Profit and justice- are they opposites?
Wonga and other pay-day loan companies derive most of their profit from people who do not pay on time and therefore incur high interest rates. In some ways that is little different from the illegal loan sharks. A contrast is the recent TV programme “The Bank of Dave”- lending to small businesses in the Burnley area.
There are examples in the Bible of radical alternatives- eg Isaiah chapter 55, the “communism” of the first Jerusalem Church, and perhaps the Parable of the Great Feast in Luke ch. 14. But there is a common assumption (or is it a myth??) that these experiments did not last – and was that because of later compromises or because they were impossibly idealistic to begin with? (Or hopeful that the world would change soon- if it becomes clear that will take longer you don’t necessarily give up the experiment, though it might take different forms).
There appears to be a tendency for power and wealth to concentrate in fewer hands- is that “human nature” or the way our current economic system works? No system is perfect, and will need regular correction and restoration. (The Jubilee law was intended to do that every 50 years- it’s a very “modern” idea that land is a commodity, which can be bought and sold and held as private property).
The Wall Street crash of 1929 led to a willingness to regulate financial services in Roosevelt’s US New Deal and the adoption of Keynesian economic ideals. By the 1970s the weaknesses of that were evident, and people were willing to abandon all regulation- which led to the banking crisis of 2008 and subsequent years.
Perhaps churches need to look again at alternative economic models- as they did with 19th century building societies, or the Scott-Bader Commonwealth at Wollaston. These models will not be adopted by most businesses because they do not see it to be in their short-term interest. But churches will not be alone if they do this. Positive Money http://www.positivemoney.org/ is also questioning the power of the banks to “create money”. Islamic (Sharia) law has a negative view of the interest-based financial system our economy depends on. Andy Haldane, from the Bank of England, recognised the need for change in his 2011 Wincott Annual Memorial Lecture.
Sustainable profit is in the interest of business and society as a whole. But the lure of higher profit (despite the greater risks often involved) can make business destructive in society (as happened with the banks, and perhaps also with big breweries demanding high rents which make local pubs unviable). Business have a short-term interest in wringing greater productivity out of their workers (this also applies to public agencies under pressure to cut costs) at the risk of stress and breakdown. A “1960s” generation who were keen on radical alternatives was replaced by a generation who felt the need to “keep your heads down”- but there are signs this is changing, with a new generation whose experience of debt and unemployment is forcing them to look for alternatives.