The Influence of the Economic Crisis on Centre-right Values: A Christian Democratic Perspective

Introduction

Four reflections are forced upon the parties of the European People's Party (EPP) by the economic crisis:

I think it is important to start by stating what I understand by the terms used in these questions.

Values and the economic crisis

The term ‘economic crisis’ is used very freely, on the assumption that everybody has the same understanding of what it means. But different people are suffering different types of crisis, some more serious than others. For some the crisis is one of reduced income. For others, it is a crisis of the loss of a job, and of the sense of meaning in their lives that comes from having a regular activity that is recognised as valuable by society by means of a financial payment. For yet other people, mostly not in Europe, the economic crisis means actual starvation or loss of life for avoidable reasons.

A value system is what helps us, as individuals or as political parties, to weigh the differences between varying personal experiences of the economic crisis and to adjust our political and personal responses, to give greater attention to the more serious effects and somewhat less attention to the less serious. This may seem so obvious as not to need to be said, but it is of importance, in terms of showing what ‘values’ mean in practice. For example, if loss of income is less serious than loss of a job, then pay cuts are to be preferred to redundancies as a way of reducing public sector wage costs. Likewise, if policies on energy use are causing global climate change that is leading to the loss of arable land and consequent starvation in another part of the world, that is more serious than the net income loss we might suffer by switching to a more expensive, but less environmentally destructive, form of energy use. If one has a well-worked-out value system, one can make judgements like this confidently. If one does not, one treats all losses as equally severe, or decides not to think about dilemmas and choices at all because it is too much like hard work.

In considering the first of the four questions raised at the outset of this article, I would argue that the economic crisis does affect our values in the sense that it puts them to the test in difficult circumstances. But if our values are genuine, it ought not to change them in any way.

Turning to the title of the article, I would question whether there are what one might call ‘centre-right’ values in any meaningful sense. ‘Centre-right’ describes a position on a one-dimensional spectrum. It does not describe, or even hint at, a value system. Nor, of course, does the label ‘centre-left’. The terms ‘left’ and ‘right’, as used in politics, do convey some meaning, but they hide as much as they reveal, and do no justice to the complexity of political issues or to the rich variety of human thinking about them.

‘Socialism’ does not really describe a value system either. It describes a particular means–-state control–-of realising particular values. Socialism can be democratic or undemocratic, but its common feature is an enhanced role for the state. State control can be used in some socialist societies, for example in China, in ways that achieve high levels of income inequality, while in other self-described socialist states the outcome may have been more egalitarian.

Nor does the ‘free market’ really describe a value system. It is also one of the means of achieving the optimum allocation of resources to achieve common goals. But it is the value system of a society, as expressed through the market, which determines what those common goals ought to be. For example, in some wealthy and free societies, the contemporary value system may favour conspicuous consumption; in others it may emphasise ostentatious frugality.

Are values in a free market best expressed through collective action or individual decisions?

Where should the line between the market and collective decisions be drawn? Some may argue that people express their values through their purchasing decisions, for example by deciding to pay for health insurance rather than a holiday, and this is a choice that should be left to individuals. Others may say that such decisions should not be left to the market, that people do not know enough to make a wise, free decision about something as complex as health insurance, and that such a decision should be made for them by a democratic state, either through making health insurance compulsory or by tax concessions that reduce the relative cost of taking out health insurance (as against using the money to take a holiday instead).

Some free market theorists, like Friedrich Hayek, argue that it is best to leave as many choices as possible to individual purchasing decisions by individual people, because the sum of these decisions is likely to come closer to optimising the common good, since it draws on the rational and calculated wisdom of millions of people. They prefer this to concentrating decisions in fewer hands, as is inevitable if a state, however democratic it may be, makes the decisions. Others argue that market participants are not particularly rational in their decisions and are influenced by emotional and short-term factors, not able to take an adequately enlightened account of their own long-term interests (if it is possible to work out what these are!). Behavioural economists are discovering that people do not always base their decisions on rational calculation but are influenced just as much by inertia and emotional factors.

