Dave Ramsey and Financial Peace University: the Good, the Bad, and the Ugly, Part 1

Few people today interested in personal money management have not heard the name Dave Ramsey. Ramsey has built an empire of financial counseling that includes a nationally-syndicated radio show, a slot on Fox Business channel, and a NY Times bestseller, The Total Money Makeover. His website claims that over 1,000,000 families have taken Financial Peace University (FPU), his financial class designed to help people take charge of their money. On average, the website claims, attendees pay off $5,300 in debt and save $2,700 in just 90 days. FPU is billed as “a 13-week video curriculum—taught by financial expert Dave Ramsey—that incorporates small-group discussions to encourage accountability and discipleship. Financial Peace University is highly entertaining for everyone, with a unique combination of humor, informative financial advice and biblical messages.”

With such stunning results, it’s easy to understand why so many people are turning to Ramsey for financial advice. Since FPU is marketed to churches (along with other institutions such as businesses and the military), it is worth the effort to examine the program and evaluate it biblically. While Ramsey professes to be a Christian and uses Scripture liberally (in his church version of FPU), I discovered profound problems with the program, both in its content, and in its use by churches as an evangelistic tool. What follows is not a thorough critique, but a general attempt to evaluate the program biblically and theologically, while being as charitable as possible.

The Good

FPU is a professionally-presented, entertaining course of financial management. It does not teach advanced skills such as stock market investing or business finance, but focuses on the individual’s escape from debt and saving for the future. My wife and I learned many invaluable lessons, some of which were reminders, others that were new and crucial.

First, FPU teaches the simplicity and power of saving. Using vivid examples and simple charts, Ramsey shows the power of compound interest (although he presents wildly optimistic interest rates as normal). This taught us that anyone could save a little over many years and gain considerable interest through consistent investing. Also, Ramsey emphasizes living on a written budget, something we had not done so explicitly in the past. This has proven to be one of the most difficult disciplines to master. But Ramsey is right, that if you don’t tell your money what to do, you’ll wonder where it went. Budgeting is simply naming every dollar at the beginning of the month, and assigning it a place. I’ve heard this before, but it was good reminder.

Second, FPU teaches people how to get out of debt. The most powerful testimonials in FPU are those stories of people getting out of massive amounts of debt through the principles learned in the class. I personally know of one person who worked her way out of $60,000 of debt in less than three years through FPU. This alone may make the course worth many times its $100 price tag. Ramsey also gives helpful advice regarding creditors, credit scores, collection agencies and telemarketing.

Third, FPU teaches the inside story of marketing, and how to buy things wisely, with cash, and for a bargain price. He teaches the power of negotiating, even for things you thought had a fixed price. He also teaches invaluable lessons regarding identity theft and what kinds of insurances to buy and not to buy. He gives advice about real estate (Ramsey’s area of expertise), job interviews, retirement, and college savings. Some of the advice in these areas is debatable, but generally helpful. It would be wise to get advice from other sources as well in order to get differing perspectives on these vital areas.

While taking the course, my wife and I were given access to a wide variety of helpful tools through the FPU website. Readers should be aware, however, that once the thirteen weeks are over, many of these services require a subscription fee to continue using. In fact, for many of the topics covered in FPU, Ramsey’s company offers services that require payment once the class has ended, including insurances, financial advice, and identity theft protection. One is quickly reminded that this is a business, not a ministry, even though at times, the “feel” of it is church-like.

For all its benefits regarding financial advice, however, I found several troubling problems with FPU. Before I treat what I consider to be the truly bad elements of FPU, I would like to point out its ugliness first.

The Ugly

It doesn’t take more than a few weeks of exposure to the FPU videos before Ramsey’s arrogance and self-glorification becomes obvious. Dave Ramsey is not a humble man, and I would argue strongly that what some perceive to be his self-confidence is actually a bad case of egotism. After a few weeks of the class, I could barely control my gag reflex anymore when at the beginning of EACH video, all of his accolades (see above) were mentioned AGAIN. No doubt, this bald self-promotion is applauded by the world, but in a Christian atmosphere, it was downright sickening. On the way to FPU class one week I said to my wife in disgust, “I can’t stand to see his face again, and hear him brag about his money.” But this is not the truly ugly aspect of FPU.

The ugliest facet of FPU is actually something internal to me. I can’t really blame Dave Ramsey for this, but FPU does bear some responsibility. I found growing in my heart, after the first few weeks, a subtle materialism and greed I had never experienced before. So much of the advice given in FPU is designed to help people earn the kind of wealth that would free them from ever having to worry about money again. This is a rather explicit message throughout FPU and is reinforced by the oft-repeated mantra, “Live like no one else now, so you can live like no one else later.” The first half of this motto is helpful. It encourages frugality, saving and financial planning, but the second half promotes a lavish lifestyle and self-sufficiency. Audiences are wowed by compound-interest tables showing what it takes to retire with two, five and even eleven million dollars. Ramsey tells story after story of his wealth and what he has been able to purchase in cash, the financial freedom his millions have earned him, and how you too can live this way, thank you very much.

Now, I don’t blame Ramsey entirely for the greed I found being nurtured in my heart. He was simply telling the truth about the amazing power of compound interest. I found myself fantasizing about how comfortably we could live if we could just sock away the recommended amount for the recommended number of years. For a couple weeks my head was in the stars, and all thoughts of sacrificial service and daily bread were gone. I eventually came to recognize my greed and confess it as such. I had tried never to live for money in the past, so why were promises of millions suddenly turning my head at age 43?

There is a clear message throughout FPU—if you are not getting richer, you are a loser. In fact, in one of the videos, Ramsey says as much when he quips that if you are making the same amount of money you did twenty years ago, you are a loser. This is the ugly side of FPU. It knows nothing of sacrifice, of losing one’s life, of taking up one’s cross. It is a theology of glory and power and wealth, not of suffering and humiliation. Money seems to attain godlike status at times in FPU, as if it were the solution to everything. At one point Ramsey claims that having more money means less money fights in a marriage. Really? Are we to believe that wealth by itself has this kind of power?

Another ugly facet of FPU is the wildly optimistic picture Ramsey paints in his descriptions of saving and investing. By taking 12% as the average return on investments, he implies that extreme wealth is a normal result of saving just a little. For example, one table shows that a person would accumulate over $20,000,000 if he invested the cost of his lunch instead of going out to eat. This rather unreal scenario, however, is based on never going out to eat for lunch over a 60-year span (between ages 16 and 76) and earning 12% interest for those 60 years. Ramsey fails to take into consideration the cost of making one’s own lunch, which while minimal in comparison to the $8 a day he allots in the illustration, would still cut into his profit considerably. In another example he compares buying a new car with buying a clunker, but doesn’t consider the added expense of repairs a used car would necessitate.

