Retrospect: the Credit Crunch

We begin by looking back to the recent financial crisis, and asking about its causes and about what light Christian theology should cast on them.

To some extent, as worldly wise economists observe, the crisis was just another bubble in the natural economic cycle of boom-and-bust, of ‘animal spirits’ getting out of control and over-reaching themselves, of hubris meeting nemesis. The story is so perennial that it has become the stuff of myths. For sure, hubris and imprudence are vices, but sin—like the poor—will always be with us until God’s kingdom comes. The credit crunch may be damaging, but it is a long way short of the End of the World. So let us meet the problem with christian patience rather than unchristian hysteria. That’s the first point.

Christian patience, however, should not amount to complacency. While it does not expect to eradicate sin, its faith in God and hope for the ultimate rectification of things nonetheless moves it into opposition. But what forms should this opposition take? In his book, Good Value,(1) the Anglican priest and former Chairman of HSBC, Stephen Green, argues that bankers—and the rest of us—need to expand our understanding of what is valuable beyond the mere maximisation of financial returns to shareholders. We need to recognise the value of such things as the healthy family lives of employees, loyalty within firms, trust between firms and customers, and the flourishing of local economies and communities. This may not be the sum of the Gospel, but it is surely part of it. Part of the Gospel involves liberating us from the enslaving idolatry of Mammon to recognise and appreciate other, relational dimensions of the flourishing that is proper to human creatures.

How might this expanded appreciation of human goods be brought about? Green finds grounds for hope in the fact that, in his experience, most people are aware that shareholder profit is not the beginning and end of value. Nevertheless, it remains true that institutions appear to find it difficult to pay much more than lip-service to goods that can’t be quantified and measured—in monetary terms.

Thus the Government, in its pursuit of ‘value-for-money’, has reduced Arts & Humanities departments in universities to justifying their existence in terms of their contribution to the tourist and entertainments industries. There is a crying need for the development of a robust account of non-economic goods that can be taken seriously by commercial firms and civil servants in the Treasury, and therefore by shareholders and the electorate.

A third point is made by John Reynolds in his contribution to the collection of essays recently edited by Rowan Williams and Larry Elliot.(2)  Here he locates one of the causes of the financial crisis in the tendency of investment bankers to prefer short-term over long-term value; and he suggests as one reason for this the weakening of the social bonds between firms and their members. Those who work for banks are no longer partners but employees, who can be made redundant at will. Employees respond, quite reasonably, by making no emotional investment in the long-term future of the firm. If this analysis is anywhere close to the truth, then one challenge that the financial crisis poses is that of reversing the culture of reciprocal disloyalty between firms and their members. One could start by pointing out that while the freedom of a firm to shed employees at short notice might seem efficient, the long-term evils that mutual disloyalty breeds confound that appearance. Again, the fostering of mutual care and loyalty (a.k.a. ‘faithfulness’) is not the whole of the Gospel, but it is part it.

Prospect: the Coalition Government’s Cuts in Public Funding

One of the complaints made about current public discussion of the Government’s planned cuts in public funding concerns the media’s carelessness with the data, in particular its over-dramatisation of the issues and consequent feeding of anxiety and anger. The reasons for this, it seems to me, are complex and are not simply attributable to the ill-will of journalists. On this matter, it is important that Christians first play empathetic pastor lest they proceed to play moralistic prophet. One main reason for the hyperbolic and histrionic tendencies of the British press is the intense competition between too many newspapers, all of them based in a single city (London), for a shrinking market of readers. Advertising revenue is declining, with the result that fewer journalists are employed to produce more copy with less time.

Under such conditions, it is no surprise that journalistic carelessness is on the increase. In addition there is the fact that in Britain most newspapers are sold from newsstands, not by subscription, which means that copy-editors are under commercial pressure to attract consumers by screaming at them through headlines. Given these structural, economic conditions, it seems to me that the only way to raise standards of accuracy and interpretation is by means of regulation across the sector as a whole, so that no newspaper is disadvantaged by keeping its journalism honest, the playing-field being level. And since the press has signally failed to regulate itself effectively through various forms of Press Complaints Commission, the time has come for statutory regulation with serious powers of enforcement. Law is not a social luxury; and sometimes sin proves so intractable and socially damaging that only law can curb it effectively.

