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The Christian Faith and the Financial Crisis
Part One: The Christian Faith (2)
STORY OF A SUCCESSFUL REVOLUTIONARY (BRIAN GRIFFITHS)
There is a large Christian literature the aim of which is to soften the impact of these plain and unequivocal commandments of Jesus, to reduce them to something more practical, more easily compatible with the demands of our everyday life. This talk is a response to a talk given last March in Swansea by Brian Griffiths - Lord Griffiths of Fforestfach. Griffiths came from an evangelical Protestant background in Swansea. As a student in the London School of Economics he attended Westminster chapel under the great Welsh Calvinistic Methodist preacher David Martyn Lloyd Jones. He later joined the Anglican Church but still in the evangelical wing under John Stott in All Souls, Langham Place. He was a lecturer in LSE from 1965 to 1975 and in that role he was part - increasingly a very important part - of what was effectively a revolution in thinking on economics and in our political life.
This was the transition from an economic thinking dominated by J.M.Keynes, which allowed for a great deal of state involvement in economic life, to Friedrich Hayek, who argued the classical liberal case that the interference of government could only do harm to the operations of a free market which, left to its own devices, was a self correcting mechanism that could generally be relied on to produce the best possible result. Famously, Margaret Thatcher, when she first became leader of the Conservative Party in 1975, interrupted the speaker at a meeting of a Conservative think-tank by producing a copy of Hayek's Constitution of Liberty, slapping it down on a table and declaring 'This is what we believe'. (2)
(2) John Ranelagh, Thatcher's People: An Insider's Account of the Politics, the Power, and the Personalities (Fontana, 1992), p. ix. quoted in the Wikipedia entry on Friedrich Hayek.
Griffiths, who by this time had moved on to become Professor of Banking and International Finance in City University (the 'City' in question being the City of London) was consulted by the Conservative government from its earliest days in 1979 and he used his influence both in memos and in articles in the press to support the government aim of restricting the money supply in order to combat inflation, regardless of the effects on manufacturing and employment. Indeed, he complained that the government was not moving hard or fast enough, arguing that government support for an industrial structure that was no longer competitive in world markets was preventing a necessary reorientation of the market that was inevitable and could only be the more painful the longer it was postponed. (3) In 1985 he was appointed as head of Margaret Thatcher's Policy Unit and in that role played an important part in the deregulation of the financial services industry which many people (myself included) see as ultimately responsible for the financial crisis which became apparent in 2008. In 1990, after Margaret Thatcher's removal from office, he went on to become Vice Chairman of Goldman Sachs International.
(3) Some of this material can be consulted on the website of the Margaret Thatcher Foundation, which has a rich archive of government correspondence up to the limits of the thirty year rule (1983 at the time of writing) for the release of government papers.