These are very interesting issues but, when you boil them down, they are really only practical questions about how to give expression to values in a particular society at a particular time, rather than questions about what one's enduring values are, as such. I believe, therefore, that values can never ‘suffer from practical considerations’, to use the terms of the question posed at the beginning of this article. But practical considerations will influence the choice of means to give expression to those values, and this will vary from time to time. In some periods of history, it will be safe to leave certain categories of decision to a free market. In others, collective provision or democratic compulsion may be the better option. If a society is simple, materially underdeveloped and one where most people know one another, one set of means may be best. If a society is rich, complex and anonymous, a different set of means may have to be used to give expression to the same set of values.

Christian Democracy: a value system in the real meaning of the term

From my point of view, ‘Christian Democratic’ describes a true value system, as distinct from a mere means of realising values (like socialism or the free market). At the same time, the simple term ‘Christian Democratic’ does not start out with a preferred means to use to express one's values to the same degree as do terms like ‘socialist’ or ‘free market’. As I understand it, Christian Democracy starts, not with a preordained view of how society should be organised, but with a view of the value of each person as an individual who has been created by God. It puts the value of the person on a higher plane than that of the nation, a social class or a preferred system of decision-making. That differentiates Christian Democracy from nationalism, socialism and capitalism.

‘Every person counts’ is an expression which, for me, encapsulates the core of Christian Democracy. Every person ought to have their life protected and be allowed to develop their talents. In turn, every person has responsibilities as to how he or she treats other people, both as individuals and in relating to them through politics. Christian Democracy, as its name suggests, draws on religious belief as a source of understanding how to deal with political questions.

Some, in what one might describe as the libertarian or liberal section of the centre-right, might argue that instead of Christian Democracy, the idea of freedom might provide a better core or organising value for parties in that part of the political spectrum. I would disagree. Freedom always has to be limited, and the limits will vary from time to time. This reduces the value of ‘freedom’ as a fundamental organising value. In a civilised society, there can be no freedom to commit crime, to steal the property of others or to carry on activity in one's own property that damages the property of others. Even freedom of speech has be to limited by protections against damage to the reputations of others and against obscenity. Freedoms compete with one another, and sometimes one freedom has to take precedence over another freedom. Some might argue that people should have freedom to do what they wish with their own bodies and their own lives and lifestyles, and that, on that basis, there should be no limit placed on abortion. But abortion takes away another freedom: the freedom to be born, the consequent freedom of a child to live. To my mind that is the freedom that should take precedence, because it is existential. One cannot, for example, ever attain the right to do as one wishes with one's body, unless one has first been granted the freedom to be born. That is an important distinction that needs to be made between an existential freedom and a contingent one.

But should religious belief not be kept out of politics?

Some argue that Christian belief or any other form of religious belief should be kept out of politics, and that politics should operate in a separate sphere from religious belief, which should neither influence nor be influenced by political institutions. This is not a universally accepted viewpoint. The European Convention on Human Rights, guarantees to every European the right, in its words, to ‘manifest his religion, with others in public or private, in teaching, practice, worship, and observance’. That right to manifest belief clearly includes a right to manifest it in the realm of politics. I believe a ‘separationist’ view, one that would keep religion in the private sphere and out of politics, is artificial. It misunderstands human nature. It also refuses to accept religious faith for what it is, something that potentially informs every aspect of one's life. Voters do not divide their minds into compartments, one marked ‘religious’, another marked ‘political’, another ‘personal’ and yet another marked ‘family’ and so forth. What goes on in one part of their mind influences what goes on in the other.

Everyone agrees that ethical beliefs can, and should, influence the actions of political institutions. But for many people, it is impossible to separate their ethical beliefs from the religious source from which they spring. Chief Rabbi Jonathan Sachs said that in modern society, we need to be bilingual: we need to be able to speak the language of faith in our religious community, and the language of the common good in the wider world. And learning another language usually enriches our use of the one we already speak!

