Neo-liberalism, the Gospel and Trade Justice

Neo-liberalism, the Gospel and Trade Justice

Part I

1. Introduction

This paper is about Christian response to neo-liberal economics. Turning hope into action commits Christian Aid to challenging the "economic orthodoxies currently forced on poor countries [which] weaken and undermine their economies." Neo-liberalism is the philosophy inspiring many of today's orthodoxies. In order to fulfil its objectives of secure livelihoods for all; economic justice for poor people and the strengthening of a movement to eradicate poverty, Christian Aid's work needs to challenge hold of neo-liberal thought - and outline real alternatives. It's in this area that I want to focus today's discussion: responding specifically to the goals in Christian Aid's strategic framework which are about mobilising and educating supporters in Britain and Ireland.

So in the first part of this paper, I will describe neo-liberalism, and then look at why it has taken such a hold on contemporary politics and economics. Sixty years ago, it was only advocated by a small minority of thinkers. How did it build such a powerful coalition of supporters - and are there lessons for those of us who want to mobilise around alternative viewpoints?

In the second part of this paper, I will look at the vision of human flourishing presented in the Gospels - and see the points of contrast with neo-liberalism. I will relate this contrast to the particular issue of Trade Justice.

Later in the seminar, in my second set of remarks, I will look at the practical implications this might have for promoting the Trade Justice Campaign and Christian Aid's wider set of objectives.

2. What is neo-liberalism?

The father of modern neo-liberalism is the economist and philosopher Friedrich von Hayek. His view of the world is very individualistic - and we need to remember that it was forged in the 1940s, in the midst of the evils of collectivism in Nazi Germany and Stalinist Russia. So for Hayek, neo-liberalism is not some kind of cynical theory to justify corporate greed: it is a moral vision of the world, based on a reaction to the evils of the totalitarian state.

Reading Hayek, we are reminded that today's orthodoxy was yesterday's heresy. For in the 1940s, much more egalitarian and interventionist approaches were popular. Indeed, in 1949, one of his essays tries to explain the popularity of socialism - and asks what neo-liberals might learn from this success. Interestingly, he argues that the success of socialism comes from its moral vision:

The main lesson which the true liberal must learn from the success of the socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote.

There are four key elements of Hayek's neo-liberal vision:

1. A negative understanding of 'freedom': 'Freedom' is the absence of coercion by another person. So I can be 'free' without having enough resources to live well.
2. Market economics: The freedom to buy and sell goods with minimal state interference is both a human right and the most economically efficient way of allocating resources. Competition is the motor of innovation and prosperity.
3. The sanctity of private property: The money people earn in a free market economy is morally theirs, and it is an infringement of their freedom for the state to take more of it in taxation than is absolutely necessary.
4. A neutral, minimal state: Freedom is to be exercised by individuals who spend their time and resources as they see fit. It is not the role of the state to promote a particular moral vision or lifestyle: the state simply creates an environment in which individuals can make their own choices.

As you can see, there is an emphasis here on rules and on rights. Neo-liberalism doesn't offer a positive account of human flourishing and of human community. It implies a has a very atomistic view of human beings. That's left to consenting adults to work out between themselves. People are fundamentally consumers, who should be free to spend their time and money on whatever they personally consider to be valuable: the state has a minimal role in co-ordinating wider social goals. People are also understood to be competitive - economics is about the allocation of scarce resources, and it is by selling their goods (or their labour) in the free market that people get control of those resources. Adam Smith, the most famous forerunner of neo-liberalism, remarked that it is not the altruism of the baker that gets us our bread: for neo-liberals, human action is inspired and co-ordinated by the profit motive and the price mechanism.

3. How did neo-liberalism win?

In this next section of the paper, I want to look at how neo-liberalism won the battle of ideas. How does it come about that a minority view in 1949 is the economic orthodoxy by the mid-1980s? From the 1940s onwards, neo-liberals engaged in a concerted campaign to reverse the prevailing political consensus. Through both tenacious organisation, and the failings of previous economic models, they achieved a great deal.

Studying the rise of neo-liberalism over the last six decades, we can see a number of tactics which its supporters used. They may be of use to us when, later in this seminar, we look at the ways in which we might influence the debate today.

