Making Finance Fair
by Julian Bond
Posted: 11 Nov 2013
The saying goes 'don't mention religion or politics'. We can add money to that quotation, the British being notoriously reticent to tell each other what they earn. So it was something of a surprise, as well as a liberating experience, when I recently found myself sharing details of my annual income with a bunch of male friends as part of a conversation about status and how we valued ourselves.
But if we Brits avoid some topics, what about religious people talking about money? Should finance be left to bankers and economists, or are faith people allowed a word too? In my opinion, everyone should be involved in the national conversations about finance - whether talking about the economy, our levels of debt, housing shortages, or new forms of raising capital (such as Islamic finance).
My organisation, the Christian Muslim Forum, recently hosted an event on 'Faith in Finance', which was held a few days after the close of the World Islamic Economic Forum (hosted for the first time in a non-Muslim country and heralding record levels of Muslim investment in the UK economy). The discussion session gave the speakers an opportunity to respond to the practical concerns of a large audience of people working in the City of London and a range of ethical finance campaigners.
Our event opened up the question of how finance can serve 'us', rather than the market, and what wisdom we can find on this issue in our ancient traditions. Like it or not, the way we use our money tells us things about ourselves and each other: "money talks" and it can have some difficult things to say.
Bishop Peter Selby, interim co-director of the St Paul's Institute (our partners and hosts at St Paul's Cathedral on the evening of 5 November) opened the conversation by telling us that the Christian faith is full of wisdom about money. I was particularly struck by his challenging of debt culture (see his book 'Grace and Mortgage'), offering instead one based on giving - 'we are being moved by God into a world of exchange of gifts'.
Debt is a form of slavery and the Biblical message is one of release from slavery, of freeing of captives. It cannot be a mark of a civilised society that it is based on enslavement through debt. Peter Selby reminded us passionately that debt, interest and the slavery of the poor is condemned by God and the prophets in both Christian and Muslim religious traditions.
Tarek El Diwany (author of 'The Problem with Interest' and one of the team behind the documentary 'Why are we all in Debt?') was even more challenging, labelling greed as idolatry and capitalism itself as a religion. This 'idolatry' has taken away the space that should be occupied by faith so that there is no room to talk about justice and economic fairness.
The next speaker was Patricia Alexander, Managing Director of Shared Interest, the UK's only 100% fair Trade lender. She described her organisation as operating on the 'simple but profound proposition of Christian love and justice' embodied in making fair trade loans to people in developing countries.
We closed with Shaykh Faizal Manjoo (head of Islamic Finance at Markfield Institute of Higher Education), who reminded us of the limitations of financial regulation. In Islam usury (charging interest - but with the sense of making money from money - which is inherently exploitative, even low rates) is the main cause of economic injustice, enabling some to profit while others lose out. He told us that 'statistics and academic research from the International Monetary Fund revealed that Islamic banks were least affected by the recent global financial crisis'.
He also highlighted that law does not 'do' ethics (because it cannot) and that ethics are left to the individual, with well-known consequences. Lack of the right kind of financial ethics is a gap in the market. He offered this remedy: 'As a global force, religion has to take the reins so that there is some level of morality in economics'.
Among his suggestions, he raised ideas about:
• Poverty alleviation - a priority in the financial world, for example tax on corporations which could be directed towards poverty relief
• Establishment of endowments (Waqf and trusts) -for research in finance with religious and ethical objectives
• Dialogue with regulators - with religion being a fundamental concern of many in the world's population, regulators need to consider the impact of financial systems on the values and wellbeing of people.
Tarek also said that we should be leveraging the huge resources of faith communities to secure ethical ways of getting people out of debt. The Archbishop of Canterbury's has recently spoken of the importance of credit unions whilst the Prime Minister has promised to make shari'ah-compliant student financing available to Muslim students.
The panel also urged the creation of an attitude of 'giving', reminding us that debt only takes away. The ethical investment offered by Shared Interest is one way of giving to the poor. Returning to those ancient texts, Peter Selby reminded us of the ancient ethical finance and transaction rules laid down in the 'holiness code' of the little-read Biblical book of Leviticus (especially Chapter 19 - treatment of the poor and employees, and the concept of Jubilee - debt amnesty and restoration of assets - in Chapter 25). Patricia Alexander brought this to the present by emphasising that European trade rules have resulted in worsening the economic situation of developing and poor countries (some of which are heavily indebted through international loans).
So what can we do? The consensus during our meeting was that we need to keep talking about the topic, so that people can hear the problem being named and so that we work to reclaim important financial words that are missing from the market - justice and fairness, and especially the lie that is debt. If economic 'growth' is driven by spending on credit, borrowing and more debt, then it is not growth at all.
There was also a strong message that people and communities should be using their money to support each other. Ergo, we need very different financial systems and priorities. This was well-captured in a tweet by our friends at the Faith Based Regeneration Network: 'Act locally; join with others in your community. Start conversations and make things happen which change how finance works.' This was a key concern for Chris Sheldon, Director of Kingdom Bank, an independent Christian bank, who was one of the respondents. The final comment, from Peter Selby, reminded us that 'our accountability is to those whom we cannot see' - those on the margins of society, the enslaved and the poor.
The opinions expressed in this article are those of the author, and do not necessarily represent the views of St Paul's Institute or St Paul's Cathedral.