Is There Enough? The Law of Scarcity vs The Law of Consecration

Bruce W. Kimzey was born in Worland, Wyoming, in 1942, the third and youngest child of C. Leslie and Virginia Kimzey. He lived in Worland until he graduated from high school in 1960 and week later married his childhood sweetheart, Judy Brinkerhoff. Four years later he graduated from BYU and entered graduate school in economics at Washington State University. They left WSU in 1968 with six children and moved to Las Cruces, New Mexico, where he began teaching at New Mexico State University. He finished his Ph.D. in economics in 1970. He later taught at Pepperdine University, University of Nevada, Reno, and BYU Provo, and operated a business in Salt Lake City before moving to BYU-Hawaii in 1989.

While he was at Pepperdine Bruce was Director of the Interdisciplinary Program in American Studies, and at Reno he was the Director of Economic Education for Northern Nevada, working with the public school system and the business community to promote economic education throughout the state. In Provo he wrote a weekly newspaper column on economic issues and financial planning for two years. He also completed the requirements to become a Certified Financial Planner (CFP) in 1984.

At BYUH Bruce has served on the General Education Committee, the University Faculty Housing Committee, the University Accreditation Self-study Committee, and the Academic Planning Council. He also served as Chairman of the Department of Business Management for five years before being appointed Dean of the School of Business in May 1996.

Bruce is currently Bishop of the BYUH Seventh Ward and has been a Bishop's counselor, ward clerk, financial clerk, and gospel doctrine teacher. His interest include sports, movies, walking (whenever Judy can I get him up), and trying, to keep Judy from spending all of his money on their 23 grandchildren.

ACKNOWLEDGMENTS

I would like to express appreciation to the students of my IDS class during the fall semester 1996, who helped prepare this lecture through their comments, papers, and enthusiasm for the law of consecration, while tolerating my attempts to force them to also understand current economic theory and reality, I would also like to express appreciation to Tonya Barnes and, Ronald Yan for assisting with the graphics portion of the lecture.

Bruce W. Kimzey

As an economist I have long believed that there was something missing from my classroom discussions of the Law of Scarcity, the Market System, and the consequences of an unbridled quest for efficiency and economic growth. Several years ago I began to think about the consequences of having all people observe simple gospel principles such as the Word of Wisdom, with a corresponding decline in the demand for (and hence production of) products such as tobacco, alcohol, and drugs. Such a change would free literally millions of acres of agricultural land for the production of grains and vegetables, providing abundance for millions of the world's population. I then wondered what would happen if everyone accepted the Lord's admonition to become responsible stewards over natural resources, becoming responsible not just for the use of resources, but for their conservation and preservation as well. But then I dismissed such thoughts as fantasies that could never occur, given the world's obsession with economic growth and profit maximization.

While it was obvious to me that the market economic system had serious shortcomings as a potential celestial law, I also accepted the economic view that the alternative system of a planned economy was even worse because it sacrificed efficiency and output for small and sometimes imaginary gains in income equality. But then I began to think seriously of the Law of Consecration as a real alternative to both of the existing systems. Today I would like to compare the Lord's law of economics with the best system man has to offer. I am indebted to James Lucas and Warner Woodworth who last summer published their work titled Working Toward Zion: Principles of the United Order for the Modern World. This book formed the basis for many IDS class discussions and has helped me focus on the things we as individuals can do to begin living the Law of Consecration.

Is there enough? Enough resources, goods and services, or income and wealth to satisfy the needs and wants of the world's billions of people? Do some people have "too much", and if so, does it mean others must have "too little"? Are we as individuals required to share what we have with the "poor and the needy", and it so, how much are we required to share?

On April 23, 1834, the Lord gave the following revelation to the Prophet Joseph Smith, while discussing the United Order of Kirtland.

For it is expedient that I, the Lord, should make every man accountable, as a steward over earthly blessings, which I have made and prepared for my creatures.

