What does justice mean to me?

Dr Clare Jones Senior Law Lecturer at the Open University writes about what justice means to her in celebration of Justice Week 2021.

There has been much written on the notion of justice by philosophers, like Plato who explores justice in the Republic in 380BC and sees justice as a bond which joins society together. A notion of how justice applies to both man and society, entwining the political and the social together. Plato is not alone and other great thinkers like Socrates and Aristotle also discuss at length what justice means to them. In this short piece, it is not my intention to look at these philosophical debates, but rather contextualise and modernise what justice means to me within the area of financial exclusion and debt. In this piece I take a sceptical view of how financial exclusion has been justified. It ignores the plentiful initiatives that have and continue to be taken surrounding financial exclusion. This piece is intended to provoke and to consider what justice means to those who are financially excluded.

Financial exclusion policy views

Justice, law, politics and society are all intertwined in today’s modern world and this can be seen starkly in the area of financial exclusion. Policy and regulation from government have been reactive at best in terms of fighting financial exclusion and can be viewed as unjust in this context.

Financial exclusion has been described by Kempson and Whyley, (1999a, b) as a multi-dimensional construct and providing a single definition is problematic. Although problematic academics have sought to provide various overviews of what financial exclusion encompasses. Panigyrakis et al. suggests that financial exclusion is where people are “unable to access financial services in an appropriate form” (2002, p.55). The academic work on financial exclusion in the early 2000’s saw an ideological shift from viewing the ‘problem’ of financial exclusion, to seeing the ‘solution’ of financial inclusion at the forefront of policy initiatives. The Financial Inclusion Commission (2020) defined financial inclusion as the means by which people can make their money work well for them, enabling them to maximise opportunities, move into employment, become more self-reliant, and enhance physical and mental wellbeing. Financial inclusion contributes to greater social mobility and levelling up, a more effective welfare system and greater national resilience from economic shock. (Financial Inclusion Commission 2020). 

In short government sees that financial inclusion “enables people to fully participate in the economy and empowers them to achieve their goals in life, whilst offering them protection in the face of adversity (HM Treasury, 2019, p. 2).  The governments positive outlook of financial inclusion ignores the multifaceted problems on actually achieving and maintaining the financial inclusion utopian state.  

Financial exclusion in practice

To be financially excluded, if it is not by choice is unfair, it is unjust. Practices to render people financially excluded are not always transparent. It is not always on an equitable footing that people enter the financial marketplace. There is often not equality among people in financial services. The bias is not always conscious, but it is present. The financial marketplace is not always accessible, it is not always proportionate. If we think about how I see justice, then financial exclusion is unjust, there is not always justice.

Moving away from the academic and governmental definitions in practice financial exclusion is whereby a person is excluded from the mainstream financial market-place and products for differing reasons, such as and not limited to, affordability, homelessness, social and cultural reasons, geography, education or market forces. Financial exclusion therefore prevents people from being social actors in society. It excludes people from the same possibilities open to others within society. It creates a divide between those included and those excluded. It puts barriers in the way of social participation and effects every corner of people’s lives. In the context of justice, it is questionable as to whether this is just?

If we consider modern banking practices over the last twenty or so years, when access to credit, banks and products become a possibility for the many and not just the few, then these practices demonstrate how injustices have promulgated financial exclusion. There are a few questions here that could be asked: Is it just that banks shut bank branches within towns and cities meaning people cannot have local access to banks? Is it just, that people cannot access the same financial products or even at the same cost, because of their personal circumstances? Is it just, to penalise those who are in poverty, with bank charges for overdrafts and debt? Is it just that people cannot understand the complex legal terms used in financial products which could impact on their financial wellbeing? Is it just, that to get a job, you need a bank account and an address, when each requires the others to enter the financial marketplace? Plainly, I argue, that these are not just, but these injustices can be and are justified using capitalist thinking, within businesses and governments.

