Archbishop of Canterbury Opens Trinity Wall Street Economics ConferenceJeff WaltonFebruary 5, 2010
Amid the backdrop of an ongoing economic recession, Archbishop of Canterbury Rowan Williams gave the keynote address at the annual conference hosted by the Episcopal Church’s affluent Wall Street outpost. “Building An Ethical Economy: Theology and the Marketplace” was the 40th annual event hosted by Trinity Wall Street’s Trinity Institute.
While Williams warned against materialism's dangers, his respondent, a former Wall Street Journal editor, warned against theologians who ignore the moral need for wealth creation.
Speaking of “rescuing the concept of civic virtue,” Williams argued for a connection between theology and economy, saying that not all motivation was economic. Williams said he was against the idea that the most basic relation between one human being and another is that of the “carefully calibrated exchange of material resources.”
“Economic exchange is one of the things people do,” Williams said. “Treat it as the only ‘real’ thing people do and you face the same problems that face the evolutionary biologist for whom the only question is how organisms compete and survive or the fundamentalist Freudian for whom the only issue is how we resolve the tensions of infantile sexuality.”
Williams said that being a “human self” is learning how to ask critical questions of one’s own habits and compulsions so as to adjust actions in the light of a model of human behavior that represents some fundamental truth about what humanity is for.
“A theory that wanders too far from these basics is a recipe for damage to the vulnerable, to the regularity and usefulness of labor and to the possibilities human beings have for renewing (and challenging) themselves through leisure and creativity,” Williams said.
The former Oxford and Cambridge academic said that this was the kind of damage that resulted “from an economic climate in which everything reduces to the search for maximized profit and unlimited material growth.”
“The isolated homo economicus of the old textbooks, making rational calculations of self-interest, has been exposed as a straw man: the search for profit at all costs in terms of risk and unrealism has shown that there can be a form of economic ‘rationality’ that is in fact wildly irrational,” Williams said.
The Welshman said that theology does not solve specific economic questions, rather it offers a “robust definition of what human well-being looks like and what the rationale is for human life well-lived in common.”
“To separate our destiny from that of the poor of the world, or from the rejected or disabled in our own context, is to compromise that destiny and to invite a life that is less than whole for ourselves,” Williams said.
“Faith educates us in dependence and in the authority of the giver at the same time; and in our current climate, this particular balance is one of the hardest to achieve,” Williams said. “But if our economic life is indeed ‘one of the things we do’, it will be marked in its actual operations by just the same constraints and buried rhythms or tensions that appear in other aspects of what we do. If theology has something to say about those rhythms and tensions, it has something to say to economics.”
Williams believes that what theology has to say to economics is that people have a “proper interest” in integrity, what he described as being recognizable and answerable to ourselves from moment to moment.
The Anglican Communion leader acknowledged that regulation alone is ill-equipped to solve problems.
“The issues need to be internalized in terms of the sort of life that humans might find actively desirable and admirable, the sort of biographies that carry conviction by their self-consistency. And this means recovering the language of the virtues,” the Archbishop said. Williams said this included “bearing one’s own scrutiny” – being able to look at one’s self without despair or contempt.
Williams stressed mutuality as crucial to public discussion of economics.
“But we need also to look with the greatest of care at what is being assumed and what is being actively promoted by our economic practices about human motivation, about character and integrity,” the Church of England primate said.
Williams said that theology does represent a ‘separate’ frame of reference, one that does not depend on how things turn out in this world for its system of values. He said this is why theology is not in competition with other sorts of discourse.
“But that is also why it is so important – so indispensable, a believer would say – a register for talking about such a range of activities,” Williams said. “It recalls us to the idea that what makes humanity human is completely independent of anyone’s judgments of failure or success, profit or loss. It is sheer gift.”
Following his presentation, Williams heard from three respondents. A vigorous critique was offered by economist Susan Lee, who agreed with Williams’ ethical call, but emphasized the need to “grow the economic pie” in order for affluence to spread.
According to Lee, theologians, especially on the left, tend to emphasize the distribution of wealth – how fair it is – economists tend to emphasize the generation of wealth – how we can combine scarce resources in more productive ways.
“I agree with economists,” Lee said. “Generation and distribution [are] both very important, but I think our crucial concern has got to be the generation of wealth.”
