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What is the relevance of religious belief to the Libor scandal? We are hearing wise and persuasive words from Jewish thinkers: but what do our bishops say?

Why is it always Rabbi Sacks who gives rational and coherent moral guidance to our benighted society, and not any Catholic leader?

By on Monday, 9 July 2012

Lord Sacks, the former chief rabbi of Great Britain (PA photo)

Lord Sacks, the former chief rabbi of Great Britain (PA photo)

Religious leaders (with the exception of the Holy Father himself) tend not to operate in a specifically religious register when they are speaking about moral questions, to a general audience of those who may or may not be religious. They will rightly not, for instance, insist that you need to be religious to be moral. But they will insist that morality is relevant to public affairs. They will, that is, if they have anything to say in the first place.

So what, if anything, are they saying about the Libor scandal? As a result of this affair, we are to have an all-party parliamentary committee of both Houses into the “culture and practices of banking”. It will, no doubt, come to the conclusion that careful assessment has been displaced by greed, reckless risk-taking and contempt for customers and that bankers are now unduly concerned at the size of their bonuses and will naturally behave in such a way as to maximise them. They will also conclude that this is inevitable without proper regulation, that so-called “light-touch” regulation is to blame for recent scandals and that new, strict standards of ethical conduct must be imposed on bankers by the Financial Services Authority and by the criminal law. It will suggest appropriate legislation to bring this about, and the Financial Services Authority will tighten up its controls. The conclusion, in other words, will be that bankers will of course necessarily behave badly, unless they are tightly controlled.

We have heard nothing about the Libor scandal, so far as I can see, from our own bishops; perhaps they are still scratching their heads and wondering what Libor stands for (it is the London Interbank Offered Rate, your lordships), but don’t ask me how they fiddled it, or how the fiddle made anyone rich, since the whole point is, I thought, that the banks weren’t lending any money anyway, so nobody, in effect, was actually offering anything at all. But those in the know say it was all pretty dubious; so assuming it was, what is the moral to draw?

The only religious leader to speak on the scandal so far, so far as I can see, has been the admirable and predictably coherent as well as forceful Rabbi Jonathan Sacks, who in the Times on Saturday said: “The banking scandals, rate fixing and resignations may have a silver lining if they awaken us to a fact about which we have been in denial for decades. Morality matters. Not just laws, regulations, supervisory authorities, committees of inquiry, courts, fines and punishments, but morality: the inner voice of self-restraint that tells us not to do something even when it is to our advantage, even though it may be legal and even if there is a fair chance it won’t be found out. Because it’s wrong. Because it’s dishonourable. Because it is a breach of trust. We are reaching the endgame of a failed experiment: society’s attempt to live without a shared moral code.”

Rabbi Sacks, you will note, says nothing here about religion. This is because he wants to appeal to the idea of a shared moral code, so he doesn’t want to suggest that without religion you can’t have one. And of course he’s right: you can be a moral person without religion. You can even be a moral banker without religion. I have, as it happens, a good friend who is a very wealthy banker, and who has done more good in the world than anyone else I know including me, precisely because that is what he is. He has over the years been paid by his merchant bank many millions in bonuses. But since he has considered that he was already paid quite enough to make him as wealthy as anyone needs to be, he has simply put all the bonus money into a charitable trust, with which he does untold good to those less fortunate than himself. And he has very little time for what he would no doubt call “organised religion”.

Now, you can certainly be a good and honourable person, even one who considers that doing good is a moral imperative, without religion. But there can be little doubt that it is a lot harder for most people, and certainly for society as a whole, effectively to believe this. It may be the case that as the Catechism of the Catholic Church has it: “Man participates in the wisdom and goodness of the Creator, who gives him mastery over his acts and the ability to govern himself with a view to the true and the good” – and that “the natural law is written and engraved in the soul of each and every man, because it is human reason ordaining him to do good and forbidding him to sin”.

It is all true, very true. All the same, as the Catechism goes on to say: “This command of human reason would not have the force of law if it were not the voice and interpreter of a higher reason to which our spirit and our freedom must be submitted”: and the simple fact is that if you actually believe in the objective existence of that “higher reason”, and are part of a religious culture which is based on that belief, then the notion of a shared moral code is an awful lot easier to accept. Rabbi Sacks recently gave an interview to the Huffington Post in which he addressed the question of the role of religion in developing such a shared ethical code: “We have,” he said, “a natural moral sense”:

I do not want to suggest that you have to be religious to be moral. We have always had these two imperatives that take us in conflicting directions. There is the drive for survival and there is the drive for co-operation — the altruistic element.

