The Christian think tank Theos has quite a remarkable knack of producing reports that are both thorough and of an incredibly high quality. I’ve repeatedly covered their work over the last few years, generating a fair amount of interest in the process. What they consistently manage to achieve is work that is utterly grounded in the Christian Faith and is also applied to a range of current issues with rigour and integrity. It is an impressive demonstration that Christianity has the teeth and balls to take on hard-hitters in the secular and political arenas without trepidation.
The latest offering, Just Money: How Catholic Social Teaching can Redeem Capitalism follows the high standards of those before it. Written by the respected Roman Catholic commentator Clifford Longley, it takes a long hard look at the financial crash of 2008 and asks if it could have been avoided if morality had not been progressively sucked out of the banking system in the years leading up to the market meltdown. Longley sets out a vision for how Catholic Social Teaching (CST), with its intention of applying the essence of Christian moral principles to life in society, can offer hope and the chance of redemption for our commercial organisations and economies.
This is meaty stuff and, weighing in at 92 pages, there is far too much content and thought to cover in any great depth in a humble blog post. There are, however, a few themes that are worth exploring.
The brunt of the criticism dished out in this report (and there is plenty of it) is placed at the feet of Neoliberalism or free-market fundamentalism. This ideological belief that neoliberal markets are self-correcting and that any destructive tendencies are self-limiting has proved to be wildly inaccurate. The report describes this approach to economics as the “biggest intellectual mistake this generation has ever witnessed, arguably the world has ever witnessed”.
Catholic political preferences have consistently been shown to be more left-wing, so such criticism is of little surprise coming from the author. But Longley is just as comfortable reprimanding the economic policies of the last Labour government under Gordon Brown and putting down the notion that Socialism, especially when it verges towards Communism with the state taking control of the reins, will provide the antidote. Instead, its collectivist mentality has a centralising and therefore disempowering tendency.
The answer to these two extremes, in Clifford Longley’s eyes, is a via media in the form of Catholic Social Teaching, with its long and established doctrine that embraces markets and wealth creation, but seeks to place at the heart of it the common good where morality and mutual benefit for both companies and their employees and customers are placed at the heart of business and economic thinking.
An emphasis on dealing in terms of the common good is gaining traction in lofty places, partly in response to the epic failures of markets left largely to their own devices. Mark Carney, the current Governor of the Bank of England, speaking earlier this year, made this observation:
My core point is that, just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself… Market fundamentalism – in the form of light-touch regulation, the belief that bubbles cannot be identified and that markets always clear – contributed directly to the financial crisis and the associated erosion of social capital.
Alan Greenspan , former chairman of the US Federal Reserve, who was widely regarded as the neoliberal father of modern free-market economics, had a significant change of heart following the shocks of 2008. Among the factors Greenspan identified that could change economic behaviour – apart from rational self-interest – was morality. In 2013 he wrote:
No human being can avoid the imperative of judging right from wrong. What we feel is right and just reflects our own deep-seated code of values. We rationally codify our introspective view of how our actions will further our values and, therefore, what set of actions we believe, rightly or wrongly, will nurture our lives. The value systems of most people are rooted in religion and culture.
When he talks about religion in an American cultural context, he is implicitly referring to Christianity, and it is leaders who are professing Christians who are now driving this push for morality and values to be placed at the heart of economic structures. Mark Carney is a Roman Catholic, as is Christine Lagarde, the Managing Director of the International Monetary Fund, who quoted Pope Francis this year, saying:
(He) recently put this in stark terms when he called increasing inequality the root of social evil. It is therefore not surprising that IMF research – which looked at 173 countries over the last 50 years – found that more unequal countries tend to have lower and less durable economic growth.
This and other themes from CST are increasingly penetrating economic and political philosophy. Archbishop of Canterbury Justin Welby, who has been particularly outspoken regarding banking reform, has described how Catholic social teachings have been “formative influences of my own thinking in terms of the ministry of the church, and the most powerful one from which I’ve learned and continue to learn”.