Humans are social beings. They do not live atomised lives. They live in overlapping communities of families, neighbourhoods, workplaces, political parties, nations, sports clubs, and for many … in the community of a church. All of these communities, including churches, help form a society's ethos. One's heritage of religious belief shapes one's ethos, even in ways one does not acknowledge. A shared ethos is part of the social capital of any state.

A shared ethos helps a society to function

Without a shared ethos, it is difficult for a society to function or to be governed. Common sense tells us that laws are obeyed not only out of fear of retribution but also out of respect for the shared ethos, the ethos that forms a basis for trust in society and which makes government, governance and states possible. A shared ethos is also important to the working of the economy, because it creates a basis for trust between people, without which a modern capitalist economy could not function. As Pope Benedict puts it in the encyclical Caritas in Veritate, ‘Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function. And today it is this trust that has ceased to exist, and the loss of trust is a great loss.’ This is a very important insight. All markets depend on trust. Without trust, we would find ourselves spending so much on lawyers to check one another out or devising so many complex regulations that trading with one another would become incredibly expensive.

But where does trust come from? It comes from a shared ethos or belief system in a society, on the basis of which one can anticipate how people one has never met will behave. And where, for many people, does that shared ethos, that ability to anticipate how others might behave, come from? To a significant degree, it comes from their shared religious beliefs, from their religious heritage, from their religious education.

It is simple. Markets need ethics, and for many people, ethics derive from religious belief, or from the social capital left behind by religious belief. There are, of course, clear distinctions of function between the roles the state performs and the role churches perform. These must be respected even though the boundaries will shift slightly from time to time. But the participation of people of faith can enhance the quality of political discourse.

Faith in eternal life helps one to be humble in all things, including in one's contribution to politics, to accept that we do not know it all. Because faith tells people that there is a God and that they are not alone in the universe, it tells them that they should not be arrogant. They should not act as if this generation, with all its technologies, has all the answers. Faith tells people that no matter how hard they try, they are not going to create a heaven on earth, and that totalitarian or materialist philosophies that pretend to do so are just plain wrong. It also tells them that there is such a thing as fundamental truth for which one must seek, by the use of reason, informed by the teachings of one's church or religious tradition.

But if we believe there are certain fundamental truths, then in approaching political questions, we cannot claim that what is right or wrong, what is true or untrue, is to be determined solely by the political consensus in a society at any particular time. Opinion polls are not the determinant of truth, nor, for that matter, is the ‘latest scientific research’. Opinion polls are just opinion polls, and research is essentially what it says it is: research, part of a continuing search. Both can and will be superseded by other polls and other research. Meanwhile, fundamental truths remain true.

Majorities are not always enough to decide issues

Truth and right are not contingent. Majorities can be wrong, and often are. In this, Christianity is in agreement with the approach of the framers of the Universal Declaration of Human Rights, who also held that there are certain fundamentals that are antecedent to the opinion of the majority at any given time. These fundamentals are formulated as enduring human rights.

A belief that ‘every person counts’ makes it reasonable to respect the right to life from conception to natural death and, equally importantly, to work vigorously and commit scarce resources to eliminating easily curable diseases, like malaria, that cause children to die prematurely. Just because a human being has not yet been born, or lives out of our sight on another continent, does not mean that he or she has no call on us to vindicate their human rights. The view that ‘every person counts’ is incompatible with a nationalistic view of the world, which would give preference to people of our own nationality, ethnicity or linguistic group. And those who are disabled, mentally or physically, also have a call on us, whether that call is answered by charitable giving or through state provision funded by taxation.

It is not a question of abstract legal rights enforceable against the state (i.e. against someone else), but rather a question of what we do, and how we understand our personal responsibilities, how we each live our lives and express ourselves politically. It is not consistent to be privately charitable, but fail to apply that charity in the voting choices we make. Nor is it enough to vote for social justice, but fail to be charitable in our private lives. We should apply the same values to all we do. One of the fundamentals of Christianity is forgiveness, and that must influence a Christian Democratic approach to law enforcement, which should banish from penal policy the notion of retribution for the sake of victims.

