Futures of Capitalism by Peter Dominy

THE FUTURES OF CAPITALISM: Conference held at the University of Winchester
8th– 9th April 2014 – Report by Rev Dr Peter Dominy

This conference was the culmination of a year-long series of events, organised by the University of Winchester and Winchester Cathedral, conceived in the wake of the Occupy protests, to make a positive contribution to the national debate concerning the reform and renewal of the economy. Unfortunately, the attendance was not high, possibly because of inadequate advertising, but the calibre of the speakers (especially the keynote speakers) was particularly high, and much of the input came from a specifically Christian viewpoint.

The first plenary paper was by Professor Michael Northcott  from Edinburgh University, under the title “The measure you give will be the measure you get, and still more will be given you” (Mark 4.24) : The Creation of Money, the Gift of Good Land and the Future of Love. His paper was summarised as follows :- Paper and electronic money – unlike food or gold – are theoretically unlimited but when they grow exponentially ecologically and socially limited asset prices are inflated – house prices and child care costs are examples of this in the UK. The failure of most academic economists to predict the economic crash in 2008 is because their models of asset prices and money are fundamentally flawed. Early modern political economists such as David Hume and Adam Smith assumed money supply was limited because tied to gold, a limited commodity. They also modeled money-asset relationships in bordered nations rather than in an increasingly global and off-shore economy. When borderless paper or digital money increase exponentially, moral, social and ecological crises follow inevitably because asset prices become irrationally related to human utility. Abundance is a central theme of the economy of the kingdom of God as described by Christ, just as it is the leading descriptor of the redemptive gift of the Promised Land in the Hebrew Bible. The leading social characteristic of exchange in the kingdom of God is love between persons. But according to Christ there is an inverse relationship between love of money and love between persons. Hence the creation of money should be remodeled on the ecology of the earth as characterized by a bordered land (and rain and sunlight) conceived as covenantal gift in the Old Testament, and on the social economy conceived as the reciprocal exchange of love and care between persons in community in the New Testament. (For instance, in the UK the Bristol pound represents an alternative form of paper money based on an ecologically limited land area, and on exchange of real commodities and services originating within this area such as locally grown food, construction and craft skills, and personal services. Money creation in the Bristol pound area more closely resembles the biblical economy of limited land and abundant love than money creation by UK clearing banks.

Shorter papers were then given by Rabbi Dr. Naphtali Brawer on Corporate Repentance.  Referring to the four key elements of repentance in Jewish thought – remorse, resolution for the future, verbalisation, and restitution – he drew attention to the lack of corporate repentance in contemporary society, recognised constraints on corporations like limited liability and responsibility to shareholders, but felt that corporate responsibility needed to be acknowledged, and that it could actually be good for a corporations’ long-term prospects.  Kevin Hargaden, a PhD student at the University of Aberdeen,  spoke about the Irish experience in the period 1994-2008, when it was known as the “Celtic Tiger”, pointing particularly to the great increase in property prices. This highlighted the false conception of land as a commodity to be traded, in contrast with the Biblical view that land belonged to God and was to be used for the benefit of all. Dr. Walter Houston, Honorary Research Fellow at the University of Manchester,  spoke on Justice and Righteousness as the key to the Old Testament teaching on economic issues, and that it was the responsibility of the king to regulate the economy in accordance with these principles.Fr Dermot Tredget spoke about his current research concerning the value of contemplation, as in the Lectio Divina of St. Benedict, as a way of countering the conspicuous consumption of present-day society.

On the second morning we were treated to a fascinating paper by Professor Ken McPhail, a Scotsman on the staff of La Trobe University in Australia, about Business Responsibility for Human Rights and the Future of Capitalism. His paper was summarised as follows :-

The language of human rights is emerging as the generally accepted way that the global community discusses how we as human beings should treat each other (Howen 2005). Over the past few years the development and endorsement of a series of UN Guiding Principles on Business and Human Rights (The GP’s) has placed business responsibility for human rights at the forefront of global corporate governance debates. The ratification of the Guiding Principles by the UN Human Rights Council in June 2011 is widely regarded as one of the most significant, even “revolutionary” developments in corporate governance in a decade (Taylor 2011; Muchlinski 2012).

This talk initially outlines three reasons why the GP’s are considered to be revolutionary. First, the GP’s take the rights of individuals outside of the context of national citizenship. This has been characterized as a shift from national citizenship to global citizenship. Second, the GP’s implicitly question the capacity of states to realize rights. Third, and partially in response to this observation, the GP’s contend that corporations should play a role in the realization of rights.

The GP’s reflect a shift in global governance that fundamentally changes both the assumed relationship between corporations and states and the purpose of corporations that lies at the heart of free market capitalism. The GP’s present the corporation as having a legitimate role in the regulation of nation states and the realization of the substantive lived experience of citizenship that have historically been used to justify the legitimacy of the nation state. Within the emerging discourse on global governance, corporations are cast in a role where they deliver more than profits, or indeed the subsidiary benefits that are assumed to flow from economic growth. Rather, this evolving discourse envisions a role for corporations in realizing the right to health, the right to energy, the right to environment, and so on and also a role in regulating nation states in order to achieve those ends. This runs counter to the theoretical perspective of the corporation that has informed much of our analysis of business to date.

