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January 1982 · Vol. 11 No. 1 · pp. 49–55 

Mennonite Economic Institutions for the Future

Melvin J. Loewen

I congratulate the Seminary for organizing this workshop on business because the church needs to be aware of emerging forces in the economy, and Christian men and women of the market-place need periodically to review their commitment to biblical teachings on entrepreneurship. This consultation, though unique in its mix of participants, is part of a current concern in the broader Evangelical community of North America regarding God’s will for his children in dealing with poverty and property.

Those of us who are here have come from and will return to our Mennonite communities. We all know that communities—whether geographic or by affinity—are an important element in promoting social goodwill to their members as well as to the surrounding world. Each affinity group needs to define its unique characteristics and seek to relate them as contributions to the world. Others can often see us better than we can see ourselves. The words I hear most often about Mennonites are charity and responsibility.

I want to talk about a few of the economic endeavors that Mennonites can undertake within the parameters of those two words—charity and responsibility—and relate them to poverty and property in our world in the light of the idea of progress.

The idea of progress is required for all useful work; it is necessary to sustain the human spirit. Progress is a God-given urge. When a child is born it is expected to grow physically and mentally. When we are born again we want to grow spiritually. Economic growth is an urge common to the poor and the rich. The Bible cautions against the worship of wealth and personal consumption but not against productive work which is essential to achieve economic progress. The current zero growth concept is a luxury of comfortable academics and middle-class students, not the goal of the poor. I endorse the need to conserve, to preserve, and to replenish our resources; but to preach no-growth economics is to deny our humanity and the joy of working.

As Art DeFehr has said in another context, Mennonites should concentrate their efforts in those areas where they have shown historic {50} strengths. Those strengths are obviously in dealing with poverty and in creating wealth out of productive work—the two sides of the Mennonite economic coin of charity and responsibility. I should like to propose three new economic institutions which Mennonites should create to facilitate collective action, two for dealing with poverty, one to handle property.


In order to deal with poverty, let us first distinguish between absolute poverty and relative poverty. Absolute poverty is a sub-human level of subsistence characterized by: 1) inadequate food to sustain life, 2) lack of access to means of production, 3) lack of medical assistance, 4) illiteracy, and 5) the absence of hope for improvement. These characteristics describe daily life for about 800 million people in the Third and Fourth World. Very few in the First and Second World fall into this category. The absolute poor are the concern of the Western world, of the church and para-church agencies in general, and of our own Mennonite Central Committee (MCC). Absolute poverty in North America is mainly limited to physical and mental incapacities or the undue burdens of dependents: widows, orphans, and the physically and mentally disabled. In Europe and North America they were traditionally the charge of the church, though in recent times they have become the charge of the state.

Relative poverty is relative. Some people always have less than others. In this room tonight we have present the relatively rich and the relatively poor. Pity the poor seminary student who has only three shirts and one old car, and pity the millionaire who has only one yacht instead of two. Yet both the seminarian and the millionaire have food and clothing and shelter. Should they not therewith be content? Relative poverty also depends on cultural context. What we would consider intolerably poor in absolute money terms may in fact mean considerable security in an Asian or African village. A farmer with two goats, a bullock, and a cart may be “top man” in his village.

Those who are relatively poor in a given culture do not need the material aid of a church agency. They do, however, need the help of preachers to remind them that sufficient unto the day are the cares as well as blessings thereof. The relatively poor, overseas and at home, may also need the help of experienced businesspersons to support them in improving their lot—not only for purposes of personal consumption but to enable increased sharing with the absolute poor. In either case it is production by the poor that raises them out of poverty in the long run. With these distinctions between absolute and relative poverty let us describe possible institutions to deal with them. {51}


First, we need an institution to help communities develop in poor countries abroad. MCC has been our church vehicle to dispense charity in forms of material aid. MCC has a good record in dealing with absolute poverty and many parachurch agencies of the Evangelical community are now using MCC as a model. Mennonite Economic Development Agency (MEDA), an institution to finance small enterprises abroad, has had good success with traditional Mennonites in Paraguay and Bolivia but has had poor results—both in promotion of new enterprises and in recovery of loan capital—among new Christians in Asia and Africa. Several lessons about economic institutions have been learned also from a longer Mennonite history.

