Ethical capitalism?
On December 7th the Oasis Charities Parliament held a discussion entitled ‘Ethical Capitalism?’
The evening was to be a joint venture with the Occupy London movement who are regularly discussing such issues and seeking a way forward in the way in which we do economics.
The evening was chaired by Steve Chalke and held at Oasis Church Waterloo.
There were five panellists who gave short comments on the question of whether capitalism could be ethical.
First up was a gentleman called Clive from the Occupy Movement. He made it abundantly clear that no one speaks on behalf of the movement; there are no leaders, everything is operated through consensus, giving everyone a voice.
Clive made the case that the unifying thread in the argument that the Occupy movement was consistently putting forward is not a case of capitalism Vs socialism. Instead the problem lies with the systematic and institutionalised incentives to misbehave and play the system in the banking sector. It is the banking and monetary systems, which have become accepted in western capitalist societies, that are the real problem.
He emphasised the need for a values based banking system and the need for people to actually understand the systems that exist. As someone who worked in the city himself, he said that he was shocked by the number of people in the sector who didn’t really understand how things worked or what effect their actions had on wider society.
Clive made the point that banks create money essentially from debt, and because debt grows exponentially, printing more and more money to try and dig oneself out of a crisis is madness.
He ended his brief comments with the hope that when more people come to an understanding of how the current system works, there will also be an accompanying will to make a change and create a system that follows a natural growth path. Like growth in nature, it would grow and then level out. The only things that grow exponentially in nature are bacteria and disease. He finished by claiming that our banking and monetary systems are the cancer at the heart of our society.
John from the Tax Justice Network then spent a few minutes to push home the point that one cannot have economic justice (and therefore and ethical banking system) without proper tax justice.
The core of his message was a call for tax havens to be abolished, saying that they undermine any regulation one could put in place. He said that tax havens reflect neo-liberal capitalism that poses a threat to true democracy and western society.
John said that after much investigation into banks and banking practices he had come to the conclusion that there is corruption in the sector on a huge scale and that vast numbers of dealings would not be profitable as they are at present if they were taxed properly.
For him, tax is where it starts, you cannot create an ethical form of capitalism without significant moves to end the crime of tax evasion.
Ken Costa, the investment banker charged with reconnecting the banking sector with ethics and morality took his turn to speak.
He wanted to be clear that in his work he wanted to avoid stereotyping on either side of the apparent divide between bankers and everyone else who have more ethical concerns. The problem is not as simple as that and the dividing lines are not so clear-cut.
Ken said that he didn’t agree with those who think that the market economy is bad or has ended and it isn’t that the market economy hasn’t had values, it has, but they are the wrong values.
He sees his task as being one that helps the financial sector rediscover the language or morality and ethics and be able to assess what they do according to this vocabulary.
Ken pointed out that the banking system is vital for growth and jobs and that the 20th century had seen its fair share of attempts to work in a different way, all of which failed.
But we need to understand the banking system as being made up of people rather than operating systems and numbers. People making tough decisions about banking and ethics.
He rounded off his comments with the famous quote from Friedman in the 1970’s that the job of business was to ‘make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom’. This was to be a much debated quote over the course of the evening. Ken used it to make the point that what the bankers had been doing, and what politicians had done in the expenses scandal was wrong in the eyes of almost everybody, but it was entirely legal.
So as well as reconnecting the banking sector with the language of ethics, Costa also wants to see a thorough assessment of the legal responsibilities banks and other institutions have towards wider society. Where as there are common moral commitments that combine us as a society, these are not necessarily enshrined in law. They should be, he argued, if our banking system is going to have incentives to behave properly.
Luke Bretherton, reader at Kings College London in theology and politics then took the stage and put forward his vision of what needs to happen in economics and the banking sector.
He spoke about the need for debate on three connected issues.
Love – Luke characterised capitalism as a promiscuous individual going places it shouldn’t go and doing things it shouldn’t do because it’s only imperative is to seek endless return, to expand. Therefore, in this quest of ever increasing growth, it turns everything people into commodities. He spoke of the need for capitalism to settle down and get married, to make commitments to people and build relationships rather than endlessly seeking greater and greater returns. There is a need to see the ecology of relationships in society in both capitalism and social democracy, which rather than seeing everything as a commodity, sees the world and relationships in terms of procedures and management. Both need an injection of love.
Limits – In order to become more loving, institutions need limits. There are many examples of limits to economic activity in the Bible, for example rules against usury, very relevant now in the case of pay day lenders. Every good marriage has limits, if we want capitalism to settle down we must take this seriously.
Power – Luke continued with a plea to redistribute power within the systems we have created. He said that excessively unfair pension remuneration for executives would not happen if there was fair and broad representation of workers, share holders and bosses on the boards of companies. This simple move can have profoundly transformative effects for greater equality.
Tanya, a representative from the Occupy movement spoke last of all. She described herself as an ordinary person who simply found herself in disbelief after she began to join the dots of the economic mess we find ourselves in.
Speaking out against capitalism, she compared it to a balloon, gradually being blown to bursting point. It relies on constant and continued growth. But because we live in an ecologically finite world, continuous growth is impossible.
A small percentage of people profit massively from this system and this ensures that it continues through self-interest. The countries of the African continent are among the richest on earth in terms of natural resources, yet they are among the world’s economically poorest due to having been ‘plundered by capitalism’.
She called for people to begin to consider alternatives to capitalism because things simply cannot continue the way they are.
After these initial comments came a barrage of comments, questions and ideas from the floor, the debate covered various causes, consequences and solutions to market capitalism. The debate was lively and some times heated. Much ground was covered and some genuinely achievable proposals were suggested.
As is often the case with this type of event, many people wanted to have their say and make a contribution.
This also meant that it was difficult to go away with a sense of the way forward, what’s next?
Oasis are aiming to continue the conversation through resources for schools across the key stages, to enable them to discuss economics and the question of ethical capitalism in class rooms across the country.
Over all this was a great event to be part of, sparking much needed thought and discussion amongst people of faith in particular. We must be part of this wider debate if we are to live out our faith in public life. There is a real opportunity, what ever we personally think about market capitalism or the banking system, to help people to think about these issues from a moral standpoint.
If capitalism does need to get married as Luke Bretherton said, the big question is ‘to whom or what?’ as Christians we might want to say ‘to Christian values that can re-introduce the language of morality and ethics to economics as the Bible displays so magnificently’. Others might contend that the Christian message is wholly incompatible with market capitalism. Either way this crisis is a call for Christians to take real notice of biblical economics and work out how we can contribute something meaningful and substantial to this debate.
However unlikely it is that the public at large would accept biblical economics as an answer to our financial problems, simply exploring the possibilities and talking about it can make a real difference as people realise there is such a thing!
The more we become aware of how the system operates, the more we will have the will to make a difference. The more we are plugged in to what our God has to say about injustice and economics, the greater our contribution will be to the ongoing debate and the reshaping of our financial systems.
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