One last charge of ugliness. FPU is nothing more than brilliant marketing, with a dazzling set, cool graphics and carefully designed elements to make the viewer feel good. Almost none of Ramsey’s material is original; it is merely a collection of financial wisdom packaged for a 21st century video-trained audience. I was flipping through an old Reader’s Digest magazine from April 1998 and found an article entitled “How to Plan for Your Financial Future” by Richard Miniter. Everything of value I learned in thirteen weeks of attending FPU I found in this article. As I said, there is not much original in FPU, just the glitz and glamour.


Mark Farnham is Assistant Professor of Theology and New Testament at Calvary Baptist Theological Seminary (Lansdale, PA). He and his wife, Adrienne, grew up in Connecticut and were married after graduating from Maranatha Baptist Bible College (Watertown, WI). They have two daughters and a son, all teenagers. Mark served as director of youth ministries at Positive Action for Christ (Rocky Mount, NC) right out of seminary and pastored for seven years in New London, Connecticut. He holds an MDiv from Calvary and a ThM in New Testament from Gordon-Conwell Theological Seminary (South Hamilton, MA). He has also studied ancient manuscripts at Harvard Divinity School and philosophy at Villanova University. He is presently a doctoral student at Westminster Theological Seminary (Glenside, PA) in the field of Apologetics. These views do not necessarily reflect those of Calvary Baptist Theological Seminary or its faculty and administration.

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Aaron Blumer's picture

EditorAdmin

Paul, I think Larry's response is fine. Just a little "turn about is fair play" to reveal some problems with logic in a poignant way.
(It's a bit off topic, but Matt.18 is not about public sins.)

As for whether Farnham's review is not "a fair evaluation" of Ramsey, we have you asserting that repeatedly, and I'm open to that possibility, but I think it would be difficult to show where Mark is factually in error or to prove that the opinion parts are not well founded (he also cannot really prove that the opinion parts are well founded. This is the nature of opinion writing.) That is, it's a case of agreeing on the facts and disagreeing on evaluation. Strongest thing we can do about that part is say "I disagree."

I'm sure most readers respond to a negative review along the lines of "Well, I'll have to find out for myself."

The strongest criticism we've seen in the thread here is coming from folks who are philosophically opposed to making a large profit. With that grid in place, Ramsey cannot win with them no matter what he does. It makes no difference if they've ever seen or heard him or not. It's a matter of record, I think, that he's rich and getting richer. I suppose he could give it all away tomorrow and that might silence some critics. Might be interesting to talk about why that would or wouldn't be a good move.

What might also be interesting is to talk about how phrases along the lines of "Do this and you'll be rich" (Paul, would you agree he talks that way? I wouldn't know one way or the other.) square with 1 Timothy 6:9-10. What does this passage mean and how would it apply in this case?

Jonathan Charles's picture

How does Ramsey square with Paul's statement concerning those who use godliness as a means of gain (1 Timothy 6:5)? I'm not against Ramsey making a living, but I am leery of the local church being made a tool of a man's corporation to enrich his company and himself, personally. If Ramsey wanted to, he could divide Financial Peace University off of Lampo Group and let it operate as a non-profit to minister solely to local churches. I doubt he will do that, so, in the mean time, there are plenty of non-profits who do this stuff who will take their income above expenses and invest it back into ministry to keep the cost of their program down.

The charge has been brought up time and time again on this thread by some who have watched the videos, read the books and taken the course that Ramsey does not deal sufficiently with heart issues and spiritual motivations concerning how money is spent. I'll ask one more time, "What is being accomplished if Christians become debt free but their heart issues regarding money are never dealt with?" If the gospel is to pervade every aspect of our lives, does Ramsey bring out how the gospel impacts how/why we spend/save money? If this is missing as Joe Griffin (above) and others have pointed out, then what is being accomplished????????????????????

Paul J. Scharf's picture

Jonathan Charles wrote:
If the gospel is to pervade every aspect of our lives, does Ramsey bring out how the gospel impacts how/why we spend/save money? If this is missing as Joe Griffin (above) and others have pointed out, then what is being accomplished????????????????????

Jonathan,
This is a good and fair question. I think what is being accomplished, at the very least, is that Ramsey is helping people every day who are on the verge of bankruptcy and foreclosure (or who may think they are, but really are not). It is interesting that people who are opposed to Ramsey for reasons only they apparently understand have argued in this thread, simultaneously, both that (a) Ramsey is not Christian or Biblical enough; and (b) there is no such thing as Bibilical financial wisdom anyway -- any old secular finance person can do what he does.

He is offering Biblical counsel on finances in the mainstream media -- and we are sitting here griping about it. That, to me, is very sad.

If you want the exact same Biblical financial persepective from a "kinder, gentler" -- and, yes, probably more Biblically-informed source -- check Ron Blue (www.ronblue.com). The problem, of course, is that Blue does not have anywhere near the volume or quality of materials or programs which Ramsey makes available.

Aaron asked,
"What might also be interesting is to talk about how phrases along the lines of "Do this and you'll be rich" (Paul, would you agree he talks that way? I wouldn't know one way or the other.) square with 1 Timothy 6:9-10."

I would simply say that Ramsey is on radio/TV for 20 hours per week, so this is open for anyone to check out and evaluate his teaching. If you have not listened to Ramsey, however, it is difficult to carry on a conversation about it. In the grand context, the sense I get is that when Ramsey talks about being "rich," he is talking primarily about "retiring with dignity," "changing your family tree" and "giving most of it away." This is a major part of the end chapters of TTMM. For every example he gives of how he has achieved "financial peace" himself, he also gives examples of how he and his wife live very frugally.

For all the griping about how much money Ramsey makes, who is to say that he has not already stepped down and sacrificed to do his work of financial counseling and running a radio show? I am sure he is probably earning a healthy income from it, but I believe he originally became a millionaire a second time through his first career in real estate. Again, these kinds of details make it difficult to carry on a conversation on this thread with folks who are commenting while not knowing anything about Ramsey.

People are even griping about the price of his books. Do they know that he sold TTMM for $5 this Christmas?

"I think it would be difficult to show where Mark is factually in error."

Mark already admitted one case in Post #18.

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Aaron Blumer's picture

EditorAdmin

Quote:
"I think it would be difficult to show where Mark is factually in error."
Mark already admitted one case in Post #18.
Granted. Any others?

