Time for us to challenge the idols of high finance
Tuesday 1st November 2011
It's
sometimes been said in recent years that the Church of England is still
used by British society as a sort of stage on which to conduct by proxy
the arguments that society itself doesn't know how to handle. It
certainly helps to explain the obsessional interest in what the Church
has to say about issues of sex and gender. It may help to explain just
what has been going on around St Paul's Cathedral in the last couple of
weeks.
The protest at St Paul's was seen by an unexpectedly large
number of people as the expression of a widespread and deep exasperation
with the financial establishment that shows no sign at all of
diminishing. There is still a powerful sense around – fair or not – of a
whole society paying for the errors and irresponsibility of bankers; of
messages not getting through; of impatience with a return to 'business
as usual' – represented by still soaring bonuses and little visible
change in banking practices.
So it was not surprising that initial
reactions to what was happening at St Paul's and to the welcome offered
by the Cathedral were quite sympathetic. Here were people – protesters
and clergy too, it seemed – saying on our behalf that 'something must
be done'. A marker had been put down, though, comfortingly, not in a
way that made any very specific demands.
The cataract of
unintended consequences that followed has been dramatic. The Cathedral
found itself trapped between what must have looked like equally
unpleasant alternative courses of action. Two outstandingly gifted
clergy have resigned. The Chapter has now decided against legal action.
Everyone has been able to be wise after the event and to pour scorn on
the Cathedral in particular and the Church of England in general for
failing to know how to square the circle of public interest and public
protest.
There will be plenty of post-mortems, no doubt. But
before we indulge too quickly in yet more satisfying indignation, we
should keep two things in mind. One is what I began with. The Church
of England is a place where the unfinished business and unspoken
anxieties of society can often find a voice, for good and ill. And if
the Church cannot find ways through, that is not an index of the unique
incompetence of the Church so much as of the extreme sensitivity of the
matters in hand and of the fact that they touch us deeply, in ways that
can't be solved – even by the ablest and wisest – in short order. The
second is that we are at risk, in all the excitement of personal crises
and dramas, of forgetting the substantive questions that prompted the
protest in the first place.
As I said, the demands of the
protesters have been vague. Many people are frustrated beyond measure
at what they see as the disastrous effects of global capitalism; but it
isn't easy to say what exactly we should be doing differently. I
believe it is time we tried to be a bit more specific.
There is
help to be had from a bold statement on our financial situation emerging
last week from the Vatican. This document, from the Pontifical Council
for Justice and Peace, is entitled 'Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority'.
It contains, along with some sharp critical analysis a rather utopian
vision of global governance and regulation. But, more importantly, it
offers three quite specific recommendations that seek not to change
everything at once but simply to minimize the damage of certain current
practices and assumptions in the immediate future.
One is
something we have now heard clearly from many sources – a plea now
endorsed by the Vickers Commission that routine banking business should
be clearly separated operationally from speculative transactions. The
rolling-up of individual and small-scale savings into high-risk and
high-return adventures in the virtual economy is one of the more obvious
danger areas in the light of recent years. Early Government action in
this area is needed.
A second plea is for the recapitalization of
banks with public money to be accompanied by obligations on the banks to
help re-invigorate the real economy.
But the third suggestion is
probably the most far-reaching. The Vatican statement strongly backs
the proposal of a Financial Transaction Tax – a 'Tobin Tax' or,
popularly, a 'Robin Hood Tax' in the form in which it has been talked
about most recently. This means a comparatively small rate of tax
(0.05%) being levied on share, bond, and currency transactions and their
derivatives, with the resulting funds being designated for investment
and development in the 'real' economy, domestically and internationally.
The modest rate of taxation conceals the high levels of return that
could be expected (some $410bn globally on one estimate).
This has
won the backing of significant experts who cannot be written off as
naïve anti-capitalists – George Soros, Bill Gates and many others. It
is gaining traction among European nations, with a strong statement in
support this week from Wolfgang Schaüble, the German Finance Minister.
The objections made by some who claim that it would mean a substantial
drop in employment and in the national economy generally seem to rest on
very much exaggerated and sharply challenged projections – and, more
importantly, ignore the potential of such a tax to stabilise currency
markets in a way that would boost rather than damage the real local
economy.
The UK Government currently prefers the model of a direct
taxation of bank assets, and it looks as though that will be their
position at the impending G20 summit. But we need some robust public
discussion enabling us to compare the relative merits of these
structures, to assess the advantage of a co-ordinated approach across
Europe, and to probe how far the Government's preferred option will
guarantee the domestic and international development goals central to
the 'Robin Hood ' proposals.
These ideas – ideas that have been
advanced from other quarters, religious and secular, in recent years –
do not amount to a simplistic call for the end of capitalism, but they
are far more than a general expression of discontent. If we want to
take seriously the moral agenda of the protesters at St Paul's, these
are some of the ways in which we should be taking it forward. The
Church of England and the Church Universal have a proper interest in the
ethics of the financial world and in the question of whether our
financial practices serve those who need to be served – or have simply
become idols that themselves demand uncritical service.
The best
outcome from the unhappy controversies in the City of London's Cathedral
will be if the sort of issues raised by the Pontifical Council can
focus a concerted effort to move the debate on and effect credible and
hopeful change in the financial world. If religious leaders and
commentators in the UK and elsewhere could agree on these three
proposals, not as a fixed agenda but as a common ground on which to
start serious discussion, the struggles and questionings alike of
protesters and clergy at St Paul's will not have been wasted.
| 
