Sunday, 20 June 2010

Banks, budgets and the Archbishop calling for unethical behaviour


Every now and then national newspapers – in what I guess is some form of social service – hand over prominent columns to senior churchmen. Mostly the resulting mushy thinking can be ignored or ridiculed in the same manner we treat thought for the day but sometimes the opinions expressed are thoroughly disturbing.

The Sunday Telegraph published a column penned by the Archbishop of Westminster – England’s top catholic priest – in which he urges the banks (or more specifically the leaders of banks) to behave unethically.

A key part of the change needed is to forge a cultural consensus in the financial sector that its licence to operate depends on a clear and demonstrable commitment to service. Of course, profits have to be made if an efficient and thriving financial sector is in fact to serve society. But the ethical judgment, which has to be transmitted right through the organisations concerned, is that profit must only be a means to this end, and not an end in itself. We have a long way to go to achieve this.

What the priest is saying is that managers within banks should make decisions that are not about securing the maximum return on the capital invested in the business. So what, I hear you all saying? This is wrong – not just against the interests of the business but straightforwardly unethical. Those managers – however much they are paid – are merely agents of the business owners. And the business owners require that the business focus on maximising return on investment (I know this because I am one of those business owners).

Secondly this priest says that financial organisations operate only under licence. Where on earth he gets this idea from (perhaps it comes from on high) but it is again suggesting that there should be some other relationship of significance beside those between owners and managers and between the business and its customers. Again it is unethical to suggest that a business should only operate under some unspecified entitlement rather than as a consequence of the free use of property.

The article then descends into typical priest-speak about social justice, equality and demonstrating a profound ignorance of economics and the point of measuring economic performance. And up pops the mushy thinking:

A great deal of the support which any government needs in such difficult circumstances will depend on the extent to which it is seen to be acting impartially and prudently, with a demonstrable care for basic human needs and a continuing sense of our responsibility in the wider world. A powerfully positive message will be sent if in Tuesday’s Budget the overseas aid programme to assist the development of the world’s poorest people is not cut.

Sorry Archbishop but the support for the government will come if it’s seen to be sorting out the mess – that’s it really. Where it matters – the bond markets, the stock exchange, the real economy – the positive response will come if the deficit is eliminated and the debt begins to fall. And not giving India £300 million thereby allowing them to buy up our manufacturing industry might be a good start towards achieving that aim.


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