(D&C 104:13-18)

The Lord seems clear in this section that there is enough for all the world's people if resources are managed according to correct principles. But the obvious question then becomes, "How much is enough?" Is there enough to provide each person a quantity of goods equal to that currently enjoyed by those in the richest nations? Or do those people currently enjoy far more than they need? I would like to take a brief look at some important economic statistics. Please stay with me and try to concentrate on the comparisons and trends, not on the individual numbers.

In 1992, the two most populous nations of the world were China and India, with a total of 2.05 billion people, or 37.6 percent of the total world population. They had a combined output of goods and services of $820 billion, only $400 per person. They produced only 3.5 percent of the world's output, and they were not the poorest nations on the earth.

The poorest 42 countries had a combined population of 3.2 billion, or 59 percent of the total, and a combined output of $1.2 trillion, or only 5.3 percent of the total. The poorest 109 nations had 85 percent of the people, but only 20.5 percent of the output.

In contrast, the U.S. and Japan had a combined 1992 population of 380 million, 4.7 percent of the world's total, and produced $9.4 trillion of output, 41 percent of the world's total; a per capita amount of $24,800, which was 62 times the average income in China and India.

The richest 23 nations had only 15 percent of the population, but 79 percent of the available goods and services.1

While it is not clear that the rich nations have "too much", it is clear that the poorest nations have "too little". If absolute poverty is defined as a per capita income of $500 a year or less, then almost half of the world's people live in a destitute, subsistence state. And since economic growth occurs primarily in industrialized nations, the income gap is likely to grow wider over time.

Even in the rich nations the distribution of income and wealth is highly unequal. Income distribution in the U.S. over the past thirty years has become decidedly more unequal, reversing a fifty year trend toward greater equality. The share of total income going to the poorest 20 percent of the population has fallen from a high of 5.5 percent in 1967 to 4.1 percent in 1994, while the share going to the wealthiest 20 percent has risen from 40.4 percent to 47 percent over the same period.2

A major reason for this trend has been the drop in relative wages for poor and unskilled workers compared to those with advanced skills and technical training, entrepreneurs, and executives. Increases in labor incomes have accrued almost entirely during this period to those at the top of the income scale. The Census Bureau reported recently that from 1984 to 1994, the wealthiest fifth of households increased their average income by 20%, the second fifth increased income by 5%, the middle fifth by 1%, the next fifth stayed even, and the poorest fifth of families saw their average income fall by 3%.3

Salaries of Chief Executive Officers (CE0s) in 1995 averaged $3.75 million, up from $625,000 in 1980. The highest paid executive in 1995 earned a total of $65.6 million in total compensation. In 1980 the average CEO salary was 42 times an ordinary worker's, but by 1995 it was 141 times as much. While factory worker's 1995 pay increased by a average of 1% in the 20 companies who announced the largest employee layoffs during the year, CEO salaries in those companies jumped 25%.4

While the gap in the distribution of income has become greater over the past two decades, the gap in the distribution of total wealth is even more pronounced. While wealth figures are more difficult to obtain, and hence, distribution estimates more unreliable, the Federal Reserve has estimated that the wealthiest one percent of Americans hold approximately 36 percent of net wealth, while the wealthiest 10% hold two-thirds of the total.5

Inequality in the distribution of wealth comes primarily from the unequal distribution of financial assets such as stocks and bonds. Some estimates show the top 1% of households holding as much as 48% of all financial assets6, and the richest 5% holding 77% of such assets, but the bottom 80% owning only 1.8% of the total.7 As a consequence, when the stock market gained over $2 trillion in value over the past year and a half, the wealth of a few increased significantly while that of the majority of families stayed constant or rose only slightly.

These trends in income and wealth have also taken their toll on what has long been called the "American Dream". For generations, American families have believed that each generation would become more successful and more wealthy than the last, and that all families would have the opportunity to purchase their own home, cars, furniture, and other material goods. Families would be able to send their children to college, where the resulting education would ensure the continuation of the dream. From the end of the Second World War until the 1980's, families lived this dream, each generation building bigger houses, owning more cars, and accumulating more goods than any people in the history of the world. But the dream seems to be slipping away for all but the very richest of families in the 1990's, with employment insecurity, falling real incomes, and increased uncertainty now the norm for the majority of families.

