Addicted to wealth

Sermon preached at 18:30 Choral Evensong at St Alphege, Solihull
Sunday 12th October 2008, Harvest festival

Readings: Joel 2: 21-27 1 Timothy 6: 6-10


1 Timothy 6: 9: “But those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into destruction.” It seems to me that in this one sentence, St Paul very neatly summarises the situation of our western society today. Paul goes on, “For the love of money is the root of all kinds of evil, and in their eagerness to be rich some have wondered away from the faith and pierced themselves with many pains.” When I read these words, I could not help but think of the credit crunch and of our current financial crisis. How profoundly true these words of St Paul are!
For far, far too long our society has been slave to the desire to be rich and to the love of money. In the 1970s this was a collective desire, exemplified in the demands of Trade Unionists, which often took little account of economic reality. The problems this caused built up until we had the paralysing winter of discontent in 1979. In the 1980s there was a clear political decision to break down the collective greed associated with Trade Unionism by colluding with a new kind of individualistic greed. The YUPPIE (Young Urban Professional) was born. The banks were deregulated, much of traditional British industry disappeared and new service industries appeared. “Job for life” positions and company loyalty both went out of the window together. Gordon Gekko made his “Greed is Good” speech in the film Wall Street. Trade Unionism took a terrible beating. The salaries of top bankers and company directors started to increase rapidly. And after the initial economic shock, there did appear to be some benefits of this new approach. British industry became more flexible and competitive. The rich got richer but there was a significant trick down effect that benefited most people, except the unemployed, whose numbers grew significantly.
The trouble was that this new approach to economics was powered by the individuals motivated by the desire for more money. Performance related pay became commonplace. The trickledown effect started to dry up, such that the rich are now getting richer and the poor, poorer. We have become more and more dependent on financial reward the motivation reason for working. Investments in the City of London have become more and more short term in their outlook and more and more complex in their nature. And now suddenly we are finding that it is all grinding to a halt. Suddenly we have our worst economic crisis since the great depression.
Now the government, supported by all the political parties, has committed a great deal of tax payers money to addressing the immediate causes of the crisis; the lack of liquidity, under capitalisation in banks and lack of trust in banks as borrowers. So far these measures have not been as effective as we might have hoped, but it seems to me that even if the situation is stabilised and we get away with a minor recession rather than a great depression even if these things happen then still some serious underlying problems remain.
As a society we are still addicted to money. We still need the promise of more money, to make us want to do anything. And we are all caught up in this. The attitudes might be at there most extreme amongst the big bankers, but we all share these attitudes. We all hope for an annual pay rise. We all feel hard done by if our neighbour gets better financial treatment than we do. We none of us find financial giving easy. There is no room for feeling smug or self righteous about the fall of top bankers. We are all in this together.
So how do we reform ourselves? How do we start to rebuild the attitudes of trust and integrity needed for economic success. How do we rebuild the values that lead to wealth creation. Well I have to say I don’t think it is easy; in fact I think it is very hard and I fear that it will take a long and severe economic downturn to make us do it.
At a policy level it seems to me essential that we rediscover committed business relationships as the only sound basis for economic wealth. For example, there should always be a close relationship and deep understanding between borrower and lender. If the loan works well then both parties benefit, if the loan fails then both parties lose out. This shared interest in the positive outcome of a loan has been undermined in recent years. The selling on of securitised of mortgages, the trade in credit default swaps, the practice of insuring against none repayment, the outsourcing of the understanding a borrowers credit risk to credit assessment agencies, all these measures can undermine the proper incentives that should arise between borrower and lender.
Similarly issues exist in the relationships between investors and company. Investors like Warren Buffet have always argued that equity shares are long term investments and commitments to the company. They are a commitment to the company and should signify some practical interest in the way the company behaves. If we simply try to make money by buying in and selling out at the right moment, or by loaning the stock out to others, then we undermine the key ownership relationship.
Most especially there is the relationship of fiduciary duty between an owner of a business or business interests and the managers and agents who run those ownership interests on a day to day level. The managers and agents must work to the best interests of the owner. If they are arranging things for their own profit or power and paying themselves huge sums then the agency relationship is undermined. It becomes a relationship of mutual exploitation and ultimately value is destroyed.
And underlying all these policy issues are the values that wealth depends on. Harvest Festival is a very important time for remembering before God all the many, many blessings that we do have in terms of our food and our material wealth. Remembering this and giving thanks to God for it helps us to appreciate how blessed we already are, and helps to reduce are need for further material blessing.
Then I think we need to remember that wealth and poverty are ultimately gifts from God which in his great love he allocates as he chooses. In our first reading we heard from the book of Joel, God promising great blessings to Israel. He says that the land will produce richly and the farm animals multiply. Israel shall eat in plenty and be satisfied. God will pay back for years when he sent the great swarming locusts to destroy all the crops. Obviously we have to do our part to work with God on the creation of wealth, but ultimately wealth or poverty is more God’s gift. We have to see ourselves as the stewards of the good gifts that god has given us, rather than as people who deserve something. Ironically it is our detachment from wealth and our the willingness to loose our wealth for God that is central to all our efforts to build wealth.