The turmoil in global financial markets caused by the widespread failure of subprime loans in the US, does leave one wondering what would happen if just a small proportion of the £1.25 trillion (that’s right, trillion) in consumer debt we all owe on cards, mortgages and loans in the UK, were defaulted upon or suddenly called in.
But whilst most Christians maintain that charging too much interest is unacceptable, the Church Commissioners, like most of us, are at their happiest when the returns on their own loans – in the form of investments – are being maximised.
How you feel about debt depends a great deal on whether you identify with the lender or the recipient. Many a sermon has been preached using the Parable of the Talents as a justification for getting a premium. But some poorer churches have a different reading. Given that the lender is a ruthless absentee landlord, out apparently only for financial gain, and who puts to death both the servant and his family for failing to deliver a return on his money, it is unlikely that he represents Jesus, they say. The story is really a warning against lending for profit.
The Gospel is about freely giving having freely received. The great driver of growth at Pentecost was cooperation, not competition. So in the current climate the church perhaps has something special to offer if it is brave enough to do it. Often found at the margins, and in less affluent parts of Christianity, is a rich tradition of alternative economic models on which to draw. Co-operative housing, credit unions, investment, pension and insurance schemes from Monasticism to early Methodism suggest there are alternatives where money can be leant not for profit, but for the good of the recipient. And in so doing risk can be carried by communities rather than individuals, and vulnerabilities limited.
Sadly, however, the idea that success means a decent return for lending our cash often remains unquestioned, even in our churches. Indeed, it has steadily replaced other ways of organising economically – and not always with good effect.
State pensions for example were initially set up so that the working population paid directly for the retirement costs of others. But low birth rates, a declining workforce, and increasing length of life led many to the stockmarket, and private pensions, instead. And although more than 1.2 million families in the US live in property occupied through cooperative associations, in the drive for home ownership, sub-prime mortgages were offered instead to those who found it hard to get credit. Since those who took them out were, by definition, in a vulnerable (sub-prime) financial position higher rates of interest were charged to reward the lenders for their entrepreneurial daring.
But with the FTSE now over 1000 points lower than eight years ago, and apparently at the beginning of a bear market, private pensions don’t look like being able to deliver for the last years of many people’s lives. And in addition to those who have and will lose their homes, we are all now suffering the effects of the subprime gamble which has sent the global economy on a downward trajectory.
Perhaps now is the time for all of us to reassess whether wise stewardship is really about the pursuit of profit, or more about the protection of the financially vulnerable.
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(c) Jonathan Bartley is co-director of Ekklesia. This column is adapted from one that first appeared in the Church Times, with kind acknowledgments.
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One group promoting ‘credit for need’ rather than a ‘credit crunch’ is Oikocredit, a worldwide ecumenical co-operative which challenges churches and others to share their resources through socially responsible investments. It is actively seeking new UK investors – www.oikocredit.org.uk