Jim Wallis, founder of the Christian Sojourners movement and spiritual advisor to President Obama, is also the Vice Chairman of the Global Agenda Council on Values of the World Economic Forum, and regularly mixes with world leaders attending the annual Davos business summit in Switzerland. His latest book On God’s Side: What Religion Forgets and Politics Hasn’t Learned About Serving the Common Good openly draws inspiration from CST, which offers a set of principles that can protect social capital – shared values and standards such as honesty and trust – from being devoured in the way Mark Carney describes. This model of social capital looks to transcend the power of markets and the reach of governments by holding both them and all of us accountable to the common good. And that means prioritising the common good over profits, defending the rights of workers and, importantly, the incorporation of morality and virtue into economic thinking and practice.
Over the last few years, and certainly up until 2008, the opposite has been in place. There has been a thrust to make economic ideology more rational, removing the human dimension and turning it into a science. Longley writes:
Economists want their subject to be similarly predictive. But they don’t know what to program into their computers, or whether human behaviour is even capable of being reduced to a set of scientific laws.
This point is picked by Ken Costa in his book God at Work. Costa is Chairman of Alpha International and also Churchwarden of Holy Trinity Brompton (HTB). He was also previously the chairman of Lazard, one of the world’s preeminent financial advisory and asset-management firms. Discussing the financial crash, he writes:
For many years, economics has tried to turn itself into a hard, objective science, totally grounded in mathematical equations and, significantly, free from subjective and personal judgement. This apparently gave economists a sense of confidence, reliability and respectability. Economics became totally separate from values, morality, character, relationships or anything concrete, everyday and ordinary. It was about science, mathematics, calculations and equations. The prevailing mindset of the time was that economics was much better for it.
The only problem with this outlook is that it was nonsense. The search for a system that was perfectly rational, objective and logical was the financial equivalent of the Holy Grail.
If there is one thing that should be discerned from the global financial crisis it is that it is impossible to separate the financial from the human. By fragmenting that link, we see that society itself runs the risk of becoming broken and fragmented.
So what does this new future look like that sees the social responsibility of business being far more than the pursuit of profits?
We should not be afraid to ‘Do Morality’ and bring the subject into the public forum. Discussing morality is not the same as moralising. It is not about judgement and finding fault with others: it is a recognition that, despite what some might want us to believe, we are moral creatures. Turning to Costa’s words again:
The reality – the unpalatable reality – is that we, all of us have a propensity to deviate from the common good. Our inclination is to favour the ‘me’ over the ‘we’; to prioritise short-term gain over long-term commitment; even to prefer greed over moderation. Clearly there is an important regulatory role here. However, we should not imagine that regulation in and of itself will cure what Isaiah Berlin called ‘The crooked timber of humanity’. An external support may well correct the worst excess of a tree growing crookedly, but it will be insufficient to straighten it out.
The challenge for the financial world in the twenty-first century is to draw a line in the global sand and encourage more human, and therefore more humane, economic vision. Above all we need to recover a moral spirit that eschews narrow moralising but recovers a more gracious, less legalistic, spirit that recognises our need for a values-based economy. This is the challenge of our time.
When Justin Welby spoke of his plan at an IMF meeting for Britain’s “ambitious” young bankers to give up work for a year and join the “quasi-monastic community” of St Anselm at Lambeth in order to learn about ethics ahead of entering the City, he was directly meeting this challenge. If we are to see a real and substantial shift in the way morality is integrated into business and banking, the change will need to come from the inside, with those at the top embracing the values present in Catholic Social Teaching and a vision of the common good.
If we look to the past, so often it has been Christians who have embraced this vision and played a distinctive role in connecting the financial to the ethical. It is time to see a new generation take on this challenge with conviction and purpose with the aim of bringing about significant and lasting change that works toward the common good for us all.