Has the market system, with its promise of maximum efficiency and the greatest good for the greatest number, finally failed to deliver on its promises? Every introductory economics student knows that the study of economics exists because of the Law of Scarcity. This law is founded in two propositions,

1. Man has unlimited or insatiable wants, and
2. Resources that are used to produce goods and services are limited.

Obviously, man's basic "needs" are limited to the essential quantities of food, clothing, and shelter, but "wants" are never completely satisfied. This is partly because of the creation of new products and partly because of the desire most people have to always want more than they now possess. Unlimited wants, combined with limited quantities of land, labor, and capital create a problem of scarcity in which all wants cannot be satisfied. The study of economics, then, is the study of how we make choices among competing wants, knowing that we cannot satisfy all our wants now.

A market economic system attempts to deal with scarcity through interaction between "demand" and "supply", with market price playing the role of regulator. As long as there is competition between buyers and between sellers, the market will efficiently allocate scarce resources to those wants that yield the greatest satisfaction to the greatest number of buyers and sellers.

A market system depends on the existence of private property rights to provide both buyers and sellers the necessary incentives to use resources efficiently. The right to own and control the factors of production (resources) and the goods they produce gives individuals incentives to take risks in search of material rewards. Market success is measured by the quantity of private property one has accumulated.

The market as regulator makes decisions without regard for interpersonal utility, i.e., without making value judgements about one person's wants being more important or desirable than another's. Milk for the rich man's cat is as important as milk for the poor man's baby. This lack of moral-based decisions is both a strength and a weakness. It allows the market to maximize efficiency in the use of resources, but it prohibits ability to achieve equity in the consumption or availability of goods and services.

In economic discussions of the firm, or business enterprise, economists begin by making an assumption that the goal of the business is to maximize profits or total returns to the owners. If competition exists between firms, profits will be limited to what owners could receive on alternative investments. But clearly, owners have an incentive to eliminate or reduce competition in their pursuit of maximum profits and the accumulation of private property rights. Large fortunes are created in the absence of competition, not because of it.

Adam Smith, the father of economics, argued that because of the "invisible hand of competition" having every individual pursue their self-interest would result in a maximization of the public interest as well. But he also believed in a moral-based business system in which profits were limited, as were the disparities between rich and poor. In Smith's market system, wages were as important to the success of the system as were profits, and owners were concerned about workers, customers, and society at large in addition to making profits.

A competitive, unrestrained, amoral market system does indeed yield the greatest economic efficiency, producing the maximum output at the least possible cost, while satisfying the greatest number of wants. But even at its very best, such a system fails to provide for social goods such as national defense and police protection and fails to recognize social costs from pollution or social benefits from medical care and education. And efficiency bestows its rewards unevenly, creating and perpetuating inequalities of income and wealth. And if efficiency and competition can be sacrificed for profit, inequalities can become extreme.

If the market measures success in terms of the accumulation of property, then it is natural to assume that those with the most property are the most successful and have made the greatest contributions. Wealth is easily viewed as the well deserved reward for intelligence and hard work, while poverty is the consequence of being lazy or stupid, and is equally deserved. Latter-day Saints often take the analogy another step, arguing that wealth and prosperity are rewards for righteous living and keeping commandments. But the corollary then must also be assumed to be true: poverty or unemployment are the Lord's punishment for sin and sloth. While this corollary is often unspoken, it is implied in the actions and attitudes of many saints.

The Psalmist said, "Blessed is he that considereth the poor: the Lord will deliver him in time of trouble." (Psalm 41:1)
And in Proverbs we read, ". . . he that hath mercy on the poor, happy is he." (Proverbs 14:21).

The Law of Moses as recorded in Leviticus and Deuteronomy is filled with exhortations and commandments on treatment of the poor. Christ reiterated these commandments in Matthew and throughout the Book of Mormon, and again in modern scripture.

