– by Simon Barrow: 18 November 2008
Following huge losses during the financial crisis, the Church of England should return to the Christian principles of using material wealth for the common good. No-one is immune from the global economic crunch. That includes the Church of England, which has £5 billion tied up in assets, pensions and buildings.
When the archbishops of Canterbury and York started to sermonise on short-term greed and the failures of market, they were embarrassed to discover that the Church had been playing the system in pretty much the same way as everyone else. Initially, things looked good. Due to its share holdings, England’s Established Church gained hugely from rising oil, gold and copper prices, driven at least in part by speculators. In 2006-7 the Church Commissioners, accountable to parliament, set up a currency-hedging programme, in effect short-selling sterling to guard against rises in other currencies. The C of E invested £13 million in Man Group, the largest listed hedge fund manager. It also has a stock lending programme through JP Morgan Chase and has traded debts, in spite of the Archbishop of Canterbury’s criticism of doing so exclusively for profit. The Church sold a £135 million mortgage portfolio last year.
Then things went pear-shaped. A week ago the Man Group was down 30 per cent in early trading after its profits slumped, potentially wiping £4 million off the value of the Church’s holdings. The Commissioners have announced an average return on investments of almost 10 per cent a year over the last ten years. But most of these are in property and equities, which have taken a hammering as markets have fallen; so future prospects are not rosy. Exposure in banking (HSBC, TSB, RBS, and HSBOS, which has fallen a staggering 90 per cent) and mining (in defiance of ethical advice) is also costing the C of E dear.
It doesn’t have to be this way. The founder of Christianity once pointed out that “where your treasure is, there is your heart also”. Now is the right time for the Church of England to completely re-examine its asset and investment policies and to put its money where its message is. Given the performance of more ethical funds, that would also be a prudent move. Many church groups are involved in alternative economic practices – co-ops, credit unions, ethical investment, fairer trade, local exchange schemes, micro credit, small loans for development, initiatives for monetary reform and more. Christianity, Judaism and Islam all have a history of critiquing usury, unjust profit from interest, and Jews and Muslims have set up non-interest based lending institutions. Globally, churches have an opportunity to use their assets in new and creative ways, for economic change driven by human need rather than by greed. What is needed is the will.
The earliest Christian communities were founded on principles of seeking to use material wealth for the common good, striving for equality and giving priority to the poorest. Today’s churches struggle to be so Christian, it seems. But as neo-liberal ideology quakes before stark reality, the wages of economic spin are proving deadly rather than ‘realistic’.
Simon Barrow is co-director of the religion and society think tank Ekklesia. He is author of ‘An economy worth believing in’.
The Seven Steps, in summary, with short comment, are set out below:-
• First Step:- That there be open, regular and public acknowledgement by state, economists and academia that the present western banking system is an unjust monopoly that creates 97% of the money supply as interest-bearing debt.
• Step Two That interest-free loans (i.e. state-issued repayable money created free of charge beyond administrative and other necessary cost) be used, via community investment corporations and the like, for capital investment needed by the public sector thus enabling such investment to be one half, even one third, of the present cost.
• Step Three That interest-free loans (i.e. state-issued repayable money created free of charge beyond administrative and other necessary cost including loan insurance) be used, on the principles of binary economics, for private capital investment which will create ownership stakes and property incomes for all income groups, especially the poor.
• Step Four That interest-free loans (i.e. state-issued repayable money created free of charge beyond administrative and other necessary cost including loan insurance) be used for loans to start-up and small business for socially desirable enterprise.
• Step Five That, since Steps Two, Three and Four above, while enhancing productive capacity and individual productiveness, are counter-inflationary and ultimately diminish the money supply, debt-free money (state-issued, non-repayable money for public or wide ownership purposes) should be issued for another individual basic income to the extent necessary to keep a stable level of prices. The amount should be decided by a body free from operational control by politicians.
• Step Six That women be addressed as to the role they can play in getting two basic incomes for all individuals throughout the world.
• Step Seven That moves be made to establish The Abraham Society and The Kashmiriat Society. Step Seven uses Steps two to six to find a new long term solution for the problems of the Middle East and Kashmir. A solution is urgent and would be about as clear a gain to the human race as anything could be. Implementation of the Seven Steps will create healthy non-inflationary economies and societies in which all individuals attain a sturdy independence becoming economically productive to the extent necessary to satisfy their reasonable needs.