Oh dear. What can be said of Ann Pettifor’s article in the Guardian on the spiritual meaning of the recent financial turmoil? Is it possible to untangle the different connotations of values and value she writes about? Let us begin our college try with her sermon’s conclusion. “As a first step to applying those social values, we may bring back the ancient truth that usury is a sin.” Ms. Pettifor’s byline indicates she is a political economist so presumably she is familiar with the modern analysis of usury, which Adrian Caldrone succinctly summarizes in the entry on usury published in the Encyclopedia of Catholic Social Thought, Social Science, and Social Policy, Scarecrow Press, 2007, pp. 1102-03. “On the basis of the changed function of money in the modern world the [Catholic] Church no longer considers the charging of interest, in itself, to be an injustice.” And for more on usury controversy, see the quotes from D. Wood’s Medieval Economic Thought under Recommended Books on the right side bar…
It is natural for journalists, sorry, political economists to wring their hands about indebtedness and foreclosure levels in the early phases of an economic contraction when debt is near or above long term averages. It will I suppose be of some comfort to Ms. Pettifor and others who share her fiscal-spiritual worldview to watch debt levels as a percent of income decrease in the coming weeks and months, as they usually do during a macroeconomic slowdown.
Values broadly understood refer to ideals like love, freedom, and justice. Value in an economic sense is a comparative term about the relative worth of two or more goods or services. Pettifor explains that the cause of the current financial “crisis” is the crisis of a society that values capital gains more highly than the rights of people to own a home. Where do we start with this? She conflates values as ideal with value as comparison. Perhaps we might ask two simple questions and then go on a little mind journey. What is the evidence that society idealizes capital gains more than the ‘right’ to a own a home? What comparative measure justifies her characterization?
Now, the mental trip. Granting for the sake of a smooth journey that owning a home is a right, then justice is served for those who own homes and not served for those who do not. If “home owning” justice is an ideal why not build a house or provide an apartment for everyone so they can move in, sign ownership documents, and have all of us live in a just society? Indeed, home ownership is no more a right than my “right” to cross the street whenever I please. Crossing the street, like owning a home, requires evaluation of current conditions, delaying action until the timing is right, avoiding unreasonable levels of risky behavior, but most of all taking responsibility for deciding what to do. Homeowning-as-right involves no active responsibility, only passive receptivity. Home ownership may well be a social ideal or valued state of affairs, but it is also a goal and commodity worth (or perhaps not worth) striving for. It is often a family objective, pursued in an institutional market framework comprised of formal and informal rules, comparisons of subjective valuations, and lots of detailed information that requires personal decision-making about scarcity. Homes are homes but they are also physical structures that are constructed by people and businesses that need to cover costs and that need incentives to attract them into the home building business in the first place. Homes, and therefore “rights” of home ownership, do not grow on trees. They are built, slowly, over time. This implies owning a home is more deliberative process which requires taking responsibility for complex decisions such as what kind of home to buy, where to buy one, and how much present and future income is reasonable to commit to this goal. It also assumes that other people, many, many other people have figured out how not only to build homes but also how to help prospective buyers to finance them as well. This is not sinful. It is commerce and how we get things done. Think about that at home tonight.
I do not mean to say that there is no stain of sin in the modern housing or housing finance industries. There undoubtedly is. But it is always individual, personal, and the result of knowingly choosing the bad. What concerns me about the moral assessment in the Pettifor article, beside the conceptual, economic, and historical jumbles, is the moral condemnation of whole industries encompassing some who behave very badly but also others who strive to do good. Likewise, many involved in these industries, and many homeowners and aspirant homeowners as well, sometimes make good decisions and sometimes make bad ones. But the classification of who belongs in which moral column is for God, not us to decide.
One final thought. If the circulation of the Guardian plummeted and the “right” to many jobs were on the line, would it be appropriate to condemn the sin of shoddy financial journalism as the cause of the crisis? I suspect not.
