Risk. It’s probably our fault, all of this. It was the Scholastics who famously got round usury by deciding that ‘reasonable interest’ was legitimate. This was defined in various ways, ranging from the opportunity cost of making the loan (lucrum cessans), and the risk that the borrower might default (periculum sortis), perhaps because a ship or cargo was lost at sea. So now when we consider the price of money, we add all kinds of things in, to show the ‘true cost’ of something. This of course includes costing in risk.
The word ‘risk’ normally connotes something worrying or negative, but in practice risk is big – and profitable – business. To avoid risk, we invest huge sums in insurance, often for things which are quite unlikely to happen. But we have been taught to feel irresponsible if we don’t insure ourselves against risk, and in many cases we are required to do so. Companies also try to iron out risk. For sure, the canny entrepreneur actively seeks out risk in order to make a margin on it, but more established businesses fear risk. So our friends in Financial Services sell them various hedges and elaborate instruments of ‘securitization’ to make all that yukky risk disappear in a puff of smoke. Except that it doesn’t. Remember the CDOs at the heart of the Credit Crunch? Risk that remained risky, despite the smoke and mirrors and positive credit ratings – the sort of risk that crashed the global financial system.
But in spite of this we haven’t come to terms with risk, we just try to price it better. And the assumption that we should be allowed – nay, encouraged – to live in a risk-free world now permeates our culture, from the balance sheet to the playground, involving every possible activity in between, particularly where lawyers might help us bring claims.
Nowhere is this thinking more entrenched or devastating than in the current TTIP trade agreement. The Transatlantic Trade and Investment Partnership is currently being negotiated behind closed doors by EU and US negotiators. As a bi-lateral trade agreement, TTIP aims to boost trade by reducing regulatory barriers on things like food safety, environmental legislation, and banking regulations, and to discourage ‘protectionist’ activity by the sovereign powers of individual nations. This sounds eminently sensible. Except that it includes the Investor-State Dispute Settlement mechanism or ISDS – so unpopular they have now re-branded it the Investment Court System (ICS). This means that multinationals will be able to sue the UK for changing any policy or regulation that affects corporate profits, in order to remove any risk to their investment in UK business.
There is a lot to be commended in the agreement. Establishing good global trading relationships is a key underwriter of world peace. But not at any price. With this clause included in TTIP, we are selling our sovereignty cheap. For example, the Swedish company Vattenfall sued the German government for €3.7bn over its decision to phase out nuclear power plants in the wake of the Fukushima disaster in Japan. We can all sympathise with businesses that sign up to something in good faith, only to find that the goal-posts move and they stand to lose out. But the worry for democracy is that proactive policies enacted both locally and nationally to protect communities and the environment, for instance on fracking or GMO or bee-killing pesticides, will not withstand the onslaught of deep-pocketed corporations trying to recover costs. In effect, it gives multinationals the power to tie state hands.
I did a soft launch of my latest book to a group of sparky young Tories in the upper room of a Westminster pub. The question I put to them was this: If free-market capitalism is so great, why do we need politicians? Why not just have lots of companies, and lots of lawyers to keep them honest? Why are states important? Chiefly because they are designed to represent the interests of all citizens, not just those who pay, or use the services they provide. Corporates only have a direct interest in their own business network and, while the enlightened ones invest in their communities and their embeddedness in society, this is by no means either standard or mandatory. So we’re better off if we’re governed by a democratic state than by even the most enlightened multinational.
Why should the Christian community care? Because a grave injustice is in danger of being done, which will affect our stewardship of the planet, and divert state resources from the provision of vital services to the fighting of expensive legal battles, and the paying out of damages to corporations. While Christians have every right to regard Caesar with suspicion, being ruled by the Corporation may be far scarier.
With Brexit clogging up the newswires, you’re probably behind on your monitoring of European Commission business. Were you to have been following their official twitter feeds, you’d know that at the end of February we passed a milestone – the wrap-up of the 12th negotiation round of TTIP. Here is an example of how skewed the negotiating process has already become. In the first months of the talks, the European Commission’s trade department had 597 private meetings with lobbyists to discuss the negotiations. 88% of those meetings were with business lobbyists. For every 1 meeting with a trade union or a consumer group lobby, 10 were held with companies and industry federations.
But the good news is that hundreds of campaign groups have sprung up, united in their horror of the ISDS/ICS mechanism. They are already gaining concessions. Orchestrated lobbying from bodies like 38 Degrees produced an EU-wide petition containing 3 million signatures, which caused the delay of a key TTIP vote in the EU parliament. When MEPs eventually did vote, over half the UK representation voted against, thanks to the direct lobbying of MEPs by members of the public. Along with the Church of England, many Christian groups are already involved: CAFOD, Christian Aid, the Jubilee Debt Campaign and Traidcraft, as well as the Trade Justice Campaign, Friends of the Earth, Greenpeace, the TUC and UNISON.
The machine rolls on, and we need to keep momentum up to match the might of the corporates. So please lobby your MP and your MSP, sign up for on-line campaigns like sumofus and 38 Degrees, and support your local council.
But most importantly, think about risk.
I think that Christians peculiarly ‘get’ risk. The act of creation was an extraordinary risk, particularly the designing in of free-will. The bible is a catalogue of extraordinary risks taken, in great hope. Faith, similarly, is a huge risk. Risk is our vocation, and living with it is part of the human condition. So why can’t we bear it anymore? Why this relentless quest to annihilate it? Because we have given up hope, and we have no faith. They’ll sell us a whole range of reassuring products to make the pain go away, and they’ll call me irresponsible for questioning it. But rather than outsourcing the whole topic to Finance and the lawyers, wouldn’t it be far healthier to have a proper conversation about risk? Or is that too risky…
Eve Poole is an Associate Research Fellow of the William Temple Foundation.
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