On 5 December, Christian Heritage London and the Jubilee Centre, a Cambridge-based Christian research and policy think tank dedicated to promoting ‘a biblical vision for public life’, co-hosted a seminar entitled ‘Reforming the Monetary System: Christian perspectives on a crucial debate’.
Five panellists were invited to give their perspectives on this hotly-debated topic, especially in the light of the recent financial crisis. The seminar followed the publication of the Jubilee Centre’s booklet Crumbling Foundations: A Biblical Critique of Modern Money by Guy Brandon.
Academics and business people
The panellists, a varied group of Christian academics and business people, including a representative of the IMF, offered their perspectives on how Christians should view the modern money economy. Guy Brandon explained what the Bible teaches about money, laying down various principles. His main argument was that the Bible warns against concentration of control over money, and for the ‘relational’ aspect of the use of money in assuring fair dealings between individuals. Brandon argued that, in today's economy, the creation of money is in the hands of a concentrated banking system. This has led to the call by some to put the creation of money into the hands of government. Brandon warns that this is equally dangerous, because history has shown how governments can use the control of money to oppress their people or else succumb to the temptation to print too much of it, thereby debasing the currency and provoking runaway inflation (Weimar Republic).
Conflict of interest
One panellist pointed out the intrinsic conflict of interest embedded in the modern banking system.
Banks engage in lending to individuals and businesses, which can be risky. They also control the payment system which business, government and individuals use in their monetary transactions. In times of crisis, when boom turns to bust, the failure of a bank’s lending to business can threaten the bank's payment system business. Governments naturally feel compelled to step in to rescue failing banks, for fear of the contagion it can cause to the payment system and customer deposits. Hence recent regulatory changes significantly increasing the capital that banks must hold against their risk assets and the proposal in the UK to create so-called ‘ring-fenced banks’ which separate banks’ risky capital market activities from their basic payment services and retail lending businesses.
Another panellist supported Brandon’s call for Christian support for alternative currency systems such as Bitcoin and projects such as the Bristol pound creating legal tender for transactions within small communities, in order to reduce the concentration of control of currency. It was acknowledged that solutions for dealing with the downside of such alternative currencies, such as fraud and money laundering, needed to be developed.
One panellist, while expressing himself as ‘not a fan’ of the banking system, argued that banks are simply doing what they have been asked to do, which is to collect deposits from customers and lend them out to potentially risky borrowers, while promising to provide deposit customers access to their deposits on demand. He argued that blame for lack of reform lay on individual citizens, because any attempt to reform the monetary system would almost certainly result in lower economic growth and higher unemployment over an extended period. He asked if we were truly prepared to accept this consequence for the sake of a more stable monetary system.
The seminar was a useful forum for debating these topics; this writer was encouraged to see that many Christians are involved in the debate.
