthetimeofHammurabionwardshowpaymentsofinterestasawellestablishedcustom.TheCodeofHammurabi(1750B.C.)soughttoalleviatethe
economicburdenofthepoor.Itdidsobylimitinginterestratesto20%formoneyloans,and331/3%ongrain.Thetermoftheloanwasfromseedtimetoharvest.
Interestandprincipalwererepaidinonelumpsumatharvesttime.1
Despitesuchattempts,thedebtorremainedamongthemostpitiableofthepoorintheAncientEast,andinlaterGreekandRomansocietiesaswell.
TheOldTestamentprohibition,then,didnotborrowfromexistingpractice.Ittookanoppositeposition.WhileHammurabisoughttolimitinterestrates,Israel'sGod
forbadeanyinterest.
TounderstandanyIsraeliteinstitution,onemustappreciatetheallembracingcovenantofwhichitwasapart.ThecovenantwasabondbetweentheLordandthe
Lord'schosenpeople.GodtookthesoleinitiativeinestablishingthisbondGod'smotivationwaslove(Deut.7:8).TherequiredresponsefromIsraelwasalsolove.
ThemultitudeofcommandmentsincludedinthecovenantshowedthewayinwhichIsrael'sloveforGodandfellowhumanbeingscouldbeexpressed.
Thecommandsthemselvestoucheduponwhatwetodaywouldcallsacredmatters(suchassacrifices)andsecularones(suchasfinancialrelationshipsandusury).
Thecovenantmadenosuchcleardistinctions,ofcourse.AlloflifewasunderthedominionofGod.Israelwastobesetapartfromotherculturesandtoadopta
lifestyleworthyofGod'sholiness.Thisextendedtothepoliticaleconomyofthelandandtheroleofinterestwithinthateconomy.

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UsuryandthePentateuch
WewillnowexplorethespecificPentateuchalteachingconcerningtheusurydoctrine.
A.Exodus22:2527.Ifyoulendtooneofmypeopleamongyouwhoisneedy,donotbelikeamoneylenderchargehimnointerest.Ifyoutakeyourneighbor's
cloakasapledge,returnittohimbysunset,becausehiscloakistheonlycoveringhehasforhisbody.Whatelsewillhesleepin?Whenhecriesouttome,Iwill
hear,forIamcompassionate(NIV).
1.Context.Thispassageisfoundinthecontextofthecompassionatetreatmentofvariousoppressedgroups:thesojournerorresidentalien,thewidow,theorphan
andthepoor.Thealienlackedtheprotectionoffamilyandclan.Thewidowandorphanwereripeforoppression,lackingamaletolookoutfortheirinterests.The
poorwereparticularlyvulnerabletoexploitationanddebtleadingtobondage.
SuchconcernforthepoorischaracteristicoftheOldTestament(Deut.15:4).TheLawencouragedeveryconceivableactofgenerositytowardthem:
openhandedness(Deut.15:8),gleaningsinthefield(Deut.24:19),employment(Lev.25:35),andthepoortithe(Deut.14:2829,26:12).TheSabbaticalYearand
Jubileewereinstitutedwiththepoorinmind.Poorpeopleweretobehelpedfinanciallywithinterestfreeloans,andnosignificantcollateralwastobedemanded.
2.Pledges.Afellowcovenantmemberwasnottomakeanother'spovertyanopportunityformonetarygain.Thus,notonlywasinterestforbidden,butonlythemost
insignificantsecuritywasallowed.Forbiddenassecuritywerewidow'sclothing(Deut.24:17),upperandlowermillstones(Deut.24:6),andthewidow'sox(Job
24:3).
Thecreditorcouldnotevenenterthedebtor'shousetoreceivethepledgerather,hewastoremainoutsidewhilethedebtorbroughthimthepledgehedeemed
sufficient(Deut.24:1013).Clothingwasatypicalpledge(Exod.22:26compareAmos2:8Prov.20:1627:13Job22:6).
Thechoiceofclothingwasacommonpledge.Ithadtobereturnedbeforesundowneachday,whichservedtwopurposes.Fromtheborrower'spointofview,the
lossofacloak

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servedasanannoyingreminderofthedebtthatmustberepaid(compareGen.38:1226).Forthelender,thesheerinconvenienceofhavingtotrampovertothe
borrower'sresidencetopickitupeverymorninganddropitoffeveryeveningdiscourageddemandingapledgeatall.
Toconclude,wefindinthisbriefparagraphthreereasonsfortheregulationsconcerningtheoppressed.First,Israelwaswellawareofwhatlifecanbelikeasanalien
(Exod.22:21).Second,inacovenantcommunitycharacterizedbylove("mypeople,"v.25)exploitationcouldnotbepermitted.Andthird,sinceGodisbynature
compassionate(v.27),compassionwasdemandedofGod'speopleaswell.
B.Leviticus25:3537.Ifoneofyourcountrymenbecomespoorandisunabletosupporthimselfamongyou,helphimasyouwouldanalienoratemporaryresident,
sothathecancontinuetoliveamongyou.Donottakeinterestofanykindfromhim,butfearyourGod,sothatyourcountrymanmaycontinuetoliveamongyou.You
mustnotlendhimmoneyatinterestorsellhimfoodataprofit.
1.Context.ThissecondpassageisfoundinakeychapteroneconomicsthatemphasizesGod'ssovereigntyovertheland,inalienablepropertyrights,andthe
institutionoftheJubilee.Verses3537addressoneofthekeyproblemsinmaintainingtheproposedpropertysystem,theexistenceofusury.
WhereasinExodus22:25onlymoneyismentionedandjustthepoorIsraeliteissingledoutforattention,theLeviticalcommand(perhapsinanattempttoplug
loopholesbeingexploitedbywilymoneylenders)extendstheloantoincludefoodaswellasmoney.Italsoincludestheresidentalienamongreceiversof
compassionatetreatment.Inaddition,verse35,implicitlyatleast,requiresthattheneedsofthepoorbemet("support"or"sustain"literally,"holdup'').
2.Theresidentalien.Interestingly,beyondthefellowcovenantmembers,theresidentalienissingledoutforequaltreatment(compareLev.19:3334Deut.24:14,
17).Sojournerstendedtobepoorsince,asnonIsraelites,theywereexcludedfromownershipoflandandhadtohirethemselvesoutasfarmhands.Weoftenfind
themincludedwithothereconomicallyweakgroupssuchasthewidowandorphan

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(Exod.22:2122).Theyareamongeligiblecandidatesforthepoortithe(Deut.14:29),aswellasinterestfreeloans.
Toconclude,thispassagesupplementstheearlierlegislationinExodus22:25.Lenderswerenottogainfromanysortofloan.Inverse38thecompassionofGod
servesasamodelforIsraelitesindealingwiththeirbrotherorsisteroranalien.
C.Deuteronomy23:1920.Donotchargeyourbrotherinterest,whetheronmoneyorfoodoranythingelsethatmayearninterest.Youmaychargeaforeigner
interest,butnotabrotherIsraelite,sothattheLordyourGodmayblessyou.
1.Controversy.Inthetwopassagesconsideredthusfar,thelawhasprovidedprotectionforthepoor,bothcovenantmembersanddependentaliens.TheLevitical
passageseemstodemandthattheimpoverishedbehelpedwithlifesustainingloans.Butthelawapparentlydidnotobjecttolendingwithinteresttopeoplewho
enjoyedbettereconomiccircumstances.
Deuteronomy23:1920materiallychangesourperception.Anabsolutebanoninteresttoanybrotherorsisterisintroduced,whethermoney,food,oranyother
loanableitem.WastheLawgiverexpandingthescopeoftheusuryprohibition?Certainlythiswastheunderstandingoflaterrabbis,andoftheChristianchurchforat
leastsixteencenturies.2 Theyinterpretedthebantoapplytobothconsumerandinvestmentloans.
Proponentsoftheviewthatatotalbanwasintroducedciteatleasttwolinesofevidence.Thefirstinvolvesthetraditionsrecordedinrabbinicliterature.Inthethirty
secondtractateoftheTalmud(BabaMetzia),forinstance,notonlyisthelendingofmoneyorfoodstuffsatinterestcondemnedbuteventhe"dust"ofinterest,
meaninganythingthatsmackedofusury.Examplesinclude
a.Allowingalendertoliveontheborrower'spremiseswithoutrentoratreducedrent.Infact,iftheborrowerhadlivedtherewithoutpayingrentpriortomakingthe
loan,theborrowermustnowbechargedrent.
b.Sendinggiftstoapersonpriortorequestingaloan,oraftergrantingaloan.
c.Words,intheformofvaluableinformationoreveninthe

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formofagreetingtoalenderwhootherwisewasnevergreeted.
TheTalmudviewedusuryasadenialofGod.Interesttakingwasconnectedwiththegravestofsins,includingidolatry,bloodshed,androbbery.Usurerswere
disqualifiedfrombeingwitnessesorjudges.Soweresuch"worthies"asthegambler,thetaxcollector,extortioners,andherdsmen.
Usurywasoverwhelminglyrejected(althoughcommercialpressureseventuallyledtosomeremarkableaccommodations.Forinstance,arabbipermittedapersonto
lendthroughasecondpartytoathird,reasoningthatthepersonwhogavethegiftwasnottheonewhomadetheloan).
ThesecondargumentcitedforatotalbaninDeuteronomyisitsemphasisonthewordbrother.Forinstance,Exodus21:2referstoaHebrewslave.Deuteronomy
15:12speaksof"yourbrotheraHebreworHebrewess"whoissold.Exodus22:25speaksof"mypeople."Deuteronomy23:19refersto"yourbrother"intheusury
texts.Suchexamplesarenumerous.Withrespecttointerestonloans,theemphasisonbrotherhood,itisargued,includesthebanningofinteresttakingamongall
brothersandsisters.
2.TheForeigner.Beforecomingtoanyconclusionconcerningtheabovearguments,onemore"player"onthescenemustbeexamined."Theforeigner"is
distinguishedfromtheresidentalieninthatheorshewasnotapermanentresident.Assuch,theforeignerdidnotenjoytheprotectionoflawaffordedthesojourner
(Deut.15:323:20),norcouldtheforeignerparticipateinIsrael'sreligiousceremonies(Exod.12:43Lev.22:25).
Theconsensusofscholarsisthattheforeignerwasinthiscaseatravelingmerchant.3 ForcenturiesIsraelwasalmostexclusivelyanationofpeasants,whileforeigners
lookedaftercommercialactivities(compareNeh.10:3113:15f.).OccasionallythewordCanaaniteisusedsimplytomeanatrader(Zech.14:21Prov.31:24).The
law,infact,seemedtoconnectthepracticeofinterestbearingloanstoforeignerswithdominationofthem.
InDeuteronomy15:6,andagainin28:12,itisforetoldthatIsraelwouldlendtomanynations,butneverborrow,thusrulingoverthemandneverbeingsubjectto
them.
Somefathersoftheearlychurchunderstoodforeignerto

