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Changing the system: capitalism after the financial crisis, and climate change

by
04 December 2015

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From Mr Gavin Oldham

Sir, — Barbara Ridpath’s article (Comment, 27 November) on the need for creative thinking on capitalism is timely and appropriate. Democratic capitalism is a highly effective engine for wealth creation and, thereby, for improving the standard of living, but few would claim that it works for the benefit of all at present, and it can easily descend into an “us and them” attitude across society.

There are two adjustments that could be made to the free market which are key to the operation of capitalism, and which would address both these flaws.

The first is to introduce inter-generational sharing based on providing the opportunity to build individual life skills and financial resources, thus to enable disadvantaged young people to achieve their human potential: those whose start in life is scarred by poverty, insecurity both at home and the environment in which they live, and inadequate access to education.

Ideally, gaining these life skills and resources should be linked by “incentivised learning”, which not only provides a sense of earning and accountability (in a similar way to micro-finance), but also encourages willing givers to contribute the funds, because they will be more likely to be put to good use.

The most logical source of funds would come from inheritance-tax receipts, the recipients being all families in receipt of child tax credit (about one in six of the population). The Share Foundation, however, which operates the Junior ISA scheme for young people in care on behalf of the Department for Education, will be introducing such a scheme for Looked After young people in 2016, based on voluntary contributions.

The second adjustment is to dis-intermediate the capitalist system, so that people throughout society feel a real sense of ownership — and thus some responsibility — for the great engines of economic growth. Institutional capitalism encourages better economic performance than socialism, because it has to operate in a competitive rather than monopolistic environment; but it still alienates people from that sense of ownership.

Individual participation in capitalism comes from people in all walks of life owning directly part of the businesses in which they work and with whom they transact day by day. That is the real reason that wider share ownership is so important: it brings society together in a common purpose of stewardship, while still enabling personal freedom.

These two adjustments to democratic capitalism address both its long-term and short-term flaws. Individual freedom and aspiration are great assets to the human condition, but their economic outcomes are only worth while when tempered by loving our neighbour as ourself. Indeed, economic value is of little import when the time comes to meet our Maker; so those in a position to change capitalism through their influence or wealth should strive to make the system, which has brought them such benefit, fairer and more meaningful for all.

This is what drives egalitarian capitalism.

GAVIN OLDHAM
(Synod member for Oxford diocese, and Chair of Trustees of The Share Foundation)
Ashfield House, St Leonards
Tring HP23 6NP

 

From the Revd Christine Bainbridge

Sir, — Barbara Ridpath highlights the need for more spaces where multi-disciplinary discussion on economics can take place. She points out the challenge of questioning the current fixation on growth in discussions about economics. Such questioning is being encouraged by the Christian care-for-the-earth charities Green Christian and A Rocha, with others, through their Joy in Enough project (www.greenchristian.org.uk/joy-in-enough).

The latter aims to build a grass-roots movement for a new, just, and sustainable economy. It offers a place for informed debate, input on alternative economic models, and the invitation to take up a rule of life that moves theory into practice at an individual, local level.

At its 2014 conference, Dan O’Neill from Leeds University presented the case for what he calls a steady state economy (www.steadystate.org.uk). At this year’s conference, Molly Cato MP considered how more locally based economies might work, and Jonathan Rowson, director of the RSA’s Social Brain project, reported the findings of his recent research project Spiritualise (www.thersa.org/globalassets/pdfs/reports/spiritualise-report.pdf).

The research demonstrates that being given information on, for example, the benefits of a circular economy over a linear one, or irrefutable evidence that human activity is causing climate change, is not enough to alter behaviour. Indeed, faced with a huge issue such as climate change, we are likely to go into denial. Human reason is not equal to the task.

It is at these points that we need to draw on the deeper resources of our faith tradition. Joy in Enough encourages Christians to do just that. It is a timely movement to join as we prepare for whatever is the outcome of the Paris Summit on climate change.

CHRISTINE BAINBRIDGE
16 The Mount
Reading RG1 5HL

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