Is it possible to be ethically correct when participating in the banking system?
Introduction to the arms trade In this essay, I am going to discuss the ethics surrounding the UK banking system, whilst arguing whether it could be considered morally and ethically correct in terms of what these banks affiliate themselves with, or for the people who participate and utilise these facilities, whether that be knowing or unknowing of these affiliations themselves.
To begin with, the first argument regarding the UK banking systems ethical grounding is what it is responsible for. “The arms industry is an industry unlike any other. It is responsible for producing machines that main or kill human beings and wipe out whole communities- and it profits from the destruction” (War on Want, 2009) This wouldn’t be possible without money to invest- whenever we put money into the bank. But how is it that we, participants in UK banks, are contributing to this? To summarise how UK banks contribute to the arms trade, it all comes down to investments. When a bank invests in arms companies, it is wages and savings from our personal accounts which have been put out and invested in order for you to gain interest. This interest comes from the money the banks are making from investing in things such as international arms. Some may argue that this is very damaging, as the interest being built onto many people’s current accounts could be enough incentive to stay with a bank despite their unethical endeavours. One example of argument supporting the ideas that banking in the UK is considered unethical would be from War on Want’s article on ‘Up Front’ Blood Banks. In summary, this article surrounds where the money we pay into our banks goes, and exactly what it is used for. “For years UK high street banks have been funding the arms trade, a lethal business which fuels conflict around the world. The arms industry profits directly from war, and provides the weapons which kill civilians and undermine development in the world’s poorest countries.” (War on Want, 2009) “Despite its appalling record on human rights and its continuing illegal occupation of Palestine, every year the UK government licenses arms sales to Israel worth millions of pounds. UK is world’s second largest exploiter of arms after the US The UK exported £53 billion worth of weaponry in the past 5 years to countries including Saudi arabia, Colombia and Israel.” (War on Want, 2009) Barclays for example has arms shares worth £.7.3 billion “War creates opportunities for business – Iraq conflict has been benefitting companies who share in arms. When Israel raids gaza, they gain over and over.” (Williams .J, 2009) But is this Unethical? When analysing the technicality of ‘ethics’ in the eyes of the law, investing people’s money in arms can be considered both ethical and unethical. For example, according to New York: Oxford University Press, an act is considered legally
ethical if it follows the law. "Legality Know and obey relevant laws and institutional and governmental policies" (Shamoo. A, Resnik. D 2015) However, the New York: Oxford University press also argue that ‘honesty’ is technically a factor in terms of ethics. " Strive for honesty in all scientific communications. Honestly report data, results, methods and procedures, and publication status. Do not fabricate, falsify, or misrepresent data. Do not deceive colleagues, research sponsors, or the public." (Shamoo. A, Rensik. D 2015) In 2000, HSBC Publicly stated its commitment to avoid financing the arms trade, yet over the last 10 years they have contributed over £27.1 billion in loans to arms companies. (war on want, 2009) It could be argued that this is a blatant falsification of promise and commitment to the public who utilise HSBC’s facilities; therefore this would breach the ethical rule of honesty. UK banks also advertise their commitment to the basic principles of human rights through what is known as a Corprate, Social Responsibilty (CSR) policy. “Support for any industry which kills civillians, fuels poverty and undermines development would plainly violate even the weakest CSR policy.” (War on Want, 2009) The violation of these policies could support the argument that profit for the banks overrides the development of peace around the world, therefore contradicting CSR policies.
“Willing to turn a blind eye to human rights for the sake of profit, many UK arms companies have sold weapons to some of the world’s most notorious regimes , including Saudi Arabia, Colombia, China, Russia and Israel.” (War on Want, 2009)
“The appetite for easy, short-term profits offered purely by speculative investment has turned the stock, currency and real estate markets into crisis-creation machines” (Klein: 2007, 426) Problem, Reaction, Solution is a concept often associated with the New World Order- In short it is the act of a higher elite creating problems for the public to react to in a way that justifies them taking action against the problem they created in the first place. Theorists, such as Naomi Klein believe that governments in particular create planned ‘terrorist’ attacks in order to receive an outcry from the public in order to serve justice and protect the country. Often this can be affiliated with the rise in security measures which include breaches to privacy of the public, but in the case of the arms trade, the outcry may often spark the demand for war. An example of this would be 9/11 attacks and the birth of the War on Terror. “theorists believe wars are purposefully created and dragged out in order to benefit mass corporations, as these companies are basically in charge. They can be created and dragged out by warmongering and driving public against other countries” (Klein. N: 2007) However, It isn’t always about profit when it comes to creating and encouraging wars. Referring back to the topic of Problem, Reaction, Solution and the theories surrounding the gain from dropping bombs; These theories have been rejected multiple times on the basis of how unrealistic they seem – the damages caused by 9/11 and the cost this caused to us.