(i) Lay strong foundations: The intellectual foundations of neo-liberalism were outlined clearly and forcefully, in works like Hayek's The Road to Serfdom. His work wasn't aimed simply at his fellow academics. Hayek made a distinction between scholars in academia, and intellectuals - journalists, novelists, filmmakers and community leaders. The intellectuals, he said, were vital to the promotion of any political and moral vision.

(ii) Tell a clear and compelling story: The neo-liberals had great success in fashioning a narrative. Through think-tanks and journalism, neo-liberals have ensured their interpretation of events is heard clearly. An example today would be the way neo-liberals represent tje story of the “Asian tigers” as a success for capitalism - in contrast with the failure of the planned economies in post-colonial Africa.

(iii) Practical application: John Blundell's book Waging the War of Ideas uses military metaphors for the neo-liberals' strategy. He explains that, as well as having an 'artillery' which gave the overview, the neo-liberals had an 'infantry' working on a carefully-selected (and not too large) number of policy issues. The big picture was combined with specific and well-researched policies. The rise of the neo-liberals in Chile and the United Kingdom in the 1970s was based on this mixture of a clear narrative and practical recommendations. In response to the economic crises which had faced Salvador Allende and James Callaghan, the neo-liberals had a clear account of what had gone wrong - and made sure their people were in place to recommend alternatives.

(iv) Nurture people: The neo-liberals had a clear strategy in to support scholars in need of tenure and publication, and to set up a network of think-tanks - to make this an attractive career choice for those in each new generation with the relevant gifts. Likewise, the media, writers and the leaders of community were enlisted to promote the neo-liberal vision in the wider world.

(v) Think about group interests: A lesson of the neo-liberals’ success is that the moral and practical case for capitalism found a willing ear in those who would benefit from it financially. It was an entrepreneur - Anthony Fisher - who, on reading The Road to Serfdom was moved to donate the funds needed to found the Institute of Economic Affairs. Part of the reason neo-liberalism succeeded was that, for some key groups in society, it helped them to make sense of their experience, and told them something they wanted to hear.

So the triumph of neo-liberal ideas didn't happen either by accident, or simply because the ideas were powerful and convincing. The neo-liberals were organised - in academia, business and politics. There may be lessons there for us today.

4. The Gospel and Neo-liberalism

What, then, does the Christian Gospel have to say to neo-liberalism? There are many passages in the Bible which speak of social justice, and of the liberation of the poor. They are no doubt very familiar to you - and are used well in Christian Aid's devotional material, and in reports such as Trade Justice: A Christian Response to Global Poverty Here, I will explore the wider theological context.

I want to make three contrasts between the Gospels and neo-liberalism. The first is about the basis of their ethics.

Neo-liberalism is founded on rights. If I do not give my consent, you have no right to take my property, or restrict the way I buy and sell things. I am a free agent, an individual who has the right to choose what I do with my time and money - the right to determine my own destiny.

The Christian Gospel, by contrast, is rooted in communion. True fulfilment does not come from the "choice" of a capitalist consumer faced with an array of different products. Rather, human fulfilment comes from our participation in the life of God, who is Father, Son and Holy Spirit. The mission that Jesus entrusts to his church in Matthew 28 is to call all people into that communion.

The Trinity is central to Christian ethics: it tells us that God is a fellowship of love, and that when human beings live together in love, they are actually living ('abiding') in the divine life. (1 John 4.16) A number of theologians have used this, along with passages such as Matthew 25, to argue for the possibility of 'anonymous Christians' - those who may not assent to Christianity intellectually, but by abiding in such love, are unknowingly abiding in God.

There has been a renewal of interest in the doctrine of the Trinity in the last few decades - and much of this has been due to increased dialogue with the Eastern Orthodox churches. The Russian theologian Federov wrote that “Our social programme is the Trinity. No other goal. The love of Father, Son and Holy Spirit is adequate to us.” Because communion with the divine is the goal of the Christian life, it shapes the way we are called to relate to one another politically and economically. If we are made in the image of God - and if God is a communion - then holiness must be expressed socially, as well as an individually.

Another word for this communion is "charity". Charity, in the older sense of the word, is not about good deeds done by one group of people to another. Charity is a relationship. When we live "in charity with one another" we are living in a way that is mutually enriching. As the King James Bible translates 1 Corinthians 13

Charity suffereth long, and is kind; charity envieth not;
charity vaunteth not itself, [and] is not puffed up

While faith and hope are virtues for the Christian on this side of eternity - "charity" is the one thing that will endure for ever. For it describes the relationship with God and with neighbour for which we have been created. If God is communion, and God creates us for communion - then everything else that we do must ultimately have that goal.

