| | |
Christianity, Compassion and the Market Economy
November 1995
by Rt Hon Peter Lilley MP
given at Victoria Thistle Hotel
| |
|
|
|
CHRISTIANITY, COMPASSION AND THE MARKET ECONOMY
CCF FIFTH ANNIVERSARY ADDRESS
The text of the speech to the Conservative Christian Fellowship given by Rt Hon Peter Lilley MP, Secretary of State for Social Security, on 30 November 1995. The evening was hosted by Gary Streeter MP.
· Success in a free market, which is based on freedom and voluntary activity, depends on being able to serve other people.
· Christianity is compatible with capitalism - but no political philosophy owns God.
*****
INTRODUCTORY REMARKS
I accepted your invitation with enthusiasm because I hold the Conservative Christian Fellowship in the highest regard. It is immensely important that we in Parliament know that we are being upheld in prayer by Christian colleagues throughout the Party. And it is vital for the Party that there be a leaven of active and committed Christians who act as yeast does in the bread of the Party as a whole.
Also it is important that there are Conservatives in the churches to reinforce links which ought to be much stronger than they are. There has been a tension, often whipped up and manipulated by the press, to put the Conservative Party and the church, usually the Church of England, at loggerheads. I discovered this soon after I had been appointed to my present job and the Archbishop of Canterbury to his.
We would be each be asked by journalists questions about what the other had said, but taken out of context. Dr Carey and I met up and agreed that we would, in future, never comment on what the other said without having read the full speech or sermon. I have found that what he says is always extremely good and wise.
If I have not read a Dr Carey speech when a journalist rings me, I say that all the sermons of the Archbishop I have read are good, wise and sensible and I am sure the latest sermon is, too. Of course if it is not a live interview it never gets reported! But at least there is no negative publicity.
It was once said that 'we don't have ideas, ideas have us' and there is a lot of truth in that. We know that the Christian idea which possesses us is something special and alive. But ideas in general can and do take people over surreptitiously. So it is very important that we win the battle of ideas and that we take ideas seriously. There is a battle of ideas waging between secular religion and true religion and that is a battle that we should be intimately involved in.
CHRISTIANITY AND THE FREE MARKET
There is also a conflict of ideas, within politics about things which we as Conservatives believe. This battle does, to some extent, pitch the Conservative Party, and some elements of the Christian community against each other. And this tension is what I want to consider tonight. That battle concerns the relationship between our belief in the free market and the Christian faith.
Despite the collapse of communism and the retreat of socialism there is still a strong collectivist critique of the free market which holds sway in large areas of public life, not least in a large part of the churches and Christian circles. We need to be able to refute and rebut that critique. We certainly do not want to go to the other extreme and pretend that if you are a Christian, you must believe fully in free market economics and accept every word of Milton Friedman as holy writ.
We should not mirror Paul Tillich, the theologian who said that "socialism is the only possible economic system from the Christian point of view". We should not pretend that the free market is the only possible view that a Christian can hold. We must respect our Christian colleagues in other parties who come to a different conclusion. But we must at least be convinced in our own minds - and be prepared to convince others - that Conservatism and Christianity are compatible and that free markets and Conservatism are compatible. I am a Christian first and a Conservative second. Happily having studied this evening's subject I have concluded that they are compatible and I can remain within the Party!
There are four main arguments I come across against the market:
'THE MARKET ECONOMY IS INEFFICIENT'
The first is now pretty discredited and I need not dwell on it. The market was regarded by lots of people as inefficient. They would argue 'how could you possibly have wasteful competition when a planned economy with centralised resource management must be better'.
You can see quite clearly when the Berlin Wall came down that East Germany and West Germany, although each starting off much the same at the end of the last war, ended up vastly different after one had tried socialism and the other free market capitalism. The same contrast applies between Hong Kong and Shanghai. They were in a similar condition before the Communists took over. Yet they are vastly different now.
So the practical evidence is overwhelming that the free market works and produces wealth for the people living within the society it feeds and supports. The other criticisms of the market tend to be moral criticisms. They tend to be based on the belief that the market is somehow intrinsically immoral.