These justifications come in plentiful platitudes justifying why some and not others are financially excluded. These could be that bank closures are a result of banks having to save money and move away from face to face bank branches. Of course, shareholders are considered before the needs of the banks’ customers as that is what is considered right in business and policy.  When consumers cannot access the same financial products on equitable rates, this can be justified as being right, as there is a risk the bank may not get their money back if a person is considered a too high a risk. When banks charge consumers, who go into debt interest, well, surely it can be explained as it being the persons fault that they did not have enough money in their account to not go into debt. The person must not have managed their money effectively or they must not have been thrifty. When people cannot understand complex legal terms that promulgate financial difficulties or exclusion, then it’s the school systems fault, or the general lackof  education on the part of the individual. If a person is homeless but cannot get a job or be paid without an address or bank account and cannot get a bank account because they cannot get the correct documentations for identification processes, then the justification is that, these robust controls must be in place, to prevent money laundering. It is the fault of the individual and not the bank, business or government. The problem must be solved by tackling the individual’s failings.

I argue that this is unjust, unequitable. The issue of financial exclusion is no doubt complex. The solutions are complex and multifaceted. There are further unjust positions facing financial exclusion.

Debt creating wealth?

We are all human beings, but people do not start on the same starting point in life. Everyone has different circumstances pertinent to only them. A person that is in the starting position of relative wealth, can manipulate the financial system much more easily than those who are financially excluded. This is true for not only the individual but for countries as well. There is an uneven bargaining position for those without the power of wealth. This is not just. There cannot be justice in this. Yet it continues.

Why does it continue? The answer is that debt, whether personal or country specific. Debt fuels money, it makes the world work and it does this by debt accruing interest, this making money for those in control of finance. Is this just?

The world is run on debt. Countries are in debt and borrow more, but the ones that do are those who are able to. In 2020, 34 of the richest nations borrowed $10.9 trillion (Guardian, 2020). The UK’s debt in 2020 was £1,876.8 billion (ONS, 2021). In 2020 the average total debt per UK household in the UK was £60,720, with £3,838 of unsecured debt for UK adult, on average there is £2,133 debt on credit cards per households, (The Money Charity, 2020). Can these countries or individuals ever get themselves free from debt and do the lenders really want to be paid back?

Solutions

Blanket solutions will not solve umbrella issues. Financial exclusion is so very individual specific, but you can find commonalities among people who are excluded. Policy therefore must be targeted and specific. It must look at the injustices of the finance world and consider how it can make it more transparent, accessible, equitable. It must be fair and open to allow people to, if they chose, be included into the financial marketplace.

I seek not to espouse a solution here in this piece, as there is not an easy one, but I am to bring to the attention the injustices in the banking world which have created a division among people, one which has serious lifelong implications. Justice should be considered in all policy contexts as without justice, there is no voice of reason.

References:

Financial Inclusion Committee. 2020. Financial Inclusion Committee Strategy 2020. https://financialinclusioncommission.org.uk/wp-content/uploads/2020/09/Financial-Inclusion-Commission-Strategy-website.pdf  accessed 23 February 2021.

Guardian, (2020), The world is at least $10tn in debt, so why can we still borrow so easily?, Sunday, 23 February 2020.  https://www.theguardian.com/business/2020/feb/23/borrowing-remarkably-easy-world-carrying-trillions-debt-oecd accessed 23 February 2021.

HM Treasury. (2019a) Financial Inclusion Report, March 2019. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/789070/financial_inclusion_report_2018-19_web.pdf Accessed 23 February 2021.

Kempson, E., & Whyley, C. (1999a). Kept in or opted out? Understanding and combating financial exclusion. Bristol: Policy Press.

Kempson, E., & Whyley, C. (1999b). Understanding and combating financial exclusion. Insurance Trends (The Association of British Insurers), 21, 18–22.

ONS, (2021) UK government debt and deficit: June 2020. https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/june2020 accessed 23 February 2021.

Panigyrakis, G. G., Theodoridis, P. K., & Veloutsou, C. A. (2002). All customers are not treated equally: Financial exclusion in isolated Greek islands. Journal of Financial Services Marketing, 7, 54–66.

The Money Charity, (2020), The money statistics January 2021. https://themoneycharity.org.uk/money-statistics/ accessed 23 February 2021.