In Divine Economy: Theology and the Market, Stephen Long explores what this sovereignty might mean. Capitalism asks: How does our actions fit with the maximisation of profit? and: Do they fit with economic growth? But, as Long says different questions arise for Christians:

Is charity furthered? Do our [economic] exchanges point us to our true source? Does this fit the mission Christ has entrusted to us? Does it allow us to participate in God's holiness and God's perfections? All Christian churches, orders and vocations cannot be faithful if they fail to ask and answer this question: How do our daily exchanges promote that charity which is a participation in the life of God?

This is a challenging set of questions to ask in relation to Trade Justice. The evidence of Christian Aid's research is that the ideology of liberalisation is not furthering communion. It is impoverishing vulnerable communities, and making an unequal world even less equal - and consequently also less stable. The neo-liberal focus on rules and procedures, and its cavalier attitude to the effect of these rules on the poor, stands in stark contrast to the Gospel call.

Now to the second contrast I want to draw: which concerns our understanding of human nature. Neo-liberalism has an atomistic view of humans, and treats them primarily as consumers, who choose their own values and preferences. It lacks any account of how these preferences are actually formed.

Rowan Williams has wrestled with these issues, in his book Lost Icons, and more recently in a lecture on "Formation" given in East London in April. In it he asked

What if we live in a climate where our emotions are indulged but never educated? That is to say where we never take a thoughtful perspective on how we feel, that brings in other people and their needs ... ... What if our environment is passive to the culture of the global market, simply receiving that constant stream of messages which flows out from producers and marketers? ....one in which we are all flattened out, as you might say, in the role of consumers. ...

Williams' argument is that our preferences are formed - by the way we are educated at home, school and church; by the way advertising manipulates our desires. Capitalism does not simply meet the desires of consumers - it shapes those desires. So neo-liberalism is far from neutral. In encouraging us to treat one another according to the rules of the market, it changes who we are. We are actively encouraged to develop desires it will prove impossible to satisfy. There will never come a time when rich nations feel they have enough - we are locked into cycles of increasing consumption which do not show any signs of making us any happier, but do waste resources in a world where many lack even their basic needs.

It is not only advertising which change us; the environment in which we work also affects our personality. In The Corrosion of Character, Richard Sennett looks at the effect of the "flexible labour market" in the United States.

It has a profound effect on the people who work within it:

"Who needs me?" is a question of character which suffers a radical challenge in modern capitalism. The system radiates indifference. It does so in terms of the outcomes of human striving, as in winner-take-all markets, where there is little connection between risk and reward. It radiates indifference in the organization of absence of trust, where there is no reason to be needed. And it does so through the reengineering of institutions in which people are treated as disposable. Such practices obviously and brutally diminish the sense of mattering as a person, of being necessary to others... Lack of responsiveness is a logical reaction to the feeling one is not needed.

In pushing through trade liberalisation, the World Bank and the IMF are being cavalier about the networks of trust and loyalty which may exist within a society and its previous mode of economics. The market can only function if people display a certain level of trust and loyalty: Sennett suggests capitalism may be destroying of the very qualities which enable it to function.

The third contrast between neo-liberalism and the Gospel concerns their analysis of power. This is perhaps the most pertinent to the Trade Justice Campaign. Neo-liberalism is remarkably quiet about the relationship between wealth and power. (The ideologies of the powerful usually are quiet about these things.) It assumes that markets do not deviate very much from the 'perfect markets' of economic theory. And yet, transnational companies often wield power which distorts the market - just as rich nations force liberalisation on poorer countries, whilst preserving the tariffs which protect their own industries.

The Gospel has a far more realistic analysis of power. Walter Wink's study of the language of "the world" and "the powers" in the New Testament shows the conflict between the Kingdom of justice and peace proclaimed by Christ, and the Domination System of empire and wealth. The Gospels set up an immediate tension between Jesus and the economically powerful - the struggle that culminates in his death and resurrection. Poverty, for the Gospel, is a manifestation of human sin: not the sin of the poor, but that of a society which has put its desire for finite things in the rightful place of the infinite (hence both Jesus' cleansing of the temple, and his conversation with the rich young man).