In Russia and again in Western Canada we have seen what great stress occurs within the church when development funds are administered through the church to a few. We are making the same mistakes again in Africa and Asia. Beyond the tensions of accused favoritism are the hassles of making profits and paying off loans. This is why good business counsel is needed. But these should not be the concerns of the church or MCC, the social arm of the church. The church must remain a prophetic voice helping the absolute poor. Obviously the line between absolute poverty and relative poverty is not clear-cut, and as long as MCC makes community-wide efforts at relief and raising awareness of hope for development no personal advantage need damage the relationships with the communities. But as some individuals move ahead in economic understanding and become models for others, they should be supported by development institutions made up of volunteer members who form development partnerships outside the church-sponsored institutions. Helping the relatively poor make money should not be the calling of the church nor of MCC. For the absolute poor the church is called to spare no effort.

Who then should deal with relative poverty abroad? Making money available to entrepreneurs abroad is now possible through local banks and local government development funds. What is urgently needed—and will be increasingly needed as these development funds are expanded—is the management know-how to help launch and operate new ventures. Wealth is created by disciplined application of brain and brawn. At the initial stages of development money is only a small ingredient. Systematic business approaches to development are a far more important determinant to success than quantities of money. On-the-job training and working together over the long periods of project development can gradually change attitudes and customs. What is needed in many developing countries is a cadre of middle-level business-minded managers or partners who are willing to work over the long haul with their project counterparts. {52}

We need a new organization to channel the talents of these development partners. Let us call them Mennonite Development Partners. Though made up of men and women of the church, the organization would not be under the church. There would thus be a clear distinction between dealing with absolute poverty which calls for response from the church and relative poverty which is a long-range teaching mission of responsible economics. This organization would eventually be funded by the profits of its projects which in turn would be financed by local development funds. The key difference from existing programs would be the use of development funds borrowed from financial institutions of the host country. The foreign partners would have a share in the venture based on a program of gradual phase-out as local expertise takes over.

What about poverty at home? In one short generation we have moved from community churches taking care of the poor to state and national welfare systems. These public welfare systems are failing because they are impersonal, costly to operate, and fail to resolve unemployment problems. Our governments are looking for help. Here is an opportunity for communities with sizable Mennonite populations to deal with local welfare problems with the help of a Community Services Association. We have much domestic expertise in social services. Combine these with the job-creating abilities of concerned businesspersons and we have a “winner.” It would combine assistance to the temporarily poor with job creation. The incentives would be to see people lead productive lives. The Association would be paid by the town or country out of reduced welfare payments. Should we not lead our communities in works of charity and responsibility?


We have dealt with poverty abroad and at home. We need also to deal with ownership of property in our communities.

This concern grows from two unrelated directions: 1) People living together want to participate in the economic value-decisions of their communities, and 2) the transfer of real property is becoming too cumbersome, costly and time consuming to attract the small investor. Let me elaborate on both points and then come back to an institutional solution.

First, on community participation. There is a feeling among the young workers and professionals in our communities that they are being squeezed out of property and ownership decisions. Their recourse is political action, which leads to confrontational legislation to control the activities of the owners. In the late nineteenth century in South Russia too the rich farmers were buying up more land while the young men {53} could not get started and were forced to serve as laborers. Some moved farther east and started new colonies along the Volga and around Tashkent. In Pennsylvania similar pressures forced young farmers to go west. As long as cheap land was available for agriculture new beginnings could be made and new hope could be nurtured. Those possibilities are now gone for the most part. The high price of land is not serious as long as that capital investment can be recovered from increased production. However, when land prices go beyond that point and are purchased for tax-shelters without regard for production of food, we are losing community values in rural communities. Similar constraints are being experienced by urban Mennonites. Here the problem is the increasing complexity and cost of changing property ownership. Every deal has its petty requirements with not-so-petty fees. Also, life is too short to spend in acquiring and then in dismantling one’s estate.

