Reform and renewal: morals in the market place

[odin]

http://www.timesonline.co.uk/tol/comment/faith/article5405073.ece

Like democracy, in comparison with other systems of government, it can be said of capitalism that it is the worst financial system except for all of the rest. Once all the tears and ink have been spilt over the demise of some of our present institutions, we will find that, in one form or another, capitalism is still with us. Fast-growing economies like India, China and others in Asia and Latin America will still seek world markets for the investment of large surplus funds which cannot be absorbed by domestic investment. Oil-exporters and other commodity-suppliers, similarly, will continue to invest in international markets, albeit more cautiously. The question then is not whether capitalism will survive but what form it will take.

The present situation has been caused by banks lending what they have not got to people who cannot pay it back. They have done this beyond the limits of prudence and in ways the complexity of which makes it extremely hard to identify where the buck stops. This has created the double default of borrowers unable to pay back their loans from banks and banks being unable to service their own debts. There is a crisis of confidence in the industry which arises out of mutual suspicion and distrust of one another’s actual position and intentions. The reluctance, for example, of banks to lend to one another is as much a moral issue as a financial one. So is their drawing up the bridge behind them and refusing to lend to their customers when they have themselves been rescued be taxpayers money, actual or potential. Surely, they have a moral obligation to keep the wheels of commerce moving so that even more misery among ordinary people can be avoided.

It is now widely acknowledged that the much trumpeted deregulation of the financial world in the 80s and 90s was badly done. There has to be much better regulation of what financial institutions are allowed to do, for instance in packaging and passing on bad debt to others and in how savings and investments can be protected from unprincipled speculation. Because we live in a globalised situation, an important dimension of regulation will have to be global and this will necessitate the development of global regulatory institutions and mechanisms. There is, however, a strongly moral aspect to the task ahead. Many leaders in the city recognise that the salary and bonus structures of many organisations encourage the kind of excessive risk-taking which has led to the present crisis. We must make sure that the ways in which directors and employees are rewarded does not encourage irresponsibility in the market. At Easter I wrote in this newspaper that, even in a so-called ‘amoral’ market, we can never forget that we are moral agents and responsible, therefore, for our actions. Such a precept is even more important today.

To foster such a moral culture in the market-place, we need to identify values and virtues by which people can live. In the past, British commercial and financial organisations were often characterised by the values of responsibility, honesty, trust (‘my word is my bond’) and hard work. Many of these arose from a Christian vision of accountability before God, the sacredness of work, however humble, and a context of mutual obligation. Along with such values went the well-known virtues of justice, courage, prudence and moderation, which were understood in the light of the specifically Christian virtues of faith, hope and love. Part of our problem has been the whole-scale abandoning of such Christian virtues and values leading to a highly individualistic ‘me’ culture which has instant self-gratification as its principal goal. It is not difficult to see how such a culture leads us to treat other people, whether in our personal or professional lives, as simply the means to our ends, which must be achieved ‘no matter what’. We are all culpable in this respect, whether on a smaller or greater scale. The need now is to acknowledge the value of the other as a person and of the common good and to move on to a recreation of social capital based on trust.

Any renewal of the financial system must be based on a strong moral framework which is itself derived from a Christian ethic of values and virtues outlined above. This is not to deny, of course, that people of other faiths and of none can empathise with and subscribe to such a framework. Nor is it to deny that they can make their own distinctive contribution. What we must never have again is a moral vacuum which allows the worst side of human nature to dominate. Our duty to love our neighbour must take principled form in our life together, social, economic and political.