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refertoanenemy.Ambrose,forinstance,calledtheforeignerthenotoriousfoeofGod'speople."Fromhimexactusury,"hedeclared,"whomitwouldnotbeacurse
tokill.Wherethereistherightofwar,therealsoistherightofusury."4
Amorelikelyinterpretation,however,wouldviewtheevidenceaspointinginthedirectionofcertainkindsoflegitimatecommercialinvestmentsatinterest.
3.Conclusions.Twopossibleinterpretationscanbeconsidered.AmorehumanisticassumptionisthatadevelopingnotionofbrotherhoodamongtheIsraelites
eventuallyledtoatotalbanoninterestbearingloanstooneanother,regardlessofthepurposeoftheloan(reliefofdistressorinvestmentopportunity).Astrictlyliteral
readingoftheusurypassageswouldleadtothisconclusion,andthiswastheunderstandingoflaterrabbisandchurchmen.
Theotheristhatthecovenantrelationshiprequiredanattitudeofloveamongcovenantmembersthatavoidedexploitationinanyform(suchastakingpermanent
possessionofanother'sproperty,permanentenslavementofabrother,certainpledges,interest).WealthitselfwasablessingfromGod(Deut.8:1118),butthe
accumulationofwealthwasnevertobeatthecostofanother'spoverty.
Thus,theIsraelitewaspermittedinvolvementincommercialaffairs,whichatthattimemeantdealingwithatravelingmerchantbutwasnotallowedtotakeadvantage
ofabrotherorsister.ItwouldbedifficulttoconstrueacommercialrelationshipbetweentwowealthyIsraelitesasoneoftakingadvantage.
Interest,then,wasnotconsideredintrinsicallyevil,foritwasallowedinthecaseoftheforeigner.WithintheIsraeliteeconomyitwasconsideredevilintermsofthe
propertysystem,andasavehicleforoppressionandexploitation.Butwherenosuchriskwaspresent,commercialinvestmentswithinterestwerevalid.
Despitethethemeofmercyrunningthroughthislegislation,Israelitesappearlargelytohaveignoredit.Forinstance,David'spowerfulguerrillabandwascomposed
partiallyofdisplaceddebtors(1Sam.22:2).Wefrequentlywitnesspropheticdenunciationofthosewhoexploitedtheirrelationshipwithdebtors(Amos2:684:1ff.
6:4ff.).
Habakkukwarnedtheseexploitativelendersthattheirav

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aricewould"backfire"onthemwhendebtorscouldfinallytakenomore(Hab.2:6f.).InpostexilicJudah,poorJewswereforcedtousetheirownchildrenaspledges
tosecureloansforthepurposeofbuyingfood(Neh.5:113).
Isitanywonder,then,giventheattitudeofthetypicalmoneylenderthatintheWisdomliteratureoftheOldTestamentcosigningaloanwasgenerallyadvisedagainst?
(Prov.6:1511:1517:1822:262727:13).
UnderstandingBiblicalPrinciplesandLivingThemToday
OnceagainwemustlookfortheprinciplesunderlyingthisOldTestamentlegislationtoapplyittoamodernphenomenonsuchasbankruptcy.Onescholarwhohas
contributedmuchtoourunderstandingoftheprocessofrecognizingbiblicalprinciplesisWalterKaiser.InTowardanExegeticalTheologyheoutlinesthemethods
bywhichtheprinciplesunderlyingbiblicalteachingcanbedeterminedandappliedinacontemporarycontext.
Kaiserdefinesprinciplizationasfollows:
To"principlize"istostatetheauthor'spropositions,arguments,narrations,andillustrationsintimelessabidingtruthswithspecialfocusontheapplicationsofthosetruthstothe
currentneedsofthechurch.5

StepsforUncoveringBiblicalPrinciples
Thefirststepistodeterminethesubjectofthebiblicalpassage.Thissubjectshouldreflectthemajorconcernofthebiblicalauthor.Toaccuratelydescribethesubject,
itisnecessarytodeterminewhatthebiblicalbookasawholeisallabout.Itsmajorsectionsorparts,alongwithanyargumentstheauthormaybedeveloping,mustbe
noted.Thenthespecialpartthepassageunderstudyplaysintheoverallthemeorargumentofthelargermaterialinwhichitisfoundmustbeexamined.6
TheeconomicteachingsofthePentateuchaddressthetwineconomicproblemsofscarceresourcesandinsatiable

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humandesires.Theseinevitablyledtoexploitationandeconomicinjustice.God'scovenantcommunitywastobecharacterizedbyholinessandlove,whichincluded
economicjusticeandstability,withanadequatelivingstandardforall.PaulmayhavehadtheseprinciplesinmindwhenhewrotetheCorinthiansconcerning
generosity.
Ourdesireisnotthatothersmightberelievedwhileyouarehardpressed,butthattheremightbeequality.Atthepresenttimeyourplentywillsupplywhatyouneedsothatin
turntheirplentywillsupplywhatyouneed.Thentherewillbeequality(2Cor.8:1314).

TheLeviticalteachingonusury(Lev.25:3537)isfoundinakeyeconomicchapterdealingwiththeSabbaticalYear,theYearofJubilee,inalienablepropertyrights,
andsoon.ItsbroadercontextisthebookofLeviticusitself,ofcourse,whichemphasizestheholinessofGod'speople,setapartfromallotherpeoples.
Presumablytheeconomicdiscussionsinchapter25areacontributiontothisprocessofsanctification.Theusurydoctrineisthenoneaspectofholyliving.Thiswould
fitnotonlywiththeLeviticalteaching,butwithPentateuchaleconomiclegislationasawhole.
Kaiser'snextstepistofindtheemphasisofthetextunderconsideration,includingimportantwordsandkeyterms.Suchwordsandtermsmaybeidentifiedby
frequentoccurrence.7 CertainlyinourLeviticus25example,thewordpoororotherreferencestodisadvantagedandeconomicallydependentpeopleoccur
repeatedly(v.6:servants,hiredworker,alienv.14:donottakeadvantagevv.25,35,39,47:poorcountrymen).God'sconstantcommandisthatsuchpeopleare
toberestored,treatedmercifully,notexploitedorotherwiseabused.
Thethirdessentialstepistodeterminethetheologyofthetext.Thismeansidentifyingthepermanent,abiding,and

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doctrinalpartofthepassage.Itisessentialtoexaminethe"informingtheology"or"antecedenttheology"theologywhichhasprecededthewritingofthepassagein
questionandinfluencestheauthor'soreditor'sposition.8
Exodus22:2527,theearliestreferencetousury,nodoubtinfluencedtheshapingofLeviticus25.AswiththeLeviticalteachingonusury,soinExodusthecontextof
theusurydoctrineisoneofthecompassionatetreatmentofvariousoppressedgroups.ItwasnotedearlierthatthroughoutthePentateuchaspecialcompassionforthe
poorisfound,withtheidealproclaimedinDeuteronomy15:4:"Thereshouldbenopooramongyou."
Keyprinciplesarenowreadilyapparent.Continuedpovertyisnotcompatiblewithaholy,lovingcovenantcommunity.Povertyisanindicationoflackofcompassion
andaninvitationtoexploitation.Lendingtothepoorwithinterestwasaperfectexampleofthesetwinevils.Assuchitwasforbidden.Whereneitherlackof
compassionnorexploitationwereanissue,thenneitherwasusury.
ThisconclusioncouldbeeasilysustainedexceptfortheapparentabsoluteprohibitionofusuryinDeuteronomy.Butearlierinthechapter,Isuggestedthatthe
argumentforatotalbanonusuryforanysortofloan,whethertoarichorpoorbrotherorsister,failstotakeintoaccounttheidentityoftheforeigner(thatis,a
travelingmerchant).ItalsoignoresthefactthatPalestinewasanoncommercialsociety,whereloanswerenormallyneededinperiodsoffinancialcrisis.
Tounderstandapassage,onemustfirstviewitinitscultural,geographical,historical,economic,andreligioussettingsorcontexts.TheearlyChristianchurchfathers
totallyoverlookedtheagriculturalsettingoftheusurydoctrine.Theytotallymisunderstoodthetermforeignerinthatcontext.Thustheyconcludedthatusurywas
alwayswrong,exceptwhereitcouldbeusedtopunishanenemy.Theydidnotunderstandthattheusurydoctrinewasanappropriate

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wayofshowingcompassiontowardpoorpeople.Theydidnotrealizeitcontributedtowardthebroaderprincipleofeconomicjustice.
ByJesus'time,theJewishfinancialsystemhadbecomefarmoresophisticated.Thedaysofsmallfarmersholdinginalienablepropertywerelonggone.Nowmany
tenantfarmersanddaylaborersworkedforwealthierJewishandGentilelandholdersonlargeestates.
Agriculturestilldominatedtheeconomy.ButJewsweremuchengagedincommerciallife,especiallyinimport/exportactivities.Evidenceofthismoreadvanced
economyisseeninsomeofJesus'teachings,includinghisparables.
Jesus'ContributiontoBusinessPrinciples
Despitethechangedconditions,Jesusistruetotheprinciplesunderlyingtheusuryandothereconomiclaws.Indeed,hegoesbeyondthem.Consider,forinstance,his
admonitiontocreditors.
Andifyoulendtothosefromwhomyouexpectrepayment,whatcreditisthattoyou?Even"sinners"lendto"sinners,"expectingtobepaidinfull.Butloveyourenemies,do
goodtothem,andlendtothemwithoutexpectingtogetanythingback.Thenyourrewardwillbegreat,andyouwillbesonsoftheMostHigh,becauseheiskindtothe
ungratefulandwicked(Luke6:3435).
Givetotheonewhoasksyou,anddonotturnwayfromonewhowantstoborrowfromyou(Matthew5:42).

ThepassageinLukeisfoundinLuke'scounterparttoMatthew'sSermonontheMount.Luke6:2026parallelstheBeatitudes,describinglifeinthekingdomofGod.
Intheseversesweseeareversalofthevaluesoftheworld.In6:2738wefindasecondcharacteristicofkingdomlife,thelawoflove.
FollowersofJesusweretobeconcernedwiththewelfareofothers,evenwhenmetwithhatredandabuse.Ascom

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mentatorG.B.Cairdputsit,suchlovedoesnotretaliate(vv.2731),seeksnoreward(vv.3236),andisnotjudgmental(vv.3738).9
Jesushereexhortshisdisciplestobesensitivetotheneedsofthepoorregardlessoftheirabilitytorepay.Theymustgobeyondthebestthattheworldcando.To
lendonlytothosewhocanrepayistoolowastandard.Itstressessecurity,notselflesslove.10
TheearlychurchfatherssharedJesus'viewoftherelationshipbetweencreditoranddebtor.Concerningthechargingofinterestonloans,forinstance,thecommon
perspectivewasthatusurytakingwasunacceptablefortworeasons.Itviolateddivinelaw.AnditwascontrarytoChristianprinciplesofloveandmercyevenin
economicrelationships.Consider,forinstance,BasiltheGreat(A.D.330379).
Tellme,doyouexpecttogetmoneyandprofitoutofthepauper?Ifhewereinapositiontoaddtoyourwealth,whyshouldhecomebeggingatyourdoor?Hecameseekingan
ally,andhefoundafoe.Hewaslookingformedicine,andhelightedonpoison.Yououghttohavecomfortedhiminhisdistress,butinyourattempttogrowfruitonthewaste
youareaggravatinghisnecessity.Justaswellmightaphysiciangointohispatients,andinsteadofrestoringthemtohealth,robthemofthelittlestrengththeymighthaveleft.11

TheconsistentteachingofbothTestaments,confirmedbytheearlychurch,isthatcompassion,mercy,andjusticearetooverridepurelyeconomicconcerns,suchas
loans.Christiansaretobegracioustoall,evendebtors,whomwemightlegitimatelytreatinalessmercifulmanner.
WhilethePentateuchrestricteditsteachingtomembersofthecovenantcommunity,Jesusappearstowidentheapplication.Heincludessocietyatlarge(Goddoes
causetheraintofalluponthejustandtheunjust)."Itellyou,useworldlywealthtogainfriendsforyourselves,sothatwhenitisgone,youwillbewelcomedinto
eternaldwellings"(Luke16:9).

