Economic Crisis

Audio Player

This morning we’re continuing our series on ‘The Bible and Current Concerns’. My subject is ‘Economic Crisis’. I want to tackle it through some simple questions. They are: What is happening? Why is it happening? What is the Bible’s perspective? What are the lessons for the western world? And what are the lessons for us?

Ten days ago, I was in London. The Libor bank rate fixing scandal was all over the papers. The London Evening Standard had a front page article headlining comments from the governor of the Bank of England, Mervyn King:

King blasts the banks as ‘shoddy, deceitful’: Governor demands change in the culture.

I was travelling between the City of London and Canary Wharf on the Docklands Light Railway with Vivienne and Katy, with imposing banking skyscrapers all around. Seated just in front of us were two be-suited city gents of a certain age, deep in conversation about the economic crisis and the Libor scandal. Little did they realise that I was listening in and taking notes for my sermon, but I was. One of them said:

It’s greed and ignorance. There we go. We’ll be sorting it out for a generation. We’re now in the sorting it out phase. They must have known it was wrong. We’ve had a good ten years of greed that we’re now trying to winkle out of the system. When I was making millions for [my company] I didn’t expect to be given 10% of it.

That’s a perspective from the City of London on the City of London. The rate fixing scandal is of course just the latest episode in a long drawn out economic crisis that’s already been running for four years, and will continue for many years to come. So, here’s the first question:

First, WHAT IS HAPPENING?

Clearly we’re in the middle of a multi-faceted, multi-stage, long-term, complex and severe crisis engulfing the western world, which is not only economic but also social and political. Clearly also I have no particular economic expertise when it comes to explaining what’s happening.

If you want a detailed and gripping inside account of the beginnings of the crisis from a US perspective, then you could try Andrew Ross Sorkin’s book ‘Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves’. Ben Cooper, who is now minister for training at Christ Church Fulwood in Sheffield, and who used to be an academic economist at Oxford University, has written a very helpful booklet just published by the Latimer Trust called ‘The Ethics of Usury’ – that is, lending at interest. In it he recommends as what he calls “the clearest and most readable account [of the crisis] I have come across” a book by John Lanchester called ‘Whoops! Why everyone owes everyone and no one can pay”. And it is very helpful not least if you want to get some kind of grip on CDSs and CDOs – that’s Credit Default Swaps and Collateralized Debt Obligations – and the like, which have played a key role in the story.

Just how serious the effects of the crisis are was described by the economic historian Niall Fergusson in his current Reith Lectures in these terms:

There certainly seems little doubt that the west is experiencing a relative decline unlike anything we have seen in half a millennium.

Hank Paulson, when he was US Treasury Secretary, described the crisis as “an economic 9/11”.

And for the perspective of a senior banker, here are the comments of Ken Costa, until recently the Chairman of Lazard’s investment bank in London, and a committed Christian who is churchwarden of Holy Trinity Brompton. He said recently:

We should be under no illusion about what we have just been through, indeed, what we are still recovering from. The financial crash was no ordinary blip, no ordinary cyclical downturn. It was truly epochal, seismic in fact, bringing the entire Western economy to the very brink.

That’s what’s happening.

Secondly, WHY IS IT HAPPENING?

That’s a question that needs to be answered at different levels, and we’ll come on to the Bible’s perspective on what we might call the deep level in a minute. John Lanchester’s analysis in that book ‘Whoops!’ made without reference to the Bible, is that (I quote):

The credit crunch was based on a climate, a problem, and a mistake. It was also based on a failure.

The climate was the carefree, unchallenged, boom era, the problem was sub-prime lending, the mistake was a wrong assessment of risk. And the failure was that of ignoring the warning signs.

Ken Costa’s analysis is this:

2011 was the year that saw Europe all but overwhelmed by its enormous sovereign debt. It has prompted people throughout the City to revisit reports analysing the financial crash of 2008, where the roots of today’s problems are to be found.
Many of these have rightly pointed out that banks were massively and irresponsibly over-extended, and that there were serious structural and supervisory problems. However, there were also severe moral failures…
… but the past 12 months have made it painfully clear that banks are not alone in this. Sovereign states have over-spent and borrowed to irresponsible levels, even irrespective of their decision to bail out the banks… they themselves have been spending hundreds of billions more every year than they raised in taxes.
The problem does not end with governments, however. Consumers … are hardly immune to criticism. Millions of us have spent money we did not have, and borrowed more than we should to make up the difference, without thinking about the consequences.