In an article by TrueRebublica, it states roughly how much it costs to drop bombs. This article follows the recent bombings from the UK in Syria as a retaliation attack on ISIS after the paris attacks. “Each 6 hour Tornado mission costs around £210,000, adding to that cost is the use of four Paveway bombs at £22,000 each and two Brimstone missiles at £105,000 each. If all weapons are fired on an average mission the cost of each Tornado mission is therefore £508,000.” (Vanbergen. G, 2016) “It is not possible to know how many missions the RAF will undertake over the coming months, but if sixteen bombers conduct just two raids each a week for the next six months, the cost will well exceed £400 million to the British taxpayer. Over the course of years, the final sum could easily reach billions.” *reference This could argue against the ideas of contributing the arms trades in order to gain profit, as these numbers don’t appear to contribute to the ‘money making machines’ mentioned earlier by Naomi Klein. Similarly, it is possible to make comparisons with the ideas of problem, reaction, solution to the recent spate of attacks carried out by ISIS in Paris. Shortly following the attacks, the UK government voted to drop bombs on Syria despite a mass outcry of public opposition. These bombings were also carried out despite a mass outcry of public opinion. It is interesting to consider why MP’s would have a hand at wanting to start wars, as it is their job to speak on behalf of. If they aren’t bankers making money through investing the arms trade, why would they disregard public opinion when it is in their best interest to please those who could potentially vote for them in the future? “Stock values at BAE systems, Airbus, Fimmeccanica and Thales all soared as trading began. Share prices don’t jump like this unless well informed investors have confidence that hundreds of millions of pounds will be spent in the months and years ahead as share prices only ever reflect future profitability.” (G.Vanbergen, 2016)
“Mps have a vested interest in war. Their pensions depend on the stock performance of weapons manufacturers. Huge sums of money are heaped onto dozens of serving MP’s that are guests at lavish events by organisations such as these. It only demonstrates political connections and lobbying at work whilst people die abroad on an industrial scale and are mistreated by austerity amid increasing poverty at home.” (G.Vanbergen, 2016) It seems outrageous that personal profits are at the heart of such immoral decisions- after such a large public outcry against bombings in Syria (the Independent released survey results stating that over 56% of Britons believed it was wrong to proceed with airstrikes on Syria) it is strange to think people are content with buying into organisations and institutions that profit and thrive off that particular conflict. If the public are accepting for whatever reason that wars are necessary and are fully aware of their participation in the arms trade, there is no misinformation, and therefore no breach of the ‘Honesty’ policy in the New York: oxford University Press’ definition of ethics.
If the public are able to see where their money is being invested yet choose not to, it would mean that the public are unethical, not the banks.
“Since it belongs to the nature of sin to be voluntary, ignorance has the ability to excuse sin in whole or in part insofar as ignorance takes away voluntariness.” (T.AQUINAS, 166) Can someone be unethical if they are unaware of what they are contributing to? “HSBC have pumped £27.1 billion into the arms trade in the past decade despite promising in 2000 that they would “avoid certain types of business, such as financing in weapons manufacture and sales” (J. Williams, 2009)
Through making this false promise, HSBC have misled their customers into a false sense of security. Because of this it is arguable to say that they are not at fault as they were deceived. People aren’t told where their money goes; it is not advertised and is an implicit factor of banking – a concept that is a necessity for living in the west in this era. How can it be immoral if people are blissfully unaware of what they are contributing towards? Is it unethical if you are unaware of the contribution? Should people be more aware? "It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford, founder of the Ford Motor Company (Ford, n.d: Zeitgiest, 2007) Most banks push the idea of easy banking out to the public in order for convenience to be at the heart of their banking. This notion of easy banking encourages the public to follow the ideas of convenience over ethics. There are a handful of smaller banks in the UK which exist purely on the foundation that they are ethical and do not involve themselves in what would be considered immoral relations. For example, The Co-operative was built under the intention that it remained morally and ethically correct. “The Co-operative is often seen as ‘the original ethical bank’, and not without reason. It was the first UK bank to introduce an Ethical Policy back in 1992, which blocks investments in key ‘unethical’ areas such as weapons manufacture and fossil fuel financing. The bank’s own customers decide which investments are screened, and to date the Co-operative has turned away over £1.2bn of lending because the applications fell foul of its ethical policy.” (Move Your Money, 2014) This bank is very popular among those who wish to use a mainstream bank in the UK but not contribute to affairs which may be considered ‘corrupt’ or unethical. Though these banks are considered to be of the most ethical, they aren’t considered particularly convenient. Referring back to the ideas of easy banking, these banks are short of branches within the UK. This may deter the public from using them, as having difficulty accessing your money at all times in today’s society could affect their users day to day lives. These banks are also rarely publicised. One small ethical bank for example is ‘Tridos’. Tridos are committed to using the public’s money investments to fuel environmental and
