One of the main things I'm doing here is trying to fashion a defence the financial industry, sometimes as it is, sometimes as it could be, from a Quaker and libertarian point of view. It feels an outlandish task, since an antipathy to finance seems common ground held comfortably. I want to win back this common ground, in as honest and sympathetic way as I can, for many reasons. But two will start. First, this antipathy is new: early Quakers were not merely involved in finance, they helped to build the very institutions we now query - including Barclays and Lloyds, and Gurney (of Overend,Gurney fame/notoriety). Indeed, the financial involvement, and success, of early Quakers got up the noses of other radicals (including William Cobbett and Tom Paine). Were these early Quakers simply being unquakerly?
The second reason is far more important: finance is an extraordinarily important part of the framework-setting within which much of humanity succeeds or fails - so it's got to be done properly. At the moment, it's not being done properly, and I think Quaker voices should be raised to help it be done properly. More, I'd like to see Quakers begin the reconstruction of a financial system themselves, building better, just like the Barclays, Lloyds and Gurneys did before them. It is not too late, and certainly not too early, to start refashioning a financial system that serves humanity rather than itself.
Over the coming weeks I'll share my effort to untangle the good from the necessary from the downright pernicious. I know it'll be an uphill struggle. After all, I've read 20.63: 'So much has the public conscience been warped from the living Truth that a man who has acquired wealth by operations on the Stock Exchange is spoken of as having 'made' his money regardless of whether any useful purpose has been served. . . . '
Actually, I think the 'public conscience' is in a much worse state than that. Today's Sunday Telegraph carries the quite extraordinary story that - and here I'm quoting, m'luds - 'The Financial Services Authority did nothing to prevent Icelandic bank Kaupthing from setting up British retail operations eight months before it failed because it thought taking personal deposits would help boost the bank's faltering liquidity.'
The crucial word in that sentence is 'because'. Frankly, one doesn't expect regulators to be the sharpest tools in the box, an assessment fully justified by the fact the FSA's regulators allowed Northern Rock, a deposit-taking institution, to run a loan-deposit ratio of 500%+. But even the frankly dim can be expected to know theoretically why they are there. Financial regulators are there to protect the depositors in opaque financial institutions such as banks, from the danger the greed and folly of those institutions exposes them to. In this case, however, it seems that the regulator sought to protect the financial institutions from the consequences of their own folly, by using the blind-sided depositor as a sort of ignorant financial shield of last resort. This goes beyond stupid, and indeed beyond dumb complicity, but puts the FSA into the realms of accessories before the fact. The depositors were mown down by friendly fire.
The head of the FSA at the time was Callum McCarthy. He was knighted in 2005 for 'services to finance'. Enough said.
I seriously want to master my anger at such dangerous and negligent insouciance. So let's just say that when the official mind has so grievously misunderstood the nature of finance, and is seemingly intent on compounding that misunderstanding at our expense, these may be fertile times to develop a new vision.
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I have had several interesting conversations with fellow Quakers about this blog since you started it. There's definitely a sense out there that Quakers should have some more thought-out response to financial crisis, precisely because of the history you mention.
ReplyDeleteBroadly speaking, two responses dominate. Firstly, I am reminded that financial institutions can take many forms and that the current establishment can be opposed wholesale without throwing the baby out with the bathwater. So microcredit and community-based currencies are cited as effective instruments for local transformation, for example. Moreover, at various meetings where these issues were raised at Britain Yearly Gathering, we were urged to move our money to co-operatives. Indeed, I recently switched all of my banking to the Co-operative Bank in response to that exhortation.
The second response has been that the 'right ordering' would be to establish a concern and develop new ideas about finance within Quaker structures. But I'd prefer you to keep this as a blog...
Thanks for this. Yes, I want to try and develop the argument slowly and in detail - which I suppose is why I started out at the ethics of growth.
ReplyDeleteAs will become clear, I have a lot of sympathy for the idea that the current establishment can be opposed wholesale without throwing out the baby etc. My belief is not only can it be, it must be and most probably will be. In short, that there is a great opportunity right now to reinvent finance, both domestic and national, and not necessarily merely by micro-credit etc, but rather with bigger changes which can encompass that.
And you're also insightful that because I feel the need to develop and elaborate this from the ground up, for the time being I prefer this sort of forum. My experience with the Quakers and Business meeting told me I probably didn't have the patience to work so hard against the grain. This is a failing, I know. But I do think this is important, and I don't want my personal shortcomings to get in the way. . .