Sermon preached at Jesus College, Cambridge, Sunday 8 November 2015
My brother once gave me a silver denarius. It’s from the time of Tertullian rather than the Gospels, but it’s an extraordinary thing to hold in your hand. Whenever I see it I hear ‘Render unto Caesar,’ or the grumbling of the workers in the vineyard. A whole day’s wages, it’s about the size of a modern 5p piece. Matthew, whose Gospel we just heard, collected them in taxes, and for the Jews the existence of the denarius was a daily reminder that Rome ruled.
These days, money has diversified, and its roles are legion. But it remains hugely political, and, were Jesus to be visiting Jesus today, he’d still be banging on about it.
The Bible is not short of material about money. Of course, it’s easy to argue that the marketplace was less complex in those days, when poverty was mostly about lacking land and the means of subsistence, not being without coins. You’d still search hard for a lost one, though. But its treatment of money still feels very real and very challenging.
The two passages I chose for today reflect that. The New Testament reading, from our tax collector friend, challenges those whose master is money. The hard saying that you can’t serve both God and money is for me unlocked by the line: 'for where your treasure is, there will your heart be also.' It’s not so much that no-one should work in the City, but, if you do, you need to be crystal clear about your primary allegiance to God. Because wealth carries the signal temptation that it can make you think that you don’t need God. And consumerism is brilliantly designed to wean us off God, and on to the reassuring tangibility of material gain. So we need the other reading to help us, the one from Genesis about Jacob wrestling the angel. Notice that even when his thigh is put out of joint he doesn’t give up. "I will not let you go, unless you bless me." And we need every day to wrestle with money. We need to keep wrestling with it until it blesses us, even if it puts us out of joint in the process.
But what is money, exactly? In its most obvious sense, it’s those physical coins, notes or tokens (like cheques or credit cards) that we use to pay for things. But because we now have the technology to make this process electronic, it’s also about the information flows that reckon balances all around the world. Lastly, not just because new money is created every time a loan is made, money is also about power and politics. I’ll talk about each of these before I come back to God.
First, physical money. There’s something alluring about actual cash, coinage more so than paper money, because of its very weightiness. And when it used to be made of precious metal, it was physically valuable too. But the physical incarnation of money is the least of our worries today. So many transactions in the developed world are now carried out electronically, that the amount of coinage in circulation has drastically reduced, because it’s just not needed any more. This can be useful. In Sweden, where notes and coins are used in only 3% of transactions, the number of bank robberies has dropped from 153 in 1991 to just 5 in 2012.
But physical coinage is a reminder of something important about money. Trust. We’re only happy to use notes, cards and virtual cash if we believe these proxies relate to an actual ability to buy, sell or settle, either now or in the near future. The queues outside Northern Rock during the credit crunch were a reminder, that if people stop trusting banks, they will want to ‘take their money out’ in this physical sense. Which is why the banks should be worrying a lot about why we don’t love them any more.
Second, money can be understood as ‘Information Flows.’ Money for most of us is how much appears on a payslip, a bill or a bank statement. So ‘money' is basically information about relative value and relative wealth. But modern technology has made it seem as though lunatic money has taken over the asylum. For example, the economist John Kay reports that less than 5% of bank balance sheets consists of loans to non-financial institutions. This means that the vast majority of transactions these days are bank-to-bank, as institutions hungry for profit play games with fractions of pence to end the day up. On the exchanges, high-frequency trading run by algorithm comprises the majority of transactions, estimated at anywhere between 53% and 80% of volume. And the speed? It takes a human eye at least 100 milliseconds to blink, but it takes less than a tenth of this time for a trade to travel between Chicago and New York. In order to speed up financial transactions by 6 milliseconds, a $300 million, 3,741 mile underwater cable is currently being laid between London and New York, because each millisecond saved is estimated to boost a hedge fund’s annual bottom line by $100 million.
Third, money is Power, and money is Politics. Warring rulers have always used coinage as a way of asserting supremacy. In 193 AD, the Emperor Didius Julianus managed to get some coins out, even though he only reigned for 65 days, which must be a record. And the brilliant thing about creating your own money, and using it to pay people, is that you can collect it all straight back through taxation, then pay it out again as wages, and so on. Then, if times are tough, you can manipulate the value of it, or change the level of taxation. A bit like the old English ‘truck system’, which was the practice in some factories of paying the workers in tokens, redeemable at the factory shop, ostensibly to stop the men from drinking away their wages, but really to ensure all the money paid out immediately came back into company coffers through the on-site purchase of over-priced groceries.
