Faith in Finance Debate


A Response from Dr Chris Baker

A guest post in advance of my own article which is still being edited (Ed.)

Last night’s well-attended Faith in Finance debate, organised by the St Paul’s Institute and the Christian Muslim Forum had a prescient ring to it. That same week, London hosted the World Islamic Economic Forum (the first such event ever held in a non-Muslim state) and David Cameron announced a new Islamic index on the London Stock Exchange.

The event, however, had clearly been in the planning for a long time and to that extent, the content was reassuringly timeless. All speakers started the evening by reminding the audience that economics needed to rediscover its social purposes.  The exchange and investment of capital is part of human activity that is under the laws of God and, therefore, should be aimed at the flourishing of humankind and the pursuit of love and justice.

Consequentially, the ensuing rhetorical debate was simultaneously exciting and alienating.  Tarek El Diwany from Zest Advisory LLP referred to capitalism as a religion, warning that we had a stark choice either to accept the religion of capitalism or the religion of God.

Bishop Peter Selby, highlighted the relationship between debt and slavery, asking how can we move from an economy of debt to one of gift? He also reminded that the virtue of mercy (so strongly emphasised in all the Abrahamic traditions) should be a moral imperative that counteracts the ethos and drive of a debt-fuelled economy.

Shaykh Faizal Manjoo from the Markfield Institute contentiously asserted the difference between ethical finance and Islamic finance. Ethical finance, he said, was something whereby we decide what is right; in Islamic finance that decision is already made for you. It was what he unapologetically called ‘the rigidity’ of the Islamic system that had saved the Islamic world from the worst impacts of the 2008 banking crisis.

By this point I was feeling somewhat frustrated. The tone of the debate felt hectoring and moralising. The regressive excesses of religion were being ignored and there was little by way of detailed analysis. There lacked common language between religious and non-religious worlds through which we could construct a new public economic consensus.

Fortunately some of the lived complexity of introducing faith-based finance emerged during a lively question and answer session.  Patricia Alexander, Managing Director of Shared Interest reflected that their work providing financial services to Fairtrade producers and retailers was continually undermined by transnational companies attempting to block EU proposed Fairtrade agreements. Meanwhile, when pushed on the difference between widely available ‘Islamic’ loans for house purchase and a mortgage, Tarek El Diwany conceded that in reality there was very little divergence. The basic Islamic principle of 0% interest and the idea of both partners sharing risk had been generally undermined by practical concessions to the dominant financial system. A pessimistic analogy was drawn with Medieval Christian finance which, over time, lost its distinctive prohibition against unethical investment and the charging of usury.

All of a sudden there was a more compelling edge to the debate:  just how do we operationalize key and necessary principles that religion offers into workable alternatives? How do we move from rhetoric to practice in ways that both transform the financial system, whilst keeping the radical perspective of religious-based wisdom intact?

Many of these of tensions and questions have been addressed by the William Temple Foundation’s 2006 report for the Manchester Centre for Public Theology entitled Faiths and Finance: A place for faith-based economics. The fruits of a two-year debate between Islamic and Christian theologians and economists, the report contains perspectives from Christian, Muslim and secular finance standpoints.

This was a fascinating and engrossing event which had raised more questions than answers. The perspectives of the banking and financial industries were absent and must be more fully addressed in future debates. Detailed arguments about the actual practices and impacts of faith-based finance were largely missing. More needs to be done to debate how Western concepts of autonomy and individual responsibility coalesce with Islamic understandings of surrender and obedience to the transcendent power of the God’s revelation. The rise of Eastern religions and their relationship to the new economic power of China and India needs to be considered at some point.

But if you wanted to experience the edgy and exhilarating power of the religious imagination and its potential ability to transform this whole debate, then you were in the right place.

Dr Chris Baker is Director of Research at the William Temple Foundation, an independent faith-based research institution working to advance the visionary thinking of Archbishop William Temple in an ongoing search for a just and inclusive society.


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