Power is almost never given up without a struggle. To campaign for Trade Justice is not simply to advance an intellectual alternative to neo-liberalism. It is to seek a redistribution of power in favour of some of the world's poorest people and nations. As Turning hope into action makes clear, such a transformation will require ongoing mobilisation and campaigning. Part of Christian Aid's work will be to mobilise people in the rich nations - and it is to this issue that I now turn.

5. Implications for campaigning and advocacy

Let me go back to the five ways in which the neo-liberals won the battle of ideas between 1945 and 1979.

· they laid strong intellectual foundations
· they had a clear and compelling story to tell
· they worked on practical policy recommendations
· they nurtured academics and intellectuals who would advocate the cause
· they thought about people's self-interest: what groups would benefit from their message, and how could they enlist their support

Looking at the Trade Justice Campaign, it is clear that on a number of fronts, it is doing very similar things. The publicity materials tell a very clear story about the way in which unbalanced trade is harming the lives of some of the world's poorest citizens. Along with the Make Poverty History coalition, Christian Aid is articulating a clear set of policy demands - and the level of public and media mobilisation behind these is very exciting.

Of course, one of the challenges is that the Blair government, whilst very supportive of ending extreme poverty, remains in the grip of neo-liberal economics. That is why it is much happier to work for the increasing of aid and the cancellation of debt than for the kind of relationships of trade that Christian Aid wants to see. Over the next five years, how might Christian Aid mobilise congregations and volunteers to make sure this part of its agenda does not get forgotten?

Let me offer four initial thoughts for discussion

· Firstly, we need to continue to challenge the myths behind neo-liberalism. There is an increasing amount of evidence with which to challenge the economic as well as the ethical claims of neo-liberalism. We need to enlist the "intellectuals" as well as the "academics" to do this successfully.
· Secondly, we need to develop alternative approaches to economics. The dominance of neo-liberalism is at least in part due to the lack of a perceived alternative.
· Thirdly, we need to equip Christians to apply the faith they confess to the context of their lives. This is the task of "contextual theology" - to take the texts of Scripture, and the doctrines of Christianity, and apply them to the contemporary situation.
· And, finally, we need to convince people in Britain that global justice is in their interests too. The doctrine of the Trinity proclaims our interdependence as human beings. We need to anchor that claim in people's experience - so they understand the effects of global injustice on their own lives.

I will explore these in more detail in my second presentation, but will stop now to enable discussion of this first, more broad-brush section.


Part II

Firstly, we need to continue to challenge the myths behind neo-liberalism. Some of the claims for "efficiency" made by free marketeers are clearly unravelling. Others only continue to be accepted because they are endlessly repeated.

A good example of this would be the relative success of the "Asian tiger" economies and the African economies which went down the road of more central planning. Right-wing commentators continue to claim this as a vindication of the free market - when in fact, a very different interpretation is possible, based upon the higher levels of infrastructure and education in South-East Asia, and the use of protectionism to shelter local industry in the early stages of development.

From Tanzania to California, examples abound of liberalisation failing to deliver the promised results. Sennett's analysis of the effect of capitalism on workers' motivation and sense of loyalty may help to explain this. Neo-liberalism in fact takes too dim a view of human nature - human motivation is about more than the profit motive, and to reduce our transactions to self-interest goes against the grain of human nature. Humans work best, and institutions flourish best, on the basis of trust and moral commitment. Adam Smith knew this, which is why as well a writing The Wealth of Nations he wrote a Theory of Moral Sentiments. The erosion of trust and loyalty in the unfettered market economy may have a heavy cost.

How do we communicate these criticisms, and offer an alternative narrative of events? Hayek talked about the "intellectuals" being crucial to the process of communicating ideas - filmmakers, journalists, clergy; all those who mediate academic ideas into the wider discourse. In exposing the myth of market efficiency, they will play a crucial part.

Satire is one of the most powerful weapons in this process; the kind of satire that moves beyond purely destructive criticism. When I was in America last month, I saw the new film on Enron - part-documentary, part satirical, it is an example of a work that punctures the neo-liberal rhetoric of many corporations, and exposes the accumulation of capital and abuse of power that underlies it. (I'm not suggesting Christian Aid commissions any such films or satires - only highlighting the importance of a dialogue with artists who are challenging neo-liberalism, and making our supporters and churches aware of the literature and films that offer a different perspective.)