The former New York Times and Wall Street Journal editorial page editor argued that economies either must generate more wealth, so that there is more to redistribute, or, at the very least, sustain the same level of wealth.
“If an economy doesn’t generate more or sustain wealth, then it has a shrinking pie for redistributive purposes and possibly even stands in danger of collapse,” Lee explained.
The journalist said despite the fact that “in theory” it is possible for theologians and economists to agree, “in practice, they seem to live on two different planets.”
“Perhaps the biggest gap comes in assumptions, most importantly how theologians use economics like a Chinese menu; they like to pick and choose,” Lee said. “When they look at capitalism, theologians often assume there can be profits without private property, work without incentives, enterprise without income inequality, investment without market rates of return. Or, to get really specific, theologians assume that you can have the invention of medical marvels like pacemakers without the development of unnecessary consumer products like 37 brands of breakfast cereal.”
Lee compared this practice of picking and choosing to the theological practice of some Christians “who assume there can be forgiveness without atonement, Christ’s divinity without his bodily resurrection, or even the beauty of the Psalms without the rigors of Leviticus.”
Lee said this act of choosing what one likes and discarding what one does not did not make sense. Economics, just like Christianity, is an integrated system, Lee declared, saying its operation depends on interlocking parts.
“The habit of picking and choosing means that many theological discussions of economics take place under a cloud of incoherence, or at least to economists, ignorance,” Lee said, suggesting how theologians could better sharpen the discussion.
Lee shared about how she was en editor on the New York Times op-ed page during the fall of the Berlin Wall.
“This event generated enormous discussion about the ‘peace dividend’, which was the notion that now the U.S. could cut back on expenditures associated with the cold war, and there were great gobs of money now that could be re-deployed,” Lee said. She described hundreds of op-ed submissions to the Times from religious leaders about the ‘peace dividend’.
None were published.
“Why?” Lee asked. “Reason one: really bad timing. The fall of the Berlin Wall was the triumph of democratic capitalism. The socialist system of the Soviet Union simply collapsed from within. Its economic pie had shrunk to a sliver. It was precisely the wrong moment to suggest, as many religious leaders did, that socialism be reconstituted in the U.S., by increasing government spending to redistribute wealth.”
Lee said that secondly, the language of theologians tends not to resemble everyday speech.
“If you are sitting in a church pew, as you are, you will probably have some sort of idea of the meaning of ‘radical abundance’ or ‘global reconciliation’,” Lee said. “I can tell you, to policy makers, these phrases make no sense.”
The former editorial page editor said that third, religious leaders who submitted op-ed pieces were unable to cast their arguments in a recognizable analysis.
“At least, none of their suggestions were at a level beyond just charitable giving,” Lee said. “Not that charity was inappropriate, but it is politically difficult to have taxpayers fork over money, for example, to organizations like the World Bank, which deliver very poor investment returns on their projects.”
The degree to which investment returns are below market rates, they are identical to charitable giving, according to Lee. She offered the debate over debt forgiveness as an example, which she said almost all economists agreed that some debt forgiveness made sense.
“The moral case is clear, in the case of odious debt,” Lee said, also listing economic reasons, such as the debts of many developing countries necessitating them to set aside a significant fraction of national income to repay creditors. Lee argued that this limited growth rates and also that high levels of debt discourages private investors, who fear that the debt will eventually be repaid by imposing higher taxes on business.
“But, there are also a number of things that worry economists about debt forgiveness,” Lee said. “The savings on debt relief may flow to the already rich, many of whom will spend or invest in rich countries, not in their own countries. Equally important is the moral hazard problem: giving countries a clean slate may encourage them to take on more debt in the expectation that these new debts will be forgiven.”
Lee said that debt forgiveness may also provide incentives for other developing countries to over-spend, thinking that they, too, will receive debt relief in the future.
“Simply put, debt relief involves real resources; it is not enough to make an ethical case for it,” Lee said. “Reasonable anxieties have to be addressed.”
Lee concluded her response on a complementary note, saying that despite capitalism’s Cold War triumph, economists were “really willing” to take a look at both capitalism and its ethics following the global recession.
“I hope that this is taken with the spirit of generosity, and the message that wealth creation is as important as wealth redistribution,” Lee concluded.