'THE FREE MARKET ENCOURAGES GREED'
The most frequent allegation is that free market in some way encourages greed. The very existence of the free market and the institution of private property are held to be the cause of selfishness, greed and covetousness. That is a view that I hear echoed in Christian circles. But it is profoundly unbiblical. Greed, like all vices, is a consequence of our fallen nature. It is not a consequence of some particular arrangement of society.
It manifests itself in every economic system in which people live. You will see greed manifested in collectivist societies just as much as in free societies. You see selfishness and greed manifested in violent picketing in strike threats and in demands for taxes to be imposed on one group in order to make another group better off, and so on.
If any of you doubt that greed exists in the public sector I invite you to suggest that a public sector body with whom you are connected does not spend all of the money left over at the end of the year. Suggest that it returns the unspent surplus to the public kitty because it could be used better elsewhere.
I have tried it. It was like being a character in a Batman cartoon. The idea that any public institution should not spend every last penny available to it and get every last grant available to it caused shock and incredulity. This surely demonstrates a degree of selfishness which is just as much part of our nature as selfishness expressed in other parts of the economy.
A variant of this argument is that capitalism needs greed and fosters it by rewarding it. I came across the following thoughts from a Christian missionary writer in India, Leslie Newbiggin. He says that "the driving power of capitalism is the desire of the individual to better his material condition. The name the New Testament gives to this force in question is covetousness. The capitalist system is powered by the pure, unremitting stimulation of covetousness."
Now that is wrong from start to finish. For a start, the desire to better one's material condition is not of itself evil. Indeed, Samuel Johnson, who is one of my political and religious heroes; a great Conservative and Christian and a wonderfully attractive character. said: "There are a few ways in which a man can be more innocently employed than in getting money". Earning a living to support yourself and your family is a good thing.
A desire to better your standard of living is a perfectly reasonable thing. Covetousness by contrast, is the desire to take other peoples' goods, not the desire to earn more of your own. The Bible says, "Thou shalt not covet thy neighbour's house, his wife, his manservant, his maidservant, his ox, his ass nor anything that is thy neighbour's". There is no injunction against us earning and producing things ourselves.
In fact in the free market you can only get better off, you can only be rewarded by satisfying other peoples' needs, desires and wants. Far from rewarding covetousness, the market rewards you for satisfying others. The implication of Newbiggin's remark is that 'life is a zero sum game'; one person can only get better off at the expense of other people getting worse off. That is a common fallacy. But it leads to very false conclusions.
And it is not in line with the reality of a free market economy which can increase the wellbeing of all those participating in it. Paradoxically, in collectivist states, and in the collectivised areas of our system, you do often get better off by taking money or resources from other parts of the economy. The strike is far from saying 'I want to be rewarded for producing something' but actually 'I want to be rewarded for not producing something'.
Many of those who condemn the free market as selfish, simultaneously take money from other people by taxation, rather than to earn more by personal effort. There is no evidence to me that that is morally superior to what goes on in the normal business of commercial life.
'THE FREE MARKET MAKES PEOPLE INCREASINGLY UNEQUAL'
The third argument which the moral critics of the free market deploy is that the state may take things from people but it does so for a good purpose: to make people more equal. By contrast the free market makes people unequal. And, it is often said, makes them increasingly unequal.
Of course, it is perfectly true that the free market cannot provide a living for those who cannot participate in it: the sick, the disabled, the elderly, those who are busy caring for others. We have a duty to them as our fellow citizens - to ensure that they are provided for. They cannot possibly earn a living and therefore they must be provided with help. That is a duty and indeed a privilege for us.
Again, Samuel Johnson said, as I quoted in my first Party Conference speech, "A decent provision for the poor is a test of a civilised society". That is something which we all accept. But that is very different from saying that we believe in equality, as a good in itself. Indeed, before I came here, I looked up in the Bible to any references to equality.
