The Purpose of Business: Shalom Solutions
Modern-day investing looks different than it did fifty years ago. Mutual funds changed the investing landscape by enabling a typical investor to diversify their portfolio and benefit from professional fund management. More recently, index funds and ETFs have become quite popular, allowing investors to own a more diverse portfolio at lower costs than with “actively managed” funds.
Investors can be forgiven if they imagine their money earns returns from “the market.” But despite the profusion of funds available to investors, not one generates a penny of returns on its own. It is the business activities of a fund’s underlying companies that generate profits. Those profits, in turn, fund dividends and drive share price appreciation.
In other words, business activities create profits, which create investment returns. Period.
And that means that despite all the new ways to invest, investment returns still come from the same place they always have: from companies’ business activities.
Therefore, Christian investors should think carefully about how businesses create profits in light of God’s deep and abiding purpose for business.
An Abundant Life
Jesus describes his (and his Father’s) overarching purpose in John 10:10: “I came that they may have life, and have it abundantly” (ESV). Scripture has a special word to describe this abundant life: shalom. It means full human flourishing in every dimension of life. In other words, human flourishing that encompasses our spiritual, physical, relational, economic, social justice, and artistic dimensions — harmonious prosperity pervading every aspect of life.
This is the intrinsic, hallmark character of God’s kingdom, which was lost when sin entered the world at the Fall. God’s mission has always been to restore his kingdom and its abundant life “on earth, as it is in heaven” (Matthew 6:10, ESV).
But Jesus does not intend the restoration of shalom to be his mission alone. Remarkably, he says his followers are meant to join him in the very same mission: “Whoever believes in me will also do the works that I do; and greater works than these will he do, because I am going to the Father,” (John 14:12, ESV, emphasis added). This means that just like Jesus himself, his followers are meant to do the works which help restore God’s kingdom on earth and the shalom — the human flourishing.
Nowhere is this calling to restore shalom more applicable than in that aspect of our lives to which we devote the most time and energy: our vocations. This means that the work of educators, physicians, government officials, scientists, artists, clergy, and yes, the work of businesspeople and their investors is all meant to enlarge human flourishing. In fact, every (legitimate) vocational endeavor is meant by God to further his abundant-life mission and, in so doing, further his kingdom.
How Does Business Make Our Lives Better?
Each vocation, however, is meant to make its own particular contributions to human flourishing. Each is meant to make our lives better in the ways for which they are especially suited. So how about business? In what way(s) is business meant to add to human flourishing? How is business meant to make our lives better? Answered most simply, business makes our lives better — i.e., restores shalom and fosters flourishing — by creating value.
More specifically, business creates value in two particular and important ways. First and foremost, business solves human problems, especially the material challenges of human existence. This is an extraordinarily important endeavor.
Across history, solving life’s material problems has (almost) always presented humans with our greatest challenges. Even in the modern world, economic prosperity remains the most difficult, most compelling priority for every society.
Business is at the heart of meeting this challenge. Every business is based on an idea about how to solve a human problem — big problems (“How do we cure cancer?” “How do we deliver clean energy?”) and little ones (“How do we make a crunchier potato chip?”).
What Motivates Us?
Entrepreneurs are rarely motivated by the prospect of making a lot of money. That may be a nice perk if it happens, but that’s not what’s driving them. They want to change the world — i.e., make it better in some particular way. Even Steve Jobs, one of the most successful entrepreneurs of all time, made clear that what he did was never about the money. Rather, he famously said, “I want to put a ding in the universe.”
Some business products do, in fact, deliver what we might call breakthrough solutions to our material needs — the electric light bulb, automobiles, personal computers, mobile phones — and transform our lives and the world in the process. In other cases, the solutions may be more modest: easier, cheaper video meetings; a better way to heat or air-condition our homes, or to clean our teeth. Business is capable of being a potent force for good in the world — for making people’s lives better in concrete, pragmatic ways.
Importantly, business can make the world better at scale. Successful businesses grow larger and larger, delivering more and more of their beneficial solutions — with the capital that funds the growth supplied by investors.
Prosperity is the work of businesspeople and their investors via the accumulation and accessibility of material solutions to human problems. As our solutions increase and improve, so does our prosperity. This means the “solving human problems” work of business is an essential complement to the “abundant life” mission of Jesus himself — a very high calling indeed, both for businesspeople and their investors.
And yet, there is an entirely different way business creates value and fosters flourishing — a topic we will turn to in Part II.
Investing Forward and Upward
Are you investing in businesses that are working to make the world better? If you would like us to look at your current portfolio, use our Analyze My Investments Tool or visit our website to learn more about values-based investing.