While the commandments to assist the poor are very plain, numerous, and unconditional, individuals cannot provide adequate assistance to solve a general problem of poverty created by an inability to participate effectively in a market economy. Free market advocates usually argue that the solution to general poverty lies in promoting sustained economic growth, not in individual or group charity. While growth may be a solution to absolute poverty, it is rarely a solution to relative poverty because the benefits of growth are distributed as unevenly as the distribution of private property. Since growth requires investment and savings by the wealthy, it is that group that generally claims the majority of benefits from their actions.

If saving is a requirement for growth, and if growth is a requirement for reducing poverty, then meeting the Lord's commandments to help the poor will require a reduction in current consumption and an increase in total savings. But a reduction in consumption, or even a slower rate of increase will require individuals to limit their material wants. Since the emphasis of a market economy is on accumulation, such a voluntary limitation on consumption is unlikely to be attractive to more than a few individuals who are seeking directly to obey divine commandments.

Some developing countries have discovered that one way to increase the rate of economic growth is to suppress wages of workers, thus increasing profits, and providing even more funds for saving and investment. Such nations produce primarily for export rather than domestic consumption and the goal is to maximize national income as held by wealthy industrialists, without consideration for an even distribution of the new wealth created. South Korea and the Peoples' Republic of China are the latest examples of this strategy, pioneered by Japan over the past four decades.

One of the great controversies of the 1990's has been the practice by large U.S.corporations of laying off thousands of employees in an effort to reduce labor costs and increase short-term profits. This "downsizing" generally leads to a temporary improvement in corporate income, and a large increase in the price of the company's stock, resulting in millions of dollars in capital gains for stockholders. Such tactics reflect the view that the sole goal of business is to maximize shareholder returns, regardless of the consequences to workers or customers.

Nations, and companies, who seek to maximize short-term profits at the expense of workers may find this policy of exploitation successful temporarily, but it does not produce long-run stability for either the companies or society. Only those companies and societies that share the benefits of growth with laborers will reap the long-run stability that measures social progress.

Sam Walton, one of America's greatest and most successful entrepreneurs argued that, "the more you share profits with your associates-whether it's in salaries or incentives or bonuses, or stock discounts-the more profits will accrue to the company". And Adam Smith wrote in The Wealth of Nations,

Is it possible to create an economic society where workers are as important as owners, where wages are as important as profits, where success is not measured in dollars or in the size of houses, cars, and egos, and where the poor have hope for the future? We have at least two historical examples of such a perfect society-the City of Enoch and the Nephites immediately following the visit of Christ to the New World. In both of these cases the people were able to successfully live the Lord's law of economics known as the Law of Consecration. While others, including the early saints in Utah, have attempted to live some version of this law, none have been successful for a long period.

The Lord has commanded his saints in all dispensations to consecrate their time, talents, and all that they possess to the building up of his kingdom on the earth. In practice, church members are generally called upon to consecrate only a small portion of their total worldly possessions for such use. In our day, the Law of Tithing requires only that members return ten percent of their annual increase to the Lord. But it has always been clear that the law of consecration will be required of all who would inherit the celestial kingdom--it is the celestial law.

Hugh Nibley has argued that there is only one law given to man--the law of consecration, and consecration is inseparably intertwined with the laws of obedience and sacrifice.9 Living these laws requires complete and total dedication to the Lord, with a willingness and ability to be completely subject to his will.

Most church members associate the law of consecration with the 19th century United Orders established throughout Utah by Brigham Young. While the law of consecration is the celestial law, the United Order is concerned with the financial or monetary aspects of the law. Ability to live the United Order would help one develop the attributes of godliness necessary for living the full celestial law. While the view of the United Orders as isolated, communal societies seems irrelevant to the modern world, they did embody a set of principles that help describe the law of consecration and is relevant to any people who have a desire to live the law: These principles are:

1. Equality
2. Consecration
3. Stewardship
4. Care for the poor
5. Work and Self-reliance
6. Moral Motivation.10

Only to the extent that people of any society are able to understand, accept, and live these basic principles will they be able to live the full celestial law.