There are remarkably few. There was no normative command in the Bible directly saying equality in itself, is a good thing. Generosity to the poor, yes. But resentment at differences of wealth amongst those who are dedicated to looking after themselves is, if anything, condemned as envy.
As it so happens, the market has not tended to increase inequality - to make the rich richer and the poor poorer, as the slogan has it. The tendency has been to make people more equal as time has gone by. If you look back over the past two hundred years, the incomes of those in the bottom half of society have been rising somewhat more rapidly than the average and tending to approach the average.
In any case when you examine what those who criticise the free market for being unequal say, it is quite clear that they are much more upset by wealth than they are by poverty. They are often not terribly interested in the poor. If you read Tawney's book 'Equality', his seminal work, you have to get to about page twenty before the poor even get a look in.
As I recall, they are not mentioned in the first twenty pages, which are all about the evils of wealth and the wealthy and particularly those wealthier than him. It was always thus. Samuel Johnson (again) said of the egalitarians of his time, 'the levellers', "Sir, your levellers wish to level down as far as themselves but they cannot bear levelling up to themselves. They would all have some people under them, why not then have some people above them?"
So it has been the tendency of the left over the years to be more resentful and envious of those better off, than to be concerned for the poor. By contrast, the Conservative's primary interest is in helping the poor and less with the distribution of total income.
There is also a lot of talk, not least in church documents, about the market only helping the poor through 'trickle-down' economics. I have not been able to trace the origin of this phrase. But I am pretty sure it was produced by a enemy of capitalism rather than a sympathiser. It is a pejorative phrase which does not describe the process by which the market makes people better off.
People get better off by providing something of value to others: their labour, effort, ingenuity and talents. People get better off by contributing to the general wealth-creating processes. As you move to a mass production society it is the masses who most benefit from that move.
When shoes were made by cobblers it was only the wealthy man who could afford proper shoes and the poor would have to walk barefoot. Once mass production enabled cheap production of millions of shoes, millions of people got shoes. The crucial thing for me is not that the owners of the factory became much richer - which is certainly true - but that many more people had access to these goods.
Even if this long-term trend of improvement is accepted, the criticism of this government is that since 1979 the poor have got poorer. The Rowntree report has argued that the poor have not shared in the general increase in prosperity and that they have actually seen their incomes fall. That report has subsequently been comprehensively debunked by the Institute for Fiscal Studies.
They have shown that if you look at what people actually spend (taking figures from the 'National Expenditure Survey'), the amount spent by people in the bottom tenth of incomes has risen by 30% in real terms since 1979. It is true that the income and expenditure of the 'average' person has risen even faster than that. But the living standard of the bottom tenth has undoubtedly risen.
Moreover, if you actually look at individuals who ten years ago were in the bottom tenth 10% of these are now actually in the top tenth of incomes and many more have risen out of the lowest group and up the income ladder. If after the next election I lose my job I shall see a sharp fall in my income. I hope that would be temporary! But as people lose jobs they fall into low income categories - usually for only a short time.
So we must treat these income figures with care. We should not treat income groups as stagnant and unchanging. But I have to be honest - honesty is one of the most important contributions a Christian can make to political life - so I have to be honest about the change we have seen in the last two decades.
After two hundred years of the poor getting richer at a faster rate than the comfortably-off were becoming even more comfortable, there has been a widening of the gap since the mid-1970s. Those with the least skills and ability to participate in the economy have seen their earning power either mark time or actually fall.
That seems to be the result of new technology and competition from the newly-industrialised economies of Asia, where unskilled labour are forcing global wages of all unskilled wages down. I think these pressures help explain why more people are falling back on the safety-net benefits than did twenty years ago. Every developed country faces these pressures not just Britain.
I have tried to face up to these disquieting trends and how we can tackle them in my Ulster CPC lecture (republished by the Social Market Foundation in 'Winning the Welfare Debate'). It is an important problem which demands wise consideration rather than becoming a party political debating point. And I pay tribute to Frank Field the Labour Chairman of the Social Security Select Committee who has risen above party debate and responded objectively and honestly on these issues.