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Chapter8
TheEthicsofBankruptcy:
ABiblicalPerspective
Inthe"OurFather,"Jesusisnotsimplyrecommendingvaguelythatwemightpardonthosewhohavebotheredusormadeustrouble,buttellsuspurelyandsimplytoerasethe
debtsofthosewhooweusmoneywhichistosay,practicetheJubilee.
ThePoliticsofJesus,JohnHowardYoder

Isitbiblicaltoclaimbankruptcy?Christiansdifferstronglyintheirresponsesbutmanyareconvincedthatdeclaringbankruptcyiswrong.
ArgumentsagainstBankruptcy
Writingonbusinessethics,MennoniteauthorRalphHernleydescribesasituationinwhichthenewownerofanewspaperlearnshemustpayakickbackof$500to
receiveadvertisingfromthecountysheriff'soffice.Hernley'ssummaryofthesituationisrevealing."Ifthelossoftheadvertisingincomeintheillustrationabovewould
haveforcedtheownerintobankruptcy,he'dhaveneededtochoosebetweentwounethicalconsequences"[emphasisadded].1
InHernley'sview,bankruptcyandpayingkickbacksareapparentlyonthesamemoralplane.
WenotedearliertheviewofAlbertJohnson.Heseesno

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placeforbankruptcywiththepossibleexceptionofincrediblybadluck.
Regardlessoftheleniencyofthecurrentbankruptcylaw,theChristianfindsnocomfortintheBiblefortakingsuchastep.Bankruptcymaybelegal,butitsmoralityisanother
question.Thisappliestobothvoluntaryandinvoluntarybankruptcy....Iamawarethattherearecircumstancesinwhichbankruptcymaybetheonlyavailableoption.The
suddendeathofthebreadwinnerinafamily,anextendedperiodofhospitalization,lawsuits,andbillsbeyondthecontrolofthefamily.
Butformany,bankruptcycomesupsimplyasaconsequenceofpoorplanningandbadjudgment.Undersuchcircumstances,Ibelievetheobligationstillremainstopaywhatis
owed.2

WellknownpersonalfinanceconsultantLarryBurkettleavesnodoubtastohisopinion.Inhisworkbook,HowtoManageYourMoney,hesays,
Isitscripturaltoclaimbankruptcy?Itseemlogicalthatifsomeonehasincurredexcessivedebtsandhasatrulychangedattitude,heshouldbeabletostartafresh,doesn'tit?Read
Psalm37:21.Howistheevilmandescribed?...Inworldlyterms,toavoiddebtsseemslogical....WhenChristianstransferassetssimplytoavoiddetachmentbycreditors,it
reflectsabasiclackoftrustandadeceitfulattitude[emphasisadded].3

Ahilariousillustration(purportedlytrue)ofhowsomeseebankruptcyasagodlessactisprovidedbyTheWittenburgDoor.AChristianbookstoreownerwithdebts
tosuppliersof$20,000andassetsof$3,000isattemptingtotalkamajorsupplieroutofpullingtheplugonhisbusiness.Hetriesaspiritual''guilttrip."Heendsthree
pagesofrationalizationsandexcuseswiththefollowingpairofchoices,askingthesuppliertocheckoneashisresponse:
__Okay,Mike...Iunderstandyourpredicament.Perhapsweshouldhaveinvestigatedyourministry'sfinancialconditionalittlemorethoroughlyandnotletyourbuyerrunup
thebill.In

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anycase,we'veprofitedonanypreviouslypaidforbusinessyou'vesentourway,andtheamountyounowoweusistaxdeductibleasaloss....Ibelieveyouaresincere,and
wouldnotgainanypersonalpleasureinforcingeitheryouoryourministrytolegallydeclarebankruptcy....WellwriteoffwhateveryourministryowesustoHisaccount.
__YourministryOWESusthatmoney,Idon'tcarewhatChristsays,andweintendtosueyouandyourministry.Goaheadanddeclarebankruptcy.Evenifwedon'tgetapenny
anditCOSTSustosue,I'llhavethesatisfactionofyourbankruptcy.

TheDoorwaspleasedtogivethisownertheircovetedGreenWeenieaward,whichisnotrecognitiononewantstoreceive.4
Theessenceoftheargumentsagainstbankruptcy(withtheexceptionofthelastillustration)isthatdebtsarelifelongobligations.Asidefromveryunusual
circumstances,theymusteventuallybemet,howeverlongittakestopaythemoff.Thusbankruptcyisawaytoshirkone'sChristianresponsibility.
WhattheBibleTeachesaboutDebt
Toproperlyevaluatethisethicalcontroversy,itisimportanttobeclearaboutwhattheBibleteachesconcerningdebtandtheobligationsborrowingplacesonthe
debtor.ThiswedidinChapter7.Wefoundthatborrowerswereobligedundernormalcircumstancestorepaytheirdebts.
ThisresponsibilitytomeetobligationsisparticularlyemphasizedbyaprovisionrecordedinLeviticus25:39.Hereadebtorindefaultmaygosofarastosellhimself
intoslavery.Theresponsibilitytorepayone'sdebtswastakenextremelyseriously.However,thepossibilityofthosedebtsbeingcanceled(ordebtslavesreleased)
wasnotruledout.Infact,debtorswereautomaticallyrelievedoftheirobligationseveryseventhyear,whetherornottheydeservedcompassion.

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WealthShouldGenerateCompassion
Suchcompassion,includingthesettingasideofthelegitimaterightsoflenders,wastypicalofeconomicrelationshipsinthePentateuchalpoliticaleconomy.Let'sreview
whatwehavelearnedaboutit.
IfweweretochooseonewordtosumupeconomiclifeinthePentateuch,itwouldbestability.ConfrontingusintheLawisastablesocietywithaguaranteeof
economicsecuritytoeachfamily.
WealthwasviewedasablessingfromGod(Deut.8:1118,28).ThisblessingresultedfromobedienceandwasbasedonGod'scompassion.Thepoortithe,gleaning
laws,andinterestfreeloansweretangiblewaystheIsraelitescould,inturn,showcompassionforeachother.
Beyondincomemaintenanceprograms,theLawprovidedpermanentmechanismssuchastheSabbaticalYearandJubileetoensurethattemporarymisfortune
barrednofamilyfromfullparticipationineconomiclife.
LandwasaninalienablerightGodhadgiveneachIsraelitefamily.Fromittheyweretoderivetheirsubsistence.Theexistenceofwholesaleusurycouldunderminethe
wholepropertysystemonwhichIsraelitesocietywasbased.Thusthisdoctrine,alongwithothers,supportedatribalsystemorganizedintoclansandhouseholds,each
owningpropertysupposedtoremainpermanentlyinthefamily.
ThePentateuchrevealsaclosedeconomicsystemimpregnatedbyjustice.ItwaswellsuitedtopromotethelargergoalsofJewishlife.Israelitefamilieswere
potentiallyfreedfromeconomicworries.TheywereabletodevotethemselvestothestudyoftheLawandtheworshipandserviceofGod.
Noteveryethicistwouldplacejusticeaheadofindividualrightsorsocietalbenefitasafirstconsideration.ManuelVelasquez(whomIrespect)reasons,

Page135
Aswehaveseen,moralrightsidentifyareasinwhichotherpeoplegenerallymaynotinterfereeveniftheycanshowthattheywouldderivegreaterbenefitsfromsuch
interference.Generallyspeaking,therefore,standardsconcernedwithmoralrightshavegreaterweightthaneitherutilitarianstandardsorstandardsofjustice.Andstandardsof
justicearegenerallyaccordedgreaterweightthanutilitarianconsiderations.5

Velasquezgoesontoadmit,however,thatthis"hierarchy"ofethicalconsiderationsdoesnotalwayshold.
Buttheserelationshipsholdonlyingeneral.Ifacertainaction(orpolicyorinstitution)promisestogeneratesufficientlylargesocialbenefitsortopreventsufficientlylargesocial
harm,theenormityoftheseutilitarianconsequencesmayjustifylimitedinfringementsontherightsofsomeindividuals.Moreover,sufficientlylargesocialcostsandbenefitsmay
alsobesignificantenoughtojustifysomedeparturesfromstandardsofjusticeandthecorrectionoflargeandwidespreadinjusticesmaybeimportantenoughtojustifylimited
infringementsonsomeindividualrights.6

AnemphasisonsocietalimplicationsintheScripturesshouldnotbesurprising,giventhatJewishthoughtandpracticewasmuchlessindividualisticthanours.Asan
OldTestamentprofessorIonceworkedwithputit,"WeintheNorthAmericanchurchlikenourselvestotreesinaforestinourrelationshipswithoneanother.The
Jewssawthemselvesasleavesonatree."ThenotionofacloserelationshipandmutualdependencedominatedJewishthinking.
Paulverymuchreflectedthiscorporateperspectiveinhismanyillustrationsofthechurch.
YouareGod'sfield,God'sbuilding(1Cor.3:9).
Inhim[Christ],youtooarebeingbuilttogethertobecomeadwellinginwhichGodlivesbyhisSpirit(Eph.2:22).

Page136
Fromhimthewholebody,joinedandheldtogetherbyeverysupportingligament,growsandbuildsitselfupinlove,aseachpartdoesitswork(Eph.4:16).

Inthiscontextofmutualityandinterdependence,Paulinstructedus,
IfyouhaveanyencouragementfrombeingunitedwithChrist,ifanycomfortfromhislove,ifanyfellowshipwiththeSpirit,ifanytendernessandcompassion,thenmakemyjoy
completebybeinglikeminded,havingthesamelove,beingoneinspiritandpurpose.Donothingoutofselfishambitionorvainconceit,butinhumilityconsiderothersbetter
thanyourselves.Eachofyoushouldlooknotonlytoyourowninterests,butalsototheinterestsofothers(Phil.2:14).

IncomeredistributionwastobethenormalresponseofGod'speople(includingcreditors)inthePentateuch.Likewise,actsofmercyandjusticeweretocharacterize
followersofChristintheNewTestament,ratherthananinsistenceuponone'srights.
ButletusreturntothespecificeconomicteachingoftheOldTestament.Velasquezsuggeststhatweconsiderwhatkindofvaluesareinvolvedinchoosingonekindof
ethicalaction(say,standardsofjustice)overanother(say,theprotectionofindividualrights).Wemustthendecidewhethertheirimportanceandimpactwarrants
choosingthem.7
Withinthecommunityofthecovenantpeople,economicjusticeandstability,compassionatetreatmentofthepoor,andpreservationofthefamilyunitwereputahead
ofsuchstrictlymaterialconcernsasrepaymentofdebt.Deuteronomy15:710isparticularlyforceful:
Ifthereisapoormanamongyourbrothers...donotbehardheartedortightfistedtowardyourpoorbrother.Ratherbeopenhandedandfreelylendhimwhateverheneeds.Be
carefulnottoharborthiswickedthought:"Theseventhyear,theyearforcancelingdebts,isnear,"sothatyoushowillwilltowardyourneedy

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brotherandgivehimnothing.HemaythenappealtotheLORDagainstyou,andyouwillbefoundguiltyofsin.Givegenerouslytohimanddosowithoutagrudgingheartthen
becauseofthistheLORDyourGodwillblessyouinallyourworkandineverythingyouputyourhandto[emphasisadded].