When the Lord speaks of temporal equality he does not require an absolute, arithmetic leveling of all incomes and assets, but an equality of opportunity so all may have access to society's resources and goods and services. Such equality must certainly require cooperation rather than competition, service to others rather than pursuit of profits, and shared wealth rather than class conscienceness and conspicuous consumption by the few. Every citizen would have a desire and an obligation to share the temporal blessings he or she has received and use their talents for the common good rather than for individual accumulations.

Brigham Young counseled, "The underlying principle of the United Order is that there should be no rich and no poor, that men's talents should be used for the common good, and that selfish interests should make way for a more benevolent and generous spirit among the saints."11

The law of consecration requires the willing contribution or return of all one's resources and abilities to the building up of the Lord's kingdom. Every contribution of time, money, or service is a consecration that helps fulfill the law. By the same token, every time we withhold a significant portion of ourselves or our resources, we risk condemnation. President Howard W. Hunter counseled priesthood holders that "this is a materialistic world, and Latter-day Saints must be careful not to confuse luxuries with necessities...There are some who unwisely aspire to self-indulgent luxuries that often lead them away from complete commitment to the gospel of our Savior." They should seek instead "enough income so that we may be self-sufficient and able to support our families, while leaving us enough time free to be good fathers and church workers."12

Consecration means seeing that all things in and on the earth belong to the Lord; they are not "ours" to use for our selfish interests. Consecration means recognizing the interests and wants of others as being equal in importance to our own, being able to recognize a surplus when it exists, and foregoing our lusts for ever-larger homes, cars, and toys. We can then consecrate our surplus to the benefit of others. And most importantly, we must do it all voluntarily, with true love and pure motivation.

Just as the celestial law provides for the consecration of all resources and abilities, the Lord has provided for each of us to become stewards over whatever property we need to maximize our contributions. When we consecrate what we have to the Lord, he returns to each of us whatever we need and can use productively. Thus, the stewardship or control over property becomes widespread. Stewardship, combined with consecration, ensures that individuals will all have what they need to adequately use their productive talents and provide for their material needs. Some individuals will receive a stewardship over more than they consecrate and some less. Individuals, in cooperation with the Bishop, will decide how much they receive. The key is being able to limit wants and recognize that the goal is not to accumulate material goods but to improve the community.

The commandment to care for the poor is universal and eternal. In all dispensations the Lord's prophets have echoed this commandment and condemned those who have ignored it. And yet only twice in recorded history have people completely and wholeheartedly embraced this principle. Just as the Lord has repeatedly condemned those who refuse the requests of the poor, he has condemned self-serving attitudes of the rich. King Benjamin said:

Just as members with a surplus are condemned for withholding their excess from the poor, all, including the poor, are exhorted to work and become self-reliant.

The commandment to work is also universal and eternal, but as Hugh Nibley points out, the scriptures that command "he that is idle shall not eat the bread nor wear the garments of the laborer" (D&C 42:42) applies as much to the idle rich as it does to the idle poor.13

Work serves two purposes: first, to provide income through the production of goods and services, and second, to develop and utilize one's talents for self-improvement and satisfaction. Winners of lotteries are rarely happy when they quit working to pursue a life of leisure filled with the ability to consume without the necessity to produce. Wealth without work is as dangerous to one's self esteem as work without reward.

The key to the success of the law of consecration, and the primary reason for our failure to live the law, is the ability to enter into all the agreements unselfishly, voluntarily, and wholeheartedly seeking the welfare of friends and strangers with the same dedication and commitment as we seek our own. Such dedication and commitment are inconsistent with living in a world governed by the law of scarcity where wants are never satisfied, and where more is always preferred to less.

It must also be recognized that the principle of free agency is a critical and essential part of the law. As long as we honor this principle, no individual can be compelled to be virtuous or unselfish, and no individual or agency can determine for another the level at which satisfaction must occur and sharing begin. Each individual must determine for himself or herself how much is enough and how much they want to share.

Is there enough? Is it possible to become satisfied with some level of wealth and ability to consume that would lead someone to share any additional income with others unselfishly? While the concepts of scarcity and growth seem so deeply ingrained throughout the world that the macroeconomic answer must be negative, it does appear possible for individuals to reject scarcity and embrace consecration at a personal level.

