Wake-up Call

by The Rt Revd Dr Peter Selby

Posted: 10 Aug 2012

This article first appeared in The Tablet of 3rd August 2012 ©The Tablet

As financial crises dominate the world's news, we are caught up in a rising tide of economic road rage as those who played no part in the 2008 crisis, the world's poor, suffer the most. At the same time attempts to deal with the crisis are placing the constitutional architecture of nation states under increasing strain. As Pope Benedict put it in his 2009 social encyclical Caritas in Veritate:

"In our own day, the state finds itself having to address the limitations to its sovereignty imposed by the new context of international trade and finance, which is characterised by increasing mobility both of financial capital and means of production, material and immaterial. This new context has altered the political power of states."

Three years on, it is a brave person who claims to see grounds for any optimism. The signs that we might learn something that will prevent such events recurring seem to be contradicted by the many signs that the only aspiration is to return to business as usual. Yet there are perhaps, for people of faith, some signs that an unlooked-for consequence of all the flailing about is a questioning of the assumption that religion is private, with nothing to say that might alter the character of the public square. In a situation where it is clear that there is no agreed solution, hardened secular economists are rather more open to new sources of wisdom.

So is a sleeping giant awaking? Among the results of the succession of financial crises of recent years is a growing awareness that within the Christian inheritance are immense resources for reflection and action in connection with our economic life. This awareness is not confined to any one of our communions: Caritas in Veritate, while outstanding in its range and depth, is thankfully not unique. In its 2003 report, Being Human, the Doctrine Commission of the Church of England included a notable chapter on money.

However as well as intellectual engagement with the economy, the present crisis has precipitated the creation - or reinforced the energy -of a number of Christian organisations. I am personally associated with two of them: St Paul's Institute (the outreach of St Paul's Cathedral into the financial sector of the City of London) and the Christian Council for Monetary Justice; both see, in different ways, their years of activity vindicated by a crisis which displays the need for serious reform at the deepest level.

Christians are only one among the peoples of faith with resources of wisdom to bring to bear on the current crisis. Islam's strictures on usury are just one highly relevant example of the searching questions the world's economists need to hear from the world's faiths.

What has unfolded before our eyes is not simply the aberrant behaviour of rogue individuals in the banking sector. It has become clear that a major cause of our economic difficulties has been the ever more intriguing ways found to make money out of money, at an ever-increasing distance from real economic activity. This generated riches for practitioners when confidence was intact, but did not protect the real economy from disaster when the confidence bubble burst. Then a financial sector that was too big to control became too big to fail.

Those who then suffer most are the most economically vulnerable, as is plainly visible in the news from Greece, and will become more and more evident in our own country as the coalition Government's "austerity measures" take effect. As Pope Benedict asserts, we have seen in the crisis and the way in which it has been handled how democratically accountable governments have to defer in their decisions to "the operation of the market", a seemingly impersonal and irresistible force, though in fact operated by persons, often for their own benefit.

Yet, behind these immediate happenings lie more subtle and yet more far-reaching developments that have the deepest effects on our culture and, through that, on our self-consciousness as human beings. The frequency with which we handle money, talk about it, concern ourselves with it, all give it power over our lives. Money has numbers on it, and the numbers are decisive for many of our activities, purchases and choices. Nobody should assume that this does not dull our consciences, corporately and individually, so that ethical decisions which by their nature are complex, nuanced and spiritual become financial calculations.

What has to be grasped, especially by people of faith, is that our ethical convictions only shape our behaviour after repeated patterns of behaviour - in this case about money - have shaped our consciences. As the Church of England's Doctrine Commission put it in Being Human:

"Are we right and is it safe to assume that money exerts no power? Are we right to assume that we use money instrumentally, to meet our needs and desires, without money itself shaping our needs and desires, our sense of what is good, right and true?"

Newspaper money pages full of adverts and often conflicting advice on what to do with our money to secure our pension tell a story of a changing culture in which, no longer relying on the state or our employer to keep us in old age, we become our own providers, and of course are to blame if we fail.

And then there is the debt explosion. As more of our lives - our housing and our education - become debt-financed we are softened up to regard borrowing as an entirely appropriate way to fund our living. All too easily our generation is finding it acceptable to pile debts on our grandchildren and to treat the planet as a credit card. And we have been content to see the poorest, who see buying a lottery ticket as a quite rational "only chance" of breaking out of their prison, effectively funding, through lottery grants, heritage projects and even the Olympics.

The "limitations of state sovereignty" to which Pope Benedict refers have grown in their force but are not in fact new. Our currency notes may still look like promises by the Bank of England to give you a share in the gold in their vaults, but it's many decades since that was the real picture. Fractional reserve banking, the system by which banks only need to have reserves to meet a fraction of the money they have lent, may have been a benign response to the constraints by which traditional economics contributed to the Great Depression.

But "fractional reserve" actually implies "multiple debt": most of the money in the system is actually created by banks, private institutions wanting money to make a profit for them. When, as now, states want to inject money into the system to stimulate activity, they have to do it by buying debt from banks. These private institutions are now responsible for nearly all our money, and nearly all of it is debt. With every increase in the supply of money - for instance through the oil price rises - the debt bubble grows, the opportunities for imprudence and deception increase, and the social dislocation on our streets is witness to what this is doing to us all.

If our behaviour patterns have shaped our consciousness towards money-domination, it is new behaviour patterns that will be the form of our resistance. Naming the idol and its power is a start. Insisting that our congregations see money as a spiritual issue, to be struggled with in Lent, for instance, is another step forward. Joining the Christian Council for Monetary Justice or other campaigns that help us to rehearse for a different world is next. Supporting actions that will rein in the debt explosion and restore to the people and their representatives control over the instruments of exchange is the aim.

When, last autumn, St Paul's Institute published Value and Values, its survey of the attitudes of finance sector professionals, one aspect was enormously striking. While the majority of those surveyed thought they were overpaid, they also admitted that it was the money that kept them in the work. And while they thought deregulation was vital, they also thought it lowered ethical standards. It is this sense of lived contradiction that tells us that we need to stop shouting "greed" and work with the professionals to understand this trap. After all, bankers reflect our values too.

Our slavery to the principalities and powers represented by what money has been allowed to become has to be broken. Among the blandishments of choice that money seems to offer, one choice is often hidden: "You cannot be slave to God and Mammon."

About this author

The Rt Revd Dr Peter Selby is the former Bishop of Worcester. Following his role as part of the Interim Directing Team from 2012-2014, he continues as an adviser to St Paul's Institute.

Tom Sanderson Five Talents - Posted: 10 Aug 2012

Thank you for a good piece. Christians (and indeed other faiths) should certainly be in the forefront of calling for and demonstrating good financial practice. Our concern for the poor, as well as transparency and ethics in doing business, should be distinctive. Wealth creation and using our "talents" should be applauded, but we should not compromise our methods or slip into greed or over-indebtedness. We have addressed many of these issues in our microfinance programmes at Five Talents and managed to help thousands in their journey out of poverty. I think we have lots to learn, sometimes rediscover, in this whole area. See www.fivetalents.org.uk

Gill West - Posted: 10 Nov 2012

We need to support our governments to reassert control over financial institutions rather than complying with their wishes (because they pay so much tax?). Government should issue money not banks - but only if democratic control can be reasserted over governments. Capping political donations would help with this - to allow no undue influence to the well-off the cap should be around 10, rather than the 50,000 some have proposed.