TheBibleEncouragesSomeCancellationofDebts
Atthispoint,wemaycometoatentativeconclusionconcerningthequestionoftheethicsofbankruptcy.AsIsaid,borrowerswereobligedundernormal
circumstancestorepaytheirdebts.Butthepossibilityofthosedebtsbeingcanceledwasnotruledout.
Twopointsmustbekeptinmind.ThecancellationofdebtsintheOldTestamentwasdoneatlegislatedintervals(SabbaticalandJubileeyears).Debtors'paymentor
nonpaymentofdebtswasnotinquestion.Theymayormaynothavebeenculpablefortheirdebt.
Inaddition,theseborrowerswerenotbigcommercialinvestors.Theywerealmostalwaysfarmersborrowingtopreservetheirmeansofmakingaliving.Theywere
covenantbrothersandtheywerepoor.Quiteoftendebtrepresentedanobstacletoevenaminimalstandardoflivingasdefinedbythatculture.
TheOldTestamentprinciplewhichcanbelegitimatelyextractedfromthebiblicalmodelandappliedtobankruptcyisthatdebt,whiletakenseriously,couldbe
canceledtoachievesomehigherpurposesuchasthepreservationofthefamily.Nonoblegoalisachievedwhenunscrupulousdebtorsareallowedtogetoffscot
free.ButtheOldTestamentpoliticaleconomydidprovideforthecancellationofdebtsasanactofmercy,withnostigmaattached.
OnelastobservationmustbemadeconcerningOldTestamentlegislation.Itwasnotdependentonthegoodwillofthelender.Whilelendersweretobemerciful,debts
werecanceledwhethertheylikeditornot.Onthesurface,suchlegislationappearsnaive,playingintothehandsofwilybor

Page138

rowerspreparedtotakeadvantageofthesystem.Doubtlesssomedid.
ButthepoliticaleconomyofthePentateuchreflectedGod'sgraciouscovenantwithhispeople.Godwasgraciousandlovingtowardthem.Godexpectedinreturn
theirlovingobedience,includingtheofferingofgraceandlovetooneanother.
WhenGodactedonbehalfofGod'speople,blessingthemmaterially,politically,militarily,andsoon,allIsraelitesbenefited.Theundeservingwerepresumablydealt
withbyGod.Similarly,individualIsraeliteswereabletohelpthepoorandraisethemuptoanadequatestandardofliving.Ifsomewerehelpedwhodidnotdeserve
it,Godrespectedthemercifulheartofthelender,andrewardedthelenderappropriately.Nodoubtanyschemingdebtorwouldinevitablyreceiveajustrewardas
well.
CorporateSocialResponsibility
Beyondobligationstocreditors,anotherconsiderationwhichespeciallyrelatestobusinessbankruptciesiscorporatesocialresponsibility.Thisistheresponsibility
businessownershavetotheiremployees,suppliers,customers,government,societygenerally,andinthecaseofChristians,toGod.
AsIsaidearlier,incapitalisticsocietiesprivatepropertyisviewedasthecornerstoneofoureconomicsystem.NorthAmericanfreeenterpriseallowsrelatively
unrestrictedprivateownershipoflandandothermeansofproduction.Ownersoflandandothercapitalcanwithholduseoftheseassetsuntiltheyreceivetheprice
theydesire.Formostownersofcapital,thelongtermgoalismaximizingprofits.
NosuchpurposeforprivatepropertyisenvisionedinthePentateuch.God,concernedforeconomicstabilityandjustice,gaveeachIsraelitefamilyastakeinthe
economicwellbeingofthecountrythroughpermanentlyheldland.

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Pentateuchallegislationoninalienablepropertyrightswasconcernedwithsafeguardingagainstpoverty,preventinglargescaleaccumulationofland,andmeetingthe
economicneedsoffuturegenerations.
Suchcommonfreeenterprisepracticesasmortgagesandlandspeculationwerecondemned(see,forinstance,Isa.5:8).Lesttherebeanydoubtastowhowas
ultimatelyincontrol,Godgaveanunambiguouscommand:"Thelandmustnotbesoldpermanently,becausethelandismineandyouarebutaliensandmy
tenants"(Lev.25:23).
EconomistCarlKreidercarefullytracestheimplicationsofGod'sultimateownershipofcapital.Hecontraststhecommunisticandcapitalisticviewsofownershipof
wealthwiththeBible'sandarrivesatthisconclusion:"Thebiblicallysignificantquestioniswhatkindofstewardshipcanbedevisedwhichwillenableustobefaithfulin
carryingoutGod'swillforhisproperty"[emphasisadded].8
ThesignificantpointisthateveryaspectofaChristian'slife,includingownership,isdone"inthenameoftheLordJesus"(Col.3:17).Thissuggestsatotalcommitment
tointegrityofthesortthatcharacterizedChrist'sownlifeonearth.
Inthe5thcenturyB.C.,MalachichastisedGod'speopleforfallingshortofthistotalcommitment.Theirfailurewassymbolizedbytheofferingofsacrificeswhichdid
notmeettherequirementthattheybringtheverybestoftheirflocksandherdstothealtar.
"Whenyoubringblindanimalsforsacrifice,isthatnotwrong?Whenyousacrificecrippledordiseasedanimals,isthatnotwrong?Tryofferingthemtoyourgovernor!Wouldhe
bepleasedwithyou?Wouldheacceptyou?"saystheLordAlmighty(Mal.1:8).

IsBankruptcyEthical?NoandYes
Wenotedearlierthatthemajorcausesofcommercial

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bankruptcyincludeslipshodmanagementandsloppyrecordkeeping.Manyentrepreneursdonotseekadequateeducationoradviceindealingwithbusiness
problems.
SurelyChristianbusinesspeoplemustrecognizethatsuchpracticesareindicativeofthesamelackofintegritywhichsodisgustedMalachi(1:614).Theymustrepent
ofanythinglessthanaprincipledandtotallyprofessionalapproachtobusinessownership.ItistheLordChristtheyareserving(Col.3:2325).
Theforgivenessofabankrupt'sdebtsispossible.ButChristianbusinesspeoplemuststillseetheirbusinessinvolvementsasserviceinGod'snameandact
accordingly.
Oftenpersonalbankruptciesresultfromabuseofcredit.ThereareChristianswhotakeastrongpositionagainstanyuseofcredit.Oneauthorandspeakerclaimsthat
creditcannotbeusedwisely,onlywithdifferingdegreesoffoolishness.SeeingcreditasacompromisetotrustingGod,hemaintainsthattobetrulyeffectivea
Christianmustbefreefinancially.Thisisaremarkablestatement,consideringthemanytimesGod'speoplewereurgedtolendtotheneedy.Howcanitbeblessedto
lend(compassionatelyandgenerously)buteviltoborrow?
Thebiblicaldoctrineofusury(whichintheOldTestamentmeansinterestofanyamountratherthanexcessiveinterest)doesnotentirelyruleouttheuseofcredit.
Rather,itinsiststhatanotherperson'seconomicproblemsmustnotbecomeanopportunityforanaffluentlendertoprofitatapoorbrotherorsister'sexpense.
CertainlymanyofusNorthAmericansdoabusecredit,especiallybecausethemostexpensiveformsarealsothemostconvenient.Creditgrantinginstitutions
determineourcreditlimitsbylookingatourtotalearningsandotherdebts.Theyassumewecanusealargepartofourtotalearningstopaybackthesedebts.But
theydonottakeintoconsiderationouroverallfinancialobjectives.Thisisfineforthem,butnotforus!

Page141

WeChristiansmustbeginbysettingourfinancialobjectives.Wemustkeepinmindthatwearenottheultimateownersofourwealth.Thus,theshortandlongrange
budgetingofourresourcesisthefirststep.Wemustplanourtithesandcharitablegiving,savingsandinvestments,retirementplans,capitalpurchases,andsoon.
Questionsconcerningwhatisanappropriatelifestyle,givenaChristianvaluesystem,mustbeanswered.
Havingsetfinancialobjectives,wecandecidehowmuchmoneywecanaffordtotakeoutofcurrentearningstopaybackdebtswithoutthreateningourfinancial
objectives.Inthiswaywesetourowncreditlimits.BankruptcyduetoabuseofcreditisagainafailuretorecognizethatwearebutstewardsofGod'sresources.
Tosummarize,thecancellationofdebtsthebankruptcyprocesspermitsisnotnecessarilyimmoralfromabiblicalpointofview.Argumentstothecontraryareusually
basedeitherontheideaofdebtsbeinglifelongobligations,oronthenotionthatmostbankruptsdonotdeserveforgivenessbecausetheyareguiltyofpoor
managementorabuseofcredit.
Thisstudyhastriedtoshowthat,whileborrowerswereexpectedtorepaytheirdebtsinbiblicaltimes,alldebtsweresupposedtoberegularlycanceled.Apparently
thepossibilityofsomedebtorstakingadvantageofthiswasworththerisk.Godwouldensurethatthecompassionatelenderwouldnotinthelongrunbe
shortchanged.
Actsofmercyareneverintendedtoencourageundisciplinedlifestyles,ofcourse.Sindoesnotaboundsothatgracemightevenmoreabound(Rom.6:12).
ChristiansmustvieweconomiclifeaspartoftheirservicetoGod,andinservingGodweofferonly"acceptablesacrifices."
Thus,theChristianwhoispetitionedintobankruptcybycreditors,oristhinkingofvoluntarybankruptcy,shouldcarefullyconsiderthealternativeswhichthelaw
provides.

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Theseincludetheproposalandtheorderlypaymentofdebts.Bankruptcyissometimespermissible.Butitisseldomdesirable.Itcanaffectlenders,suppliers,
customers,andemployeesinadverseways.Itisnotonlytheentrepreneurwhobearstheriskofparticipationinabusiness.Beyondtheseconsiderations,foregoinga
dischargefromdebtbythecourtsinfavoroftryingtomeetcreditors'claimsisatremendousactofChristianwitness.
Finally,whatofChristianbusinesspeoplewhohave,quitesimply,''blownit"?Theirmanagementexpertisewasnonexistent,theirdecisionmakingillogical,theiruseof
creditirresponsible.Nowtheyfindthemselveshopelesslyindebt,withrestitutionimpossible.DoestheLordreallyexpectustoforgivesuchaoneasthis?Theauthors
consultedatthebeginningofthisstudywould,Ibelieve,respondwithafirmnegative.ButdoestheBibleprovidespecificguidance?
WhilemodernformsofbankruptcyarenotexplicitlyaddressedbytheScriptures,themoregeneralthemeofpovertyisdiscussedatlength.Deuteronomy15:4
proclaimstheideal:"Thereshouldbenopooramongyou."Butpoortherewere,andGod'sOldTestamentcommandsencouragedeveryconceivableactof
compassiontowardthem.
Thelawwasremarkablygenerous,infact,becausetheScripturesrecognizedthatmanybringmisfortuneonthemselves.IntheWisdomliterature,forinstance,poverty
issometimesseenastheresultoflaziness(Prov.6:61110:420:4,1324:3034),theproductofidlechatter(Prov.14:23),resultingfromworthlesspursuits(Prov.
28:19),orcausedbyselfindulgentliving(Prov.21:1723:2021).
Beyondthis,someOldTestamentpassagespointoutthatwealthandsuccessareablessingfromGod(Deut.28:114),andthatpovertycansometimesbe
understoodasdivinepunishment.Forinstance,povertyisathreatusedagainstthosewhobreakGod'slaws(Deut.28:1548Lev.26:1426).HaggaiandMalachi
bothinterpretthepovertyofJewsintheirdaythisway.

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NowthisiswhattheLordAlmightysays:"Givecarefulthoughttoyourways.Youhaveplantedmuch,buthaveharvestedlittle.Youeat,butneverhaveenough....Youearn
wages,onlytoputtheminapursewithholesinit"(Hagg.1:6).

TheOldTestamentclearlyrecognizes,ofcourse,thatmanypeoplesufferfrompovertythroughnofaultoftheirown(Amos5:1012Isa.10:12).Butitencourages
liberalitytowardallthepoor:openhandedness(Deut.15:8),gleaningsinthefield(Deut.24:19),employment(Lev.25:35),andthepoortithe(Deut.14:2829
26:12).ThesabbaticalyearandJubileewereinstitutedwiththepoorinmind(Leviticus25).Theyweretobehelpedfinanciallywithinterestfreeloans,insignificant
collateral,andforgivenessofdebts.
Whileitisnotstatedexplicitly,itwouldbeconsistentwithScripturegenerallythatwrongdoersbeexpectedtorecognizetheirerrorsandmendtheirways.Godisboth
lovingandholyGodisbothparentandjudge.ThusIconcludethatanyrepentantsinnerisacandidateforforgiveness,includingrepentantbankrupts.
IinterviewedaChristianbusinessmanwholosthisinvestmentinthebusinessofaChristianbrotherwhowentbankruptduetopoormanagement.Hehadeveryright
tobebitter.Henotonlylosthisinvestmentbut,asanemployeeofthebankruptfirm,waswithoutworkforayear.Hetoldmehisonlywayoutwastoforgiveand
forgetwithoutrepayment.Theownerhaddoneabadjobandrecoverywasimpossible.Fortheinvestor,theonlyadequateresponsehefelthecouldgivewas
forgiveness.
Bankruptcylegislationwastheretoprovidethebankruptwithafreshstart,freefromamiserableanddestructivelifeofbeingpursuedconstantlybycreditors.And
God'sSpiritwastheretoallowtheinvestortoforgive.That,too,isatremendousactofChristianwitness.