If someone determines that they want to live the law of consecration, what kind of attitudes and lifestyle changes would be required to reduce the influence of scarcity and increase the commitment to consecration? The first change must be to gain control over material wants. While the law of scarcity declares that wants are unlimited or insatiable, consecration requires that wants be controlled and limited to those things that are essential to meet needs and care for our families.

While there is no scriptural guidance to dictate the level at which wants become nonessential, it would seem safe to argue that many, if not most, American LDS church members have reached that level. In place of the desire for more and better material goods and services, a desire for sharing and strengthening others must be substituted. After generations of scarcity indoctrination and the lifestyle it creates, even the most active members may have difficulty reducing their desires for more goods.

President N. Eldon Tanner argued that church members could begin this task by living five key principles of economic constancy. Those principles are:

1. Pay an honest tithing,
2. Live on less than you earn,
3. Learn to distinguish between needs and wants,
4. Develop and live within a budget, and
5. Be honest in all your financial dealings.

President Tanner said that these five principles "will bring financial security and peace of mind under any economic circumstances".14

The second change accompanies and grows out of the first. When wants are limited, individuals must continue to work and produce so they will create a surplus that can be consecrated to the poor, the homeless, and the unemployed. To be acceptable, the consecration must be without judgement of those receiving the transfer. Again, evidence suggests that many members are already consecrating a portion of their surpluses to those in need, and doing so willingly and unselfishly.

This change can begin by extending available surpluses to family and close friends, then to members of one's community, and then to all who have a need. While it is reasonable to care for family members first and strangers second, none of us are relieved of the commandment to assist all those in need. Further, every individual must find balance between the desire to assist others and the desire to be self-reliant. At what level does the desire to save for retirement interfere with the commandment to assist the poor?

Such changes require that the seeking of wealth be reduced in importance as a personal goal of all who would live the law. Hugh Nibley has argued "Every step in the direction of increasing one's personal holdings is a step away from Zion, which is another way of saying . . . that one cannot serve two masters:. . . for mammon is simply the standard Hebrew word for any kind of financial dealing."15 Such statements by Nibley have led some individuals to quit their jobs, move to small, rural areas, and live apart from the rest of the world, essentially taking on a life of poverty. But is a life of poverty a requirement of those who would live the law of consecration?

Brigham Young said that "if we are the people of God, we are to be the richest people on the earth . . . I am ashamed to see the poverty that exists among the Latter-day Saints. They ought to be worth millions and millions."16 But he also warned, "The worst fear that I have about this people is that they will get rich in this country, forget God and His people, wax fat, and kick themselves out of the Church and go to hell."17 The apparent conflict is really a conflict between members living the law of scarcity as opposed to living the law of consecration. As long as members seek riches rather than the things of the Lord, they risk being cut off, but if they would accept and live the law of consecration, they could all prosper together and be worth "millions and millions."

The Lord has always required his people to be industrious and to excel in whatever they undertake. His prophets have argued that priesthood holders have an obligation to adequately care for and support their families. Would the Lord then have a priesthood holder become a mediocre teacher, mechanic, lawyer, doctor, or businessman just because success in any of these fields would yield financial success as well? Financial success can be the result of keeping commandments as well as the result of breaking commandments. The difference is the goal that one seeks. "It is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them."18

The Lord often uses men and women of great talent to bless others, and if their hearts are right he blesses them in the process. Many general authorities of the church are wealthy because they are generally men of great talent and ability in business, law, or education who have reached the top of their professions, through hard work and through the gifts the Lord gave them as individuals. They use their talents wisely and benefit from them. They do not indulge in outrageous displays of wealth but do live very comfortably. Even Brigham Young, with all his condemnation of wealth, left this life a rich man.

The prophet Jacob condemned his people for seeking riches (Jacob 2:12-17), and then argued that the only reason the Lord justifies for the seeking of wealth is the express intent of assisting the poor.

