Let’s face it, Jesus himself was no fan of regulation, continually clashing with the Pharisees over their legalism and replacing their red tape with the simple principle of love. And what got Luther cross, leading to the Protestant Reformation? His feeling that the brisk trade in Indulgences – religious securitisation – was evidence of the Church slipping back into something like this Pharisaic tradition: ‘justification by works’ when simple faith should suffice. What is terrifying about Luther, and about faith, is how risky it is.
When I’m having a go at believing something, and I’m not very sure about it, I try to reassure myself. I do lots of behaving ‘as if’ so that nobody finds out about my doubting, least of all myself. I hope that, when it comes down to it, like Pascal’s Wager I’ll have made the right call. If my belief is about a person or situation, I will indulge in confirmatory bias, collecting evidence in support of my meagre belief, largely ignoring contrary evidence unless and until it achieves critical mass. Religions know this pattern, so they try to help in a variety of ways.
First, they make belief a good thing in and of itself (see Luther). Next, they use liturgy to feed confirmatory bias, rehearsing faith narratives week by week as a perpetual reminder. Additionally, they encourage believers to enact their faith in their everyday lives (the ‘fake it til you feel it’ strategy). Inherently, the trump card in most religions is a reward/punishment strategy that kicks in after death which, being itself an article of faith, reinforces the entire mindset. Religions themselves are as cyclical as markets, building up towards excessive red tape then reforming away from it. For example, the clever devices used over the years by the monotheistic religions to get around the usury issue are as impressive as any Wall Street credit contortion. So what can the market learn from religion about faith? The first lesson is about honouring faith, acknowledging those institutions that train customers in it as externalities, or complementors, whose success is critical to their own. Perhaps more corporations should partner with the Church of England in its Academy projects? Or join The Christian Association of Business Executives and equivalents? Faith is hard, and it needs practice.
The second lesson is about liturgy. The religions repeat their stories week after week so that their history is not forgotten. Modern economic memory seems short, with a host of clients coming to Ashridge worrying that few of their staff can recall how the organisation managed in the last soft market, let alone what to do when markets are oscillating to the extent they have been doing of late. Economic historians are the market’s theologians; and corporations need to document their organisational lives now that they cannot rely on a phalanx of long-serving staff to act as their unofficial storytellers. Third, the fake it til you feel it strategy. Religious people encourage each other through prayer and fellowship to stick at faith even when it feels difficult or fruitless. Religions have devised rites, rituals and institutions to bolster these efforts, with beauty, music and other transportation devices used to give the soul a glimpse of its heritage and destination. What does the market do to encourage faithful behaviour? The banks have assumed default to such an extent that they have insured themselves into illiquid knots. Amazing Prudence. Amazing Grace would suggest there is something holy about staring risk in the face and accepting it. This is what the Jesus and Luther were talking about. If you assume Original Sin, you are doomed to legalism. If you risk an assumption of redemption – a very hopeful belief – you might just charm people into behaving well. Securitize that!