For God and Profit: How Banking and Finance Can Serve the Common Good. Samuel Gregg, The Crossroad Publishing Company, 2016

In many societies religion and politics are inseparable. In Britain the political elite “do not do God” while church leaders stay outside the political arena if they can help it. But the financial crisis of 2008 swept away that boundary and now church leaders are expected to weigh in on economic debates. One reason media welcomed Justin Welby to lead the Church of England was because as a former oil executive he was thought to bring City savvy to the pulpit, and every broadside Pope Francis lobs against capitalism gets headline billing. So even if politicians do not do god, clerics do economics. Questions are asked whether capitalism and Christianity are in sync. About time, too. Jesus, after all, said, “you cannot serve God and mammon” (Matt 6:24). Into this minefield treads Samuel Gregg with his book For God and Profit.

A forward is supplied by Cardinal Pell, a prelate whose rhetoric owes more to his native Australia than to the subtleties of Vatican-speak: Pell famously said climate change lobbyists reminded him of ‘water melons’ – green on the outside, red on the inside. Having Pell for a patron is a hint the author does not shy from grasping nettles. Samuel Gregg heads up research at the Acton Institute, a Michigan-based think tank named after the Victorian Liberal and Catholic, Lord Acton, and its agenda is to spearhead dialogue on issues that straddle church and commerce.

The book comes in two halves. The first sets out what Christianity in the Middle Ages had to say about business. That period is instructive because it was a time when whatever the church said about anything shaped the way society looked at things. In the second half of the book Gregg sets out a Christian stance for resolving a host of topical financial issues.

The medieval historical background matters because of misconceptions that need clearing up. Some hold Christianity imposed restrictions on banking which stifled entrepreneurship, and worse, the church blocked economic innovation by encouraging the faithful to strive for happiness in the next world rather than in this one. Both claims, for Gregg, are urban myths. True, the church banned usury, and indeed, it took time for the realization to emerge that charging interest is not always tantamount to usury. But investing in government bonds became legitimate long before the Reformation. And likewise, regarding property rights, Thomas Aquinas (and others) pointed out that although Jesus undeniably did not place much store on accumulating goods, in a world where nobody had responsibility for tending to property nobody would do any work at all and we would end up in a wholesome mess. (Admittedly, these were not the very words Aquinas used in his Summa theologiae. But that is what they amount to.)

The bottom line of Christian economics is that Christianity is pro-profit and pro-property.

Gregg turns to show how that applies to a range of flash points in public debates about finance. One area in contention is a Christian perspective on public finance. It is one of Gregg’s finds that from the seventeenth century onward, the very moment state involvement in the economy reached its inflection point and took off, Christian contributions to economics, surprisingly, began to fade away. In fact, most of what the church has had to say about public finance was already spelled out in the Middle Ages: governments should ban monopolies and ensure the purchasing power of money remains stable. Gregg’s book is peppered with observations on the right conduct of government finance which for the most part issue from theologians of the medieval period. After the Middle Ages the topic fell off the theological radar until the nineteenth century, when the church staked out its position on labour relations, and then when in the 1950s Pope Pius XI declared finance as the “crossroads [] of capital, labour, and ideas.”

But the church has been less than sure-footed in formulating policies that are robust as well as practicable regarding issues that have come to the fore in recent years. One such is financial trading, aka speculation, regarded by some in the church as morally ambivalent. For Gregg, trading in anything from currencies to orange juice smooths price swings, surely a useful social function, and use to society is the all-important criterion to assess whether speculation is a good thing. Only when traders have sufficient market power to disrupt orderly markets does speculation turn bad. So the crux here is not trading as such, the problem is excessive market power.

Another bugbear where churches have had difficulty going beyond platitudes is how financial markets should be regulated. Excessive greed is a bad thing, for sure, and it is a commendable sentiment to state that something should be done about it. But to arrive at this insight hardly requires a degree in theology. Also, for church leaders to call, as they have done, for added layers of regulation to curtail abuse is uncontroversial. But this recommendation only works if we have guidelines to ensure regulation does not stifle creativity.

Signposts pointing towards a perspective on financial markets that is constructive as well as distinctly Christian feature in Gregg’s last chapter. What matters more for the health of financial markets than regulation is the motivation of professionals working in them. And churches have a competitive advantage for giving guidance in this very field, personal ethics. As Gregg implies, in my view rightly, the question how finance contributes to communities is not an issue bankers may outsource to top managers or to consultants or to regulators, rather it is a challenge every professional ought to face up to in whatever happens to be their own particular responsibility. Gregg sees a concurrence here between Christian ethics and Adam Smith’s Theory of Moral Sentiments: in commerce no less than in any other environment, achieving lasting satisfaction is not possible unless actions are based on personal virtue. Corporations do not face moral challenges: individuals do.