Someone (who shall be nameless) who wrote to me knowing I would be preaching this sermon summed it up rather graphically like this:

We’ve got ourselves into too much debt both as individuals and as nations. We’re not living within our means. The political system is like a woman who is being wooed by two different men who each promise her a good time – she takes turns going out with them depending on who appears to be offering the better fun, without realising that actually they’re spending her money, they’re both not being truthful about how much it’s costing, and she’s actually bankrupt.

Or in John Lanchesters’s words:

It’s not just bankers who have been indulging in greed, short-termism and fantasy economics. In addition to our stretched mortgage borrowing, Britain has half of the total European credit-card debt… Bankers are to blame, but we’re to blame too. That’s just as well, because we’re the ones who are going to have to pay.

That’s why it’s happening at one level. But when we take a look at the Bible, we can see a deeper level as well. So:

Thirdly, WHAT IS THE BIBLE’S PERSPECTIVE?

I sat myself down in the heart of London, one of the world’s greatest and most historic cities, seemingly indestructible, and one of the global centres of finance. And I trawled through the Bible from beginning to end, asking myself the question: ‘What does the Bible have to say about economic crisis of the kind we’re experiencing?’ The answer that I came up with was troubling and challenging. So here’s a number of points from my reading of the Bible. And a key passage for this is Deuteronomy 8. That’s on page 187 if you’d like to have it open in front of you.

First, prosperity is God’s good gift. In Deuteronomy 8, we overhear Moses talking to the Israelites on the edge of the promised land just before his death and their crossing of the Jordan to enter that land. Moses is preparing them for what life will be like and for the spiritual and physical challenges ahead. And these lessons were not only for them, but for God’s people through the ages including today, and indeed for all humanity if only people would have ears to hear. Moses is clear that God was bringing them into a prosperous future which was his good purpose and gift. Deuteronomy 8v7-9:

For the Lord your God is bringing you into a good land —a land with streams and pools of water, with springs flowing in the valleys and hills; a land with wheat and barley, vines and fig trees, pomegranates, olive oil and honey; a land where bread will not be scarce and you will lack nothing; a land where the rocks are iron and you can dig copper out of the hills.

Prosperity is God’s good gift.

Secondly, God is gracious to all the world. That’s so clear if we backtrack from Deuteronomy to Genesis and God’s covenant with Noah – a covenant of universal preservation of all people. Genesis 8v22:

As long as the earth endures, seedtime and harvest, cold and heat, summer and winter, day and night will never cease.

God in his grace wants the blessing of prosperity for everyone, if only they will follow the maker’s instructions.

Thirdly, there is a spiritual, not to mention economic, cycle of boom and bust. And in fact the economic and spiritual are related. That’s for the simple reason that, typically, when we get prosperous we forget the God who gave us the blessing, and we fall back into idolatry and immorality. That inevitably leads to disaster – which is also part of God’s gracious judgement and discipline designed to save us from ourselves. And we can’t say we haven’t been warned – Deuteronomy 8, from verse 11:

Be careful that you do not forget the LORD your God… Otherwise, when you eat and are satisfied, when you build fine houses and settle down, and when your herds and flocks grow large and your silver and gold increase and all you have is multiplied, then your heart will become proud … You may say to yourself, “My power and the strength of my hands have produced this wealth for me.”

Given the state of our hearts, there is an inevitability about our failure to heed that warning. And that means that any talk of an end to boom and bust is not so much economically as spiritually flawed.

Fourthly, this economic crisis that we’re experiencing, extreme as it is, is not nearly as serious as what could be on the way if we don’t turn back to God. With any kind of historical perspective we have to say that what’s happened is that overall (and I’m not talking about individuals) in the west we have become less rich, but we’re still rich. I heard Max Hastings, the journalist and historian, discussing this and saying that studying the Second World War (as he does) puts our current problems into perspective. The Bible’s warning is clear – and it should be frightening. Deuteronomy 8v18-20:

But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant … If you ever forget the LORD your God and follow other gods and worship and bow down to them, I testify against you today that you will surely be destroyed. Like the nations the LORD destroyed before you, so you will be destroyed for not obeying the LORD your God.

