Ethical banks vs ethical banking

Money is an essential age-old means by which civilisation is able to function and advance. Without a reliable means of exchange the various parts of an economy of any kind cannot work together to create value.

 

Banks are obviously integral to the storage, flow and investment of money. They are crucial to the wise allocation of funds for creative and worthwhile enterprises such as

 

Charities to rescue those who suffer from deprivation

Companies providing products and services to enhance our lives

Government and public institutions (e.g. NHS in the UK)

Over the last decade or so I have increasingly heard about ethical banks. Recently I came across Triodos while reading Christian Aid News. This has savers (e.g. 30,000 in the UK) who want their money to build a sustainable society and help such organisations as
 

• Cafedirect, the Fairtrade tea and coffee producer

• Jamie’s Farm, which rehabilitates deprived urban children

• Ecotricity, which provides green energy across the UK

 

It publishes details of all the businesses it lends to and does not provide contractual bonuses to its employees.

 Such organisations are beacons of light in a dark financial world. What is sad is that it is necessary to categorise a small number of these under the heading ‘ethical banks’.  All banks should be ethical, adhering to values of truth, innovation, compassion, loyalty, sustainability and vision for a better future, either as a step towards these values becoming more widespread, or better, as a symptom of a society in which such values prevail.

 

In this kind of society all institutions would function so much more efficiently. So how do we get there?

 
For these values to become widespread in any nation there needs to be moral leadership, inspiration and sound education for all, irrespective of class, gender or race. So it falls on churches, youth groups, schools and universities to guide young people towards these values, which in turn requires leaders to find within themselves the power to lead us in the right direction, a power which, I believe, must ultimately come from faith in our Creator.

 

In the long run we need to make redundant the ethical banking sector by making ethical banking the norm.

 See also

accounting for truth
wealth inequality means economic inefficiency

stop paying for bad news

John

Author of the novel 2077 AD.

 

Reach me at cosmik.jo@gmail.com

Wealth inequality means economic inefficiency

It is well known that wealth inequality in the USA and UK has grown greatly in recent decades.  E.g. the index of inequality in disposable income over 1975-2009 has risen in both countries:

 

UK: from 0.25 to over 0.34

US: from 0.31 to 0.37

 

Capital wealth has also come to be more unequally distributed. The same trends, though less marked, have occurred across Europe. In Russia and China the inequalities are also, I suspect, increasing but I don’t have comparable data on these.

 

I do not see wealth differentials as intrinsically wrong as long as those at the bottom of the ladder are above a minimum standard of living. If people want to devote their lives to building up personal fortunes, with multiple yachts and houses, that to me is their misfortune as slaves to materialism. Pursuit of wealth for its own sake is destructive of the individual and the society around him or her. Becoming wealthy as an incidental part of seeking to build up the world or add value to it and its people is just something that happens, though the degree of wealth is not in proportion to the worthiness of the activity. People who acquire wealth this way presumably enjoy it. On the other hand there are children living on rubbish tips in India who seem happier than most westerners living in luxury.

 

But these mounting and extreme inequalities are morally wrong, economically unhealthy and socially divisive, a consequence of obsession with gain per se. Society cannot exist without hierarchy but it is not acceptable to consign millions of people to a life without hope, unable to earn a living, and in a constant state of insecurity about housing, food, health, elderly care and the education of their children. Such a society does not reflect the values of Christ.

 

Insight into the problem of wealth inequality in the Anglo-American world and how to deal with it emerged from a recent one page book review by Richard Lambert, former editor of the Financial Times. It appeared in the August 2012 issue of Prospect and the book in question is The Price of Inequality by the Nobel laureate Joseph Stiglitz.

This is what I got from it:

 

Inequality is happening because

•  the new rich use their political power to gain a larger share of wealth

•  IT increases the productivity of those who can use it while replacing the jobs of those who can’t

•  globalisation increases and therefore cheapens the supply of labour

Joseph Stiglitz

The result is not only that a minority get a disproportionately large slice of the wealth cake but that the size of the cake gets smaller because  the rich spend a smaller proportion of their income. Typically they save 15% to 20% of it while the poorest save nothing because they have no spare income. Consequently less money is injected back into the economy and this leads to less economic activity, less wealth generation and more unemployment, unless the savings of the rich find their way into productive investment, which is often far from the case in an economy weighted heavily towards  financial services rather than more value-generating activity.

Moreover, as large wealth differences set in it leads to a decline in social mobility which in turn leads to fewer talented people getting into positions where these talents can be utilised for wealth creation.