Charles Darwin understood this, and we are beginning to pick up on this in evolutionary psychology and also in neuroscience. We pass our genes on as individuals but we survive in groups, and groups only survive on the basis of altruism. So we are caught in the perennial tension between the drive to good, and instinct to self-preservation that sees everyone as a means to our ends.

So we all have a moral sense; the question is, what are the settings or environments that strengthen that sense and allow us to combat some of the more destructive human instincts? Religion is always focused on that question. It’s not that we need to be religious to know what is good, but we need to be religious in order to be educated in the habits of the heart that lead people to be moral. And we know those habits have to be inculcated by constant practice, which we do in religion through prayer and ritual. They need to be cultivated in community, and today religions are the strongest, maybe the only really strong communities that we have left.

And so I think religions make people better able to act on the moral sense.

The fact is that in a secularised culture it is particularly difficult to establish a shared moral sense. It is interesting that it was Janet Daly rather than Rabbi Sacks (she is Jewish but not, I think, religiously observant), who in the Telegraph yesterday suggested that we actually need religious standards, not only in banking but in everything else. “Is there nothing to be done,” she asked “…about the culture of Banking? Some people are arguing that capitalist enterprise cannot be properly conducted without a basis in religious principle. I find this claim quite persuasive, but surely it applies to everything else in life as much as to the banking crisis?

“Arguments for upholding moral standards of any kind are difficult to maintain without an ultimate appeal to absolute truth. Why not do the wicked thing if it brings you personal gain? How far can you get in providing an answer to that question without calling on something like a religious belief in the need to be good?”

The answer frankly is, not very far at all. What we end up with, in a relativist society, is a relativist morality, in other words with no shared moral beliefs at all. There is only one thing to add, from a Catholic perspective. It is this. Why is it that yet again I am hearing this argued so persuasively by Jews, lay and religious, and not by my own bishops? I only ask; I’m sure there’s an excellent reason.

  • ProdigalOPL

    I’ve come to depend on Rabbi Sacks to do our bishops’ job for them in public (I mean, national) discourse. 

    IIRC the root of the word ‘bishop’ is something like ‘overseer’, doubtless rendered ‘manager’ in ‘How to be a 21st century Bishop’. By contrast, ‘Rabbi’ means ‘teacher’. How I wish our managerial bishops would let their inner rabbi out occasionally. It would at least give secular society a chance to see that the Church has something to offer its non-adherents in the matter of morality as a public good. Or maybe their lordships, too, have got used to relying on the excellent Rabbi Sacks.

  • paulsays

    If bankers are willing to act with moral standards, and take responsibility, then they should have no issue with regulations to make sure they do so. 

  • Jason Clifford

    Why do people imagine there is only a valid response from the Church if it comes from the bishops?

    As a moral issue issue this is very clear cut.  It’s not something anyone should be in need of teaching from the bishops to understand.

    To complain that the bishops are failing because they have not been making PR about this is not reasonable or, if it is reasonable the question should be why all of us are not seeking to make PR about it.

  • paulpriest

    The major problem is the insidious pernicious corruption of morality through economic & financial libertarianism.
    What ostensibly seems to be a mere ideological/procedural phenomena when it comes to free market and the abolition of the old regulatory systems – which had fair pricing, minimum wage, reciprocation of loyalty/duty to a workforce, social/communal responsibility, competition & anti-monopoly regulations and quality/dignity/common decency as its aims…

    When that ideology took hold – it had two devastating consequences.
    a] Socal engineering – rupturing the fabric of society by assaulting the community, the family and the general workforce.
    b] The poisoning of the well when it came to general morality through ‘ethical libertarianism’ – which irrespective of the high-brow sophistry and obfuscating demagoguery  – it ultimately falls back on the words scrolled over the gateway to Hell: “Do what thou wilt”

    Common-sense, Tao, natural law morality discerns and adjudicates on these activities as just plain wrong – they’re contrary to justice.