We can’t escape from the fact that without repentance and a turning back to God, the end result will be not economic recession, nor even depression – but destruction. And unless God as an act of grace withholds his judgement, that can happen not only on the Day of Judgement but within history. The typical example of this in Scripture – an example we and all cities and nations are supposed to take as a very serious warning – is the wealthy merchant city of Tyre, on the Mediterranean coast north of Israel, and a centre of finance, shipping and commerce in the ancient world. You can read about it for instance in Ezekiel 26-28, and also in Isaiah 23, which says this:

An oracle concerning Tyre: Wail, O ships of Tarshish! For Tyre is destroyed and left without house or harbour… she became the market-place of nations… Is this your city of revelry, the old, old, city, whose feet have taken her to settle in far-off lands… whose traders are renowned in the earth? The Lord planned it to bring low the pride of all glory and to humble all who are renowned on the earth.

And when the end comes, which had seems so inconceivable before it happens, it can come very quickly. As Revelation 18v10 says of Babylon, the symbol of the godless city:

O Babylon, city of power! In one hour your doom has come.

These are unpalatable truths, I know, and we’d rather not face them. But only by facing them now, heeding the warning, and turning to Christ in repentance and faith will we avoid what they describe. That, in brief, is the Bible’s perspective. Which brings me to my fourth question. So:

Fourthly, WHAT ARE THE LESSONS FOR THE WESTERN WORLD?

In many ways the west is like Israel in the promised land. If the nineteenth century and before was an era of poverty, and the first half of the twentieth century was an era of warfare, then the second half of the twentieth century up to today has been a time of unprecedented prosperity in a land flowing with milk and honey. As John Lanchester puts it in that book ‘Whoops!’:

Almost everyone in the west lives a quality and length of life which would have been the envy of a pharaoh or a Roman emperor, and which most of our ancestors, and most of the populations of the rest of the world would swap for their own prospects in an eye-blink.

And yet those years have also seen the west turning away from Christ and from its Christian heritage – with all the moral consequences that inevitably flow from that. So through this economic crisis God is calling the west back to himself, back to Christ.

You look in vain for guidance in the Bible about whether investment banking should be divided from retail banking or whatever other economic prescriptions are quite rightly under consideration. And that surely is because the Bible is not interested in helping us to solve our economic problems so that we can carry on ignoring him and sinking deeper and deeper into sin. Ken Costa, the Christian banker, makes this comment: [Finance] cannot survive outside a moral framework. The crash was a painful example of what happens when it does.


You could think of the economic crisis as like a small heart attack for the west. It’s striking that John Lanchester describes it in those terms. He says:

… the effect of [a small heart attack] is, in an individual’s life, often beneficial, because it forces them to face the facts about themselves and to adopt a more healthy lifestyle … the credit crunch is capitalism’s equivalent [of a small heart attack]. It’s the point at which we all have a chance to take a look at ourselves, and at our banking system and our politicians, and make some changes… Otherwise, we’ll be doing the equivalent of discharging ourselves from hospital after that small heart attack, and going straight out to celebrate with a packet of Rothmans, a bottle of tequila and a supersized Big Mac with jumbo fries.

But that’s exactly what he expects us to do. There is a great danger that nothing is being learned. He writes:

The sad truth is that the real fix is going to have to wait until after the next crash. As the economist Paul Romer once said, ‘a crisis is a terrible thing to waste’ – but the opportunity brought by this crisis has been wasted. … The credit crunch will go down in history as one of the biggest missed opportunities the developed world has ever known.

He’s thinking economics. Let’s pray that he’s not right at the spiritual level.

Finally:

Fifthly, WHAT ARE THE LESSONS FOR US?

They are simple enough. We don’t really need to look further than the words of Jesus in Matthew 6:

“No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” (v24)

So live by faith in Christ, depending on his forgiveness and grace. Serve God, and use money to serve his kingdom. We are to keep our lives free from the love of money, because that way leads to destruction – not only national and cultural but personal. Obey God’s commands. Don’t covet. Don’t exploit. Be honest. Be generous. Do seek Godly prosperity. But whatever happens, whatever is to come, trust God.




Back to top