By David Kinley
Understanding the extent and significance of the byzantine relationship between human rights and finance are tasks that neither community can continue to neglect. (Reuters: David Gray)
Ten years on, what was touted at nothing less than financial Armageddon, the global financial crisis has descended into business as usual.
Crisis-related scandals weathered, eye-watering financial settlements negotiated in exchange for “deferred prosecutions” and bankers avoiding jail time, bank profits are again approaching pre-2008 levels, while bankers’ bonuses are now well past that marker.
It’s true that so-called “proprietary trading” by major banks is now prohibited (on conflict of interest grounds), banks are obliged to hold more equity than they did 10 years ago, and bankers’ hubris has lost its edge, but the economy still remains servant to the finance sector master.
This hitting of the financial reset button has occurred despite the economic trauma and social dislocation caused by the fallout from the financial crisis — global trade plummeted, 100 million more people were pushed beneath the World Bank’s poverty line, social welfare was slashed in Europe (youth unemployment levels in some European countries reached 50 per cent), nine million homeowners in the US lost their homes, and some rich countries savaged their aid budgets based, in our case, on a twisted logic of “Australia first”. (This is in contrast to the UK which, despite suffering a far deeper recession, has substantially increased its aid contributions).
GFC took away security, welfare, dignity and respect
In light therefore of both the consequences and the causes of the GFC, it is truly astonishing how little the language and perspectives of human rights have impacted on the popular (or even specialist) perceptions of what the GFC was about and what lessons we learned from it.
Everyday human rights of security, welfare, dignity and respect were all casualties for many millions of people worldwide, yet rights arguments have been barely heard, let alone influenced the din of post-crisis soul-searching and policy reforms proposals these past 10 years.
Tin ears and ignorance on both sides of the human rights and finance divide have fuelled mutual suspicion and distrust and have helped sustain or even widen the gap between the two. The result is an abiding detriment to both.
For the fortunes of robust human rights protections and of a thriving financial system are in fact inextricably linked.
The human rights that most of us take so much for granted (such that we seldom recognise them as human rights) — to adequate food, housing, education, health care, free speech, privacy and equal treatment before the law — are all dependent on either our capacity to pay for them ourselves or have them provided or subsidised out of the public purse.
Finance, in other words, is a necessary means for the achievement of human rights ends at their most basic, as well as when they are enjoyed in abundance.
Finance needs human rights
The dependency also works in the opposite direction.
Finance needs human rights because its very legitimacy is contingent upon the contribution it makes to fulfilling society’s conditions and expectations made of it, including human rights goals — in all their everyday ordinariness, as much as when addressing their searing abuse.
Indeed, one can fairly ask: what else is finance for, if not to help achieve these ends?
The excoriating parade of misconduct in our own silver-tailed financial services unearthed by the Hayne Royal Commission are painful testimony of impact finance can have on the lives of ordinary Australians.
To be sure, the spread of financial wealth through our society in recent decades has enhanced the lot of many (and a whole lot more for a select few), but it has also tempted the greedy, encouraged deceit, and engendered something approaching contempt for customers and clients within the financial sector itself.
This is not how it should be, in Australia or elsewhere. Banking and finance ought to be a pillar of society, not a modern-day sheltered workshop for bankers.
We must reclaim finance for the good of society and for the good of bankers.
Most of all we cannot allow finance to stoop so low as to endanger people’s human rights when it can do so much to help protect them.
A task neither easy nor quick
So, the understanding, mapping, and measuring of the extent and significance of the byzantine relationship between human rights and finance are tasks that neither community can continue to neglect, no matter how daunting the challenge.
The GFC should have made that far clearer and more urgently so than it did.
At best, however, it has illustrated the yawning gap in comprehension between these two elemental phenomena of our times and signalled that while bridging the divide is essential, the task will be neither easy nor quick.
If we heed these lessons then at least we might be prepared to better understand and more appropriately respond to the full implications of the next financial crisis.
David Kinley is Professor of Human Rights Law at the University of Sydney and author of Necessary Evil: How to Fix Finance by Saving Human Rights.