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Conclusion
Bankruptcyisatroublesomeandgrowingphenomenon.Churchleadersmustdealwithit.Misfortuneandreasonablerisktakingwhichbackfiredaccountforsome
economicfailures.Butmanybankruptsareguiltyofseriouserrorspoormanagement,abuseofcredit,lackoffinancialcontrols,andsoon.
Obviouslytheplacetobeginindealingwithbankruptcyiswellbeforethefact.Wecounselyoungpeoplebeforemarriagethattheymustbuildasolidrelationshipand
avoiddivorce.SotooweshouldprovidesolidguidancetobusinesspeopleandindividualsconcerningtheirstewardshipofGod'sresources.
Individualsneedtoberemindedthatbankruptcyhaspotentiallydevastatingeffects.Itcanseriouslyaffectthefinancialwellbeingofsuppliers,creditors,and
employees.Itsimpactonone'sfeelingsofselfworthcanbeenormous,aswasseeninChapter2.Abankrupt'sabilitytocontributefinanciallytotheLord'sworkwill
beseverelyhamperedorcompletelycurtailed.One'sChristianwitnessmaybehindered.
Ihavetriedtoshowthatbankruptcyisnotinherentlyimmoral.Ithinktherearesolidbiblicalgroundsforforgivenessofdebtswithoutstigma.Theprinciplesunderlying
thishavetodowitheconomicjusticeandstability.Theyarenot,however,meanttoencourageundisciplinedliving.
Manypeoplehavebeenhelpedbybankruptcylegislationtogetafreshstartinlife.Theresultforsomehasbeenrestorationtoeconomichealthandstability.
Unfortunately,someChristiansdidnotlearnfromthecompassionatetreatmenttheyreceived.Whenbankruptcyledtonewprosperity,theydidnotrepayatleastpart
oftheolddebts.Theylefttheircreditors"holdingthebag"andcenteredtheirnewfoundprosperityonthemselves.
Thisbringsustoonelastbiblicalprinciple:fromeveryone

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whohasbeengivenmuch,muchwillbedemanded.Ifwereceivemerciful,compassionatetreatmentandareraisedtonewpositionsofaffluence,wewillnowbe
expectedtobemercifulinturn.TheleadingreligiousfiguresofJesus'daydidnotlearnthatlessonandweknowwhatJesussaidaboutthem.

Page147

NOTES
Introduction
1.HermanLoewen,"WhenIWentBroke,"TheMarketplace,May/June1989,pp.78.
2.PhilipMarchand,"DollarSense,"CanadianBusiness,Vol.55,No.11,November1982,pp.153155.
3.LarryBurkett,God'sPrinciplesforOperatingaBusiness(Dahlonega,GA:ChristianFinancialConcepts,1982),audiocassetteseries,tape1.
Chapter1
1.PowerforLiving,July3,1983.ApublicationofScripturePressPublications,Inc.,Box513,GlenEllyn,IL60137.
2.AlbertJ.Johnson,AChristian'sGuidetoFamilyFinances(Wheaton,IL:VictorBooks,1983),pp.82,85.
3.GaryD.Foster,"ThinkAboutIt,"BookstoreJournal,Vol.16,No.10,October1983,p.73.
4.StatisticalAbstractoftheUnitedStates,1989.109thedition,p.527.
5.RogerLeRoyMiller,EconomicIssuesforConsumers,SixthEdition(St.Paul:WestPublishingCo.,1990),p.358.
6.GlobeandMail,Toronto,ON.Monday,February15,1988,p.B1.
7.GlobeandMail,Toronto,Aug.12,1985,p.B1.
8.RobertHartzler,"WhereWasGod(whenthefarmfailed),"MennoniteBrethrenHerald,January24,1986,pp.89.
9.Johnson,FamilyFinances,p.81.
10.TheVancouverSun.Friday,July15,1983,p.B5.
11.RogerTass,JohnD.Honsberger,PierreCarignanaandRaymondA.Landry,ReportoftheStudyCommitteeonBankruptcyandInsolvencyLegislation
(Ottawa:InformationCanada1970),pp.5556.SeealsoLarryHuizinghandBernardWilson,"Gettingthe(Bankruptcy)ActTogether,"CanadianBankerandICB
Review,Volume89,Number1,February1982,p.31:"Theremovalofthestigmathatwasassociatedwithbankruptcyasrecentlyastwodecadesagohasmade
bankruptcyeasyandhasledtosomeabuses.Certainindividualslooktobankruptcyasasimplecurefortheirfinancialdifficulties."
Chapter2
1.PrestonManning,lectureentitled,"GoodNewsforBadTimes,"

Page148

RegentCollege,Vancouver,B.C.,January,1983.
2.ChristinaToth,"MarketThreatenstoBuryGrowers,"Abbotsford,Sumas&MatsquiNews,Wednesday,May16,1990,p.A2.
3.WalterO.Meloon,"OntheEdgeofBankruptcy,"Decision,April1986,pp.1011.
4."SuccessReligion,"Testament,aCBCradioseriesaboutthereligiousexperienceoftoday,producedbyDonMowattandKatherineCarolan,July3,1983.
5.GordonD.Fee,"The'Alien'GospelofProsperity,"PresbyterianCommunique,AprilJune1981,pp.2122.
6.UlrichSchaffer,GreaterThanOurHearts(NewYork:HarperandRow,1981),p.33.
7.Manning,"GoodNews."
8.MiltKuyers,"DoChristandBusinessMix?"TheBanner,May14,1990,p.9.SeealsoRobertV.Thompson,Unemployed,Downer'sGrove,IL:IVP,1983,p.
5.ThompsonisaBaptistpastorwholeadsanunemploymentsupportandresourcegroupmeetingweeklyathischurch.
9.ForaninterestingparalleldescriptionoftheeffectsofunemploymentseeEstherKrystal,MarshaMoranSackett,SylviaV.Thompson,andLucileCantoni,
"ServingtheUnemployed,"SocialCasework,1981(Feb.),Vol.64(2),pp.6776.Theauthorsnotethatunemployedindividualsexperiencemajorbereavement
reactions.
10.MikeGrenby,"Thereislifeafterbankruptcy,"AbbotsfordClearbrookTimes,Wednesday,July27,1988,p.24.
Chapter3
1.GrahamCunningham,"Blamebadmanagement,nothighinterestrates,"FinancialTimesofCanada,April26,1982,p.23.
2.MichaelRyval,"IsYourBusinessGoingforBroke?"TheFinancialPostMagazine,October31,1981,p.40.
3.BernardWilson,"SpottingtheDangerSignals,"TheCanadianBankerandICBReview,Vol.86,No.5,October1979,p.32.Seefurther:JohnD.Honsberger,
"CorporateFailureCanBePredicted,"CAMagazine,June1979,pp.3032.
4.LarryE.Greiner,"EvolutionandRevolutionasOrganizationsGrow,"HarvardBusinessReview,July/August1972.ReprintedinTheOrganizationGame,
RobertH.MilesandW.AlanRandolph,editors.Glenview,IL:Scott,ForesmanandCo.,1979,pp.6473.
5.Greiner'sviewsarebackedupoverandoveragaininsurveysoffailedcompanies.ForexampleastudybyProf.RussellKnightoftheUniversityofWestern
Ontariofoundthatlackofmanagementexperienceleadstomismanagement."Theprimaryproblemsofsmallbusinessare

Page149

causedbyalackofmanagementexpertise."Symptomsarelowsales,highinventories,largeoperatingexpenses,lackofcontroloverreceivables(poorcredit
grantingpracticesandinabilitytocollect),andcashflow.SeeKenRomain,"Lackofmanagementskillsgreasesskidtobankruptcy,"GlobeandMail,Friday,
May29,1987,p.C12.
6.Messer,"CanadianBankruptcies,"p.32.
7.Ryval,"GoingforBroke,"p.42.
8.JackTaylor,"BusinessFailure:WhyItHappens,andHowtoAvoidItThroughPlanning,"SmallBusinessReview,Vol.3,No.1,November1982,p.2.
9.ReaGodbold,"lifeontheReceivingEnd,"CanadianBusiness,Vol.55,No.6,June1982,p.86.
10.TracyLeMay,"Management:TheKeytoSurvival,"FinancialTimes,April26,1982,pp.B10B11.Foranotherexcellentarticleonfinancialmanagementsee
GeorgeFox,"LookingOutfortheSevenEarlyWarningSigns,"CreditandFinancialManagement,Vol.83,No.11,December1981,pp.3032.
11.EdHarris,"StraightTalkAboutWhyBusinessesFailAndHowTheyCanBeSaved,"CanadianBusiness,Vol.53,No.7,July1980,p.160.
12.CherylHawkes,"Bankruptcy:TheBestMedicine,"CanadianBusiness,Vol.54,No.12,December1981,p.123.SeealsoMaryMargaretWantuck,"Keeping
aSmallBusinessAfloat,"Nation'sBusiness,April1985,p.53.
13.Ryval,"GoingforBroke,"p.40.
14.Bywayofcontrast,theChristianFarmersFederationofOntariodefendedthebanks.Inastatementissuedinmid1987itstated:"Thoseofuswhouseddemand
loansduringthatperiodofhighinterestunderstoodthearrangementsbeingmade....Webelievethehighcostofborrowingtobewrongbutwedonotaccusethe
banksofwrongdoing."Itcalleduponfinancialinstitutions"towalktheextramile"withfarmfamilieswhowereintrouble.See"Christianfarmersturntheothercheek,"
ChristianWeek,Winnipeg,MB,August18,1987,p.1.
15.Meloon,"OntheEdgeofBankruptcy,"p.10.
16.JohnAlexanderHaskett,"It'sYourMoney,"CGAMagazine,Volume14,No.6,June/July1980,p.24.
17.J.W.Brighton,J.A.Connidis,ConsumerBankruptsinCanada(Ottawa:MinisterofSupplyandServicesCanada,1982),p.34.
18.OttoGriedrich,"TheAmericanWayofDebt,"TimeMagazine,May31,1982,p.47.
19.Source:StatisticsCanada.Foranexcellentdiscussionoftheuseofcreditbyage,income,class,andattitudetowarddebt,seeKathleenH.Brown,Personal
FinanceforCanadians,3rdedition(Scarborough,Ontario:PrenticeHallCanada)1988,pp.316325.