To encourage broad community ownership of land as well as urban investments, I suggest we create community-based property companies in rural and urban areas. The company would own farmland leased to young farmers on long-term contracts. In urban areas Mennonite Mutual Properties would own apartment blocks and other investment potential. Since some farmlands can no longer be paid for out of agricultural production, the maintenance of community ownership may require the cross-subsidization of income from urban real estate.

In order to get broad participation in ownership of the property companies, shares would be sold to community residents. Periodic stock splits would keep per share costs low enough to attract young investors. It is important that every child should feel ownership in the community. If the child has an account in the local credit union, he/she should have a share in Mennonite Mutual Properties. When a child is born, grandpa and grandma buy it a share in the community properties.

To avoid domination by a few shareholders using most of the stock to control decisions and to avoid control by many shareholders with little investment, decisions would need the approval of 51% of the shareholders as well as 51% of the shares outstanding. Operations of these properties would be contracted to management firms. But the policy of long-range use would be set by shareholders in a cross-section of community partners.

Each year appraisals would set share values and shares could be redeemed by the company or by sale to other persons in the community: easy in, easy out, and a chance to own a piece of the community. When people have a stake in the action there is less talk of “they” and “me” and more of “we.” The former leads to increased confrontation, the latter to a stronger sense of community. {54}


Who then will carry forward the ideas of these three institutions? Who will test their feasibility?

Dealing with relative poverty abroad has been MEDA’s interest for twenty-five years, so let us assign to them the task of preparing an organization for Development Managers.

Dealing with absolute poverty is MCC’s speciality, so let us ask MCC (USA and Canada) to consider the merits of Community Services Associations for North America.

Creating new companies as vehicles for owning community property is a task for North American business people, so let us give that one to Mennonite Industry and Business Association (MIBA).

Thus we will care for our own and the stranger in our midst. To the indigent we will say, “Come and dine, without price.” To the indolent we say, “Go to the ant thou sluggard and learn to provide.” To the self indulgent we offer a better way to fulfillment and suggest generous distribution. To the diligent we say, “Here is a job and here is a chance to own a piece of the community.”

Since the Seminary called us together, let us give an assignment also to our students of the Bible. In order to carry forward our ideas on economic institutions for the future we need to increase our biblical understanding on four concepts:

1. What are the pure motivations for work? Are not the strongest motivations related to improving the welfare of self and family? Is this selfish?

2. Progress, whether spiritual or material, is premised on dissatisfaction with the present condition. Is that consistent with being content with the food and raiment we already have?

3. Stewardship responsibilities are limited to one’s choices. Among those choices for all of us are what to do with our net income (profits). Does stewardship of profits mean only giving to charitable organizations? Could it not also mean reinvestment to create more jobs for the poor?

4. What is the biblical concept of equality? Does not Scripture teach that people have a variety of talents and that they are responsible to maximize those talents to the glory of God?

Now that we have made the assignments and have sketched the next agenda, let us go back to our communities, our homes, our tasks. And let all be done with charity and responsibility. {55}

I will close by paraphrasing excerpts from the record on Hezekiah in 2 Chronicles 31.

Hezekiah did what was good and right and faithful before the Lord his God. And he worked wholeheartedly. And so he prospered. And the people brought gifts to the temple and they piled them in heaps and Hezekiah asked the High Priest, “From whence come these gifts?” And he answered: “Since the people began to bring their contributions to the temple of the Lord, we have had enough to eat and plenty to spare; because the Lord has blessed his people.”

Melvin J. Loewen works in the International Relations Department of the World Bank, Washington, D.C.

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