Monday 13 October 2014

Kingdom economics and the problem of growth - By Bethan

BMS produces a wonderful magazine called the Mission Catalyst that professes to be “intelligent comment on faith and culture”.  It never ceases to provoke my mind and stir up action in both my day-to-day life and my relationship with God.  The latest edition (issue 4, 2014) was about the economy.  Surely that’s nothing that Christians have to worry about?  That’s what I thought – well at least I assumed that I could never understand it so why bother? – but I was wrong and here’s a summary of the magazine for those of you who either didn’t receive it or didn’t read it thinking that it was not something you need to worry about.  It argues, very persuasively, that “the neglect of economics is a wound in the side of the church” (Canon Peter Challen).

The first article, “Creating Consumers”, sets the scene: an article about the man who changed the world of advertising from the mind-set of buying what we need that was durable and effective, to the age of brand identity, desire economy and disposable everything.  According to Jonathan Langley (author/editor) this change has not been a “calculated evolution instigated by big corporations, but largely the brainchild of one man.  Edward Bernays.”  Bernays was Sigmund Freud’s American nephew and he used psychology and clever wording to change ordinary peoples’ buying habits.  The advances made in manufacturing during WWI had created the danger of overproduction.  These ordinary buying habits could not keep up with the speed with which goods could be produced.  Advertising, under the tutelage of Bernays would turn into the science of making people desire things that were being produced!  Do we realise that we have been used to prop up an economic system that requires us to keep on purchasing things that we really do not need?  President Hoover even stated that Bernays had created “constantly moving happiness machines”!  In other words, slaves to production.

So that is potentially where the thirst for constant economic growth comes from.  But surely economic growth is a good thing?  Brian Czech, Founding President of the Centre for the Advancement of the Steady State Economy, thinks not and I tend to agree with him.  “In textbook terms, economic growth is increasing production and consumption of goods and services in the aggregate.”  But let’s think back to where ‘things’ come from.  “To put it in the technical terms of ecological economics, as the human economy grows, natural capital is reallocated out of the economy of nature and is converted into consumer goods and manufactured capital.”  So everything we buy has been taken from nature.  That’s not too hard to believe considering we came to this world with nothing and everything we have been provided with for life on Earth has come from the natural environment around us.  So if we are constantly pushing for economic growth, God’s Earth and therefore his creatures who depend on the Earth’s resources are going to suffer.  Czech advocates a “steady state economy” that basically means stabilising population and per capita consumption.  In simple English that means having enough children to replace ourselves and not consuming everything you can but only consuming what is necessary (and this can be argued according to the living conditions in the place where you live but think like this, as Czech does: “Would anyone be driving a Hummer in the kingdom of God?  Or building a McMansion?”)

Another problem that consumerism and constant economic growth brings is that of debt.  “Countries have got themselves horribly into debt, individuals have got themselves horribly into debt and governments have often got themselves re-elected by promising more and more goods and services and by taking themselves more and more into debt…” (Interview with Michael Ramsden)  But I, for one, am confused about how many billions of pounds countries can be in debt for.  For example couldn’t the National Mint simply print more money?  That was my simplistic thinking anyway.  But Canon Peter Challen (Chairman of the Christian Council for Monetary Justice) explains: “money is created not by the state in a transparent way by a national treasury, as people’s money, created and lent out into the system free of interest.  What we have is the commercial banks, who, ever since 1695, have been allowed to create money.  They create credit, which goes out and generates economic activity, and the money associated with that.  But what they don’t create is the money that will pay the interest.  So in order to pay the interest on top of the capital, people have to borrow.  And so we get this incredible exponential growth of debt, slowly and insidiously at first, but then at an incredibly increasingly rapid rate in recent years.”  So this ‘invisible money’ circulates and doesn’t really exist except on paper (well, computers).  But then a rumour comes about and people want to withdraw their money but their money doesn’t really exist so banks go bankrupt so that no one has any chance of getting their money back (the most infamous bankrupting situation has to be the Wall Street crash in 1929).

So is this type of economics the only way to exist?  Canon Peter has a theory that goes against the flow of economic reality today.  When asked about what economics would look like in God’s Kingdom he replied:  “[Kingdom economics] … would have to have the issuance of credit and money as the responsibility of the state and not of commercial enterprises.  I think banks would have to return to their proper role of brokerage.  Of arranging, where there is saving, that that is lent on.  At that private level of lending on people’s savings, you could have interest as a private transaction.  But basically, the income for infrastructure, for schools, hospitals, roads, etc, should be created and lent into the system to generate productivity of goods and services that then repays that money into the treasury, either to be taken out of circulation or, if a new need arises, to be circulated again.  So that you have a reciprocal flow of money against real values.”

Finally, the problem that ever-growing economics has for the world as a whole cannot be ignored; especially not by an international mission agency such as BMS!  Herbert Anders (Editor and co-author of Equomanual: a handbook for a spirituality of economic justice) wrote a paper about neoliberal economics: “an economic approach where the private sector, rather than governments, controls economic life…  The underlying idea of neoliberal economics is to have a deregulated market where the most powerful win all.”  The basic idea being that everyone will profit from the enormous riches created by a small percentage of the world because the capital will be invested in the global market.  Unfortunately, “the wealth ‘trickling down’ to more than 80 percent of humanity from the riches and consumption of its richest 20 percent is more like the crumbs that fall down from the banquet than a fair participation in the meal.”  Anders believes that correcting this problem is not a question of collecting money to share with the poor; rather “it is a question of rules that can guarantee rights of participation in the global market for the more vulnerable players.”  Andy Flannagan (director of Christians on the Left) points out that “‘Free’ markets have led to the collapse of developing world economies.  As history has shown, the weakest are inevitably exploited when there are no laws.”  This explains why the term ‘fair trade’ is creeping into our vocabulary and is perhaps better than ‘free trade’ at creating an even international playing field.

When it comes to changing economics we might all say “but we are just one person/ one church/ one village, how can we change anything?” but Anders cites that there are Christian movements opposing the main financial players in financial activities in the US [and elsewhere].  He also suggests that “[churches] are creating awareness of economic injustice in a manner that could be described as ‘capillary’ – at the local, limited level.  From that consciousness-building grows alternative economic thought and action all over the world.  There is a saying that I have heard and is particularly poignant whilst living in Africa: “If you think you’re too small to make an impact you should try sharing a room with a mosquito!”  A constant buzzing in your local MP’s ear will make a difference.

I’m going to leave you with a very sobering thought from Joseph Stiglitz, an American economist: “The top one per cent have the best houses, the best educations, the best doctors and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 per cent live.  Throughout history, this is something that the top one per cent eventually do learn.  Too late.”

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