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When market forces run amok...

Market forces are not bad things in themselves but sinister trends can easily subvert them, says Bishop Richard Randerson in a sermon to mark the 10th anniversary of the Hikoi of Hope.

Richard Randerson   |  29 Sep 2008

A sermon preached in Wellington Cathedral, 28 September

How did Fannie Mae and Freddie Mac (the large US financial institutions) get into such trouble? I can understand the current global financial crisis best by thinking how Jackie and I bought our retirement house five years ago. We bought it by tender (but did we pay too much?), and with a mortgage (the bank checked us out carefully). But things panned out well: as time went on, the valuation rose to exceed the purchase price, the mortgage was paid off, and we have a nice but modest place to live. And a legacy for the kids (not too soon we hope!).

That’s how things work in good times, and New Zealand has had a few years of those. But in bad times house prices drop, banks foreclose on mortgages, people become homeless, and on a grand scale we see a financial meltdown such as that in the USA. Our reading tonight from Isaiah 30. 8-14, 18-22 is pertinent. Prophesying in the 8th century BC, in a time of idolatry and social injustice, Isaiah speaks of a people who say : ‘Do not prophesy to us what is right; speak to us smooth things, prophesy illusions...Let us hear no more about the Holy One of Israel’ (vv.10,11).

And then comes the crash : ‘like a break in a high wall, bulging out and about to collapse, whose crash comes suddenly in an instant; the breaking is like that of a potter’s vessel that is smashed so ruthlessly that among its fragments not a sherd is found for taking fire from the hearth, or dipping water out of the cistern’ (vv 13,14).

Market forces are not bad things in themselves, but sinister forces can easily subvert them. A house is no longer a home to live in, but becomes an investment from which one can leverage further purchases; people speculate; some become exceedingly rich; banks become reckless with credit; people become reckless in investing; prices over-inflate; and then comes the crash.

Who can we blame? Clearly there are those who contrived complex schemes that collapsed, such as we have seen this last year in New Zealand with a string of finance houses going over like a pack of cards. Warren Buffet, the US multi-billionaire, says Wall St has been like a nudist beach: many people have been swimming naked, but you only discover who they are when the tide goes out.

Criticism has also been levelled at regulatory agencies that have failed to regulate reckless market behaviour. The Archbishop of Canterbury said last week that “the financial world needs new regulation, and our society is running the risk of idolatry in its relationship with wealth”.

But in a sense we can all be complicit to a greater or lesser degree insofar as we can benefit from the market. There is no wrong in buying a house to live in, but the forces of speculation and profit can tempt us to be more active players, and to be caught up in the desire for more.

And who are the losers? Not the financiers and developers who run the system. They are great advocates of market forces in the good times, but happy for governments to step in when the market goes belly-up. One person has described this as a philosophy of privatising profits but socialising losses: if there are profits, we take them; but if there are losses, the government (which means the taxpayer) steps in and picks up the tab.

The losers fall into two groups: there are those many thousands of people who cannot afford to buy a house to live in; and there are those innocent small-time investors who have put small packets of their life savings into seemingly responsible and secure finance houses, only to see those savings disappear in the collapse. As so often happens, those with least seem to lose most.

Ten years ago the Anglican Church led a hikoi, or pilgrimage, to Wellington from every corner of NZ. Thousands of people converged in parliament grounds to draw attention to the needs of those who had least. Official statistics showed significant social deficits in terms of education, housing, employment, incomes, health, longevity, such deficits often sowing the seeds for a harvest of violence and crime, drug and alcohol abuse, despair and suicide.

Ten years on from the hikoi, there have been some changes. With the change of government in 1999, Treasury solemnly intoned in their briefing paper to the incoming government that the latest thinking in policy circles was that social goals had to be pursued hand in hand with economic ones. Treasury had caught up with what the churches and others who had anything to do with poverty had been saying for 15 years.

In ten years some of the poverty statistics have improved. The gap between Maori and Pakeha has lessened in some areas. But there are many gaps, with 230,000 children estimated to be living in poverty, according to a recent report. Now in 2008, with an election looming, what path for the future should we chart as Christians? These things:

First, we must ask what’s happening to the poorest? A nation’s moral strength is measured by how the poor are faring. We are motivated not merely by compassion for those with least, nor even by a desire for social justice, important although those things are, but ultimately because the poor are our brothers and our sisters in Christ. They are part of us. They are family.

Second, in the forthcoming election our first question should not be whom to vote for, but what we should vote for. We should examine policies on the basis of what they do for the well-being of all citizens. I am encouraged that in a recent opinion poll a majority of New Zealanders said they do not want personal tax cuts at the expense of basic social services.

Third, we should recognise that insufficient regulation of the market gives rise to naked greed and corruption. We need market freedoms to allow healthy enterprise to flourish. But we also need an appropriate degree of regulation to ensure that enterprise works for the common good, and to protect people from profiteers.

Finally, we should look out for the human greed that lurks in each one of us. Isaiah calls us to ‘defile our silver-covered idols and our gold-plated images, and to listen for the voice of our Teacher who says ‘This is the way, walk in it’ (Isa 30. 20-22).
In Luke 12.13-31, Jesus tells his listeners that they should ‘guard against all kinds of greed, for one’s life does not consist in abundance of possessions’. He tells the parable of the man who amassed riches and built barns to store them in, and forfeited his life. There comes a time when our life ends and whatever nest-egg we have passes to others.

But we should also read the parable symbolically in terms of how we can forfeit the true joys of life on this earth when, as Jesus said, we ‘store up treasures for ourselves but are not rich in the sight of God’. He said to his disciples: ‘Do not worry about your life, or about food or clothing.... but strive for God’s kingdom, and these other things will be given to you as well’.

Have we found the things that make us rich in the sight of God? Have we found compassion, trust, justice, reconciliation? At the end of the day, the basic necessities of life – health, food, housing, education, work – are not tradable commodities in the market-place They are the stuff of human existence. They are the basic human rights of every person. To have enough for ourselves, and to devote our lives to ensure there is enough for others, is what it means to live our lives vocationally, walking in the footsteps of Jesus, who laid down his life so that others might live.

randersonjr@paradise.net.nz

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