Page150

20.BrightonandConnidis,p.19.
21.Ibid.,pp.2325.
22.Ibid.,p.31.
23.Ibid.,p.51.
24.Ibid.,p.39.
25.Ibid.,p.33.
26.Ibid.,Summary.
Chapter4
1.CarlRoebuck,TheWorldofAncientTimes(NewYork:CharlesScribner'sSons,1966),p.439440.
2.Tass,etal.,ReportonBankruptcy,p.5.
3.Roebuck,p.445.
4.JohnA.Willes,ContemporaryCanadianBusinessLaw(Toronto:McGrawHillRyerson,1981),p.711.
5.Tass,pp.78,10.
6.Tass,pp.1011.
7.BernardWilson,"TheLastResort,"TheCanadianBanker&ICBReview,Vol.87,No.3,June1980,pp.2022Willes,pp.714719Tass,pp.2731.
8.Atpresent,theOPDisavailableintheprovincesofBritishColumbia,Alberta,Saskatchewan,Manitoba,PrinceEdwardIsland,andNovaScotia.Similar
mechanismsexistinOntarioandQuebec.
9.MichaelRyval,"IsYourBusinessGoingforBroke?"TheFinancialPostMagazine,October31,1981,pp.4445BillAnnett,"CorporateInsolvencyandthe
CGA,"CGAMagazine,Vol.17,No.5,May1983,pp.1722BernardWilson,"ACustomerSavedIsaCustomerGained,"TheCanadianBanker&ICB
Review,Vol.86,No.6,December1979,p.13.BillAnnett,"BankruptcyorBornAgainBusiness?''B.C.Business,Vol.10,No.7,September1982,pp.2530
BernardR.Wilson,"TheCreditor'sCrunch,"CanadianBusiness,Vol.56,No.4,March1983,pp.113117.
10.JohnJudeMoran,PracticalBusinessLaw(EnglewoodCliffs,NJ:PrenticeHall,Inc.,1985)pp.245257JordanL.Paust,RobertD.Upp,JohnE.H.Sherry,
BusinessLaw,FourthEdition(St.Paul:WestPublishingCo.,1984),pp.692697MaryMargaretWantuck,"ABetterBalanceinBankruptcyLaw,"Nation's
Business,April,1985,pp.5053.
Chapter5
1.TheSun,Vancouver,BritishColumbia,January30,1989,p.A4.
2.OliverF.WilliamsandJohnW.Houck.FullValue(SanFrancisco:Harper&Row,Publishers,1978),pp.56.
3.TheProvince,Vancouver,BritishColumbia,August25,1987,p.19.
4."JesusintheOffice,"TheBanner,May14,1990,p.7.

Page151

5.WallStreetJournal,NewYork,aWallStreetJournal/GallupSurveyentitled"EthicsinAmerica,"October31throughNovember3,1983.
6.ClareAnsberry,"ForTheseM.B.A.'s,ClassBecameExerciseinCorporateEspionage,"TheWallStreetJournal,Tuesday,March22,1988,p.37.
7."JesusintheOffice,"p.7.
8.RobertC.SolomonandKristineHanson.It'sGoodBusiness(NewYork:Atheneum,1985),pp.xixii.
9.TadTuleja.BeyondtheBottomLine(NewYork:FactsonFilePublications,1985).
10.TheSun,Vancouver,BritishColumbia,January4,1988,p.B1.
11.WilliamJ.Krutza,"TheNearsightedEthicsofChristianBusinessmen,"Eternity,September1976,p.15.
12.Ibid.,p.16.
13.Kuyers,"DoChristandBusinessMix?"pp.89.
14."JimmyPattison:TheManBehindExpo'86,"FaithToday,September1986,p.31.
15.ManuelG.Velasquez.BusinessEthics,SecondEdition(EnglewoodCliffs,NJ:PrenticeHall,1988),p.10.
16.RobertC.SolomonandKristineR.Hanson.AbovetheBottomLine:AnIntroductiontoBusinessEthics(NewYork:HarcourtBraceJovanovich,Inc.,
1983),p.9.
17.JournalofBusinessEthics(Dordrecht:KluwerAcademicPublishers).SeealsoRogeneA.Buchholz.FundamentalConceptsandProblemsinBusiness
Ethics.(EnglewoodCliffs,NJ:PrenticeHall,1989),pp.23.
18.WilliamC.Frederick,KeithDavis,andJamesE.Post.BusinessandSociety:CorporateStrategy,PublicPolicy,Ethics.6thedition(NewYork:McGrawHill
BookCompany,1988),p.52.
19.Holmes,Ethics,p.10.SeealsoJohnB.Matthews,KennethE.Goodpaster,andLauraL.Nash.PoliciesandPersons(NewYork:McGrawHillBook
Company,1985),p.xiiVelasquez,BusinessEthics,pp.10ff.
20.DutchscholarSybrenTijmstra,forinstance,viewsethicsas"thehumanstrivingforhappiness,consistingofand/orleadingtothoughtsconcernedwithgoodand
wrong."SeeCeesvanDamandLundStallaent,eds.TrendsinBusinessEthics.(Boston:KluwerBostonInc.,1978),p.160.
21.LeonardJamesBrooks,"BusinessEthics:Directionsforthe1990's,"CanadianBusinessReview,Spring1990,p.38.
22.KirkO.Hanson."EthicsandBusiness:AProgressReport,"StanfordGSB,Spring1983,p.11.
23.J.J.C.Smart,"ExtremeandRestrictedUtilitarianism,"inApproachestoEthics,2ndedition,ed.W.T.Jonesetal.(NY:McGrawHill,1969),pp.625633.
24.SolomonandHanson.It'sGoodBusiness,pp.56.

Page152

25.FaithToday,September1986,p.31.
26.JohnDeMont,"Tappingamarket:swimsuitmagazinesareearningbigprofits,"Maclean's,February20,1989,p.28.
27.HaroldLindsell.FreeEnterprise:AJudeoChristianDefense.(Wheaton,IL:TyndaleHousePublishers,Inc.,1982),p.75.SeemybookreviewofLindsellin
CRUX,Vol.XIX,No.2,June1983,pp.3031.
28.BettyTrott."EthicsandtheExecutive:WhatWorksIsNotAlwaysEnough,"Executive,April1983,p.64.
29.Hanson,"EthicsandBusiness,"StanfordGSB,p.11.
30.Velasquez,BusinessEthics,pp.7273.
31.Holmes,Ethics,pp.4445.Manywritershaveattemptedtooutlineanapproachtomeasurementofutility(orbenefit)inmakingbusinessdecisions.See,for
instance,WalterKiechelIII,"UnfuzzingEthicsforManagers,"Fortune,November23,1987,pp.232234,althoughKiechelrecommendsthattheprocessshould
incorporatesomestandardofjustice.
32.SeeVelasquez,BusinessEthics,pp.8190,foranexcellentoverviewoftheconceptofrights.
33.Ibid.,pp.9099.
34.Holmes,Ethics,pp.7989.
35.Fredericketal.,BusinessandSociety,p.61.
36.R.LairdHarris,editor.TheologicalWordbookoftheOldTestament,Vol.2(Chicago:MoodyPress,1980),pp.24432444.
37.IamindebtedtoProf.ElmerMartensoftheMennoniteBiblicalSeminaryinFresno,Calif.,forthismaterialwhichwasincludedinacoursehegaveatRegent
College,Vancouver,B.C.,in1988.SeeE.A.Martens.Jeremiah.(Scottdale,PA:HeraldPress,1986).
38.Holmes,Ethics,p.50.
39.Ibid.,p.52.
40.RussellKelly.Pattison:PortraitofaCapitalistSuperstar.(Vancouver,B.C.:NewStarBooksLtd.,1986),pp.4546.
41.Matthewsetal.,PoliciesandPersons,p.518.
Chapter6
1.See,forinstance,Tuleja,BeyondtheBottomLine,p.25:"Myownattachmenttoenlightenedselfinterestisevident.YetIappreciatethecommonsensevalueof
utilitarianism,especiallytobusinesspeople,andinthisbookIwillbeusinganethicalmodelthatcombineselementsoftheBenthamite(i.e.,utilitarian)andKantian
(i.e.,categoricalimperative)systems."SeealsoThomasM.GarrettandRichardJ.Klonoski,BusinessEthics,2nded.(EnglewoodCliffs,NJ:PrenticeHall,Inc.,
1986),pp.1314:"Manycontemporarywritersonethicstendtofocuseitheronconsequencesoronintentions.Whilesomeethicalproblemsareclearlybest
attackedfromthe

Page153

perspectiveofconsequencesandothersmostfruitfullyanalyzedbyexaminingintentions,thevastmajorityofethicaldilemmasencounteredinbusinessrequireboth
theweighingofconsequencesandthescrutinyofintent."
2.LauraL.Nash."Ethicswithoutthesermon,"HarvardBusinessReview,NovemberDecember1981,pp.7990.
3.WalterKiechelIII,"UnfuzzingEthicsforManagers,"pp.232234.
4.Fredericketal.,BusinessandSociety,pp.6264.
5.Garrett,BusinessEthics,pp.12.
6.Holmes,Ethics,p.51.
7.Ibid.,pp.5152.
8.HaroldL.Johnson,"CantheBusinessmanApplyChristianity?"HarvardBusinessReview:TheBusinessofEthicsandBusiness.Specialcollectionofclassic
articlescopyrightvariousyearsfrom1957to1986,volumeno.11043,p.116.
9.ReasonsforjudgmentoftheHonourableMr.JusticeBouck,intheSupremeCourtofBritishColumbia,betweentheBoardofSchoolTrusteesofSchoolDistrict
34(Abbotsford)andJohnandIlzeShewan,January30,1986,p.34.
10.WilliamsandHouck,FullValue,pp.2438.
11.GordonBrockhouse,"GoodWorks:Whenbusinessandreligionmix,toleranceisthegoldenrule,"OfficeManagementandAutomation,Vol.4,No.1,January
1988,pp.3738.
12.EdwinDarby,"ServiceMasterCleansUpinaBigWay,"Commerce,February1985.
13.C.WilliamPollard,"Work:ACallingorCurse,"unpublishedpaper,nodate.
14."PositivePower,"MoneyMatters,Vol.5,No.1,Spring1988.
15.TakenfrommaterialsprovidedbycompanypresidentDennisW.BakkeinanaddresstoaChristianCollegeCoalitionconferenceentitled"Businessinthe
ChristianCollegeClassroom,"WheatonCollege,May2327,1988.
16.EdGrootenboer,AboutWorkandUnions.(Toronto:ChristianLabourAssociationofCanada,1984),pp.56.
17.Ibid.,p.11.
18."JesusintheOffice,"p.7.
19.SeetheexcellentdiscussionofcapitalisminRobertL.Heilbroner,TheMakingofEconomicSociety,6thedition(EnglewoodCliffs,NJ:PrenticeHall,Inc.,
1980),ch.14.
20."Yahweh"isthemoreaccuraterenderingoftheHebrewnameforGod,betterknown(althoughlesscorrectly)as"Jehovah,"usuallywrittenasLORDinmodern
EnglishBibles.
21.JohnR.Sutherland,"Usury:God'sForgottenDoctrine,"CRUX,Vol.XVIII,No.1,March1982,pp.914.

Page154

22.SeetheexcellentdiscussionondoingjusticeinbusinessinRichardC.Chewning,JohnW.Eby,andShirleyJ.Roels,BusinessThroughtheEyesofFaith(San
Francisco:Harper&Row,1990).
23.Holmes,Ethics,p.89.
Chapter7
1.JamesB.Pritchard,AncientNearEasternTexts(PrincetonUniversityPress,1955),pp.163ff.
2.See,forinstance,EncyclopediaJudaica(Jerusalem:KeterPublishingHouse,1971),pp.2731F.L.CrossandE.A.Livingstone,"Usury,"TheOxford
DictionaryoftheChristianChurch,2nded.(London:OxfordUniversityPress,1974),p.1420.
3.G.VonRad,Deuteronomy(Philadelphia:WestminsterPress,1966),pp.1920.
4.BenjaminNelson,TheIdeaofUsury(Chicago:UniversityofChicagoPress,1969),pp.34.
5.WalterC.Kaiser,TowardanExegeticalTheology(GrandRapids:BakerBookHouse,1981),p.152.
6.Ibid.,pp.152153.
7.Ibid.,p.155.
8.Ibid.,pp.134140,161162.
9.G.B.Caird,SaintLuke:ThePelicanNewTestamentCommentaries(Harmondsworth,Middlesex,England:PenguinBooks,1963),pp.100105.
10.LeonMorris,TheGospelAccordingtoSt.Luke(GrandRapids:Wm.B.Eerdmans,1974),pp.130131.
11.PhilipSchaffandHenryWace,TheNiceneandPostNiceneFathers,SecondSeries,vol.8(GrandRapids:Wm.B.Eerdmans,reprint),pp.xlviixlix.
Chapter8
1.J.DanielHess,EthicsinBusinessandLabour(Scottdale,PA:HeraldPress,1977),p.7.
2.Johnson,FamilyFinances,pp.81,8384.
3.LarryBurkett,HowtoManageYourMoney(Chicago:MoodyPress,1971),p.27.SeealsoBurkett,YourFinancesinChangingTimes(CampusCrusadefor
Christ,Inc.,1971),pp.6566.
4."LoseroftheMonth,"TheWittenburgDoor,No.51,October/November1979,p.26.
5.Velasquez,BusinessEthics,p.117.
6.Ibid.,p.117.
7.Ibid.,P.118.
8.CarlKreider,TheChristianEntrepreneur(Scottdale,PA:HeraldPress,1980),p.41.