The GP’s thus challenge the way we traditionally think about the governance of corporations and their moral agency. The GP’s contend that in order to realize their new responsibility for human rights, businesses need to introduce new human rights due diligence systems, along with non-judicial forms of access to remedy. Through these practices, the GP’s seek to introduce a deliberative and participative democratic sensibility into the operations of corporations. It would seem that the Guiding Principles, at least marginally, hint towards the democratization of corporations (MacDonald & MacDonald 2010). This talk explores whether these changes coalesce to represent a significant moment in the evolution of Capitalism.

This was followed by a paper from Bishop Peter Selby, presently Moderator of the St. Paul’s Institute in London, on An Alternative to Chaos and Fear. His paper was summarised as follows :-

This paper will argue that the human and planetary future is dependent on recognising the departure from faith which the structure of late capitalism represents, particularly in the way in which its monetary system is now operating. Because that structure tends towards chaos and fear, an understanding of what is at stake is crucial if necessary reforms are to engage our imagination and release our energy for change. In this paper I am arguing that in particular, some attitudinal shifts are needed that would challenge our individual and corporate behaviour. I shall seek to describe those shifts in what follows. In summary, what is required are: 1. A radical change in the public’s attitude to the consequences of the way in which our present market economy is working. Those consequences are no longer simply disadvantages which can in principle be outweighed by the increased prosperity that capitalism is claimed to bring or the difficulty of envisaging alternatives, but are unacceptable irrespective of either of those considerations. 2. A radical reappraisal of the form that money has taken especially in recent decades.

a. The production of money as an initiative of corporate entities, especially banks, is inherently unstable.

b. The result of that instability is a massive increase in the importance of money in people’s lives, with a resulting increase of fear for the future and resort to gambling strategies (whether so named or not), as a result of which life comes to be seen as a frightening gamble.

c. This amounts, in theological terms, to the recognition that money has acquired the characteristics of an idol; the unmasking of that idol is the prerequisite of significant social and economic change.

3. The reassertion by those who profess faith of its economic outworking. The theological contribution to 1. and 2. above is to rediscover the expression of faith in God as one who offers a different economy, specifically one who replaces chaos and fear with mercy as the guiding economic (that is, household ordering) reality. (This is the subject of a forthcoming book.)

In a formal  response to this paper  Dr. Malcolm Brown, Director of Mission and Public Affairs for the Church of England, said that he basically accepted Selby’s prophetic vision. The problem was the implementation of such a vision. In his opinion, such visions cannot be implemented dramatically. We live in interim situations, where issues are “dynamatic”. For actual change to take place, we need to work for a changed moral outlook.

There were then two more short papers, the first by Dr. Peter Heslam, Director of Transforming Business (Cambridge) and the Entrepreneurial Leadership Initiative (Oxford), who spoke on The Spirit in Capitalism : The Practical Wisdom of Religious Asceticism. The essence of this paper was that, in line with Weber’s thesis, those motivated by the asceticism inspired by the Protestant ethic still have a role to play in the removal of poverty and the development of effective business. He spoke particularly of the entrepreneurship being demonstrated in the 21st. century by representatives of the Pentecostal and Charismatic churches that are spreading round the world. Edward David, a consultant at the Said Business School, Oxford, reflected on the extent to which a business can exercise religious beliefs, looking particularly at the present situation in the USA, where some Christian businesses are claiming exemption from the requirement in the Affordable Health Care Act to provide contraceptives, abortifacients and sterilization procedures for their employees. Opponents are arguing that the businesses, whoever owns them, are essentially profit-making institutions, making it impossible for them to develop a corporate religious conscience. The question is about how people bringing their sense of religious vocation can express this in their workplace. Is it to be discerned in the views of the owners, or the employees, in founding documents or in policies ?

In one of two closing presentations, Professor Rebecca Todd Peters of Elon University, North Carolina, and a member of the Faith and Order commission of the World Council of Churches, spoke on the theme of Solidarity Economics (the title of her latest book). A summary of her paper is as follows :- An ethic of solidarity offers a moral foundation for building a new set of economic, political, and social relations that respond to the very real needs of a planet in crisis and a human community where half of the population lives in poverty. When solidarity is understood as the voluntary action of individuals and groups working together across lines of difference toward a common good, it represents a different paradigm for thinking about and modelling human behaviour and relationships than capitalism. A moral norm of solidarity that promotes sustainability, the social well-being of people, and social justice would make it less likely to create labour and environmental policies that exploited or harmed people and the environment. Furthermore, these theological principles would also translate into economic policy that had a different set of assumptions about the nature of both economics and markets than the assumptions that guide free-market capitalism.

This was an inspiring picture, but, unfortunately, it did not make practical proposals about how it could be implemented.

The final presentation was by Professor Richard Werner, Professor of Interanational Banking at Southampton University, spoke about the central role of interest (usury) in our present economic system and the creation of money (as loans to be repaid with interest) by commercial banks. This was a very comprehensive paper, giving the most thorough negative critique of interest that I have heard in purely economic terms. No  summary of the paper could possibly do it justice but I am hoping to be able to acquire a copy..

It meant that the conference ended on a very high note. The question is how all these substantial contributions can be shared with a much wider audience.