The Morality of the Markets

The Chapter House of Lincoln Cathedral, with its extraordinary soaring gothic lines, where the Canons meet, where Edward I held the English Parliament, where the De Vinci Code and the Young Victoria were filmed: this was the setting for our first debate around the subject of the Common Good.

Dr Mark Hocknull, the Chancellor of Lincoln Cathedral, reminded the audience of forty that this was the traditional role of cathedrals, as centres for debate and discussion. The full text of the presentations may be downloaded here.

The airwaves had been filled with arguments over bankers’ bonuses, stripped knighthoods and the never ending demands that ‘the market’ makes on nation states. It was perhaps hardly surprising that Professor David Head began with reference to Dr Rowan Williams’ Dimbleby Lecture in 2002 where he had thrown his spotlight on the loss of power of nation states as a direct result of the free movement of capital across borders. David went on to set the scene drawing on writings about the St Paul’s Protest and importantly the work that had been done by the St Paul’s Institute and its then canon, Giles Fraser, well before the protest took place. Much of this focused on those who actually work in the financial markets and what they actually think. At its centre there stands a blatant contradiction that what motivates bankers most of all is financial reward, but that reward itself is seen by many of them to be far too great.

Questions and comments from the audience followed each speaker and, really following Professor Head’s lead, the first round of questioners covered the well-rehearsed arguments. Markets were vilified as corrupt; justification was found for them the shape of the demands of investors for above average returns; Mrs Thatcher and the big bang were blamed. The complexity of financial instruments and their misunderstood risks: perhaps markets had tried to be too clever. What emerged though was an understanding that markets by themselves do nothing; it is investors who are empowered to make ethical choices.

Lincoln MP, Karl McCartney, extolled plans for free and fair markets, responsible capitalism, enterprise and innovation. From his own experience of working in the city he recalled the active role of city guilds in philanthropy. He pointed his finger at the withdrawal of tax breaks for pension funds in 1997 as the trigger for their demands for higher investment returns. As to the recent crisis, he pondered whether it might have been better to let at least one bank fail; the others may have quickly learnt responsibility.

This time questions ranged more widely. The imperative of care in the community, tax avoidance, the powerlessness of government when faced with massive bonus payments by state owned banks. The previous over confidence in pension funds and the pension holidays employers were forced to take. The almost unbelievable dependence of government on tax revenues from the banking sector, set in contrast with an economy that overall is mainly populated by small and medium sized businesses.

Mark Hocknull sought to draw the strands together and offered a theological reflection. Perhaps the problem was neither moral nor economic, but about process, about strange independent forces? The Tulip Bubble of 17^th century Holland had already been referred to by more than one questioner; Dr Hocknull saw the valuation of things as more than they are actually worth as a constantly repeated pattern in history. He drew on Peter Selby’s introduction to the St Paul’s Institute Report where Selby focussed on the inherent contradiction that we had identified between bankers both knowing they were paid too much but needing the money for motivation. It is as if the system has a power of its own.

As to theology, he explained that the New Testament is set in a world of principalities and powers; it was how former generations made sense of the world around them. Yet, powers can also be social and psychological and it is perhaps these that are at work in the financial markets. Profit has become the product and no longer the result of providing valued services. There is nothing wrong with the accrual of wealth; the problem comes with how it is used: the missing side of Mrs Thatcher’s project was matching generosity. No government since then has had an ideology; what is needed is one espousing a vision of how wealth may best be used for the good of all.

The final group of questions followed this shift from whence the wealth came to its use. Mention was made of Bill Gates’s declared intent to give away essentially all his wealth, of Warren Buffett’s wish to pay more tax, of the way that philanthropy does go on but quietly. There is a fundamental problem of measurement. We assess value by counting money; there seems to be no way of counting social and cultural values. But where is the debate leading? Dr Hocknull concluded by suggesting that things only change when there is a head of steam; it is matter of people starting to recognise some of the things they truly want so that they may be articulated in the political arena. We are each other’s keeper; we must start to put humanity first.

Phil Hamlyn Williams
Chapter Clerk Lincoln Cathedral
3 February 2012

The text of the three talks by Professor David Head, of Lincoln University, Karl McCartney, MP for Lincoln and the Chancellor with be available on the cathedral website www.lincolncathedra.com