Christian Perspectives on the Financial Crash

Christian Perspectives on the Financial Crash

edited by Philip Booth, St. Paul's Publishing, 2010, 191 pages, £12.95

reviewed by Edwards Hadas

This review first appeared in Faith, summer 2010

It is tricky to talk about any economic topic from a truly Christian perspective. The standard professional approach springs from intellectual traditions that are distinctly non-Christian: utilitarianism, enlightenment rationalism, Hegelian dialectic and Marxian materialism. The responses to nearly a century of papal appeals for an economics based on a more Christian vision of society - solidarity broken by sin - have been inadequate, or at least have not created a lively school of thinkers.

Christians have a particularly hard time talking about finance, for three reasons. First, this is one part of economics where there seems to be a longstanding Christian view - the condemnation of usury - but that tradition is probably more harmful than helpful. It is not at all clear how to apply the unequivocal Biblical words to a modern economy. The ubiquity of fiat money (money created by governments and through the credit system) and the expectation of fairly steady economic growth seem to invalidate many of the objections to lending at interest. The Church's doctrine on usury is, like the practice it condemns, largely unfruitful.

Second, it is hard to get or keep a full Christian perspective on questions which are unavoidably technical. Even a quick summary of the recent financial crisis, the starting-off point for the book under review, would require a reasonably sure grasp of such arcane matters as cross-border capital flows, fixed and floating exchange rates, securitisation, bank capital requirements and regulatory arbitrage. Professionals almost never explain or analyse these terms in terms of virtue and vice or solidarity and selfishness, leaving the would-be Christian commentator to face the daunting challenge of simultaneously understanding and re-interpreting the signs of the times.

Finally, a superficial analysis often hides a quite different underlying reality. It is easy to condemn the wild excesses that led up to the crash, but, even in the midst of them, overall the financial system effectively and virtuously helped keep societies together. In finance, greed may hide under the appearance of generosity and generosity under the appearance of greed. For example, it is easy, and in part correct, to mock bankers who defend their practices as "God's work", but a well-run banking system is much more a sign of social solidarity than of untrammelled individualistic greed. The moral commentator has to proceed with care.

Those difficulties help explain why this book is disappointing. None of the 12 chapters could be considered required reading for a Christian interested in understanding what went on and what it should mean.

The introduction by the editor, Philip Booth, is well argued, but is marred by Booth's unquestioning faith in the ideal of free markets. This may be good finance- although I am not persuaded. To me, this line of thought leads only to a peculiarly modest sort of utopianism. In any case, the assumption that social policy will be improved by giving freedom of choice to self-interested individuals is not obviously very good Christianity. Booth's government-out approach is not accepted by most of the contributors, as his quite elegant final summary chapter makes clear.

Booth at least has the virtue of seeing the big picture. Most of the other essays suffer from a narrow perspective, starting with the overly technical description of the causes of the crash by Catherine Cowley. In other essays, there is much talk of usury, but almost no awareness of the underlying economic and social issues, or even of the history of the debate. The many references to charity and solidarity are virtuous but stray pretty far from the theme of the financial crash.

I would make a partial exception to the negative judgment for the contribution of Andrew Lilico, the chief economist of the Policy Exchange think tank. His discussion of usury shows imagination and his moral condemnation of bank bailouts makes sense. Although the argument could have been more refined, it is certainly encouraging to see an economist who works in a mainstream organisation try to integrate belief and finance.


Picture: Tableau de François-Marie Balanant, An allegorical image depicting the human heart subject to the seven deadly sins, each represented by an animal (toad = avarice; snake = envy; lion = wrath; snail = sloth; pig = gluttony; goat = lust; peacock = pride).