Rowan Williams: Time for us to challenge the idols of high finance

 — Nov. 1, 20111 nov. 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.

Posted: Nov. 1, 2011 • Permanent link:
Categories: News, OpinionIn this article: Anglican, economic ethics, Rowan Williams
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