Economy

While it has in some ways been less dominant than in recent UK elections, the economy is nevertheless a hugely important issue in 2017. The health and structure of the economy are by far the most important factors in determining our living standards. As Christians, we should care about the quality of life of ourselves and of those around us, and that means caring about the economy and economic policy.

The closest the Bible has to a commentary on the institutional structure of the economy may be the instructions God gave his people in the Old Testament. The Jubilee principle laid out in Leviticus 25, whereby slaves were freed and land returned to its original owners every fifty years, establishes as a fundamental principle the right of all to a permanent stake in the means of production and in the wealth of the nation.pentecost.jpg

In the New Testament, we see the early church take a series of staggering measures to share and provide for the material needs of one another and of the most vulnerable in society (see Acts 2:44-45). This further illustrates God’s underlying belief that a community is only successful when each individual has a chance to flourish and when nobody is left behind.

Although the economy has changed beyond recognition in the ensuing millennia, it is arguably more important than ever that we work to implement these principles in the way our economy works. It is beyond doubt that the proliferation of capitalism has created great wealth and improved living standards for millions as a result of the incentives and efficiency that competitive markets create. However, it has become equally clear that, when capitalism is taken to an extreme, unfettered markets bring huge disadvantages: exploitation, inequality and environmental destruction.

Christians on the Left therefore believes that the best economic system has to be one that combines the power of markets to improve our lives with the safeguards of a state willing to mitigate their worst effects. Business is the lifeblood of our economy, and is an expression of our God-given creativity. A dynamic economy must encourage sustainable and responsible business activity, recognising the enormous benefits they bring, while being unafraid of a positive role for the state in promoting social justice.

canarywharf.jpgIn recent years, the problems associated with the excessive liberalisation of markets have been laid bare by the global financial crisis. Millions of British people suffered, and are still suffering in the form of sizeable real wage cuts, from an economic crisis triggered largely by the greed and the failure of an irresponsible investment banking sector. It is both tragic and embarrassing that the government’s major policy response has been to slash spending on vital public services in order to meet arbitrary deficit reduction targets, thereby punishing ordinary people for the mistakes of large corporations.

Nine years on from the crisis, it is clear that austerity has failed. Average wages remain lower[1]. Rates of child poverty are increasing[2]. A sizeable budget deficit is still with us, despite repeated broken promises of its demise[3]. And while the situation is better than before the crisis, it is not clear that the banking sector has really learned (or been taught) the lessons of the crash.

Homeless.jpgThe past seven years of economic policy have failed to address the root of the problem but have succeeded in disproportionately penalising the most vulnerable in our society. This is despite the government missing every target it has set itself for cutting the deficit.

A clear change of direction is needed. Labour’s fully costed manifesto sets out a bold blueprint for such a change, with an ambitious yet responsible plan to make our economy work for everyone. Cuts to welfare and public services will end. There will be firm action against the exploitative ‘gig economy’ and against corporate tax evasion. A National Investment Bank will invest in the future of the country, transforming the prospects of millions who feel left behind by globalisation. There will be unprecedented investment in education, and additional money for health, social care and the police.

Nowhere is the need for a major change of direction more apparent than in the area of employment. The ability to support oneself financially through secure employment is a basic component of human dignity and honour. Unfortunately, this essential need is increasingly out of reach for many people, especially the most vulnerable. Recent years have seen severe pressure on living standards for many people as earnings stagnate or fall even as the cost of living rises. In-work poverty is growing rapidly, low pay is becoming ever more prevalent and unscrupulous corporations are attempting to exploit workers.

The present government, which has often pointed to healthy unemployment and employment figures, seems to have made the quantity of jobs a much greater political priority than the quality of jobs. This is having a severe negative effect on many British people.

ukawe.pngWe believe that an economy is not truly strong unless it delivers for all. Even though GDP per person has grown by 1.7% in real terms since the pre-recession peak[4], average weekly earnings are an abject 6.4% lower than they were before the crisis[5]. This is evidence that the economy is not working for everyone.

Government policy over recent years has not only been completely inadequate to deal with these issues, but in many cases has directly caused or added to the problems. Blindly parroting a belief that ‘work is the best route out of poverty’ simply does not and will not cut it when 55% of those in poverty – 7.4 million people – are in a working family, a record high according to the Rowntree Foundation[6]. This shocking statistic makes it clear that the biggest problem facing low-income households is not unemployment, and certainly not welfare dependency, but low pay.

Labour is the only party with a credible plan to transform the British economy so that it works for all, including the most vulnerable. If it is carefully implemented, Labour’s proposed increase in the minimum wage to £10 per hour could be a game changer for millions of underpaid workers, lifting living standards and drastically reducing levels of poverty.

Ultimately, our economic systems are most fundamentally flawed when they treat human beings as economic units rather than as people made in the image of God. We are not animate robots whose purpose in life is to add to our economy’s GDP, but the handiwork of a loving heavenly father made to love God and our fellow humans. An economy based on the principle of individualism, which ultimately derives human worth from the value that can be extracted from labour and consumption, cannot ultimately escape exploitation, inequality and devaluation of humanity. God’s economy differs radically, asserting that every human life has real and equal value independent of its contribution to the economy. Reshaping our economy to work on this principle is the change Christians on the Left is passionate about working towards.

When he was on earth, our Lord said ‘whatever you did for one of the least of these brothers and sisters of mine, you did for me’ (Matthew 25:40). Loving God means caring for the hungry, the hurt, the sick and the poor. This inspirational message is one that should impel us all to hope for an economy for the common good.



[4] https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ihxw/pn2 based on gross domestic product (average) per head (seasonally adjusted), comparing 2007 Q4 to 2017 Q1.

[5] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/averageweeklyearningsearn01 based on average weekly earnings (total pay, seasonally adjusted) in real terms, comparing March 2017 to February 2008.

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