    But I’m afraid we’re in the realm of a Ayn Rand post-Nietzschean quasi religious perspective that ‘Every Man is an Island – and nothing out there’s going to prevent me getting the best one I can’…
    ..and arguments for Justice are perverted into
    ‘a man’s [dignified - you'll even sometimes hear 'God-given']  right to do X, Y, Z whenever he pleases for whatever reason whenever he wants to whatever end’
    The John Stuart Mill proviso of ‘providing it does not harm another’ is seen as a superstitious irrelevance merely used by the weak to bully the strong.

    When a government or a big business or a banking system tells society it’s not worth considering – society soon adopts the mantra amongst its members.

    e.g. when Sunday trading forced parents into the workplace at the weekend and family/community structures were irrevocably fractured…how soon did we stop knowing the names of our next door neighbours?

    …or how many times does one now witness with incredulity down a pub,or at a social gathering or among younger family members or even in a tabloid or broadsheet column somebody asking ‘why is X wrong?’ when even a geneartion ago the questioner would have been determined a madman to question why an injustice was unjust or why it was wrong to do something wrong.

    Welcome to Bedlam!

  • theroadmaster

    Rabbi Sacks makes his points very effectively in measured tones but his words are not watered down for the sake of being politically correct or neutral regarding public morality.  The Jewish community has  developed a very noble, biblical, talmudic jurisprudence with it’s concomitant moral teachings, going back some 3,500 years.  So religious scholars and rabbis from that background speak very credibly when they pronounce on ethical matters in the public domain.  There is a natural order of right and wrong not subject to the whimsical subjective decisions of individuals and cannot be overturned to convenience people in certain situations.  This moral order can be discerned by us, which is analogous to discovering the hard underlying bedrock underneath weak topsoil.  While one can refer to this natural order of right and wrong outside the spiritual/religious context in which it is best framed, one will soon find that it’s whole raison d’etre can become lost in those circumstances and descend into mere gratuitous self-interest and sentimentality for many.

  • Henry Law

    Strange that the Catholic bishops of all people should have nothing to say on the Libor business. After all, the first papal encyclical of 1745, Vix Pervenit, “On usury and other dishonest profit”, addressed this very issue. Why has this been forgotten?

  • Parasum

    That is a good argument against the ridiculous (& woefully ignorant) idea that one has to be a theist to have a moral sense. It also explains why the bishops have not commented: there is nothing for them to say – bishops are not needed when people can tell, from their moral sense, what what they are doing is wrong or not. Bishops have (or they should have) better things to do, than to comment on every passing item of news. If they have to comment at every turn, are they going to be expected to comment on the Booker Prize, on who wins “Big Brother”, on the EU referendum ? 

  • daclamat

    Ask those those bishops who still read to have a look at Gustavo Gutierrez. We don’t need them to give us direction, but to stop hounding. In the seventies and eighties, many couragous bishops in Latin America, not to mention ordinary priests and layfolk, stood up against military dictatorships and paid the ultimate price; branded “marxist” and imprisoned, tortured and shot, non obstante CIA and the Vatican. There are a few theologians still around, for example Jon Sobrino (out of town when his close friends were slaughtered, much persecuted by the Vatican) and Tissa Balasuriya (excommunicated by Ratzinger’s mob).

  • Resjohn2

    One may think it is a matter of common sense that there has been wrongdoing by those involved in the Libor scandal and. It does not require the clergy to castigate the perpetrators in the media. One would hope and indeed expect that practicing Catholic are not involved in corrupt or dishonest banking practices. Perhaps we should be grateful that our bishops are not seeking self glorification in the media.   

  • Michael Petek

    Absolutely correct, Henry. Everyone seems to have forgotten the minor premiss of the argument against usury: in the synchronic or diachronic exchange of any two quantities of the same fungible good, there is equality of value where, and only where, there is equality of quantity.

  • Lee

    I was about to write on the subject of why this should, strictly, be no problem as we have encyclicals pointing to the detriment and thus unworthy practice of sloth and usury. Basically, us Catholics should not practice it.

  • Lazarus

    ‘Tissa Balasuriya (excommunicated by Ratzinger’s mob)’
    And, after acceptance of Church discipline, duly restored to full communion by ‘Ratzinger’s mob’.

  • Nicolas Bellord

    This is not a simple subject but it is crucially important.  It involves both morality and regulation.

