Ship of Fools: Church of England "Ethics" involve Loan Sharking

Thread: Church of England "Ethics" involve Loan Sharking Board: Oblivion / Ship of Fools.

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Posted by Justinian (# 5357) on :

So. After Justin Welby tried and failed to go to war with Wonga.com, the CofE "Ethics" review has said that investing in loan sharks is just peachy.

The snark about Usury, and about moneychangers in the temple is all just too easy here.

Posted by Honest Ron Bacardi (# 38) on :

I agree Justinian.

quote:
It is no more realistic to desire that they invest only in morally perfect companies than it is to desire that any of us should relate only to morally perfect individuals. In any event, such an objective would rather miss the point of the Gospel. It is not the healthy who need a doctor but the sick.

What kind of argument is that supposed to be? And who exactly are "the sick" here.

Posted by Gildas (# 525) on :

And what, exactly, is the medicine? Are we supposed to be doing the immortal souls of the proprietors and shareholders of Wonga some unspecified good by investing our money in them?

Posted by Matt Black (# 2210) on :

I thought his 'argument' was that "if we force the likes of Wonga out of business without having ethical alternatives in place such as credit unions to take up the resulting slack, we run the risk of exposing vulnerable debtors to criminal loan sharks"(?)

Posted by Gildas (# 525) on :

Since when did "not investing" equal "forcing an organisation out of business"?

Posted by Matt Black (# 2210) on :

Quite.

Posted by Adeodatus (# 4992) on :

quote:
Originally posted by Matt Black:
I thought his 'argument' was that "if we force the likes of Wonga out of business without having ethical alternatives in place such as credit unions to take up the resulting slack, we run the risk of exposing vulnerable debtors to criminal loan sharks"(?)

From the Grauniad article, the argument seems to be more along the lines of saying holding shares in these companies gives us some clout with them. Two problems with that. First, there's no point having clout if you don't use it (and quite obviously, we don't). Secondly, if that's your only argument, then you could use it if you wanted to invest in arms, porn, slavery or the Daily Mail.

Someone needs to introduce this Featherby person to the concept of the "straw man": ethical investment isn't about attaining a "morally perfect portfolio" - it's about attaining a morally acceptable one.

Once again, in the CofE, it's all about the money.

Posted by Schroedinger's cat (# 64) on :

And this just after Wonga has been fined for other dodgy practices.

The idea is not to have a "morally perfect" portfolio. That is not possible - there is NOBODY with a morally perfect portfolio, including myself. The idea is to explicitly invest in organisations that seem to reflect our positive aims, and not invest in those that reflect our negative aims. The Co-op has just done its ethics survey, and it is based around these ideas.

While it isn't Justins fault, it makes the CofE sound like they are saying that other people shouldn't do bad things, but that it is OK for them to. Arrogant hypocrisy of the highest order.

As for "investing in them to have an influence" - yes, OK, if you have a majority shareholding. That is a strategy, but not one that works often. If that is the reason, then fine, invest a whole lot more there, and change the Wonga approach. But don't also expect to make any money out of this.

Not investing in them, for a high-profile investor like the CofE does send a message, that if they want this money, they have to change. They won't go out of business - there are plenty of unethical investors around who will enjoy the high returns. It is all typical crap that avoids saying "Wonga earn us loadsamoney, so of course we will invest in them".

If Justin has any balls at all, he will ignore this and insist that the investments are withdrawn.

Posted by BroJames (# 9636) on :

Mind you, it would be fairer to read the EIAG's own words in their context, both in the Report the Guardian quotes from (PDF), and in their statement of their 'comprehensive approach to ethical investment' (also a PDF).

Posted by Lyda*Rose (# 4544) on :

quote:
Originally posted by BroJames:
Mind you, it would be fairer to read the EIAG's own words in their context, both in the Report the Guardian quotes from (PDF), and in their statement of their 'comprehensive approach to ethical investment' (also a PDF).

I now have (thanks for the links). And I still agree with the comments above. The whole "perfect portfolio" thing is a piece of crap and definitely a strawman. If the CoE would like to show a bit of moral leadership, they should sell off the bundle that includes Wonga, and check out other bundles that are less problematic. There are alternatives. The part of the bundle that Wonga occupies may be small, but investment companies might blink if a fairly large investor starts to invest with [Eek!]

ethics in mind.

Posted by Ricardus (# 8757) on :

Exactly. Also, the bits quoted by the Guardian came mostly from the executive summary. The executive summary is supposed to answer the question "What do we want people to remember from all this bumf?" If you don't want the papers to make you look crap, you should put the crap in a footnote in Appendix D like normal companies.

quote:
Originally posted by Adeodatus:
From the Grauniad article, the argument seems to be more along the lines of saying holding shares in these companies gives us some clout with them. Two problems with that. First, there's no point having clout if you don't use it (and quite obviously, we don't).

There is, or used to be, a common tactic among activists, of buying a single share in an arms dealer and then using their status as a shareholder as a means of entering the AGM in order to heckle.

However the Church of England has not, AIUI, bought any shares in Wonga at all, but rather in a fund that invested in Wonga. Meaning that the Church of England gets all the dividends but disbars itself from the chance to stand up in Wonga's AGM and make a nuisance of itself.