I can accept the idea that when he says "Do this and you'll get rich" he means some a bit different by it than it may sound.
Still, what does 1 Tim 6.9ff mean when it warns that those who desire to be rich fall into a snare, etc.?
I wrestle with this because my own view of wealth is not quite what I hear from many Fundamentalists. (It's probably a moot point in my case, though, since my plan to be rich and famous by age 22 is a bit behind schedule Wink )

It would be really interesting to see thorough study of the whole topic of wealth from a serious, conservative biblical perspective. Most evangelicals tend to approach these questions strongly tilted from the outset either toward a sort of Benedictine "poor is more spiritual than rich" view or the opposite "health and wealth gospel" perspective.

(Edit: some might say we've got that study in Burkette's work, but I'm not really talking about an advice book w/some developing of prinicples for context. More of a theology of wealth. It's probably been done, but I haven't seen it)

My concern is that sometimes I think I see a serious financial weakness in Fundamentalism due in part to short-term thinking and a failure to value the role of money in ministry across generations.... as well as the role of money in sustaining a strong family tradition across generations. It's hard to explain, but once you are "too poor" to educate a generation well, your family or ministry or "movement" or whatever begins a slow death. It's not that simple of course, but I wonder sometimes what the better sort of Fundamentalists could accomplish if they were better financed.

Surely Paul's point in 1 Tim. is not that it is dangerous or sinful to ask "How can I amply fund multiple generations of well educated, leaders in my family?" But it is hard to reconcile with the "this world is not my home I'm just a passin' through" attitude. The problem there is that we do not know how many more generations must "pass through."

Matthew Olmstead's picture

@Aaron,

My argument wouldn't be that Mark's article contains factual errors, but rather opinionated propaganda. Propaganda isn't necessarily error as much as it is half-truths—it's not "fair and balanced." I already stated my "I disagree" for the article. The unfortunate thing is that when something is published in the blog from someone with Mark's credentials it is difficult to avoid the tacit endorsement by SI that what he says carries more weight, even having dogmatic conclusions. Perhaps that's why Paul has been so vocal in his opposition.

I appreciate the "market place of ideas" that SI affords those with opinions. I only hope the same courtesy is afforded others with whose opinion you may disagree more strongly. Wink

Father of three, husband of one, servant of the Lord Jesus Christ. I blog at mattolmstead.com.

Paul J. Scharf's picture

I think your post #29 is the key to this whole thread.

As I read Mark's article in light of your post, I am left to wonder:

Is Mark saying --

a) Ramsey's teaching are in error, so take my caution and avoid them;

b) Ramsey's teaching is correct, but his methods are so egregious that they invalidate his program; or

c) This is a vent about how I feel about Dave Ramsey.

I truly hope that part 2, "the bad," is not just more venting. It will not affect my life, but it may negatively impact people -- perhaps Christian college students -- who really NEED Ramsey's teaching, whether they get it through him or someone else.

(I can pretty much guarantee that they are not going to get it in Christian college or seminary.)

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Paul J. Scharf's picture

You have a lot of good points in post #64, and I wanted you to know I thought seriously about them -- just don't have all the answers (maybe any of the answers).

Unfortunately, a lot of instances which I have seen in this life qualify to help only by serving as "bad examples" :).

The only people I know with materials related to your profound thoughts in the last two paragraphs are the guys at Vision Forum (www.visionforum.com).

Your post is definitely the kind of discussion that an article on Ramsey should generate -- much more edifying than arguing about how much money he makes or what his materials cost.

Church Ministries Representative for the Friends of Israel Gospel Ministry

Becky Petersen's picture

At the very minimum, if Christians would learn to be more self-disciplined in their financial matters, it would be a better testimony to the world, and they could sleep at night knowing that their bills are paid.

There's a lot to be said for teaching people the basics. There are a lot of really big risk takers out there (financially speaking) and often the husband/wife team really aren't in philosophical agreement there. We've seen it when we stay in people's homes. If it takes DR, and his abrupt style (maybe crude?), then at least maybe it is getting some people's attention. Maybe it says more about our culture than anything else.

Anyway, if he is helping the average Joe Blow in the churches to get their personal finances in order, I'm glad. But, even though I've had not a lot of personal contact with his stuff, I'd say that he will reach his zenith and then become less popular and someone else will get the spotlight. It's the way of life in modern times.

In anyone's ministry, you can find the good and the bad.

BryanBice's picture

I'm not personally familiar with DR's stuff for churches...just know it exits. I'm aware of his Fox program and read his column in the paper sometimes. But I'm curious about the whole "show his stuff in your church for $100 a head" approach. If the material is biblically based, why can't someone build a S.S. series off his books--using perhaps his topical organization w/ examples, etc.--and simply present it to adult classes? Most likely, the series could be shorter (don't have all the glitz of a DVD presentation), more targeted to the specific needs/problems of the church or class, and wouldn't cost people money--just time. And if I felt some resources were particularly valuable, the church could make them available.

Am I missing something here? I do realize the value of "no need reinventing the wheel," and it's certainly more convenient & takes less effort to set up a DVD presentation & pop in this week's lesson. I've done that with a couple of packaged series, but the "student" didn't have to pay to attend the sessions. The church buys the DVD pkg for $100, corresponding books are made available for those who want to buy them (for maybe $15), and that's it. I'd have a huge problem telling my congregation, "We're doing a series on biblically based stewardship. To get the goods, you have to shell out the bucks." Incidentally, I have no problem with DR putting the material together, selling it, and making a reasonable profit. There are scores of DVD packaged lesson materials available sold at a profit...but the students don't have to pay to attend the sessions & get the basic lesson material.

Maybe the argument is, "It's like going to a conference. If you went to a weekend conference you'd have to pay to learn...same thing." But it's not. A little thinking would come up with a bunch of huge differences.

