Today’s investors are focusing, now
more than ever, on secure investments. Guarding the financial
security of our families is at the forefront of our minds. As public
outrage increases over the utter lack of accountability in our global
financial systems, from the taxpayer-funded bail-outs of global
powerhouses to the inaction of the criminal justice system (“too
big to fail” has become “too big to prosecute”), the public’s
vote of “no confidence” is ringing loud and clear. Witness, for
example, the dearth of campaign bumper stickers and yard signs for
the 2012 U.S. presidential election – they are conspicuous by their
Because of this uncertainty, investors
are holding large cash positions, afraid to pay even 80 cents on the
dollar for distressed real estate on the Southern California coast.
Meanwhile, asset managers for mortgage lenders are holding back
properties, manipulating the U.S. real estate market. Reports have
claimed that there are 18.5 million vacant homes in the United
The market is demanding a new type of
investment, and once-overlooked sources offer such investments.
Sustainable real estate improvements, designed to radically lower
operating costs and increase living comfort, today command up to a
vis-à-vis traditional properties. Green communities, built entirely
off grid on clean land, where residents can grow their own food in
community gardens, are no longer a thing of the fringe. Such ethical
investments are quickly becoming the new standard and the only way to
gain loyal investors.
In uncertain times such as these we
must question our paradigms, asking not only how we got here, but
also what each of us could have – indeed, should have – done
differently, and what we must do to change direction.
I first asked myself this question
while staring at a set of legal papers for a billion-dollar
cross-border hedge and listening to a voice on the phone telling me
to ignore what I knew was true and rubber stamp the transaction. “We
are doing this transaction the same way I did the last transaction,”
said the counterparty’s counsel. I refused, knowing that, “Some
people, eager for money, have wandered from the faith and pierced
themselves with many griefs.” Since that day I have seen just how
deep this “root of all kinds of evil” has grown.
The “false dichotomy and bad
theology,” as Van Duzer calls the bifurcation between our business
and personal mores, has become a “dual ethic that accepts sharp
business practices alongside pietistic personal disciplines.”2
History has proven – and is proving again – that we cannot lead
dual lives, using one set of values for business, and another in our
If we are listening, it takes but a
mere whisper to know that we all must change course. I knew at the
end of a phone call. “For what shall it profit a man, if he shall
gain the whole world, and lose his own soul?”
Long-trusted institutions are
imploding, falling to their own internal lack of integrity, a trend
which began a decade ago with the collapses of WorldCom, Enron, and
Arthur Andersen. All of these institutions fell, not because of
external market forces, but because they had lied on their (or their
client’s) financial statements. Unfortunately, the trend has
worsened in the ensuing years.
Where, then, shall we turn for
financial security? Hiding the money under our mattress exposes it to
risk of fire and theft. A large cash position in a financial
institution is exposed to the credit risk of that financial
institution – depositors are unsecured creditors under the law. In
order to both protect and grow our wealth, we must invest, but we
must be discerning about our investments.
Security must rest on bedrock that
encompasses all parts of our lives. Contracts depend, not so much on
the integrity of the legal system, but on the integrity of the
contracting parties. For if you must go to court to enforce a
contract, you have already lost. If you cannot trust your
counterparty, no amount of legal or regulatory infrastructure can
compensate. What we need is not more regulation; what we need are
market participants who do the right thing because they practice in
business what they preach in their homes.
Ethical investments offer true growth
and security because they heal the land – the only non-wasting
earthly asset. Ethical investments build lasting, sustainable
communities that command a premium in the marketplace because of
their lower operating costs, higher comfort levels, and longer useful
lives. Ethical investments build “Shining Cities on a Hill,”
changing the world where all of our children, and their children,
will live and providing stable, lasting returns.
The power of markets is deep and
exacting. Business and finance are human tools of enormous potential,
a potential we can unleash to change the world. Imagine what commerce
and finance could do if truly used to help our communities flourish.
Imagine the potential if, instead of allowing government to
interfere, stifling innovation and creating barriers to entry, we
simply did the right thing and allowed for a true free market system!
Know what your money is doing. Be
responsible for the source of your profits. Your investments reflect
you and create the future in which your children and grandchildren
will live. The bifurcation between our business and personal mores
has placed us, and the world, at risk. It is time to step back from
the precipice using the strength of commerce to begin again.
Nathaniel K. (Nathan) MacPherson,
J.D., is President and CEO of MacPherson Investment Group, LLC.
While working as an attorney in Europe, Nathan represented global
banks as well as finance ministries in cross-border lending,
securitization, and government bail-outs of failed financial
Jeff Van Duzer. Why Business Matters to God: (And What Still Needs
to Be Fixed) (Kindle Locations 126 and 956). Kindle Edition.