Page155

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Willes,JohnA.ContemporaryCanadianBusinessLaw.Toronto:McGrawHillRyerson,1981.
Williams,OliverF.,andHouck,JohnW.FullValue.SanFrancisco:HarperandRow,Publishers,1978.
Wilson,Bernard."ACustomerSavedIsaCustomerGained."TheCanadianBankerandICBReview.Vol.86,No.6,December1979.
Wilson,Bernard."SpottingtheDangerSignals."TheCanadianBankerandICBReview.Vol.86,No.5,October1979.
Wilson,BernardR."TheCreditor'sCrunch."CanadianBusiness.Vol.46,No.3,March1983.
Wilson,Bernard."TheLastResort."TheCanadianBankerandICBReview.Vol.87,No.3,June1980.
Wolf,HaroldA.PersonalFinancialPlanning.Boston:AllynandBacon,1989.
Yates,RichardA.BusinessLawinCanada,SecondEdition.Scarborough,ON:PrenticeHallCanadaInc.,1989.

Page163

SUBJECTINDEX
IndexesbyRichardA.Wiebe,PublicServicesLibraries,TrinityWesternUniversity.
Bankruptcyhasnotbeenusedasamainheading.Searchdirectlyunderthesubjectdesired,e.g.,causesofbankruptcy,emotionalimpactofbankruptcy,etc.
A
abortiondebate,86
accountsreceivableandpayable,lackofcontrol,45,149
AES(company),103104
Ambrose,125
Amway,33
Annett,Bill,150
Ansberry,Clare,151
AppliedEnergyServices(AES)company,104
arbitration,voluntarybinding,105
B
Bakke,DennisW.,153
bancarotta,54
BankruptcyAct(Canada),25
BankruptcyActof1571(England),54
BankruptcyActof1883(England),54
BankruptcyActof1919(Canada),55
BankruptcyReformActof1978(U.S.),55
BankruptcyReformActof1984(U.S.),55,61,6364
bankrupts
attitudestobankruptcy,51
forgiven,143
grievingprocess,3738.Seealsounemployed
statisticalprofile,Canada,5051
supportandcounsel,16,3539
banksandbankruptcy,4647,52,149
BasiltheGreat,130
Baumhart,Raymond,72
Bentham,Jeremy,78,152
BoardofSchoolTrusteesofSchoolDistrict34(Abbotsford,B.C.),6768,100,153
Boaz(biblicalcharacter),112
Boesky,Ivan,69
Bouck,Mr.Justice,153
Brighton,J.W.,149,150
BritishColumbiaCourtofAppeal,68
BritishColumbiaSchoolAct.BoardofReference,68
Brockhouse,Gordon,153
BrookfieldChristianReformedChurch,36
Brooks,LeonardJ.,151
Brown,KathleenH.,149
Buchholz,RogeneA.,151
Burkett,Larry,14,132,147,154
C
Caird,G.B.,130,154

Page164

Camp,Dalton,118
CanadianFarmersSurvivalAssociation,criticalofbanks,47
CanadianOrganizationofSmallBusiness,24
Cantoni,Lucile,147
capitalmarket(OldTestament),112
capitalredistribution,112,136
capitalisticeconomics,87
Carignana,Pierre,147
Carolan,Katherine,148
Carrington,James,36,37
CASE,44
cashflow,inadequate,43,149
CategoricalImperative,8485,152
causesofbankruptcy,132,144
business
banks,4647,149
corruptpractices,4748
inadequatefinancialinformation,4546,144
lackofadaptability,48
marketfactors,49
poormanagement,4244,49,139140,141144,148149
undercapitalizationandovertrade,4445
personal
businessfailure,5152
consumerdebt,4951,140142,144
creditgrantingindustry,52
personalmisfortune,5152
chapter7,bankruptcylaw,UnitedStates,6164
chapter11,bankruptcylaw,UnitedStates,61,64
chapter13,bankruptcylaw,UnitedStates,61,6364
Chewning,RichardC.,154
ChristianCollegeCoalition,153
Christianethics.Seeethicalsystems,justice
ChristianFarmersFederationofOntario,supportiveofbanks,149
ChristianLabourAssociationofCanada(CLAC),104106
churchdiscipline,35
churchfathers,124,128130
church'sreactiontobankruptcy,2728
CLAC,104106
CodeofHammurabi,5354,120
collateral.Seeunderloans
CompanyofLombardMerchants,54
compensatoryjustice,definition,87
Connidis,J.A.,149150
contingentapproachinethics.Seeunderethicalsystems
cosignedloans,biblicalview,126
costcontrol,inadequate,4546
CounselingAssistancetoSmallEnterprises(CASE),44
counselingforbankrupts,16,3539
covenantofGodwithIsrael,120,125,127,138
credit,abuse,4951,140142,144
creditandcollectionpolicies,inadequate,43
creditratings,effectofbankruptcy,64
creditors,poorcommunicationwith,46
Cross,F.L.,154
Cunningham,Graham,148
D
Darby,Edwin,153
Davis,Keith,151
DaytonHudson(company),70
DeMont,John,152
DeVos,Richard,33
debt
biblicaluseofterm,118
biblicalview,129130,133
cancellation,108,137,140141,143144
repayment,136137,141
CodeofHammurabi,5354
decisionsinbusiness,marketbased,7880

Page165

deontologicalethics.Seeunderethicalsystems
distributivejustice,82
definition,8687
divinecommandtheory,9091
Dofasco(company),75
Dostoevski,F.,12
E
Eby,JohnW.,154
emotionalimpactofbankruptcy,3032,3739,144
employees
shareincompanyownership,102
turnoverrate,44
environmentprotectionandbusiness,104
ethicalabsolutes,70,7879,82,9596,100.Seealsovalues,relative
ethicalleadership,106
ethicalstandardsinbusiness,70,7475
andChristians,7172
mediaportrayal,70
opinionpolls,69
reasonspracticed,7576
ethicalsystems
contingentapproach,9295
deontological,8182,90,9293,117,134136
andabortiondebate,86
definition,8386
evaluation,8687
andindividualrights,8486
andprivatepropertyrights,84
andutilitarianism,84,86
justice,82,90,9294,134136,138,144,152.
Seealsowealth,biblicalview8789
biblicalview,114117
definition,8687
andutilitarianism,89
mixedframework,divinecommandtheory,9091
utilitarian,84,86,8990,9294,115,117,134135,152153
andethicalabsolutes,7879
andindividualrights,8182
andmarketeconomy,7880
andpornographyindustry,7980,82
biblicalevaluation,8283
definition,7778
ethicaltheory,98
structure,96
ethicalviewsofbankruptcy,22,35
acceptableinbusiness,1314,2526,146
andChristianbusinesspeople,140144
justiceapproach,137,141
unbiblical,1314,21,131133,141
ethics
coursesinM.B.A.programs,6970
definition,7274,150
practicalapplication,9295
ethics,Christian.Seeethicalsystems,justice
ethics,hierarchical,135
ExxonValdez(ship),75
F
fallowyear,115
familyunit
AncientNearEast,oppression,109110
Israel,preservation,109110,136137
Westerncivilization,preservation,110111
FederalBusinessDevelopmentBank(Canada),44
Fee,GordonD.,3334,148
festivals,Israelite,115
feudalsystem,108.Seealsoland
financialplanning
inbusiness,inadequate,45,144
personal,141
financing,4445
Foster,GaryD.,147
Fox,George,149

Page166

Franklin,Ben,49
Frederick,WilliamC.,95,151153
freedomofassociation,laborunions,84
FrenchRevolution,99
G
Gagnon,David,38
Garrett,ThomasM.,152153
gleaninglaws,111112,121,134,143
Godbold,Rea,45,149
goldenrule,85
Goodpaster,KennethE.,151
gospelofprosperity,16.Seealsowealth
evaluation,3235
viewofbankruptcy,13
GreenWeenieaward,133
Greiner,LarryE.,43,148
Grenby,Mike,21,53,148
Griedrich,Otto,149
Grootenboer,Ed,153
H
Hanson,KirkO.,151152
Hanson,KristineR.,151152
Hardy,Thomas,42
Harrington,Bob,32
Harris,Ed,149
Harris,R.Laird,152
Hartzler,Robert,147
Haskett,JohnA.,48,149
Hawkes,Cheryl,149
healthandwealthgospel.Seegospelofprosperity
Heilbroner,RobertL.,153
Hemley,Ralph,131
Hess,J.Daniel,154
historyofbankruptcy,5355
Holmes,Arthur,7374,81,85,8990,96,116,151153
HomeofLoveChurch,106
Honsberger,JohnD.,147148
Houck,JohnW.,68,100,150,153
Huizingh,Larry,147

I
IBM(company),70
incomeredistribution,112,136
individualrights,8182,8486
InsideSports,79
interest,OldTestamentuseofterm,119
interestlaws
churchfathers,125,128130
CodeofHammurabi,120
OldTestament,112,119129,140
Talmud,119,123124
interestratesandbankruptcy,42
InternationalCreditAssociation,24
interpretationoftheBible,98
stepsinprincipalization,126129
inventoryanalysis,inadequate,43,46
involuntarybankruptcy,law
Canada,5658
UnitedStates,6162
J
Jehoiakim(biblicalcharacter),8788
Jehovah,153
Jelksma,George,65
Jelksma,John,65
jobprocurement,effectofbankruptcy,64
Johnson,HaroldL.,97,153
Johnson,AlbertJ.,21,25,131,147,154
JohnsonandJohnson(company),70
Jones,W.T.,151
Josiah(biblicalcharacter),87
Jubilee,year,108109,115,121122,127,134,137,143
justice,biblicalview,8789,115117.
Seealsounderethicalsystems
wealth
K
Kaiser,WalterC.,126,154
Kant,Immanuel,84,152

Page167

Kelly,Russell,152
KiechelIII,Walter,94,152153
kinsmanredeemer,108109
Klonoski,RichardJ.,152
Knight,Russell,148
Kreider,Carl,139,154
Krutza,WilliamJ.,151
Krystal,Esther,148
Kuyers,Milt,36,148,151
L
labormanagementrelations,nonadversial,105
laborunions,84,105106
land
AncientNearEast,108
Israel,108109,115,134,139
Landry,RaymondA.,147
law,bankruptcy
Canada,5455
involuntarybankruptcy,5658
proposalsforreform,6061
refinancing,64
voluntarybankruptcyorderlypaymentofdebts,5859,61,142,150
theproposal,5960,142
England,54
Italy,54
Rome,5354
UnitedStates
chapter7,6164
chapter11,61,64
chapter13,61,6364
involuntarypetition,61
involuntaryposition,6162
voluntarypetition,61
law,bankruptcy,purpose,55,143
Lazarus(biblicalcharacter),113
LeMay,Tracy,149
leisure,115
LeviStrauss(company),70
LighthouseGospelChurch,3637
Lindsell,Harold,80,152
Livingstone,E.A.,154
loans
ancienttimes,secured,53,110
OldTestament
cosigned,126
interestfree,121,123,134,143
secured,121122,125126,143
Loblaws(company),75
Locke,John,85
Loewen,Herman,147
M
management,participative,105106
managementlaborrelations,nonadversarial,105
managementofgrowingbusinesses,4344
ManningPreston,3031,3537,146147
Marchand,Philip,147
marketbaseddecisions,7880
Martens,ElmerA.,152
Matthews,JohnB.,151152
MediaInstitute,70
mediaportrayalofbusiness,70
Meloon,WalterO.,4041,47,148149
Messer,Tom,43,149
Miles,RobertH.,148
Mill,JohnStuart,78
Miller,RogerL.,147
mixedframeworkforethicalanalysis.Seeunderethicalsystems
Moore,G.E.,78
Moran,JohnJ.,150
MoranSackett,Marsha,148
Morris,Leon,154
Mowatt,Don,148
N
Nash,LauraL,9294,96,151,153
NationalAssociationofAccountants,69
naturalrights,85
Nelson,Benjamin,154
NewWestminsterColumbian(newspaper),59,64
nexum(contract),5354