So, just curious. For those who have attended a church-sponsored FPU event, or if your church put one on, why the fee-based approach?

jimcarwest's picture

DR's major emphasis is getting people out of debt. Christians are equally as guilty as non-Christians when it comes to oppressive debt. Our country is plagued to the point of crisis by debt -- currently about $14 trillion annually. As a debtor nation, America leads the world. We are becoming servants to China and Japan. As debtors, Christians are a reflection and a part of this national problem. Whatever one's disagreements with DR's personality, his emphasis on gaining wealth, his use of slick advertising, etc., wouldn't it be more patriotic for all Americans to become debt free? Wouldn't our politicians be more inclined to stop increasing the national debt if a generation of citizens who have learned to operate by sound financial principles were to demand more fiscal responsibility of its leaders? Maybe this same influence from church members, who have learned the proper use of money, might prevent churches from making unwise financial decisions. Paul makes reference in 1 Cor. 7:31 to the principle of "using the world without abusing it." Maybe this principle might apply to making use of worldly-wise concepts of handling money as well. In Luke 16:8, our Lord says that "the sons of this world are more shrewd in their generation than the sons of light." Again, in Luke 16:10-12, Jesus says: "He who is faithful in what is least is faithful also in much; and he who is unjust in what is least is unjust also in much. Therefore if you have not been faithful in the unrighteous mammom, who will commit to your trust the true riches? And if you have not been faithful in what is another man's, who will give you what is your own?" Multitudes of Christians are unfaithful in the use of the resources God gives them, and this unwise use of money leads to want and poverty as well as to lost opportunities for serving God with our resources. The principles of saving and financial investing are common knowledge. Christians ignore them to their own hurt and to the hurt of the kingdom of God. Why should our Lord have to rebuke the righteous for not being as wise as the "sons of this world"? When it comes to solving other problems or to acquiring useful information, why do some Christians get so uptight about the source of their knowledge? I would agree that the motives for gaining wealth ought to be in step with Scripture and that giving to the Lord's work should trump the selfish use of what God blesses us with. But I thnk that the original intent of this thread ignores the fact that Christians have by and large fallen into the trap of debt and need help in resolving this problem. Thousands of Christians and non-Christians have benefited from DR and Crown. The Bible says as "laborers," they are worthy of their hire. We've got bigger fish to fry.

Paul J. Scharf's picture

BryanBice wrote:
But I'm curious about the whole "show his stuff in your church for $100 a head" approach. If the material is biblically based, why can't someone build a S.S. series off his books--using perhaps his topical organization w/ examples, etc.--and simply present it to adult classes? Most likely, the series could be shorter (don't have all the glitz of a DVD presentation), more targeted to the specific needs/problems of the church or class, and wouldn't cost people money--just time. And if I felt some resources were particularly valuable, the church could make them available.

Bryan,

You certainly could refer to the book in teaching a class, but if you are suggesting "Build-your-own-FPU" using Ramsey's materials, I think you would be running into some serious copyright issues.

Ramsey has explained that one reason for charging for the class as he does is that it makes it become something of value for the student -- just as some church programs have charged for Biblical (nouthetic) counseling. Also, the fee includes a personal set of all the materials for the student and a lifetime membership to the course. (http://www.daveramsey.com/fpu/home/) I don't suppose that even Ramsey has enough money to give a set of DVDs to every person in America who wants them for free :).

Even Farnham's original article said, "the course (may be) worth many times its $100 price tag."

I have to say that I am very puzzled by the repeated interjection in this thread to the "glitz" of Ramsey/FPU. Can someone state an example of misconduct or even something they personally dislike? Or is this just a mantra that is being picked up? How do his videos or Web site differ from something else you have seen, or how would you do it differently? Is there some fault you can point to that represents something of substance (i.e., not "I don't like the color of his Web site")?

jimcarwest wrote:
"But I thnk that the original intent of this thread ignores the fact that Christians have by and large fallen into the trap of debt and need help in resolving this problem. Thousands of Christians and non-Christians have benefited from DR and Crown. The Bible says as 'laborers,' they are worthy of their hire. We've got bigger fish to fry."

Amen Jim! Preach it! Both the original article and the discussion which follow have largely ignored the substance of the issue -- Christians and even CHURCHES facing foreclosure in record numbers, personal and national debt at record levels, etc., etc. We are arguing over the hairs in Ramsey's mustache while the country is on fire!

Church Ministries Representative for the Friends of Israel Gospel Ministry

Joe Griffin's picture

Paul,

I agree with you that the controversy regarding what Ramsey charges for his video class seems like straining a gnat. He produces a high quality product that is delivered in an engaging manner, and, as I said in my earlier post, I think Ramsey’s product works for its intended purposes: getting people out of debt and on a secure financial footing. Why would we think that someone should give this product away? Just because certain product lines are directed at churches or religious organizations? I think not. This isn’t a burden we put on our own ministers.

But I would like to ask you about one of your statements. The relevant quote is below:

Quote:
Amen Jim! Preach it! Both the original article and the discussion which follow have largely ignored the substance of the issue -- Christians and even CHURCHES facing foreclosure in record numbers, personal and national debt at record levels, etc., etc. We are arguing over the hairs in Ramsey's mustache while the country is on fire!

You seem to imply, and I may be misunderstanding you, that the country is on fire because of the debt load that churches and believers and the country are under. From a political perspective, I have no problem with this statement. The national and individual debt load has placed and is placing a burden on this country that we most likely have not felt the full weight of.

But from the perspective of a believer or that of a church, the debt load we as churches and individuals are under is indicative of a much deeper problem. The debt is merely a symptom of a much more sinister problem: envy, greed, pride, etc. We want this or that, cannot afford it, but think we deserve it to the point that we place ourselves under a load of debt we cannot support. The debt isn’t the problem, it is the motivation that led us to want something so much that we forgot biblical principles of wise stewardship. If we paid off the debt without resolving the heart issues, this would not put out the true proverbial fire.

This again is my caution with Dave Ramsey. His materials will help you get of debt and on secure financial footing, but they do not focus on the motivations of the heart. Therefore, I would urge any individual or church using his material to supplement it with teaching that causes them to analyze their motivations and heart.

Paul J. Scharf's picture

I have no problem with your statement. I think we are on the same page.

(Sometimes also, however, the debt IS the problem -- such as in the case of medical debt.)

Back to your analogy, personally I think Ramsey is at least good at "ringing the fire alarm" in a way that most people are going to hear it.

To stretch the analogy, if we begin with Crown or Randy Alcorn dissecting "who started the fire and why," we may just end with a few folks sleeping right through the fire in the burning house.

Fire investigators usually do their work after the firefighters are done.

Am I wrong to put things in this order with regard to debt? Smile

Church Ministries Representative for the Friends of Israel Gospel Ministry

GregH's picture

Paul J. Scharf wrote:
I have to say that I am very puzzled by the repeated interjection in this thread to the "glitz" of Ramsey/FPU. Can someone state an example of misconduct or even something they personally dislike? Or is this just a mantra that is being picked up? How do his videos or Web site differ from something else you have seen, or how would you do it differently? Is there some fault you can point to that represents something of substance (i.e., not "I don't like the color of his Web site")?

