[Vishal Mangalwadi argues that we have much to learn from a couple of Scots who wanted to care for widows and did something about it. Go here to read his original, unedited post of  which the following is a condensation.]

Almost 300 years ago, two Calvinist pastors in Scotland combined a pro-life, pro-sex, pro-marriage spirituality  with the best available mathematics to create the world of modern finance.

In their day, if a minister died, his widow and orphans received a stipend from the church for six months; after that they were on their own. This was unacceptable to these two mathematician-pastors because the Bible told them that “Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world. (James  1:27)

Using the system of actuarial calculation and five other mathematical principles, they estimated exactly how much premium each pastor would need to contribute to create a fund which would make it possible to take care of the widows, and to invest prudently to make the fund grow. Their system, the Scottish Widow Fund, was eventually followed by all the insurance companies that came after them.

Another element of this success was the “modern” democracy in the Scottish church (and the Republican system of government in America) birthed by the Protestant Reformation’s return to the Bible. Reforming the church included replacing the autocratic rule of bishops and popes by the rule of democratically elected elders.

“The voice of the people” can be “the voice of God” only if the people grow in their knowledge of God and if their character becomes godly. If the people are corrupt then their voice becomes the voice of the devil. This, as we shall see, is the problem now facing secularized democratic nations in the West. Far too many people in these nations no longer want to take the responsibility to work, earn, save, wisely invest, and take care of their neighbors, widows, orphans, refugees, and other victims of natural or man-made evils. They want their governments to tax or borrow from productive people and spend it on their welfare.

The democratic milieu [of the UK] was critical for the Fund’s success because the Presbyterian structure of the Scottish Church simultaneously cultivated godly character and nurtured grassroots democracy – ordinary church members elected wise and God-fearing elders and held them accountable. So the Widow Fund succeeded not simply because of Mathematics but also because:

• The biblical spirituality nurtured honest, productive, compassionate, and public-spirited character,
• The Bible’s emphasis on human sinfulness required institutionalizing accountability even among religious leaders, and
• The biblically derived idea of local church-based grassroots democracy promoted responsible leadership all the way to the top.

Of course, there were plenty of sinful Protestants; and corrupt people always seek to control public funds. The Presbyterian structure, however, was designed for sinful people. It sought to make them godly but also instituted wise structures to minimize the abuse of public funds. Transparency of institutions and rules that governed the church and the Widow’s fund as well as public knowledge of the private lives of the church leaders helped generate the trust that ensured the Fund’s success.

Many attempts to establish medical insurance companies in India have failed (in spite of our mathematical aptitude) because the poor character of participating members, doctors, pharmacists, agents, and their lawyers. If insurance money is claimed for diseases that do not exist and procedures that have not been performed, then the calculations behind premiums become meaningless.

The Widow’s Fund was a wonderful “welfare” scheme. It was a capitalistic or free-market enterprise. It operated under the law of the land, but was neither controlled by politicians nor run by bureaucrats. Why did deeply religious men multiply the Fund’s capital through wise business investments? They made money because they followed the Lord Jesus who, in the spirit of the Old Testament, commended such economic stewardship – turning five bags of gold into ten – as true spirituality (Matthew 25:15-17). People joined the Fund because they trusted their community leaders with their money and their trust was not betrayed.

Today the Fund is completely secular and it is not growing as it used to.

– Vishal Mangalwadi

[to be continued …]

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