    On the subject of morality I do not think that a shared moral code exists any longer.  It is notable how many of our leaders read PPE at Oxford – Cameron, Balls to name but two.  Would they not have imbibed utilitarianism and consequentialism as a result?   If that is the case then one can see how both politicians and bankers have arrived at the present situation.  If the decisions they make are purely based on what they think the consequences will be then nothing is intrinsically wrong.  Thus usury, gambling, telling lies and failing to tackle criminal behaviour become acceptable if you think the consequences will be acceptable.

    Taking these delicts one by one:

    Usury:  It is rife.  Lending to anyone regardless of their creditworthyness and the purpose for which they borrow and covering yourself by charging 19.5% or much worse with payday loans where the rates of interest are perhaps 2000% p.a.  All perfectly legal now as a result of legislation over the last 30 years or so.

    Usury is not a straightforward subject.  A good starting point is to read Hilaire Belloc’s 1931 essay “On Usury” in Essays of a Catholic  and then compare it with Ayn Rand’s Objectivism and rational egoism which allows any kind of usury.  Has not recent consumer credit legislation followed Ayn Rand rather than Belloc.

    Gambling:  The Financial Services Act 1986 allowed any contract that had previously been regarded as gambling and therefore unenforceable to become legitimate and enforceable provided it took place in the context of financial services.  Now gambling can become a vice and the vicious gambler gambles to lose as it is in losing everything that he gets his final kick or catharsis.  The whole derivatives industry needs examination to see which instruments are legitimate e.g. futures on hog backs and which should not be allowed as being pure gambling such as betting on stock exchange indices.

    Telling lies:  Misrepresentations of financial products is rife – who has the time to read the small print or the capacity to understand how financial products actually work.  To take a very simple example I was due to go onto a new tariff with EDF for electricity and their website said I could expect a substantial reduction in the annual cost.  I had the time (being retired) to investigate this further and my calculations showed a 20% increase.  I put it to EDF and they agreed my calculation was correct but they seemed entirely unconcerned that their previous estimate was a deliberate misrepresentation.   Effectively in the present situation lies were told in order to fiddle the LIBOR rate.

    Failing to tackle criminal behaviour:  I am astonished that the FSA has acted the way it has.  I can only assume that it was the American regulators who gave them no alternative but to act.  The Serious Fraud Office is a farce.

    These are moral issues.  Unless you have people who adhere to traditional Judaeo/Christian morality running our financial system then things will go wrong.

    Regulation is necessary but like Patriotism is not enough.  Ethical behaviour is sometimes defined as complying with the regulations and if you can find a way round the regulations then that is sufficient.  You must have a basic moral code.

    But then of course you have to have regulators who will regulate.  “Quis custodiet ipsos custodies?”  One needs to read the Parliamentary Ombudsman’s report on Equitable Life “A decade of regulatory failure” which contains a blow by blow account of how regulators did nothing effective beyond the odd pencilled note such as “that is a bit odd.  Perhaps we ought to take them out to lunch”.  Hedge fund managers got a £200 per head lunch at the expense of the FSA according to Private Eye.

    And then things got much worse.  After a decade of no regulation Equitable Life was broke to the tune of £1.5 billion.  They were advised by the FSA to take out a reassurance treaty.  The Government Actuary saw a draft and said it was worthless.  Somebody in the FSA or the Tripartite Committee – perhaps a Treasury Minister? – said fix it.  We cannot allow our oldest insurance company to collapse – damn the policy holders – we need to support a stable market.  So a fraudulent instrument was put in the company’s balance sheet to show it was not broke.  Did anyone get prosecuted for fraud?  Not likely.  I asked a new Treasury Minister – Mark Hoban – why nobody was prosecuted and I got the response “What would be the point?”.  Now on the other hand some Americans did the same thing with AIG with the same reassurance treaty company and where are they now?  In gaol.

    Barclays are claiming that they had a nod and a wink from above and in view of what happened with Equitable Life I can believe that this is possible.  Will we ever know?  In a crisis morality gets discarded and a utilitarian solution is given the okay.

  • awkwardcustomer

    What, exactly, is so wonderful about Rabbi Jonathan Sacks’ comments?  You don’t have to be religious to be moral, but religious societies with a shared moral code tend to be better at observing that moral code – hardly the observation of the century.  The problem is that religious societies, no doubt with shared moral codes, have been known to indulge in such practices as human sacrifice because their gods demanded it.  Rabbi Sacks dodges the question.  Which moral code is the individual and society to adopt?  He gives no answer.