Thus large inequalities of wealth mean lower economic efficiency, to the detriment of all. They also have bad social consequences. ‘Stiglitz describes a grim future in which society is divided into haves and have-nots: the rich living in gated communities, the rest in a world marked by insecurity, poor healthcare and mediocre education. At the bottom are millions of young people alienated and without hope.’

 

Three remedies are suggested, particularly for the UK but no doubt they have a more general relevance to the USA and other nations :

 

/1/ help young people in houses where no one works to find their way into work

/2/ increase the incentives to take on and train British workers

/3/ reform the tax system, making it simpler, more progressive and free of tax havens

 Lambert does not mention direct investment by the government in large enterprises. Personally, I think there is a role for major flagship projects which generate technological spin offs, create valuable skills and provide inspiration. The American space programme did this. The revolutionary engine propulsion technology developed by the Skylon project, for example, could employ 70,000 people if a government would support it.(No private investors seem interested, possibly because of bureaucratic or political factors or because they don't understand the technology.)
 

The most just economy is also the most efficient and I don’t believe this is coincidence. It is the way reality has been set up.

 

John

Reach me at cosmik.jo@gmail.com

Clothes for a cleaner future

One thing that all seven billion people possess is clothing. If this could be made to perform some function which helps the environment it could significantly compensate for the damage we do as human beings.

 

Moves in this direction are currently underway and not too far from the shops.

 

Denim which absorbs Nox

 

Nitrogen mono-oxide and nitrogen dioxide are atmospheric pollutants produced by traffic and factories. Generically they are known as NOx and they damage both health (nausea, irritated eyes, respiratory problems) and the environment (acid rain, global warming, inhibition of plant growth). They can also react with aerosols from cans in a harmful way.

 Since over half the world population live in cities it is becoming increasingly important to remove them from the air.

 

The natural world provides us with the means: titanium dioxide, which is found mainly in two kinds of ore – ilmenite and rutile – and is used in catalytic converters to remove NOx from engine exhaust gases, as well as in paving stones, glass and sun cream. A small company in the UK called Catalytic Clothing discovered that by spraying nanometric titanium dioxide particles onto denim they had invented a form of clothing which absorbs NOx from the air. The more the clothing is subjected to movement while being worn the more NOx is absorbed and converted into harmless water soluble nitrates. Presumably, someone jogging in titanium oxide coated denim clothes would extract more NOx the faster they jogged.

The most encouraging thing about this development is that it is not far from market. ‘Field of Jeans’ has just been exhibited at the Manchester Science Festival, UK (27 Oct – 4 November, 2012).

 

As well as making new clothes with the specially coated denim (and other materials?) the same company is working with the detergent company Ecover to produce a washing powder additive called CatClo. If this became universally available and could work on other fabrics as well as denim the benefit to city air quality could be considerable and in the near future.

 

Converting pressure, heat and sunlight into electricity

These products could be on the market within 2-3 years. If they took off it might speed up the manufacture and marketing of piezoelectric clothing and shoes. A lot of research is going on in this area. The idea is to utilise the piezoelectric effect by which pressure on a material is converted into electricity. When a person moves it causes pressure to build up in parts of the clothes worn and this pressure can be used to power small electronic devices such as mobile phones or batteries. Pressure in the soles of shoes can also be used to generate electrical power as the person walks. See, for example, http://www.nsf.gov/news/news_summ.jsp?cntn_id=111038

This would indirectly benefit the environment by reducing the need to make batteries, a very energy intensive process which generates waste and global warming emissions.  The pioezoelectric effect is already being incorporated into fashion designs.

 

The thermoelectric effect could also be used. This is the conversion of differences in temperature across the interface between two different materials into an electric voltage. E.g. the inside of a shoe being worn is hotter than the outside. The same principle of deriving electricity from heat  could be used wherever otherwise wasted heat is available - a hot water pipe for instance. The solar voltaic effect – by which sunlight is converted into electricity, is another possibility.

 

Hydrophobic clothing

There have been startling developments in spray-on technology to make fabric able to completely repel water. The same method can be used to make all sorts of equipment fully water proof e.g. by applying hydrophobic coatings to the outside and inside of a mobile phone it will still work underwater as long as the signal is strong enough. Hydrophic clothes  help the environment by reducing, if not eliminating, the need to clean them.

John
author of  the novel 2077 AD which is now being revised and expanded
Reach me at cosmik.jo@gmail.com