Naturally, the prospect of severe cuts in public funding raises worries about rising unemployment. Some reckon that the private sector will more than compensate for the loss of public sector jobs; but even if that does prove to be the case, some people will not be able to make the transition and will face many years without paid employment. Therefore, the Christian churches need to reacquaint themselves with the considerable literature that they generated during the economic downturn of the 1980s, much of which argued for the need to upgrade the social status of work that is worthwhile, even when it is not paid. While it is true that faith in God and in his calling can be a vital support for those who lack the esteem of their peers, it remains true that local and social esteem is enormously important, and the lack of it enormously painful. So the churches should also give some hard thought to the kinds of practical arrangements that are necessary to foster such social esteem.

Finally, the withdrawal of public funding raises questions about the future of the communal support of the poor. Christians, with their belief that humans are dependent and limited creatures, all subject to the grace, judgement, and calling of the same God, naturally adhere to some notion of social solidarity. Not everyone else does. Aristotelians, Nietzscheans, and Social Darwinists, for example, don’t have much time for the weak. The influential moral philosopher, John Harris, has recently announced that he does not regard humility as a virtue. Still, if Christians recognise that the stronger have a responsibility for the weaker—and that, since they will always be with us, we need to be patient with them—that still leaves open the pragmatic question of how best to aid the weak without infantilising them.

It also leaves open the question of what are the most efficacious means of keeping the rich invested in state support of the poor, and of whether the universal provision of welfare benefits is necessary for that. The groundswell of support for the creation of welfare state after the Second World War was considerably inspired by the experience of war, in which the upper and middle classes actually found themselves living alongside the poor, whether in the trenches of Picardy and Flanders or by opening their homes to evacuees. What will constitute comparable springs of solidarity in the first half of the 21st century?

Conclusion: Where is the Christianity in the Analysis and Assessment?

Not everything that is characteristic is distinctive. Something may be characteristic of Christianity—integral to it—without being distinctive. Whether it is distinctive is an accident of what it happens to be compared with. More important than distinctiveness, then, is integrity. It is important that Christian ethical analysis and assessment be properly integrated into the basic theological structure of the Christian world-view.

Let me conclude, then, by bringing right to the surface the ways in which the preceding analysis and assessment has been shaped by features of Christian theology and anthropology. First, faith in the one God who is creator of the world, and who loves it, leads the Christian (as it does the Jew and the Muslim) to view all human beings as fellow-creatures, deserving of due respect and care. Abrahamic monotheism generates human solidarity. To paraphrase I John 4.20a: he who claims to love God without loving his neighbour does not know what the word ‘God’ means.

Second, Christians do not collapse value—that is, human good or flourishing—into money. Money may be an instrumental good, but it is no more than that; and if it fails to serve other goods, among them relational ones such as faithfulness, then it ceases to be an instrument and becomes an obstacle.

Third, Christians take the presence and persistence of sin seriously, and are therefore do not become hysterical when its operations are exposed.

Fourth, acknowledging their own sinfulness and moral weakness, Christians will have sympathy even for those whose carelessness with the truth is the part-result of severe commercial pressures or whose poverty is partly due to their own habitual fecklessness.

Nevertheless, fifth and finally, the Resurrection and the eschatological hope that it inspires do not allow Christians to rest easy with sin, but encourage them to take up arms against it—if need be, by means of law.

Nigel Biggar

November 2010

(1) Stephen Green, Good Value: Reflections on Money, Morality, and an Uncertain World (London: Allen Lane, 2009).

(2) John Reynolds, “Investment Banking: The Inevitable Triumph of Incentives over Ethics”, in Crisis and Recovery: Ethics, Economics, and Justice (London: Palgrave MacMillan, 2010).