In the meantime, there is a lot of bandaging to be done. Gordon Brown’s allusion to the parable of the Good Samaritan is very apt. Indeed, we cannot pass by on the other side. If there is to be a process of reconstruction and of renewal in our financial institutions, we must make sure that they survive, even if they are much leaner and fitter at the end of it all. The engines of credit, the life-blood of commerce, must be kept working if smaller businesses are not to be driven out of existence and home-owners out of their homes. It is true, of course that the massive support being provided to the banks by the taxpayer must not be a recipe for business as usual. Rather it must be used to guide the reform and renewal which are essential for the future. It is right, of course, for government to work in partnership with the banks so that credit does not dry up for those who need it to work, study or buy their own home. There must, however, also be direct assistance for those affected by the downturn, especially those who have lost their jobs and may be at risk of losing their homes. It is not a matter of spending recklessly and hoping that this will bring us out of a recession. It must be, rather, the careful targeting of where money needs to be spent and how much and of always maintaining a balance between supporting our tottering financial institutions and those who are the victims of their past unwise policies. Prudence is needed not only by the banks but also in government. This is, indeed, also an opportunity for government and the private sector to work towards a reorientation of the wider economy from an over-reliance on financial services to a new emphasis on manufacturing, high-level education and research and the flourishing of the service-sector.

What though of churches and charities? What is their position in this situation and what is their role? It needs to be said straightaway that one of the tasks of an established church is precisely to bring the moral and spiritual dimension of the crisis to the attention of those in the corridors of power. As long as the nation wants the voice of the church in its counsels, the church should be willing to provide such a voice, always faithful to the good news in Jesus Christ and using the Christian tradition to both affirm and critique different aspects of national life. This is an enormous privilege which should never be taken for granted or lightly thrown away. It is not the task of the Church to tell politicians what to do nor is it to make specific prescriptions for this or that. It is rather to be the conscience of the nation and to set out fundamental spiritual and moral principles by which we can order our lives together and solve problems as they arise. The Church has not always been effective in this task and for that, we need to repent and start again.

On the ground, the churches have noticed already a greater need for pastoral help for those who have lost their jobs or businesses. At this early stage, only anecdotal evidence is available but this indicates that significant numbers are seeking spiritual succour. It is estimated that around 40% of the population will attend church during the Christmas season. They need clear guidance about the moral issues facing us. People, moreover, require space to reflect and to prepare for the next phase in their lives. Churches can often provide the space that people need to think and to pray. Greater support for marriage and the family is a must at this time and, for the poorest, assistance with food, warmth and shelter. Churches can often be a focal point for local authorities and charities to deliver appropriate services to the neediest. Churches and charities are already providing food banks, credit unions, debt counselling and preparation for employment. In one of the poorest areas in our diocese, the Church is the most important community landmark. Its programmes enable people to live with dignity and to take pride in their neighbourhood. Without the church, the community would be needier still.

As this time, it would be easy to forget the importance of philanthropy – both individual and corporate. We should not forget all of those organisations which work on our behalf at home or abroad. It is important, in the current situation, that their work be strengthened. Whether that is in meeting need at home or, for example, in making sure that the Millennium Development Goals for the poorest nations are not forgotten by the still-wealthy nations of the world. One of the characteristics of a new, more responsible and morally-aware capitalism would be what has been called philanthropic capitalism. That is to say a capitalism which feels a responsibility towards local communities, the environment and world poverty and which is willing to translate such a sense of responsibility with action and giving. Marxism failed to deliver on both prosperity and justice. The new capitalism must not be allowed to fail on either front. It should, of course, continue to add value and thus to generate wealth but we must make sure that it is accountable and that its benefits reach even those whose stake in it is marginal. There are some good examples of such responsible capitalism. Let us pray there will be many more.

We can still have a blessed New Year even if it is not as materially prosperous as the last.
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Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached". -Manuel II Palaiologos, Byzantine emperor 1391-1425

[peace_chakra]

Capitalism is good. The world should not turn it's back on capitalism. What is needed is better regulation. Profit by mere specualtion should be discouraged. Specualtion should be controlled very strongly and if possible even wiped out.
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"There's a divinity that shapes our ends,
Rough-hew them how we will."
- William Shakespeare

[thunderbalt]

Nazir-Ali seems to be the best Bishop in the Church in England.

Why is he not the Archbishop of Canterbury, he will be better than that idiot Rowan.