    Calling for a shared moral code as a means of restraining the bankers is pointless unless the moral code is specified.  Many modern people think they are being very moral in calling for an end to discrimination against gay people, even if this results in the closure of Catholic adoption agencies.  It’s not that the secular world wants an end of all morality.  They just want the end of Christian morality so they can replace it with their own.

    As for the greed of the bankers.  According to Adam Smith, ‘the pursuit of self-interest’ is one of the three principles of Capitalism.  The bankers operate within an economic system which is essentially exploitative.  Yes, regulations were lifted and this allowed the bankers, and lots of other people, to run wild on credit.  But that regulation was only put in place to prevent the madness of the 1920s which led to the Wall Street Crash of 1929 and the ensuing Great Depression  Throughout the 1920s investing ‘on the margin’ allowed speculators with borrowed money to make great gains in the bond market, which became wildly over-valued and led to the crash which followed.  This time around, it was the property market.

    The silence of the Bishops on the Libor scandal doesn’t worry or surprise me.  If religious leaders are too wishy-washy to be specific, and too worried about the response to point out that human actions have eternal consequences, no-one will pay any attention to them anyway.

  • Kevin

    “you can be a moral person without religion”

    The greatest and the first commandment is to love God. If rejection of religion implies deliberate rejection of God, then such a person would be objectively deficient in his or her morality. Humility before God remains etched in the architecture of the City of London, whose motto is “Lord, guide us”. The Royal Exchange, for example, bears the inscription, “The earth is the Lord’s and the fullness thereof”. Canary Wharf, on the other hand, has no such reminders.

  • theroadmaster

    The Jewish system of jurisprudence and morality was directly inspired by the firm belief in a Monotheistic Creator and not by a DIY methodology which relied on fickle custom or fashion.  While one can have a sense of right and wrong while not believing in a Creator God, the natural order which is accessible to all, would have no higher reason for existing than our subjective version of it.  Without their proper religious context, the laws which underwrite the reality of our world, have no solid basis or reason for their existence.

  • rjt1

    Interesting comment about Oxford. I did a paper on Moral and Political Philosophy there. J.S.Mill and David Hume were prominent figures so systems of morality based on consequences or on feelings would have been important influences on future policy makers – oh dear. I don’t think Aquinas got a look in.

  • c matt

    that one has to be a theist to have a moral sense.

    One certainly does not have to be a theist to have a moral sense, any more than one has to be an automotive engineer to drive a car.  But without the automotive engineer, there would no car to drive.  Just as without the theist, (or more precisely, the object of the theist’s belief), there would be no morality to sense.

  • Willoughby Chase

    Of course you need religion to have morality. If their is no God then why would anything matter? If there is no life after death, then who cares? Because its biologically better to continue the species? Is that why we should care? That is not a sufficient reason to care. Why should I care about the species if after I die, I will just be annihilated? This information about why my hormones make me feel altruistic simply frees me from altruism. I now understand that altruism is just a bunch of chemicals that I evolved to have – but that don’t mean anything beyond that biological purpose. A biological purpose that I have no imperative to desire or accept. If there is no religion than there is nothing, no good no purpose no reason to do anything, no reason to see anything as good or bad. We are lying to ourselves of we think that we can make society have a shared moral code without having a shared religion.

  • Imarinespino

    Of course you need religion to have morality. If their is no God then why would anything matter? If there is no life after death, then who cares? Because its biologically better to continue the species? Is that why we should care? That is not a sufficient reason to care. Why should I care about the species if after I die, I will just be annihilated? This information about why my hormones make me feel altruistic simply frees me from altruism. I now understand that altruism is just a bunch of chemicals that I evolved to have – but that don’t mean anything beyond that biological purpose. A biological purpose that I have no imperative to desire or accept. If there is no religion than there is nothing, no good no purpose no reason to do anything, no reason to see anything as good or bad. We are lying to ourselves of we think that we can make society have a shared moral code without having a shared religion.

  • doubtom

    Maybe you’re hearing from a jewish rabbi because of the preponderance of jews involved in the crime. Ya think?