| Any debate on the explosion in indebtedness is to be welcomed. One that draws attention to the connections between debt and poverty is doubly welcome. The debate initiated in the House of Lords by the Archbishop of Canterbury last Friday produced a wealth of evidence that the burdens of debt weigh heaviest on the poorest.
As the Archbishop said in his closing words, we are faced with the paradox “that those who are most in need of dependable credit in our society seem to find it hardest to obtain it, and that those to whom it is most readily and irresponsibly offered by many agents are those to whom it should not be so readily available”.
Out of these paradoxes come swaths of human misery: the poorest pay the highest rates of interest, and will have the highest proportion of their disposable income used up in debt repayments. Citizens’ Advice Bureaux are having to spend more and more of their time and resources on debt counselling; and the effects of unrepayable debt on the stability of marriages and families, on mental health, and on crime are all too obvious.
Yet focusing on the suffering caused by debt can be only the beginning. Other vital issues were just hinted at in the debate: that we inhabit a culture in which indebtedness is increasingly regarded as normal; and that some of the assumptions made by earlier generations — that you avoid debt, and save up for what you want — no longer hold for the vast majority of people in Western societies. Furthermore, those most in need of education in financial matters are the least likely to receive it.
It is with those issues that we really need to engage. This is not happening, because it is too challenging to our habits of thinking. We have invented for ourselves a language calculated to conceal the location of responsibility. We speak of “cultural change” and the “credit crunch”, as though we were dealing with impersonal forces that operate outside human control.
It is as if they had nothing to do with the deliberate acts of those able to manipulate the economy and control the communications and advertising industries in such a way as to change attitudes, and profit greatly thereby. This is a “cultural change” deliberately engineered for money.
It is entirely proper, especially for those who speak for the Christian community, to draw attention to the effects of rising indebtedness on the poorest — but only if we go on to develop the argument to demonstrate the induced dependence of our economy on inflationary borrowing.
We need to talk about the price of land bloated by competitive lending: about the creating and advertising of financial “vehicles” that have transformed houses from being primarily homes to being primarily investments, making us all need rising house prices.
We need to challenge lenders who are far more interested in the rising value of the house that is the security of their loan than they are in the affordability of the loan to the person who lives in the house. We need to talk about the debt explosion, not just as something with serious consequences for vulnerable people, but as a judgement on the deliberate policy of allowing the market to be the only decisive influence on what is lent, to whom, and at what rate of interest.
This “cultural change” did not come from nowhere. Steadily expanding credit is not some impersonal tidal current. Deliberate — and compassionate — policies during the Great Depression liberated money from the possession of gold reserves, and allowed a paralysed economy, which was impoverishing millions, to grow.
It was the deliberate and self-interested policies of the last quarter of the 20th century that removed regulation from credit markets, and so invited us into the fools’ paradise in which tomorrow’s resources can be eaten up today, without concern for the consequences.
Those same policies, which plunged the poorest nations into their debt crisis, have now brought the financial system to the edge of collapse, and subject the poorest in our society to further impoverishment. It is the fantasy of unlimited growth through credit and debt which has also depleted precious natural resources, and so fuelled climate change.
Of course, Christian people’s consciences should be engaged by the plight of the poorest, and their energies solicited for encouraging good financial advice and institutions such as credit unions, which can make affordable credit available to those who need it.
Yet we also need our consciences to be engaged by the evidence that credit has been deliberately inflated, and not just by “irresponsible lenders”, but by the whole might of the financial and advertising establishment. We need to think hard about how nine-tenths of the money we use is actually debt, and bring back a level of humane regulation that may cause our wealth to pause in its headlong growth.
It may yet save the economy and the ecosystem as a whole, and the well-being of the poorest in particular. This is the next debate we need, and we need it urgently.
Dr Peter Selby, the retired Bishop of Worcester, is Visiting Professor in the Department of Theology and Religion at the International Centre for Prison Studies at King’s College, London.
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