Lucas and Woodworth, authors of Working Toward Zion, have identified dozens, perhaps hundreds, of cases where individuals have given unselfishly of their resources, time, and energy to help those less fortunate, especially those in underdeveloped nations where poverty rates are extreme. While time does not permit a complete listing, these efforts range from retired couples who give of their time serving on welfare missions, to individuals and wards who regularly contribute time and money to feed and care for the hungry and homeless, to professionals such as doctors and dentists who give of their talents in free clinics to help those who cannot pay, to organizations such as Enterprise Mentors International which helps Filipinos identify, create, finance, and manage small business enterprises.

The Church has recently organized LDS Charities to gather funds to assist in humanitarian efforts around the world. Members may now contribute to fast offerings or to broader welfare programs directly through the donation process. The Church and its members have provided millions of dollars and thousands of hours in relief to victims of hurricanes, floods, and earthquakes throughout the world. The creation of LDS Charities will increase those efforts and provide the Church with a direct and recognized means for providing assistance to those in need.

It seems clear that only as individuals change their attitudes can consecration be implemented. They need not act alone, or only in their roles as individuals. Corporations produce most of the world's goods and employ most of the workers, and individuals acting as corporate officers offer the greatest possibilities for change. Small corporations controlled by families or individuals committed to justice and equality are making significant impacts on the lives of millions of their workers. They do so through fair wages, improved working conditions, and responsible treatment of their employees. They recognize that their success is dependent on the success and satisfaction of their workers, and they treat them as partners rather than adversaries.

Aaron Feuerstein, owner of Malden Mills, stepped in when his mill burned to the ground in December of 1995 and continued to pay his 1,400 workers full pay and benefits for 90 days, and added a $275 Christmas bonus. He then rebuilt the mill and within a year reemployed all but 400 of his workers, and expects to hire the remainder soon. He argues, "Once you break the workers' trust I don't think you ever get it back. You'll never get the quality you need. Once you treat them like a cuttable expense, instead of your most important asset, you won't recover. I am firmly convinced the degree of loyalty our people have extended Malden Mills is equal to or greater than what we have done for them."19

Such examples show that there are corporate officers who view wages and the welfare of workers as equal in importance to profits and the return to capital, but they can generally occur only when officers are also the corporate owners. When ownership is widespread, profits tend to become the primary goal, while wages and workers are viewed as a cost to be reduced to the lowest possible denominator. In such cases, workers lose their loyalty and their commitment to excellence and innovation because the rewards for increased productivity go to capital rather than labor.

If workers become corporate owners they become stewards over their own resources, both labor and capital, and reap the rewards of their own productivity. Employee ownership can provide a modern proxy for consecration and stewardship. The most common form of employee ownership is currently the Employee Stock Ownership Plan (ESOP) created by Congress in 1974. ESOPs grew by 1993 to over 9,500 firms employing over 11 million worker-owners and accounting for tens of billions of dollars in equity capital. Initially used only by small privately owned companies, ESOPs now include firms such as Avis, United Airlines, and Polaroid.20

ESOPs are created through special trust or pension funds which borrow money to buy out current owners, and repay the loans through profits. Stock is held in worker accounts within the ESOP and workers are paid dividends whenever profits are generated. When a worker retires, the stock can be cashed out, giving the worker an additional retirement benefit of potentially hundreds of thousands of dollars.

In addition to ESOPs, many company owners have sold their companies directly to their workers, or left the companies to workers in their wills. LDS business owners have an opportunity to set an example of how to own and operate a Zion company through the way they treat their employees, and the way they use the wealth they help create. Church members should seek out opportunities to become entrepreneurs, to be worker-owners with an interest in the welfare of others as well as their own.

Is there enough? Under modern economic principles there is enough to create growth in rich nations and some growth in poor ones, but the gap between rich and poor will grow over time. Is the best economic system one that creates inequalities in the name of efficiency, and creates output without regard for conservation of resources? Or is there an alternative system which can create both efficiency and equity, where there are no rich and no poor, where cooperation can replace competition, and where workers and owners share the rewards of production?