Posted by Ricardus (# 8757) on :

Also this:

quote:
We usually only recommend divestment where we see no genuine desire for change.

is an amazing piece of disingenuousness. The reason people are criticising the Wonga investment is because we regard payday loans companies as inherently immoral, and no amount of change on Wonga's part is going to make them moral unless they cease to be a payday loans company.

[Amazing bit of code as well.]

[ 30. June 2014, 17:36: Message edited by: Ricardus ]

Posted by Schroedinger's cat (# 64) on :

quote:
Originally posted by Ricardus:
Also this:

quote:
We usually only recommend divestment where we see no genuine desire for change.
is an amazing piece of disingenuousness. The reason people are criticising the Wonga investment is because we regard payday loans companies as inherently immoral, and no amount of change on Wonga's part is going to make them moral unless they cease to be a payday loans company.

[Amazing bit of code as well.]

Well, I am not sure. the problem is not payday loans as such, but payday loans with high interest rates, as most of them have ( Wronga is not the worst, but is exorbitant). They could, in theory, change to being an ethical payday loan company, charge reasonable interest rates, and help to manage clients finances by considering their ability to pay etc. Of course then, they would not be a good investment.

Posted by Oscar the Grouch (# 1916) on :

Let's face it - Justin Welby's comments about Wonga were never intended to be much more than window dressing. It is part of his modus operandi. Don't look at what he says - look at what he does (or doesn't do). In many respects, he is "pure" HTB - say what you think will go down well, regardless of what you actually intend to do.

Posted by Ricardus (# 8757) on :

quote:
Originally posted by Schroedinger's cat:
Well, I am not sure. the problem is not payday loans as such, but payday loans with high interest rates, as most of them have ( Wronga is not the worst, but is exorbitant).

I disagree. The defining feature of the payday loan is the insistence that you HAVE to pay on a specific short-term date, or else your debt starts to balloon - and this is precisely the feature that drags debtors into the shitter very quickly.

Payday loan rates are, in absolute terms, not much worse than overdrafts once fees are taken into account - the difference is that overdrafts do not have clauses saying you have to pay them off in full on a specific date or face ballooning arrears penalties. And by definition, if I'm in a position where taking out a payday loan looks like a good option, I'm probably the least likely person to be able to guarantee to have a specific sum in my bank account on a specific day.

Posted by Ricardus (# 8757) on :

Actually I should qualify that post because you have to engineer fairly specific circumstances to make a payday loan a cheaper option than an overdraft. The point is that the rates are not the main problem, and the main problem is also the defining feature of the loan.

Posted by Schroedinger's cat (# 64) on :

quote:
Originally posted by Oscar the Grouch:
Let's face it - Justin Welby's comments about Wonga were never intended to be much more than window dressing. It is part of his modus operandi. Don't look at what he says - look at what he does (or doesn't do). In many respects, he is "pure" HTB - say what you think will go down well, regardless of what you actually intend to do.

Actually, I don't agree. I think he was genuine in what he said. The problem comes that he his unable to live up to his early promises, because he faces the resistance of "the system".

Ricardus - Yes, maybe. Now stop being reasonable.

I was reminded of this thread when I heard the Grace Petrie line today:

"If I believed in Jesus, and if I believed in God,
Then the Church of Englands stock portfolio would seem rather odd"

The song is very poignant to this story, about putting financial gain above peoples welfare.

Posted by Matt Black (# 2210) on :

So is he a Jim Hacker being frustrated by all the Sir Humphreys then?

Posted by QLib (# 43) on :

Some of the worst decisions in the world are due to people backing away from noble instincts because the action required by those instincts seems to be not very sensible. Of course, there's a place for common sense, and people who run charities do have to be careful to be seen not to be foolish or reckless, but it's still not good enough IMHO. There is a respectable case for disinvesting and seeking alternatives would not be reckless.

I suppose they're entitled to take a different view, but what is indicative of total moral bankruptcy is the attempt to dress it up with this utterly nauseating disingenuous bullshit, such as the impossibility of moral perfection argument. Hey, why doesn't the CofE invest in crack dens and whorehouses, then? Because obviously the people running those really need God's help. And actually, when they invest in companies that charge this level of interest, then some of the money they're getting probably does come from prostitution. Fucking disgusting. [Mad]

Posted by Schroedinger's cat (# 64) on :

quote:
Originally posted by Matt Black:
So is he a Jim Hacker being frustrated by all the Sir Humphreys then?

Sort of. It is more that when he arrives in office, he makes statements about what he thinks should be done, and has a platform because of being the new ABC. As time goes by, and he tries to make changes in the right way, he realises that there are a whole lot of other issues and views that need to be taken into account.

I think he believed that he could do something when he made his statements. He is not being blocked by Sir Humphrey, as much as finding that there a re good reasons why his vision is (genuinely) more difficult to put into practice than it appeared.

Posted by Justinian (# 5357) on :

Credit where it's due the CofE has finally got rid of the stake in Wonga

Posted by Schroedinger's cat (# 64) on :

Absolutely - good on them. It has still been rather embarrassing. Maybe there is some hope that, given time, they will right wrongs that should never have been there in the first place.

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