Simon Barrow

Politics faces an economic crunch

By Simon Barrow
September 26, 2008

One of the chastening realities of commentary on public issues is that you are only ever a deadline away from getting it totally wrong. The latest wave of the global credit crunch, banking and finance crisis (which will certainly be the most costly in history) happened only a week or so after I had filed my latest 'Westminster Watch' column for Third Way, the monthly Christian magazine on faith and society.

At that stage, the chancellor had got into trouble for being a doom monger (he proved right) and the political parties were lumbering up for their conferences in such a way that economic realities looked certain to be the famous 'elephant in the room': everyone knows it's there, but speaking about it won't make it go away or morph into something less big and awkward.

The immediate response to September's developments, which include the collapse of some major banking institutions and the need for American free marketeers to contemplate major public interventions, has been to cast round for villains and talk up the need for confidence in the overall system.

But what it exposes most of all is the fact that our major political leaders have all been heavily swayed by neo-liberal ideology, and all conceive of themselves managing and adjusting an economic giant that none of them control and all of them feed and fear in more or less equal amounts.

The churches, meanwhile are challenged positively to speak a 'new language' about economics, and to invest it with a range of actions that put their mouth where their message is. For as Jesus once commented, "where your treasure is, there will be your heart also."

This is not a natural instinct, however. Under Christendom, the accommodation of institutional religion with governing authority, the churches have largely bought into (literally) the economic status quo. That needs to change. In the past 100 years we have seen that neither unfettered free markets nor a state-controlled command economy can 'work'. But what does it mean for an economy to work?

If we are all, as the New Testament suggests, to envision ourselves as members of a household established on principles of grace, justice, sharing and participation (the word oikonomia links household management with modern economics and with the oikumene, the whole inhabited earth seen as God's gift), then we need to cultivate practices and structures that point towards that - and which declare to the "there is no alternative" ideologues of right and left that there is an economic alternative - one which grows out of real people, real needs, human scale, and the adaptation of structures and mechanisms from those perspectives.

Bodies like the New Economics Foundation (NEF) have long been seeking to encourage, theorise and develop fresh perspectives on the basis of the many alternatives that already exist, from local trading schemes and co-ops right through to taxation on speculation, environmental credit, and major changes in global financial institutions and regulations.

Alongside the large and small enterprise of changing our economic hearts and minds (and wallets), however, sits the democratic political process that must have a role in re-shaping them - but which is often disenfranchised by the globalisation of money beyond accountability.

And so back to the brief reflections I offered on the domestic credit crunch for September 2008's Third Way, before the latest banking implosion took hold. The agenda has just got even bigger again, of course, but the dominant political discourse still has not enough to say that can address the deeper concerns of oikonomia. We all need to play a part in trying to change that.


When America sneezes we catch a cold, the old saying declared. That was in an economic era when the fixed gold price, exchange controls and Keynesian dinosaurs ruled the earth. In the brave new era of globalisation, the instant electronic migration of capital and world stock markets buffeted by turbulence in the USA … not so much has changed.

When chancellor Alistair Darling was honest enough to point out that the present credit crunch may be the worst we've faced in 60 years, there was uproar about the implications of this for the veracity of Gordon Brown’s claim to be ‘steering the ship through the storm’. So much so, that the reaction to his interview in the Guardian apparently caused a dip in share prices and the value of the pound. Careless chatter cost us bills.

But while it’s impossible not to talk about the economy, no one really has anything fresh to say about it. Darling’s prognosis, contrary to the fevered imaginations of commentators left twiddling their pens during by the parliamentary recess, was solidly loyal to the government’s handling of finance, fuel and food. Significantly it also contained no different vision for the future conduct of economic policy.

It’s a fair bet that the British party political conferences will also niftily sidestep the big economic puzzle, just as the Democratic and Republican conventions did last month in the US, in spite of the polls showing that it remains the biggest public concern. For the truth is, our Emperors have no money for new clothes.

In Britain, that’s as true for the Tories as it is for Labour. In fact David Cameron has announced that if he is elected as the country’s next premier, his administration will make the social repair of ‘broken Britain’ their equivalent to Margaret Thatcher’s economic revolution. This is partly a reflection of the post-Thatcher neo-liberal consensus, and partly a way of deflecting attention from the biggest hole in their thinking – one that tax cuts alone cannot resolve, Liberal Democrats might like to note.

Meanwhile, Brown’s battered administration (the only thing anyone in political journalism wants to talk about right now, though I’m trying to buck the trend) is not just on the whipping post for a recession-by-any-other-name, simply by being in power. It also appears to have lost the plot on social policy.

If the 10p tax fiasco made Labour’s grassroots question whether the government really understood its own heartlands, its rejection of a direct payment for fuel-poor families and the dithering over a windfall tax on energy companies produced more parliamentary revolt (petitions by 70 and 100 backbenchers respectively) and public disillusionment. An autumn of discontent now seems assured.

But does Gordon Brown have anywhere else to go? There are snags all round. He has to bear the cost of bailing out the mortgage lending banks, because the option of more people being dispossessed is worse. An open cheque for banking shareholders won’t exactly keep the home fires burning, though.


Third Way subscriptions:

(c) Simon Barrow is co-director of Ekklesia. He blogs at and his website is at The latest book he has edited, Fear or Freedom? Why a warring church must change is published by Shoving Leopard.

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.