socially beneficial projects around the UK. Though this is considered ethical, the bank doesn’t have a single branch in the UK. This could make banking with Tridos considerably inconvenient and difficult, especially when comparing this to more mainstream high street banks such as HSBC, which has over 1,100 banks across the UK. It is understandable that the public could be sceptical about trusting an organisation to handle their money when the bank isn’t mainstream. This could connote ideas of distrust, as they aren’t well renowned and there may not be a large body of people who can vouch for their reliability. Because of this, it is possible to say that the public aren’t entirely responsible for being unethical, when their choices of banks which avoid participating in unethical affairs are limited. The use of ethical banking could also depend on whether the public believe that switching to an ethical bank would really make a difference to the state of the arms industry at all. It is a common misconception that one person’s actions won’t make a difference regarding mass industries such as the arms trade. Amnesty International’s 2013 ad campaign serves as an example of this idea. (Amnesty International, 2013)
Amnesty international is an ongoing collective present online, in particular social media, where their aim is to spread awareness surrounding the arms trade. They often use art as a main driving point for their message, and in 2013 their campaign featured two scenes of natural disaster, however the nature in these images has been replaced with symbols of war. I think these images are very powerful in the way that they communicate the seriousness of war. It shows how vast and destructive the arms trade is, and it also gives an insight into how we are unable to visualise just how much damage is being done unless it is physically in front of us. However I believe that these images have a fault. Their campaign title reads “the arms trade is out of control.”
Though it may seem this way, Amnesty International aim to assist in boycotting the arms trade through switching banks to ethical ones and making people generally more aware of what they buy into. It seems hypocritical to promote the ideals of change and power to the people and then feature uncontrollable mass destruction whilst suggesting there is no ounce of hope to resolve it in the ad campaign which will influence the ideas of what the arms industry is to the mass public. Not only is the title something which suggests uncontrollable chaos, but the imagery itself could connote the ideas that it’s a natural occurrence that cannot be prevented. Natural disasters are often seen as tragedies which are unavoidable, therefore could be argued that these images further reinforce the message that the arms trade is something we cannot change and have to accept and work around. It seems strange that an organisation that promotes the ideals of change and fighting back have released a campaign which symbolises such little hope. However, it could also be argued that the images of natural disaster are used tactfully. Perhaps the creators wanted the image to seem bizarre by using weapons as war instead of nature itself. This allows an audience to think that the destructive behaviour of the arms trade is completely outrageous and that it is unacceptable that it has become so critical. In conclusion, it isn’t possible to bank in the UK whilst remaining ethically and morally correct if you are using mainstream, high street banks such as HSBC, Lloyds TSB, Halifax, RBS or Natwest, however it is possible if the customer were to choose a smaller, ethical bank. When summarising the ethics of UK banking, it is blatant that high street banks aren’t necessarily ethical in terms on their openness, their honesty, CSR policies and intentions. However in terms of the law, they aren’t technically doing anything strictly illegal and therefore aren’t absolutely unethical. It is possible to bank ethically when utilising the facilities of smaller, ethical banks such as Tridos, however this isn’t easily accessible or known amongst the people of the UK, therefore making it’s convenience and presence questionable. This leads us to decide whether it is down to the people of the UK who are ethical or not. When outlining reasons as to why the public participate in high street banking in the UK, it was clear that this could be down to its convenience and the fact that the information of where their money goes isn’t obvious or highlighted as something of importance for the public to pay attention to. Because of this, remaining ethical whilst banking within the UK also boils down to the people who participate with facilitating these ‘unethical’ banks. Because this information is difficult to access, it gives the public some leeway in terms of not being entirely their fault, as they may not necessarily know what damage they could be causing.
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