Page168

niputum(pledge),54
O
orderlypaymentofdebts,
bankruptcylaw,Canada,5859,61,142,150
P
Pattison,Jim,71,79
Paust,JordanL.,150
pledges.Seeunderloans
Pollard,C.William,103,152
poor,the,140
churchfathers,130
NewTestament,8889,129130
OldTestament,8788,111112,115,121123,127129,134,137138
causesofpoverty,142143
poortithe,111,121,123,134,143
pornographyindustry,7980,82
Post,JamesE.,151
presuppositions,theologicalandphilosophical,85,96
preventionofbankruptcy,52,144
principles,biblical,9699,126129
Pritchard,JamesB.,154
propertyrights,private,84,129.
Seealsowealth
biblicalview,108112,115116,122,127,134,138139
capitalisticview,107,138139
proposal,the,bankruptcylaw,Canada,5960,142
R
Randolph,W.Alan,148
receivership,definition,24
recordkeeping,inadequate,45,140
ReportoftheStudyCommitteeonBankruptcyandInsolvencyLegislation(Canada),2526
reportingsystems,inadequate,45
retributivejustice,definition,87
rightsbasedethics.Seeethicalsystems,deontological
RoebuckCarl,150
Roels,ShirleyJ.,154
Romain,Ken,149
Ruby,Kurt,92
Ruth(biblicalcharacter),111112
Ryval,Michael,148150
S
Sabbath,115
Sabbaticalyear,108,111,115,121,127,134,136137,143
Schaff,Philip,154
Schaffer,Ulrich,35,148
selfesteem,2931,46,144
Seneca,34
ServiceMaster(company),102103
seventhyear.SeeSabbaticalyear
Shaw,GeorgeBernard,67
Sherry,JohnE.H.,150
Shewan,Ilze,153
Shewan,John,153
Simmonds,David,102
Simon,theSorcerer(biblicalcharacter),114
slaves,release,108,133
Smart,J.J.C.,78,150
socialresponsibility,corporate,138
socialisteconomics,87
Solomon,RobertC.,151152
spiritualimpactofbankruptcy,30,3237
SportsIllustrated,79
Stallaent,Lund,150
statistics
bankruptcies,12,24
bankruptcies,business,32
Canada,22
UnitedStates,22,49
bankruptcies,farm,24
bankruptcies,personal
Canada,2223
UnitedStates,2324,49
bankrupts,5051
consumerdebt
Canada,4951
UnitedStates,49
ethicalstandardsinbusiness,6970

Page169

financiallosses,Canada,24
Steinberg,MarthaJean,106
stigmaofbankruptcy,2526,147
Stoics,viewofselfsufficiency,34
sucessreligion.Seegospelofprosperity
SupremeCourtofBritishColumbia,68,153
Sutherland,JohnR.,154155
T
Talmudoninterest,119,123124
Tass,Roger,147,150
taxationintheOldTestament,111
Taylor,Jack,149
Thompson,RobertV.,148
Thompson,SylviaV.,148
Tijmstra,Sybren,151
tithing,113114
OldTestament,111
Toews,Ron,28
Toth,Christina,148
Trott,Betty,152
Tuleja,Tad,151152
U
UnanimityRule,95
unemployed,grievingprocess,148.Seealsounderbankrupts
UnionCarbide(company),75
unions,84,104106
UniversalDeclarationofHumanRights,84
Upp,RobertD.,150
usurylaws.
Seeinterestlaws
utilitarianethics.
Seeunderethicalsystems
V
values,6869,
conflicting,7475,9899,117
freeenterprise,100
JudeoChristian,99,102106
relative,99100.
Seealsoethicalabsolutes
values,freeenterprise,99101
values,JudeoChristian,98102.Seealsoworldview,biblicalapplication,102106
vanDam,Cees,151
Velasquez,ManuelG.,72,81,84,134136,151152,154
voluntarybankruptcy,law
Canada,5860,141142
UnitedStates,61
VonRad,G.,154
W
Wace,Henry,154
Wade,MarionE.,102103
Wantuck,MaryMargaret,149150
W.C.C.(politicalparty),107
wealth.
Seealsoethicalsystems,justice
propertyrights,privatebiblicalview,34,112116,125,134136,141142.
Seealsogospelofprosperity
freeenterpriseview,101,116
Wessner,KennethT.,103
WesternCanadaConcept(W.C.C.)(politicalparty),107
Willes,JohnA.,150
Williams,OliverF.,68,100,150,153
Wilson,BernardR.,147148,150
workaholism,111
workandleisure,115
work,motivation,103
worldview,biblical,9799.Seealsovalues,JudeoChristian
Y
Yahweh,108,153
yearofrelease.SeeSabbaticalyear
Yoder,JohnH.,131
Z
Zacchaeus(biblicalcharacter),113
Ziegler,John,27

Page171

SCRIPTUREINDEX

OldTestament
Genesis
1:2631

101

38:1226

122

47:2026

108

Exodus
12

115

12:43

124

16:18

116

20:810

115

20:15

111

21:2

108,124

22:21

122

22:2122

123

22:25

112,119,122124

22:2527

121122,128

22:26

121

22:27

122

23:10

115

23:11

108,115

23:16

115

23:17

115

34:22

115

34:23

115

35:23

115

Leviticus
19:910

111

19:3334

122

22:25

124

23:2732

115

23:35

121

25

108,127128,143

25:155

101

25:4

108

25:517

115

25:6

127

25:817

108

25:14

127

25:23

108,139

25:2428

109

25:25

109,127

25:2526

109

25:35
25:3537.

122,127,143
112,119,122123,127

25:38

123

25:39

127,133

25:47

127

25:4749

109

26:1426

142

Numbers
27:111

108

29:16

115

29:711

115

36:112

108

Deuteronomy
7:8
8:1118

125,134

8:28

134

14:2223

111

14:23

111

14:2729

111

14:2829

121,143

14:29

123

15:118

108

15:3

124

15:4

121,128,142

15:6

124

15:710

136

15:711

112

15:8

(indexcontinuedonnextpage)

120

121,143

Page172

(indexcontinuedfrompreviouspage)
15:12

124

16:912

115

19:14

109

23:19

124

23:1920

112,119,123126

23:20

124

24:6

121

24:1013

121

24:14

122

24:17

121122

24:19

121,143

24:1921
26:12

111
121,143

28

116

28:114

142

28:12

124

28:1548

142

Ruth
2:27

111

2:1517

111

2:20

109

3:9

109

4:112

109

1Samuel
22:2

118,125

2Kings
4:7

118

Nehemiah
5:113

126

5:911

119

10:31
13:15f.

118,124
124

Job
22:6

121

24:3

121

Psalms
15:5
37:21
37:30

119
21,132
87

Proverbs
3:56

48

6:15

126

6:611

142

10:4

142

11:15

126

12:5

87

14:23

142

17:18

126

20:4

142

20:13

142

20:16

121

21:15

87

21:17

142

22:26

118

22:2627

126

23:2021

142

24:3034

142

27:13

121,126

28:19

142

31:24

124

Isaiah
5:8

110,139

5:810

112

10:12

143

10:13

112

Jeremiah
2:13

83

11:21

83

12:6

83

15:1518

83

22:1317

8788

32:6

109

32:7

109

Ezekiel
18:7

118

18:8

119

18:13

119

22:12

119

Amos
2:68

125

2:8

121

4:1ff

125

(indexcontinuedonnextpage)

Page173

(indexcontinuedfrompreviouspage)
5:1012

143

6:4ff

125

8:48

112

Micah
6:8

87,96

Habakkuk
2:6f

126

Haggai
1:6

143

Zechariah
14:21

124

Malachi
1:614

140

1:8

139

NewTestament
Matthew
5:42

129

10:39

101

16:24

101

18
18:2335

14
118

Mark
8:36

101

12:4144

101

15

25

Luke
5:11

112

5:2732

112

6:2026

129

6:2426

113

6:2731

130

6:2738

129

6:3236

130

6:3435

129

6:3738

130

7:19

88

7:2223

89

7:4043

118

814

113

9:3

113

10:14

113

11:42a

113

11:42b

113

12:1321

101,113

12:2232

101

12:3033

114

14:26

97

14:27

101

14:33

112

16:19

118

16:9

130

16:1931

101,113

18:1823

112

18:2430

113

19:110

113

21:14

112

John
10:10

34

12:2326

101

13:114

100

15:2

82

15:5

82

15:8

82

15:16

82

Acts
2:4247

101

4:1820

99

8:1820

114

Romans
6:12

141

1Corinthian
3:9

135

97

10

97

11

97

2Corinthians
8:1314

127

8:1315

116

Galatians
3:2728

(indexcontinuedonnextpage)

101

Page174

(indexcontinuedfrompreviouspage)
Ephesians
2:89

114

2:10

83

2:22

135

4:16

136

Philippians
2:14

136

2:118

100

4:11

34

Colossians
3:17

139

3:2325

140

1Timothy
5:23

34

34

Philemon
18

118

James
1:27

88

2:1417

83

2:1517

39

3John
2

33

Page175

THEAUTHOR

JohnR.SutherlandwasborninBelleville,Ontario.LikemanyTrentonHighSchoolgraduatesbeforehim,hepursueduniversityeducationatQueen'sUniversityin
nearbyKingston,completingtheM.B.A.in1970.Threeyearsasasteelindustrymarketingspecialistfollowed.
LocalchurchinvolvementinyouthworkmadeSutherlandwanttoimprovehisknowledgeoftheBible.Thisledhimandhisexpectantwife,Sharon(Martin)
Sutherland,toDeerfield,Illinois.TherehespentayearatTrinityEvangelicalDivinitySchoolandexperiencedthebirthoftheirfirstchild,Stephen.
ForthreeyearsSutherlandtaughtmarketingandmanagementatthepostsecondarylevelinSudbury,northernOntario(duringwhichtimedaughterJuliewasborn).
Therehealsohostedaweeklyopenlineradioprogramforyoungpeople.
In1977SutherlandreturnedtoIllinoistoworktowardanM.A.inbiblicalstudies.Atthetime,TrinityWestern(Langley,BritishColumbia),Canada'slargestChristian
liberalartsuniversity,neededabusinessprofessor.Sutherland'scombinationofseminarytrainingandinterestinintegratingbiblicalprinciplesandmarketplaceissues
provedappropriate,andhejoinedthefacultyin1978.
Heleftin1984toserveasanadministratoratRegent

Page176

College.HereturnedtoTrinityin1987andisnowAssociateProfessorofEthicsandOrganizationalBehavior,aswellasChairoftheDivisionofBusinessand
Economics.
SutherlandandhisfamilyattendWestAbbottsford(B.C.)MennoniteChurch,whereheteachesanadultBibleclassanddoessomelaypreaching.Hehasserved
since1983asamemberoftheAbbotsfordSchoolDistrictBoardofSchoolTrustees.