What is the good life asks Lord Skidelsky

Isabelle de Grave
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At a debate chaired by BBC Economics Editor Stephanie Flanders and hosted by St Paul’s Institute in conjunction with CCLA, a client-owned fund manager for charities, churches and local authorities, Lord Skidelsky urged people to take stock of our money breeding culture and ask: What is the good life?

 

As the financial sector’s employees headed home after a day in the office, a distinguished panel invited to a debate about our financial system were asked: Is there such a thing as good and bad money? 

Lord Skidelsky was joined on the panel by Tarek El Diwany, senior partner at Zest Advisory and expert in Islamic finance; Ann Pettifor, director of Policy Research in Macroeconomics (PRIME); and Paul Sharma, deputy head of the newly-established Prudential Regulation Authority (PRA). 
 
Skidelsky cautioned that breeding money for the love of it has reached new heights and urged us to ask how we can create the good life. For Skidelsky it is essential that we understand what we need as a society and how we want to live, so that money can be used as a tool rather than an end in itself. Otherwise money rules and we are condemned to a never-ending pursuit of more.
 
“We are yet to establish a morally-efficient economy,” said Skidelsky. In our current scenario “money serves our needs and breeds them” he said. 
 
For Tom and Barbara Good in the 1970s sitcom ‘The Good Life’, the answer to Skidelsky’s question is self-sufficiency; less and not more. After quitting his job on his 40th birthday, Tom Good and his wife Barbara, convert their garden into a farm, get in pigs and chickens, and grow their own crops. Moments of catastrophe and bliss ensue and the pair both laugh at and pine for the life of plenty they’ve abandoned, both ridiculing and relying on their snobbish neighbour Margot and her henpecked husband Jerry.
 
If self-sufficiency is taking it too far, Nobel Prizewinning economist and founder of the Grameen Bank, Muhammad Yunus makes the point that we are a natural blend of saint and sinner as human beings and in our personal lives.
 
We all want to make some money, afford a nice house, and take our loved ones on holiday. But we also want to act fairly, support our communities, help others who are less fortunate than ourselves and look out for our planet. But our society’s love affair with money makes a simple question more complicated. We are breeding money like never before and it is down to human insatiability said Skidelsky.
 
Indicting the modern practice of creating money from nothing and loaning it out at exorbitant interest rates Tarek El Diwany said: “We are cooking the books. Our financial system is based on institutionalised fraud.” 
 
But, by the very same token, when the financial crisis hit, in 2008, thanks to society’s capacity to conjure up money from thin air, central banks were able to generate $16tn to bail out the banks. Ann Petifor said: “Had this not been possible we would have had a far worse fate.” 
 
In the light of Pettifor’s argument, money is good; a human advance which can be used to help deal with challenges that face humanity, support the less fortunate and tackle climate change.
 
“We are living in a usurious age,” she said “But I think money is a jolly good thing”. She citied Ben Bernanke, head of the US central bank of the United States who explained in 2008, the bail-out was possible because:
 
“We have something that every bank has – a computer. We entered a number and created trillions of dollars.”
 
For Paul Sharma, deputy head of the Prudential Regulation Authority (PRA) money is a technological innovation and should be discussed as such, factoring in questions of ethics and values into its usage. But, the road to progress is still a hazy one. Should we abolish usury and endorse ‘positive money’ - allowing the state to create debt-free money (under control to prevent abuse). Or should we simply endeavour to ensure interest rates are kept low, follow the advice of John Maynard Keynes and maintain the power balance between lender and borrower.
 
Closing the debate Skidelsky said: “Money should be at the service of our wants. It is our wants that need scrutiny. Until we work out what we want, we can only tinker with technicalities.” 
 
The Good Money debate was the second of a series of events sponsored by CCLA, titled "The City and the Common Good: What kind of City do we want?"
 
Up for debate in the June finale, with Antony Jenkins, group chief executive at Barclays, and Justin Welby, the new Archbishop of Canterbury, will be the issue of 'Good Banks'. Register here.