Secondly, we need to develop alternative approaches to economics. One of the reasons neo-liberalism continues to have such a hold is that people, however dissatisfied they are with capitalism, feel the lack alternative framework with which to make sense of reality.

I have found Amartya Sen's "Capability Approach" helpful in thinking about these issues. Sen, like the neo-liberals, values human freedom. However, he provides an account of freedom that is based, not on property rights and procedures, but on human flourishing. For people to be free, they need to have the capabilities to lead the lives they value and have reason to value. There is a deliberate ambiguity in Sen's formulation - you can put more or less emphasis on the importance of what people "have reason to value" rather than simply what they do currently value. But Sen's approach could make room for the kinds of concerns I raised earlier, in a way that neo-liberalism cannot.

The Human Development and Capability Association is engaged in some work on how the capability approach might be communicated to what Hayek called the "intellectuals" rather than simply the "academics". At the moment, Sen's work is taught within development studies, but it is less well-known in the other parts of economics and in the wider public debate.

Thirdly, we need to equip Christians to apply the faith they confess to the context of their lives. The privatisation of religion in a secular society needs to be challenged, so that Christians understand their doctrines to have implications for politics and economics. Lay Christians and clergy alike need to be encouraged to link theology to the context of their lives outside the church - to make theological sense of their patterns of work, leisure and consumption. The more Christians are equipped to do this, the more natural it will be for them to see an issue like Trade Justice as a theological, as well as a political challenge.

Increasing understanding of the media is an important part of equipping Christians well. A simple, but creative, example of this is found at Harvard University's Episcopalian Church, where there is a group who meet on a Sunday to read the newspapers together as Christians. Christians need to be encouraged to analyse the language in which issues are framed and people are described, and the background moral assumptions which are made.

And, finally, we need to convince people in Britain that global justice is in their interests too. Christian ethics is not based on a law of duty but an invitation to communion. It teaches that we find our fulfilment in one another - that we are not ultimately competitors in a universe of scarcity. That communion is expressed in the doctrine of the Trinity - and also in our understanding of the church, as the body of Christ. As St Paul says "If one member suffers, all suffer together with it; if one member is honoured, all rejoice together with it." (1 Cor 12.26)

One piece of social action I have enjoyed in East London is broad-based citizen organising. Citizen organising unites institutions of faith, labour and value in some of London's poorest areas. The aim is to build the capacity of such communities to win power.

A striking feature of such organising is that it builds on the existing stories, concerns and interests of local people. People are motivated by more than mere self-interest - but their own needs and flourishing are very much part of the equation.

One difficulty faced when we seek to motivate people to engage with global issues is that they can seem unrelated immediate experience. Of course, that is not true for many immigrant communities in Britain - where people's personal stories will include direct experience of, and interest in, these issues. But there are still many people in Britain for whom global justice will seem entirely an issue about doing good to someone else of whom they have little or no experience.

Motivation may grow if we help people to understand that neo-liberalism has a direct impact on their own lives . This seems like a very good time to be communicating such a message - as people in Britain seem increasingly unhappy with the effects of the market on character and community, even at a time of economic prosperity. Turning hope into action stresses the importance of the World Social Forum, and other ecumenical and secular networks. These can help us draw together the stories of how the unchallenged market damages lives, and diminishes solidarity, at home as well as abroad.

The recent general election highlighted the interplay between domestic and global issues. Anxieties about international security and about flows of migration are signs that in today's world injustice and instability in poorer nations have an impact on life in this country. "Human security" is no longer something rich nations can hope to achieve simply by military and economic dominance. In an increasingly interdependent world, security can only be underpinned by greater equity.

Angus Ritchie
Contextual Theology Centre


References

J. Blundell, Waging the War of Ideas (London, 2003)
F.A. Hayek, 'The Intellectuals and Socialism', University of Chicago Law Review (Spring 1949)
F.A. Hayek, The Road to Serfdom (Ark, London, 1986)
D. S. Long, Divine Economy: Theology and the Market (Routledge, 2000)
A. Sen, Development as Freedom (OUP, Oxford, 1999)
R. Sennett, The Corrosion of Character (Norton, 1998)
A. Smith, The Wealth of Nations
A. Smith, Theory of Moral Sentiments