Paul, I (and others) have repeatedly given specific examples. You have chosen to ignore them or you refuse to give them any credibility. But it is incorrect to say that no one is giving examples.

You said something earlier (post #14) to imply that I don't know what I am talking about. When I challenged you to elaborate, you ignored it. Do you concede that you were wrong or do you want to explain to me why I am so financially ignorant?

Paul J. Scharf's picture

Saying it can be dangerous to pay off debt, advocating the use of more debt against your house, advocating investing money which could be used to pay the house off and hoping to beat the bank on interest earned -- these are dangerous ideas which Ramsey deals with in detail. Even people who are well short of agreeing with Ramsey on many things would disagree with you on these.

If you are seriously advocating for these ideas as opposed to the Biblical teaching on finance, you need to study and pray. I say this lovingly, because I was once that ignorant of the truth also.

At least you are being honest if those are your disagreements with Ramsey.

I have seen no specific examples from people who otherwise agree with Ramsey but just can't promote him because he is too "glitzy," thus I must conclude that that is a red herring. (I guess Mark is saying in the original article that Ramsey is too much of a self-promoter -- so perhaps that is a specific, but it is not very clear what Mark is telling us to do about it.)

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Larry's picture

Moderator

Quote:
... advocating investing money which could be used to pay the house off and hoping to beat the bank on interest earned
Since this is the one I brought up, gave some numbers on, and asked for interaction on, perhaps you could take a minute and show the problems with it.

So far as I know, the only time in recent history (meaning the last half century) where one would have been hurt by doing this was the last two year or so, but in that case, everyone who owned a house that wasn't paid off was in trouble. Perhaps you could explain your point here (or explain Dave's point. I have heard him make it on the radio and it made no sense then, but it was a short segment so I am sure it was lacking in some regards).

In effect, it seems like the question is, if I have an extra $300 a month (or whatever number), why should I invest it at 4.75% instead of 7% or more, in addition to paying more taxes in the long run? Please correct me if the question here is wrong.

Paul J. Scharf's picture

Larry,

The short answer is...because you can lose your house. The "tax savings" is a ruse foisted on the American people by bankers who can do math. (Larry Burkett used to lick his chops when he got that question. He would always say, "I have a better deal -- you give me your money, and I will give you 95 percent of it back...")

I am Bible teacher and a writer, not a financial teacher, so -- no -- I am going to politely refuse your invitation to go into a financial lesson. When it comes to finances, I am a student, not an expert -- just one beggar telling another beggar where to find bread.

If you don't like Ramsey, I would suggest you go to www.crown.org, where you will get the same answers.

Church Ministries Representative for the Friends of Israel Gospel Ministry

GregH's picture

Paul J. Scharf wrote:
Saying it can be dangerous to pay off debt, advocating the use of more debt against your house, advocating investing money which could be used to pay the house off and hoping to beat the bank on interest earned -- these are dangerous ideas which Ramsey deals with in detail. Even people who are well short of agreeing with Ramsey on many things would disagree with you on these.

If you are seriously advocating for these ideas as opposed to the Biblical teaching on finance, you need to study and pray. I say this lovingly, because I was once that ignorant of the truth also.

At least you are being honest if those are your disagreements with Ramsey.

I have seen no specific examples from people who otherwise agree with Ramsey but just can't promote him because he is too "glitzy," thus I must conclude that that is a red herring. (I guess Mark is saying in the original article that Ramsey is too much of a self-promoter -- so perhaps that is a specific, but it is not very clear what Mark is telling us to do about it.)

Paul, you may not have the financial acumen to understand what I said. I am not going to go into enormous details to try to educate you, but what I said was true. It can be dangerous in today's environment to pay off debt too aggressively, and there is nothing wrong with intelligently borrowing against your house.

Ramsey's teaching is designed for financial amateurs. It is illogical to people with more acumen. For example, he teaches to pay off the lowest credit balance first regardless of the interest rate. I know why he teaches this and it is OK I suppose for undisciplined people. But for those who know more, it makes no sense.

Just be careful of who you call ignorant, especially when you admit you are a financial novice.

GregH's picture

Larry wrote:
Quote:
... advocating investing money which could be used to pay the house off and hoping to beat the bank on interest earned
Since this is the one I brought up, gave some numbers on, and asked for interaction on, perhaps you could take a minute and show the problems with it.

So far as I know, the only time in recent history (meaning the last half century) where one would have been hurt by doing this was the last two year or so, but in that case, everyone who owned a house that wasn't paid off was in trouble. Perhaps you could explain your point here (or explain Dave's point. I have heard him make it on the radio and it made no sense then, but it was a short segment so I am sure it was lacking in some regards).

In effect, it seems like the question is, if I have an extra $300 a month (or whatever number), why should I invest it at 4.75% instead of 7% or more, in addition to paying more taxes in the long run? Please correct me if the question here is wrong.

I think Larry that Ramsey is gearing his material to people who are largely undisciplined and financial novices. He knows that those people are not going to invest the extra $300/month; they are going to blow it. And for people like that, they are better off paying off their house asap.

This is why he advocates many things that make no sense to people with more experience. For example, he tells people to pay off the lowest credit balances first, not the balances with the highest interest rates. He believes that if people can see progress, they will be fired up about continuing.

I see his point, but again, this kind of advice is not for everyone. It is for people that can't handle money and lack discipline to save/invest.

Larry's picture

Moderator

Thanks, Paul. I ask because I am not sure either.

Quote:
The short answer is...because you can lose your house.
How? If I put away that money, then I have it if I need it. In other words, I am not spending that money on something else. So if I lose my job or my ability to make payments, I have that money to draw on until I get another job.

And what about this: If I make extra payments, does it put me ahead of schedule, so I don't have to make any for a while? I don't think it does. I think the bank wants their payment every month, no matter how much I have paid ahead. (I could be wrong. I have no mortgage so I am not sure.) So if I lose my job and can't make my payment, and instead of investing it I have paid down my mortgage, then I have nothing in reserve to pay my mortgage with while I have no job.

Again, I could be wrong. I am not sure.

Quote:
The "tax savings" is a ruse foisted on the American people by bankers who can do math. (Larry Burkett used to lick his chops when he got that question. He would always say, "I have a better deal -- you give me your money, and I will give you 95 percent of it back...")
I am not sure how this works. I would be interested in an explanation. If I get a tax deduction for mortgage, that means I get to keep more of my money than if not. I think Burkett's deal works with playing the lottery (which has strange similarities to buying houses these days). But again, I am not sure how I benefit by paying more tax than I would otherwise have to.

