Toward a Right Relationship with Finance: Debt, Interest, Growth, and Security

screen-shot-2016-10-31-at-12-57-39-pmBy Pamela Haines, Ed Dreby, David Kane, and Charles Blanchard. Quaker Institute for the Future Focus Book 9, 2016. 126 pages. $15/paperback; free PDF available at

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Can money and faith mix? How do we apply our Quaker principles to dollars-and-cents decisions? Is it possible to invest ethically and advance a moral economy? What financial arrangements will best bring about economic justice, social inclusion, and ecological well-being? These are the questions at the heart of the work of the Quaker Institute for the Future and addressed in their focus book series.

QIF first launched its publications in 2009 with the compelling and comprehensive Right Relationship: Building a Whole Earth Economy and has since continued to produce a steady flow of shorter studies and focus books on specialized topics such as genetically modified crops, energy and fuels, economic growth, climate change, food security, and research methods. Focus Book 9 in the QIF series is Toward a Right Relationship with Finance, in which four authors write about living with and relating to our modern financial system.

This QIF book takes on many of the financial issues facing us today. The authors write about not only personal dilemmas such as unthinkable college debt burdens, credit card excesses, predatory lending, and the confusing challenges of saving for retirement in an unsteady and unpredictable environment, but also broader macroeconomic questions regarding the nature of money, the banking system, public debt, international crises, and what many of us have come to call the casino economy.

In the aftermath of the 2008 financial crisis, money and banking are topics very much on people’s minds. For many commentators the financial system has become the economic issue of our age. As Time magazine’s business columnist Rana Foroohar put it in her recent book Makers and Takers, “Our economic illness has a name: financialization.” She then cites former British banking regulator Adair Turner, who estimates that “a mere 15 percent of all financial flows now go into projects in the real economy. The rest simply stays inside the financial system,” which is a closed loop. In the views of many, including these QIF authors, the economy has become seriously over-financialized.

A vast number of today’s financial transactions appear to be bets placed in search of gain with little or no actual economic substance associated with them. When the bets go wrong, the results can have disastrous impacts on the real economy, wiping out jobs, homes, and opportunities. These transactions and their associated tax structures also seem to be the source of a good deal of inequality, disproportionately harming the poor and middle class and unconscionably and irrationally rewarding the wealthiest members of society.

Underlying all of the QIF discussions is the ultimate concern with the health of the whole earth economy: ill-conceived financial practices build the momentum of ecological overshoot, encouraging environmental destruction. The authors fear that the financial system itself is undermining a life-sustaining future for the earth.

The QIF authors do not shy away from controversy and bold proposals, and this book is likely to spark lively discussion among readers. From my own perspective, the book is strongest in its treatment of personal alternatives to the dominant systems: how to decrease dependence on speculative financial markets and build morally and socially responsible forms of investment. Looking at the larger macroeconomic topic of how to structure and regulate the monetary system is more of an uphill task for the authors. My own sense is that a treatise as brief as this one is just not the place where one is going to find a full and satisfying critique of the current money system and an outline of good alternatives to it. The authors attempt to offer such an analysis, but what they have to say in this regard seems to be only a beginning.

But begin we must, and I’m grateful for this effort to help us think about a better way forward for banking and finance. Money is a social invention, and an important agenda item for us all involves improving what Quaker economist Kenneth E. Boulding once referred to in a paper on “The Legitimacy of Central Banks” as a “curious mix of the public and the private.” Improving the financial system is not a task for any one part of society—markets, corporations, banks, individuals, families, or governments alone—but is a task which must be accomplished by all of us together. Designing, maintaining, and regulating financial arrangements that advance an inclusive and just future is work before us. As Boulding went on to say, “It would be rash indeed to argue that we have exhausted the potential of social invention in this regard.” And he concluded that such improvements “should be welcomed with joy rather than fear.” Financial topics often drift to doom and gloom. Here’s hoping our Friendly contributions to what is often called a dismal science will instead tilt toward joy.

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