The law of consecration is actually the only way to ever solve completely the problem of scarcity. A market economy is an efficient way to allocate scarce resources and to produce goods that maximize current satisfaction, but by definition markets cannot solve the problem created by unlimited wants and limited resources. No level of efficiency and economic growth will ever eliminate scarcity, or create equality between rich nations and poor.

Let me conclude with two quotes from Lucas and Woodworth, and a statement from President David O. McKay.

In the words of President David O. McKay, "With every progressive age of the world, intellectual, nobleminded leaders have sought a better way of living than that which was current....The Church...offers to the world the solution of all its social problems."23

It is surely true, as Ghandi said, that the "Earth provides enough to satisfy every man's need, but not for every man's greed."24 For as the Lord told the Prophet Joseph, "there is enough and to spare."

Bruce W. Kimzey
Box 1956 BYU-Hawai'i
Laie, HI 96762
kimzeyb@byuh.edu

ENDNOTES

1The World Bank, World Development Report 1994, Oxford University Press, 1995, pp. 162-163. Back to Top

2William A. McEachern, Economics: A Contemporary Introduction, South Western College Publishing, 1997, 4th Ed. p. 723. Back to Top

3"Rich earn more than all of middle class" USA Today, June 20, 1996, p. A 1. Back to Top

4"CEO Salaries Soared Average 30% Last Year" USA Today, April 12, 1996, p. 2B. Back to Top

5Roger LeRoy Miller, Economics Today, Addison Wesley, 1997, 9th Ed. p. 671. Back to Top

6Marjorie Kelly, "Questioning the Purpose of Capitalism", Business Ethics, Jan/Feb 1996, p. 13. Back to Top

7Robert Kuttner, "Soaring Stocks: Are only the Rich Getting Richer?", Business Week, April 22, 1996, p. 28. Back to Top

8Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Oxford: Clarendon Press, reprint 1976, p. 99. (Quoted in Lucas and Woodworth, Working Toward Zion, p. 263.) Back to Top

9Hugh Nibiey, "Law of Consecration", Approaching Zion, Deseret Book Co., SLC, 1989, p. 422. Back to Top

10James W. Lucas & Warner P. Woodworth, Working Toward Zion: Principles of the United Order for the Modern World, Aspen Press, SLC, 1996, ch. 10. Back to Top

11From the Manuscript History of Brigham Young (Church History Archives), (quoted in Nibley, Approaching Zion, p. 440.) Back to Top

12Howard W. Hunter, "Prepare for Honorable Employment," Ensign 5 (November 1975) p. 13. (Quoted in Working Toward Zion, p. 253.) Back to Top

13Hugh Nibley, "Work We Must, but the Lunch is Free," Approaching Zion, p. 241. Back to Top

14N. Eldon Tanner, "Constancy Amid Change," 149th Semiannual General Conference, Welfare Session, Oct. 6, 1979. Back to Top

15Hugh Nibley, "What is Zion? A Distant View", Approaching Zion, p. 37. Back to Top

16Brigham Young, Journal of Discourses, (Liverpool: Latter-day Saints Book Depot, 1854-86, reprint, SLC: 1964), Vol. 17, pp 43-44. (Quoted in Working Toward Zion, p. 77.) Back to Top

17Bryant S. Hinckley, The Faith of Our Pioneer Fathers, Deseret Book, SLC, 1956, p. 13. (Quoted in Working Toward Zion, p. 253.) Back to Top

18E. F. Schumacher, Small is Beautiful: Economics as if People Mattered, Harper & Row Publishers, New York, 1975, Reissued 1989, p. 60. Back to Top

19"Altruistic CEO proves that loyalty and profit go hand in hand," Yakima Herald-Republic, December 22, 1996, p.8C. Back to Top

20Lucas & Woodworth, Working Toward Zion, p. 284. Back to Top

21Ibid, p. 307. Back to Top

22Ibid, p. 309. Back to Top

23David O. McKay, "Gospel Ideals", Improvement Era, SLC, 1953, p. 91-92,96. (Quoted in Working Toward Zion, p. 51.) Back to Top

24Quoted in E. F. Schumacher, Small is Beautiful, p. 34. Back to Top

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