Now again, if one is not investing the money, that is a different story.

Quote:
If you don't like Ramsey, I would suggest you go to www.crown.org, where you will get the same answers.
For my dollar, it is not about liking or not liking Ramsey. I don't really care one way or the other. I listen to him when I am in the car and he is on. I wouldn't have him in church. He rubs me a bit the wrong way sometimes, but I don't really think that much about it. My point is about sound financial advice.

You mention Crown, so I went there and looked. [URL=http://www.crown.org/LIBRARY/ViewArticle.aspx?ArticleId=280 ]Here is what they say[/URL ]

Quote:
Nevertheless, if a home mortgage cannot be paid off within the next five years or so by adding additional payments to the principal, the homeowner might want to consider investing any surplus funds and accumulating the funds until they can pay off the mortgage with one lump sum payment

That sounds similar to what I am saying.

I would imagine their five year rule is based on the difference in interest rates, though they don't say. Their article seems based on the fact that if you don't prepay the mortgage, you waste the money. My argument is based on the fact that if you don't prepay the mortgage, you invest it. I agree that if one is not going to invest regularly, then they should prepay the mortgage.

BryanBice's picture

Paul J. Scharf wrote:
You certainly could refer to the book in teaching a class, but if you are suggesting "Build-your-own-FPU" using Ramsey's materials, I think you would be running into some serious copyright issues.

Ramsey has explained that one reason for charging for the class as he does is that it makes it become something of value for the student -- just as some church programs have charged for Biblical (nouthetic) counseling. Also, the fee includes a personal set of all the materials for the student and a lifetime membership to the course. (http://www.daveramsey.com/fpu/home/) I don't suppose that even Ramsey has enough money to give a set of DVDs to every person in America who wants them for free :).

Even Farnham's original article said, "the course (may be) worth many times its $100 price tag."

I have to say that I am very puzzled by the repeated interjection in this thread to the "glitz" of Ramsey/FPU. Can someone state an example of misconduct or even something they personally dislike? Or is this just a mantra that is being picked up? How do his videos or Web site differ from something else you have seen, or how would you do it differently? Is there some fault you can point to that represents something of substance (i.e., not "I don't like the color of his Web site")?

jimcarwest wrote:
"But I thnk that the original intent of this thread ignores the fact that Christians have by and large fallen into the trap of debt and need help in resolving this problem. Thousands of Christians and non-Christians have benefited from DR and Crown. The Bible says as 'laborers,' they are worthy of their hire. We've got bigger fish to fry."

Amen Jim! Preach it! Both the original article and the discussion which follow have largely ignored the substance of the issue -- Christians and even CHURCHES facing foreclosure in record numbers, personal and national debt at record levels, etc., etc. We are arguing over the hairs in Ramsey's mustache while the country is on fire!

Just to clarify, I'm not talking about copyright infringement. In an educational setting, there's no copyright violation by taking several sources, or even 1 primary source, and using the basic content as a starting point or outline for a class. Of course, the ethical thing to do is give proper credit & let the class know what you're doing. I've done this very thing with books like Bridges Respectable Sins & Disciplines of Grace. The class was given the option of buying the books as foundational, but they weren't required to buy them in order to attend the class. And, incidentally, some of the topics in those 2 books would deal with the root issues of many of the debt problems people face.

As far as the "charge 'em so they'll 'own' and value the material" goes, sorry...I don't buy it (no pun intended). Where does that end? I certainly have no problem with offering the "personal set of materials & lifetime membership" stuff for sale if anyone would like to buy it (no credit cards accepted though!), but you have to pay the $100 to attend? Here's the bottom line. Besides having some philosophical issues with this approach, it would be foolish to try to use FPU in my church. Most of the people can't afford the $100. Those who could afford it, need the information the least...and they wouldn't spend the money on it anyway. Besides that, I'd get all kinds of grief (and rightly so) for offering a "biblical stewardship series" for a fee. I'd also probably get a little grief from some who happen to notice that the liberal Lutheran church down the road is offering FPU, too.

As far as my "glitz" reference goes, I didn't mean anything particularly derogatory by it. I was simply referring to the fact that a DVD presentation has a lot more "glitz" to it than you'll find in my typical weekly SS class...you know, musical lead ins…introduction of author...etc, etc. I don't have a problem with any of that -- every DVD series I've used has those "glitzy" features. But if a live body were simply presenting the essential, biblical material each week, it could be done in a shorter period of time.

RPittman's picture

Born of Scot-Irish descent, frugality must be in my genes. In addition, I was brought up on debt-free living. My Dad, who is a better money manager than any MBA that I know, invested and parlayed a working man's wages into a net worth of well over a million. Meanwhile, my Dad was a generous donor to Christian and conservative causes as well as to needy individuals. There wasn't a stingy, selfish bone in his body. Dad's Christian charity was practical in carrying car-loads of groceries to struggling families, paying for automobile repairs, and paying tuition for needy students. He and my Mom worked hard and saved. They bought on a cash basis and didn't even have a credit card. We didn't indulge in luxuries but we never really missed them either. We lived according to I Timothy 6:8 and Hebrews 13:5. We had enough, really didn't desire more, and were truly thankful for what we had. This was my heritage.

When I listen to Dave Ramsey, there is something that resonances deep within my core. Debt-fee living, paying with cash, savings, and establishing priorities are my personal financial principles too. I cut my eyetooth on these. Yes, I want to get the message out to this debt-ridden, despairing world! People need to hear this! We don't need the Obama welfare state! Let's share the good news! And Dave talks about being a Christian too. Right! We need Christians promoting a Christian world-view in all areas of life.

My adrenalin flows and my mind revs with excitement when I listen to Dave Ramsey. Go, Dave, go! Tell 'em, Dave! Preach it, brother! Yeah! Then, the question pops up its ugly head. Yeah, Dave! Go, Dave, go! It must be of the Devil. Dave's a Christian. Tell it like it is, Dave! Hurray for Dave Ramsey! Like Flip Wilson, the Devil must have put the thought there. Go, Dave, go! But the question nags on. If this is so good, so right, and so great, then why am I disturbed? Yeah.........Dave......go Dave...............the question won't go away. There's something nagging at the back of my mind..............I can't shake it off.

Well, let's look at some of the nagging questions at the most basic level.