'CAPITALISM AGAINST COMMUNITY'
The fourth and final criticism of the market economy is that it destroys community solidarity and altruism. The market is held to be responsible for a breakdown of society into atomistic individuals who are not held together by any bonds of common interest or concern.
It is true that economists look at how individuals relate to each other in order to understand how whole communities work. That does not mean they deny the value of communities - scientists similarly look at the behaviour of individual sheep or cattle to understand the herd instinct - it is entirely a methodological approach. Far from it being true that the free market destroys community, true community is and must be voluntary.
It is a network of voluntary links within and between families, small platoons (the church, the club, even the pub), neighbours in a street or colleagues in the workplace. None of this need be destroyed by the fact that people work in free enterprise or by ownership of own homes or shares. Far from it. People do come together more in freer societies.
Take this wine glass. How many people are involved in voluntary social co-operation to produce this simple object? There will have been people mining the various minerals that go into making glass. In various parts of the country there will be people providing the fuel or boilers that melt and make the glass. Elsewhere there will be some who moulded the glass. All over the country shopkeepers will have stocked the glasses ready for sale.
All of these people co-operate without coercion, but are mutually dependent upon each other. A free market links the whole world in voluntary co-operation creating a network of mutual dependence; not exploitation. De Tocqueville, in his marvellous book about America, compares that country's free society - teeming with voluntary organisations and groups - with France, dominated by the state, where there is a dearth of such little community organisations.
The state can undermine community by nationalising duty, nationalising charity and nationalising the family.
THE POSITIVE CASE FOR CAPITALISM
It is easy enough to demolish the critiques of the free market. But we must also have a positive case for capitalism that is consistent with, but not essential to, Christianity. The free market is part of the natural order of things. It was not invented but 'discovered' long after it had been operating.
You remember Monsieur Jourdain, in Moliere, after discovering the difference between prose and Poetry, saying what an extraordinary thing to discover that he had been speaking prose all of his life! People have been practising capitalism since the beginnings of time. But this was recognised only when people began to write and analyse such phenomena. It was discovered and not invented. It was a product of human action rather than design.
I believe that that is the way providence operates in the world. Enoch Powell was much ridiculed in the 1960s when he said that he gave thanks every Sunday for the provision of capitalism. I do not think it ridiculous to be thankful for something which has bettered the lot of so many. It does so by enlarging freedom of choice - which is something intrinsic to our faith, it rewards service to others and responsibility for one's own welfare and that of one's family, and it fosters creativity.
By contrast, an economy based on collectivism is based upon force and compulsion. George Washington said that "Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant and a fearful master." Of course, there is a role for authority of the state in life.
We accept that the state has a role - not least in ensuring decent provision for the poor. But we believe that it should be minimised and not maximised. State power is not the best aspect of society but a necessary evil. Freedom, voluntary association and co-operation are always to be preferred to coercion, compulsion and direction.
END NOTE
The then Chairman of the Commons Social Security Select Committee, Labour's Frank Field MP, although differing with Mr Lilley on a large number of social security issues, wrote this of the Secretary of State: "Long before other senior politicians awoke to the fact that social security consumes a third of all taxpayers' contributions to public finance, and that this total is growing like Topsy, Peter Lilley recognised that this was one area where a politician who was not Prime Minister or Chancellor could become a major player at the top end of the Cabinet table. How he must have smiled to himself as some political commentators talked of his move from industry to social security as a demotion. 'John Major dumps Lilley' was the refrain.
A couple of days into his new brief I bowled him across the House of Commons floor a little technical question which aimed at best to get him waffling and at worst to floor him. His answer was deftly batted back with such force and confidence that all I could do was quietly to resume my seat. From that point it was clear that here was a minister who was already getting on top of his brief, who intended to run the most important, if invisible, department in Whitehall and I believed, who would use his considerable intelligence to steer the political debate rather than become its prisoner."
Related links
Peter Lilley delivers the First William Wilberforce Address
| |
|
