Over 2,000 years ago a heavenly chorus proclaimed the birth of Jesus to the humble shepherds keeping watch over their flocks by singing the beautiful refrain, “Glory to God in the highest, and on earth, peace, good will toward men (Luke 2:14).”

What does this message of hope have to do with money? I am currently reading the book Financial Planning 3.0: Evolving Our Relationships with Money, by Richard B. Wagner. Yesterday I read the following thought-provoking passage, which was perfect timing with Christmas fast approaching:

“Consider, for example, the noble implications behind “Peace on earth, good will to men.” What should these words mean, taken at face value?

Would they mean that greatly diverse folks could participate in common and peaceful enterprise? Would they insinuate that people who might naturally hate each other would be joyfully enabled to mutually exchange or care about the other’s continued well being? Would they connote mutual dependencies together with common and avidly sought sharing of resources, gifts, and talents? Would they denote relationship? Would they induce folks to transform swords into plowshares or lions to lay down with lambs? Seems likely.

Query: What does this better than money? Answer: Nothing.

In sum, I suggest that money is a real-world synthesis of this season’s greeting. It is a prime mover of peace and a fundamental conduit of good will.”

I think Wagner has it about right. To focus only on money’s shortcomings, as is popular to do, and ignore the incredible things it has helped mankind accomplish, is to miss a forest of incomparable beauty by concentrating on the few dead trees.

On the topic of peace, as documented by Steven Pinker in his acclaimed book The Better Angels of Our Nature: Why Violence Has Declined, there is more peace in the world now than there has ever been. And it is not even close. Violence of all types hasn’t just gone down slightly over the past several hundred years, it has decreased to a small fraction of what it was throughout most of human history.

And yet most of us are unaware of this incredible accomplishment. In fact, if you asked the average person on the street they would likely tell you that the world is more violent now than it has ever been. This is probably because we now hear about violence almost instantaneously no matter where it happens in the world, and because it is difficult for us to imagine what life was like in the past; but our perception doesn’t change the fact that peace has gained a lot of ground, and is still spreading.

While there are many possible causes for this outbreak of peace Pinker and other researchers believe two of the most important are the spread of democracy and capitalism. Good government – government held accountable by the people being governed – and economic freedom make it easier and more profitable to buy what you want from your enemy than to take it from them by force. In short, the freedom to use money over ever-widening geographic areas has tied the well-being of past enemies to our own well-being, and turned them into friends and business partners.

These same forces – democracy and capitalism – that led to a decrease in violence have also led to an increase in prosperity. Just in the last thirty years hundreds of millions of people have escaped poverty through increased economic freedom. In addition, money has unleashed unthinkable creativity and innovation, improving the lives of everyone. Good will toward men indeed.

To deny the progress we have made it is necessary to ignore the conditions most people lived in prior to the spread of democracy and capitalism. Money has most definitely been a powerful mover of peace and a conduit of good will.

And yet money is far from perfect. It tends to flow to those who use it most efficiently, not to those who need it most badly, and it doesn’t care a lot about fairness or equality. And as long as imperfect humans are involved there will be both mistakes and abuses. So what can we do with our money to bring about even more peace and good will?

One of the best things about money is that much of the good that it does happens without conscious effort on our part. Any kind of honest work that we perform to earn money helps not only us but others. Likewise, spending our money in free exchange with others makes both parties better off. This is the so-called “invisible hand” Adam Smith wrote about in action.

While the invisible hand is powerful, it is not enough. Some people are still left behind. What can we do for them? Charity helps, but is not sufficient. It is a temporary solution at best. So what is the answer?

Providing Opportunity and Hope

I believe Nobel Peace Prize winner and Grameen Bank founder Muhammad Yunus has done more to solve this riddle than anyone. Yunus’ genius was in recognizing that the poor neither needed nor wanted handouts from government or charities. They simply wanted opportunity, hope, and someone to believe in them.

Yunus accomplished this by giving small loans to the poor (micro-credit) which allowed them to earn money for themselves. This transformed families and communities from victims to entrepreneurs and customers. By including the previously forgotten in the economy Yunus has spread a lot of peace and good will. Many have followed in Yunus’ footsteps and there are now numerous micro-credit institutions throughout the world.

Others have taken a different approach. The Ashoka organization searches for social entrepreneurs like Yunus throughout the world and gives them the resources and training they need to succeed. Another organization doing a lot of good that I really love is the Acumen Fund, founded by Jacqueline Novogratz. Novogratz uses what she calls patient capital to identify and help grow businesses with great potential in developing countries. The funds’ goal is not to make money, but to break even, and thus be sustainable, while also doing good. The Hunger Project is another great organization that helps people help themselves in a sustainable way. All of these organizations, and many others, are helping a lot of people by using money to spread peace and good will.

Money Talks with Our Voices

What can you and I do to use our money to spread peace and good will? In her book The Soul of Money, Lynne Twist, a former fundraiser for The Hunger Project stated:

“If ‘money talks’ it is with our voices. Each financial choice you make is a powerful statement of who you are and what you care about. When you take a stand, and have your money reflect that, it strengthens your sense of self.”

Here are some simple things you can do to help money become an even more powerful mover of peace and conduit of good will in the coming year:

Spend more of your money at local businesses.

Spend more of your money at businesses that support fair trade in developing countries.

Tip more generously.

Give more generously and more often to charities you believe in.

Start your own Micro Philanthropy or Giving Fund.

Support organizations like the Acumen Fund, Ashoka, The Hunger Project, and others that lift people out of poverty by providing opportunity and hope.

Like Richard B. Wagner I believe that money, on balance, has been an influential force for good in the world, but I also believe it can accomplish much more good if we are all committed to make it happen. My goal during this Christmas season, and throughout the coming year, is to use the money I have been blessed with as a powerful voice proclaiming peace on earth, good will toward men. I invite you to join me.