1. First of all, there is the matter of Dave's Christianity. I cannot and will not contest his salvation and faith in Christ. The problem is that I know nothing of what he believes beyond his professed faith in Christ. Is he a Calvinist? An Arminian? A charismatic? Does he hold to Post-millennialism, Pre-millennialism, or Amillennialism? One may say that it doesn't matter but it does. His world-view, obviously, is being taught through his lectures. And his world-view, of course, is founded upon his theology. Perhaps Dave is a theonomist. Would you invite Gary North, a Theonomic economist who essentially believes what Dave Ramsey teaches, to lecture at your church? Or, a Word of Faith teacher? Would you invite Ken Copland? One may say that this is only finances, not theology. True to a certain point but a person's world-view is encompassing and comes through in all subjects, even finances. Without a doubt, Dave Ramsey's world-view is being taught through his seminars. Remember there are all kinds of "Christian" world-views out there--from Word of Faith (i.e. Health and Wealth) to Theonomic? Is not this a consideration in inviting him to your church?

2. Second of all, there is the question of how Dave promotes his Christianity. There is grave concern of how Christianity has become big business. At first, it was the publishers and recording studios but now Christianity is big business in everything from cosmetics to diet and health fads. This is, IMHO, subrogating faith to profit. Naïve believers are allured to anything claiming Christianity as a moth to a flame. Whereas there is absolutely nothing wrong with Christians doing business and making a profit, it is less than desirable for the self-same people to use their professed Christianity to promote or increase their business. This just sticks in my craw. It is making merchandise of our beliefs as an advertising gimmick. Salvation is free but Christianity is profitable.

It is common to see people from politicians to business openly professing their Christianity and piety for profit. This is nothing new. Some even preach and show religiousness for personal gain (Romans 16:18). I cannot categorically say that Dave Ramsey is doing this but I would be much more comfortably if he would refrain from mentioning his Christianity except where it is directly applicable. It is now pretty much common knowledge how George Bush's political campaigns used subterfuge to allure Christians' votes. It makes me uncomfortable. Is not this a misuse of our Christianity?

3. Third of all, the celebrity status and self-promotion turns me off. Admittedly, I have a personal bias against celebrities. For the most part, these are people whose only achievement and only interest is self-aggrandizement. The whole image is a picture of ego, self-importance, adulation, etc. All this is in direct conflict with the Biblical image of the humble man before God. I do not care to follow a celeb (I Corinthians 4:6; II Corinthians 10:12). Following celebs seems to have been a New Testament problem too (I Corinthians 3:4-8).

4. Fourth of all and finally, there is a question of what underlies Mr. Ramsey’s teachings. With most of what he teaches on a personal financial level, I can heartily agree. It is the undergirding premise behind his microeconomics and his macroeconomics that I find disturbing. Although Dave’s advice is sound and practical, his reason for being debt-free and having wealth is essentially materialistic. His appeal is materialistic. The ironic thing is that it is most likely a materialistic attitude that got people into debt in the beginning. They wanted more than their means.

What difference does it make if his advice is sound? A lot! It is possible to arrive at a good praxis from the wrong perspective. For example, one can argue for sexual abstinence on the basis of disease prevention and pregnancy prevention. This seems to work for some people. The problem is that the argument collapses if one can find a fail-safe way to avoid sexually transmitted disease and prevent pregnancy. Then abstainers return to safe promiscuous sex. On the other hand, Christians believe that promiscuous sex, either safe or unsafe, is sin because God has declared it to be. Likewise, safe, personal financial principles can be derived from a materialistic outlook but these principles are always subject of being overpowered by materialistic greed. More importantly, the Christian cannot serve both God and materialism (Matthew 6:24; Luke 16:13). From what I understand of Dave Ramsey’s philosophy of personal finances, his motivational appeal is materialistic.

Are Ramsey’s personal financial practices good? Yes! However, they are not new. Any casual Bible reader ought to know Biblical wisdom offered on personal finances (Proverbs 22:7; Proverbs 6:1; Proverbs 11:15; Proverbs 17:18; Proverbs 27:13; Romans 12:1; I Thessalonians 4:11; II Thessalonians 3:10; Proverbs 13:4; Proverbs 20:4; Proverbs 24:30-34; Proverbs 21:25; Proverbs 6:6-11; and many, many more). My parents and their generation practiced sound personal finances after having endured the Great Depression of the 1930’s. These principles were common sense and Biblical wisdom learned from their parents and their parents’ parents. Yet, we need experts and consultants to teach the same things for our better educated and more sophisticated populace today. Ironic, isn’t it?

In sum, I endorse most of Dave Ramsey’s advice as practical and good. However, I warn against the insipid materialism veiled by what appears as good principles. Although Mark Farnham has been criticized for his article, he has demonstrated wisdom, insight, and understanding. Although he is not an economist, perhaps we ought to listen to his warnings because he is conversant with the source of knowledge and wisdom—God’s Word. His critique, with slight modifications, is well said and well taken.

Larry's picture

Moderator

Quote:
Larry, if you are seriously looking for real answers, here is an introductory article to get started:
What else would I be doing???? Seriously ...

But thanks for the link. I read it but it doesn't seem to address the issue of paying down early vs investing at a higher rate, and that is precisely the question at hand for me. Everything it says, I agree with with the possible exception of the 15 vs. 30 (because of flexibility gained). But the article doesn't address the issue I am asking about. I had already searched both Ramsey and Crown, which is how I was able to post the earlier article. Crown was the only one that addressed the particular issue that I could find.

Again, I totally agree that if the option is "spend money vs. pay the mortage," then pay the mortgage. If the option is "invest money vs pay the mortgage" I don't think that is nearly so clear cut. You stand to lose up to $75,000 in the example I gave, if those numbers are right, and so far, no one has disputed them. I think even Dave Ramsey would rather have $75,000 than not.

Most people aren't disciplined with their money. That is why they are in debt. My comments are not directed towards them at all.

GregH's picture

Great post RPittman.

I am disturbed too, though like you, I agree with most of what Ramsey says about money management.

But what bothers me is that poeple seem to think that you can overlook the philosophical problems because of good advice about debt and saving. Sorry, the philosophical problems are more important. I would rather my children be broke and in debt than weighted down with materialism and obsessed with money.

The philosophy of money is a real blind spot in fundamentalism. I remember teaching a class several years ago and discussing whether people should know how their money was invested. Someone in the class make a public statement that he would not choose a mutual fund based on whether it invested in gambling but he certainly choose one based on how well it performed.

There is something very wrong with that kind of pragmatism, and we see the same problem here. The management of money is apparently more important than how we view money. Ramsey may be a billionaire but he appears to to be in conflict with the Bible on how he views money.