Christianity, like Islam, aspires to be a universal religion, a religion potentially for all humankind. That ought to mean that Christian Democrats should avoid policies that distinguish between people on ethnic or national grounds, or promote the interests of one nation at the expense of another. Christian Democrats are by their nature universalists rather than nationalists. The pursuit of all these policies must, of course, take place in a practical way. Compromises have to be made. Some goals will conflict with one another. Finance may be a limiting factor. There are new limits to the level of taxation nowadays, not least because it is so easy for people who are unhappy with the level of tax they pay to move themselves or their assets to another jurisdiction.

Economic growth: what is it?

All economists agree that there is one thing we need, to get us out of our financial and banking difficulties–-economic growth. This is where the last of the four questions I posed at the beginning of this article comes into the picture. What ideas can the EPP and its member parties contribute to the debate on how best to restore sustainable, robust and fair economic growth to Europe's economy?

The adjectives are interdependent. Growth funded by unwise borrowing or inflation would not be sustainable. Nor would growth that ran down limited non-renewable material resources be robust. Growth that enriched one section of a community while leaving others behind would certainly not be fair, but it would, in practical terms, not be robust or sustainable either.

It is also important to specify what it is we want to see growing when we aim for economic growth. In statistical terms, an increase in numbers in hospitals or prisons adds to GDP, but it is not the sort of growth we are looking for. Taking time off from paid work to look after children or sick relatives subtracts from GDP, but it does not subtract from human welfare and may add substantially to it. This is not an argument for abandoning GDP as a measure of growth, but it should be complemented by other measurements that look at resource sustainability and at people's own assessment of their well-being, taking into account things like their connectedness with family and friends, their physical and mental health and their sense of control over how they spend their time. Some of these measures will be subjective, but just because something is subjective does not make it less real.

Economic growth is really an expression of a society's ability to adapt quickly to new opportunities or needs. A flexible society will grow faster than an inflexible one. But economic growth is a means to an end, not an end in itself. A society that is contented and well ordered, in which people enjoy democratic freedoms and are valued for themselves, whether they are materially prosperous or not, may not need to grow as fast to keep its people satisfied as a society that does not enjoy these non-economic advantages. If the only values that count in a society are monetary values, the pursuit of economic growth will be insatiable, because people will never have enough and will be unhappy if others have more money than they have, even though, objectively, they may have sufficient money to lead a fulfilling and varied life. This is what lies behind the willingness to pay exorbitant prices for scarce status goods, which enable one to feel superior to others who cannot do so.

This is where Christian Democratic values can be particularly important in shaping a response to the economic and financial crisis. A society that is infused by a balance of material and non-material values will be better able to keep economic problems in proportion.

Christian Democratic values can also be helpful in diagnosing some of the reasons why the current crisis happened, and thereby avoid a recurrence of it. Values go beyond rules and regulations, and a society or business with a strong value system will not need so many detailed rules. The present economic crisis had its origin in an excessive expansion of credit, using novel forms of financial engineering that outsiders did not understand. Some of this expansion was driven by pay incentive systems that privileged short-term gains over sustainable long-term financial arrangements. This led to behaviour that was unethical, even if not strictly illegal. But the pressure to gain market share overwhelmed business ethics, and firms did not have active systems in place to remind their staff of their wider ethical obligations that went beyond simply complying with rules and maximising short-term returns.

Of course, a Christian Democratic value system does prescribe a particular formula for balanced and sustainable economic growth. The strange thing is that mainstream economists often have very little to say about what makes economies grow, at least before the growth happens. They frequently can explain growth after the event, but not before.

Seven factors that promote economic growth

My sense is that growth occurs in an economy when the following seven factors are present:

Conclusion

It is important, in discussing our values as parties occupying what is described by some as the ‘centre-right’, that we continue to draw heavily on the rich heritage of Christian Democracy, which is part of the inheritance of many of our parties. While economic growth is very important, it is no more than a means to an end, and we must organise society so that enduring human values have meaningful expression regardless of current economic conditions. Finally, we should use those values to prevent a recurrence of present problems rather than rely alone on rules and regulations, which can be cumbersome, costly and ineffective.