So where’s God in all of this? The Church’s response to money over the years has been to focus on usury, just price and debt. The dog that isn’t barking is the debate on scarcity. Let’s deal with each in turn.
First, usury, based on the Aristotelian view that it’s 'unnatural' for sterile money to breed money. Over time, ‘usury’ has become ‘unreasonable’ interest. That’s why the government recently re-introduced into law a loan repayment cap, because of the mind-boggling rates of interest charged by the ‘payday’ lenders, like the 1723% APR charged by Payday UK. And Church support, particularly though the Spiritual Lords, has helped this to happen.
Second, just price, which is the historical debate about how much profit you should make on top of the cost of producing a good or service. The sanctity of market pricing makes this debate sound anachronistic, but recent events have brought it back into vogue, in the Church’s support for fair trade, and in the green debate. This is because costs to the planet or society, so-called ‘externalities’, are rarely factored into commercial pricing. But the lesson from fairtrade is that people of good will are always happy to pay extra if they think their spend is furthering social outcomes, as well as procuring valuable goods and services.
Third, debt, made famous through the Church’s involvement in Jubilee 2000, and nowadays through Justin Welby’s support for credit unions and debt counselling. Focusing on un-repayable debt, whether by countries or indebted individuals, this debate tends to be about injustice. It links thinking on usury and just price to protect the vulnerable from being over-charged for the money they have to borrow to survive. According to Oxfam, 1 in 5 people in the UK live below the poverty line. So now it’s morphed into more general pastoral support for the poor, and education about how to eke out meagre budgets. It’s often linked with the church’s involvement with struggling families through Food Banks, and generally features in bishop speeches in the House of Lords, for instance during the recent rebellion on tax credits.
But where the Church hasn’t yet got properly stuck in, is in the debate about money and scarcity. Technical Economists argue that scarcity is actually about ‘opportunity cost’, that is, there isn’t enough of everything to go round, so to get what we want we must forgo something else. Generally this means we spend our money on one thing, and not on something else. And the sense that resources, including money, are finite, makes us ration what we have. Or trade for it, or share.
But the idea that we should husband resources has been dealt a body blow by current monetary policy. Because money is no longer scarce. It never runs out, so we don’t need to make trade-offs about it. We just borrow more. And while there are efforts to curb consumer exposure to un-ending credit, the banks still benefit from it. When recently the economy looked weak, the UK government approved ‘Quantitative Easing’, which is the practice of inventing money in order to keep the economy moving. And banks do this on a smaller scale every time they approve a loan. They don’t actually have any of this money in their vaults. Well, they may have around 2% of it, on a good day, but they’re largely creating it out of thin air. So while money remains scarce for ordinary people with poor credit histories, it’s defiantly plentiful for financial institutions and the wider economy. Theoretically this phantom money could be used for the NHS, or for welfare, or for refugees. But instead it’s used to smoothe out the balance sheets of the banks, who also happen to fund the Conservative party. Power and politics, indeed.
We could spend hours debating public policy on this subject. But I’d like to conclude with some thoughts about your own behaviour around money. If St Peter asked to see your bank statement at the pearly gates, could you justify every item on it? Are you proud of it as a statement of your economic activity?
The market is just the sum total of the messages we put in about supply and demand. So the market is a mirror of society, and we get the market we deserve. If we don’t like the market we’ve got, we can transform it overnight through our transactions. There are a lot of Christians out there, and together we have a huge amount of financial muscle. That's what created the market for fairtrade goods, and we can do it again, by supporting enterprises we like and removing our support from the ones we don't. Did you know that the new economics foundation reckons that for every £1 spent with a national chain, only 36p stays local? But if you spend that pound in a local enterprise, £1.76 stays in the local area.
The human rights movement started in America with one woman sitting down on a bus. The redemption of the markets starts the next time you hand over your card to pay for something. Does your purchase send a good signal into the market, or a bad one? Remember, money isn’t ever ‘spent’ – it just moves inexorably on through the system. Do you send yours on its way rejoicing?