RPittman's picture

GregH wrote:

I think Larry that Ramsey is gearing his material to people who are largely undisciplined and financial novices. He knows that those people are not going to invest the extra $300/month; they are going to blow it. And for people like that, they are better off paying off their house asap.

This is why he advocates many things that make no sense to people with more experience. For example, he tells people to pay off the lowest credit balances first, not the balances with the highest interest rates. He believes that if people can see progress, they will be fired up about continuing.

I see his point, but again, this kind of advice is not for everyone. It is for people that can't handle money and lack discipline to save/invest.

If this is true, then he probably has a potential market of 90-95% of the populace between 30-50 years old. This generation was sold on entitlement, although I'm hearing that the younger generation is now looking to saving because of the recent recession.

BryanBice's picture

In light of MacArthur's quote below, I'm wondering if FPU isn't the latest & greatest in a long line of Christian-issues fads that, if you're church is with-it, will just have to present--or else your people will never attain the level of spiritual maturity that they should (kinda like Jabez).

Anyway, the following quote is from http://www.gty.org/Blog/B100303:

"Evangelical fad surfing. Contemporary evangelicals have therefore become very much like 'children, tossed here and there by waves and carried about with every wind of doctrine' (Eph. 4: 14). They follow whatever is the latest popular trend. They buy whatever is the current best seller. They line up to see any celebrity who speaks spiritual-sounding language. They watch eagerly for the next Hollywood movie with any 'spiritual' theme or religious imagery that they can latch on to. And evangelicals discuss these fads and fashions endlessly, as if every cultural icon that captures their attention had profound and serious spiritual significance.

Evangelical churchgoers desperately want their churches to stay on the leading edge of whatever is currently in vogue in the evangelical community. It almost seems like ancient history now, but for a while, any church that wanted to be in fashion had to sponsor seminars on how to pray the prayer of Jabez. But woe to the church that was still doing Jabez when The Purpose-Driven Life took center stage. By then, any church that wanted to retain its standing and credibility in the evangelical movement had better be doing 'Forty Days of Purpose.' And if your church didn’t get through the 'Forty Days' in time to host group studies or preach a series of sermons about The Da Vinci Code before the Hollywood movie version came out, then your church was considered badly out of touch with what really matters."

Time will tell....

Paul J. Scharf's picture

Bryan,

On the other hand, I have been going to fundamental churches for 25-plus years, and have learned almost nothing about Biblical financial wisdom in them.

A few bad examples -- but not much positive teaching. Unless you consider, "Lord, you keep the preacher humble and we'll keep him poor" to be good teaching.

I agree with MacArthur's quote wholeheartedly. I am not interested in Ramsey because FPU is the latest fad (if it is -- at least it obviously isn't among some SI readers) but because it is addressing an area of grave concern where our churches are desperately lacking.

(I know of one fundamental church right now where the suggestion has been made to take out a six-figure loan to make roof repairs.)

What we really haven't gotten to the bottom of here is why people are opposed to Ramsey. If it is because they already totally have a handle on their finances and think he is too liberal, then this discussion really isn't for them in the first place.

But one thing we have learned is that at least some people are opposed because they do not buy Ramsey's most basic premises. To me, that simply demonstrates the need. If Ramsey's personality and methods turn them off, they need to listen to someone else with the same message.

My fear is that this whole discussion is going to turn off some soon-to-be-college graduate who is getting ready to go into the real world with $100K+ in student loans between him and his bride-to-be, and he is going to read Mark's article and a smattering of the comments and decide that Ramsey is an opportunistic lunatic, which is so far from reality. I just find that to be very sad. Sad

Church Ministries Representative for the Friends of Israel Gospel Ministry

RPittman's picture

I agree with Dave Ramsey on financial practices. Most of his practical advice is good and sound. However, I am opposed to his foundational principles. Dave Ramsey is a Capitalist and I am not. Oh, before you shut me off, hear me out and allow me to explain. I am not a Socialist or anything close to a Socialist. I am a very strong proponent of the Free Market but I am just not of the Capitalist brand. Capitalism, you see, is just one particular view of Free Market economics although it is often portrayed as the only alternative to Socialism.

There are really only two views of economics—either a Free Market view or a Managed Market view (i.e. Socialism). All views—including Communism, Fascism, Fabian Socialism, Christian Socialism, Capitalism, etc.—lie somewhere in between two extremes. Theories run the gamut from laissez faire to totalitarian control. For the most part, it is a continuum with views of various nuances defining the positions.

Capitalism, as we shall see, is only one view under the broad umbrella of Free Market philosophy, it is often misrepresented as the only alternative to Socialism. Actually, both Socialism and Capitalism have much in common and their commonality may outweigh their differences. Both Socialism and Capitalism are trends to centralization with the difference being the locus of control—private or public. Socialism is the public ownership and control of capital whereas Capitalism is the private ownership and control of capital. Capitalism, although often portrayed as entrepreneurial, is a centralizing force and anti-entrepreneurial in the long run. Only during deregulation or technological advancement does entrepreneurship flourish under Capitalism. This can be clearly seen in the computer industry. Are there more or fewer software companies than a decade ago? Are there more or fewer hardware manufacturers than a decade ago? Likewise, we are seeing the centralization of banking.

Capitalism, as we know it today, grew out of the Social Darwinism of the late nineteenth century. Although the Social Darwinism has been largely abandoned, it still has residual ideas lurking in capitalistic thought and rhetoric. The Darwinian concept of survival of the fittest may no longer be professed but it is practiced. This makes Capitalism amoral—without moral scruples or principles as long as it's legal. Even the revered Milton Friedman reputedly said, “The only obligation of a manager is to make a profit.” The bottom line justifies all. It is an all-for-me mentality that fits well with a narcissistic generation brought up on selfism.

The differences between the systems revolve round two questions—ownership and decision-making. Ownership is who owns the capital goods. Decision-making involves the three economic questions of output (what will be produced), input (how will it be produced) and distribution (who will profit). The difference between Free Market philosophy and Socialist philosophy is private ownership and private decision-making versus public ownership and public decision-making respectively. Although both support private ownership and private decision-making, Capitalism and Free Market thought differ on where the emphasis should fall. Capitalism places the emphasis on ownership—the capital—whereas Free Market philosophy puts the emphasis on decision-making. Thus, Capitalism is inherently materialistic and Free Market philosophy stresses the moral and right choices in economics. Capitalism, needless to say, is much more satisfying to the greed of the flesh than the moral restraints of right actions. I am a proponent of Free Market economics rather than Capitalism.

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