What Caused the Economic Downturn? How Do We Rebound?

Corey —  March 15, 2010

       The What Would John Templeton Say? website is holding a blog contest asking bloggers which of the economic vices John Templeton described is most responsible for the recent economic downturn and which of his economic virtues is most important to the economy’s rebound. This is my response.

Moral Relativism – The Root of All Vices

       Envy, greed, pride, and intolerance have all contributed to the recent economic downturn. But to assign any one of those as most responsible is to ignore the root cause of them all. It is moral relativism that brought the economy to its knees. The lack of belief in an absolute truth – in a clear right and wrong – has deteriorated the business and personal ethics in our society.

       You see, if there is no absolute truth, then there is nothing inherently “wrong” with envy, greed, pride, or intolerance. Envy without truth lets us blame others for our own mistakes and ignore our personal responsibilities. Greed without truth allows us to ignore what is best for others because we need only look out for ourselves. Pride without truth puffs up our ideas of who we are, what we know, and why we don’t need help. And intolerance without truth helps us ignore the observations and warnings of others. Without an absolute truth, we practice these vices without thought as to their consequences or our responsibility to others.

       The absolute truth that comes to us from God, through the Bible and the revelation of Himself through Jesus Christ, teaches us that envy, greed, pride, and intolerance will destroy us. His truth teaches us that love, hope, contentment, diligence, humility, kindness, faithfulness, and self-control are the keys to success – in our personal lives and in society as a whole. Because of the prevalence of moral relativism, we reject such absolute truth and we have suffered the consequences.

       Consumers driven by envy, discontentment, and greed bought houses they could not afford. Realtors, banks, and financial institutions driven by greed encouraged consumers along and extended credit where they should not have. All of us suffered from pride in denying our need for help or the possibility that we made major mistakes. And intolerance closed our minds to the voices who cried out with warnings against all these vices. These all played a part in the economic downturn, and they all stem from moral relativism.

       Without God’s absolute truth, we neglect to consider the dangers of envy, greed, pride, and intolerance. We succumb to our desires and ignore responsibility. Until we learn that God’s Truth is absolute and absolutely right, we will continue to fall to these economic vices. This recent downturn is clear evidence for our need of Truth. But there is hope!

Integrity – The Key to Recovery

       The key to a true rebound is integrity. Without integrity, no economy can exist. Integrity is essential to creating a trusting environment where people can work together, use their various gifts and talents, help each other, and rely on each other to keep their personal responsibilities. If we neglect integrity, we will not experience a lasting economic rebound.

       Just as moral relativism is the root of the other economic vices, so is integrity the fountainhead of the other economic virtues of cooperation, creativity, charity, and adaptability. Integrity recognizes God’s absolute Truth and our responsibility to honor that Truth at all times. The connection from integrity to all other virtues is then easily formed.

       Love leads to cooperation and charity. Love wants to work together to achieve the good of all people. Love looks to the needs of others – especially those who are the most helpless. Likewise, contentment and kindness develop generous giving in our lives to the advantage of all.

       Diligence and faithfulness yield the creativity and hard work necessary for entrepreneurs to flourish. The drive to meet others’ needs and provide service have been the start of many businesses. And no business can survive without those as their primary motivation factors. Economic rebound will flourish under this creativity, and that creativity requires the diligence and faithfulness that result from integrity.

       Finally, hope and self-control help us adapt to the situations we find ourselves in. If we do not find new ways to meet our needs, to contribute to society, and to learn from the past while looking to the future, we will not recover from this economic downturn. But the hope that comes from God’s Truth will encourage us and help us press on to a brighter future ruled by integrity instead of ignorance.

       Moral relativism contributed in many ways to the fall of the economy. But integrity can contribute in many more ways to our recovery. The power of integrity – of holding to absolute truth and doing what is right – can overwhelm the destruction brought on by moral relativism. Through integrity we can conquer the obstacles we face by working together, finding solutions, meeting needs, and pressing forward. God’s Truth is the key to helping us do these things and will unlock our society’s potential to rebound from this setback with astounding success.

       This post is an entry in the Spring 2010 blog contest sponsored by What Would John Templeton Say?. The site, which examines the philosophies of this legendary stock picker, has invited any blogger to respond to a series of posts on what Templeton called the ”Economic Virtues and Vices.” The contest is open to all and further information can be found here.



Corey is currently pursuing a Master of Arts degree in religion. While he enjoys learning and writing about Christianity, another one of his new passions is writing about personal finances in order to help others make wise decisions with their money.

6 responses to What Caused the Economic Downturn? How Do We Rebound?

  1. I think you’re completely right in all that you’re writing Paul. The only problem with returning to integrity as a means of fixing the economy is that it will take at least a generation to accomplish, and the leadership doesn’t have that kind of time.

    It has to be fixed by 2012–and I’m in no way laying the blame for this at the feet of the Obama admin–a few admins before this one had a hand in it.

    Patience is one of the casualties of lost integrity I’m afraid.

    Mechanically, I think our fascination with numbers has also been a driver, the more-is-better concept.

    As a nation, we’ve been addicted to higher numbers as a metric for success–higher GDP, higher employment, higher stock markets, higher house prices, longer lifespans, etc. There’s no QUALITY in any of that!

    So the economy “grows”–in dollar terms only–while living wage jobs and real production go overseas giving us mountainous trade deficits. House prices rise to the sky, masking the fact that people are deeper in debt than ever. The stock markets rise ever higher, masking higher consumer debt and the deterioration of living wage jobs.

    Then one day, higher goes poof, and we get double digit unemployment, millions of foreclosures, and trillions in unserviceable debt. None if it happened over night! And fixing it won’t happen over night.

    The first thing that has to happen is for our perceptions and expectations to catch up with the reality of our circumstances, and that by itself could be a long time coming.
    .-= Kevin@OutOfYourRut´s last blog ..Should You Use Retirement Savings to Pay Off Debt? =-.

  2. Thanks for your comment, Kevin! You’re completely right in saying it didn’t happen overnight and it won’t be fixed overnight. Looking at it in the context of moral relativism, it took quite a while to get to the point where the majority no longer believes in an absolute right. And that focus on quantity over quality can, in many ways, come from moral relativism through a lack of values that are good for everyone.

  3. Wow, I got so far into one point that I didn’t bring it home to the one I was thinking of–that’s the burden of being long winded, I can take myself off track all by myself.

    ALL of this, I think, owes to a rejection of God. Moral relativism and everything I wrote. Culture wide, we no longer “trouble” ourselves whether or not God is pleased with what we do, and it all becomes a matter of “what can we get away with?” Well, when you take God out, the doors aren’t just open, they’ve been taken off the hinges. But that was the objective.

    As a culture, we no longer have any anchors, we didn’t want any. Now we’re scrambling to fix symptoms while the real issue is never cured.

    It might take more than a generation to fix that.
    .-= Kevin@OutOfYourRut´s last blog ..Should You Use Retirement Savings to Pay Off Debt? =-.

  4. Haha, no problem, Kevin. I knew where you were going.

  5. Paul –

    Thanks for participating in the contest. I am very pleased to extend our congratualtions to you for winning first prize! Great entry.

    I’ll be in touch,

  6. Thanks so much, Matt! I’m excited to have won. Thank you for holding the contest.