There are many features of the current financial landscape that raise relational issues.

  • The financial system creates a set of powerful connections between people, between organizations, between nations and between generations.
  • It controls the percolation of monetary value through society in the form of earning, investing and borrowing. Using its labyrinthine channels, governments and central banks attempt to stimulate or rein in economic growth by manipulating interest rates and money supply.
  • Lending has become a key financial issue with the widespread growth of and dependence on borrowing by individuals, companies and nations. Tax advantages for debt over equity finance and persistent fiscal deficits in many nations influence the levels of debt.
  • The financial crisis of 2008 was precipitated by the realization that yesterday’s borrowers in many cases were unlikely to be able to pay their debts, inadequate capital buffers in banks, and a dangerous interplay between bank capital and risky sovereign debt.
  • The globalisation of capital flows and debt markets means that relational impact of decisions ripples across borders with international cooperation needed to manage instability and crises.

Structural injustice

The relationship between lenders and borrowers, at any level, is inherently unequal.  When unexpected events leave the borrower unable to service the loan, calamity often ensues.  Homes put up as mortgage security are lost.  Companies unable to repay loans may wind up in administration and have their assets seized (in fact a number of company takeovers occur in precisely this situation).  Nations are subjected to austerity regimes that all too easily slide into political instability and the emergence of violent extremism.

Slack lending practice

Debt finance also does little to reduce relational distance between corporate borrowers and corporate lenders. It is seldom associated with close involvement by the lender in the affairs of the borrowing company because the security provided for the loan acts as a convenient substitute for close monitoring.  The lack of transparency associated with derivatives trading and packaging and selling on of debt has exacerbated this trend. Government protection of deposits and support for the banking sector coupled with poor regulation increased the risks and dangers.


It is significant that an individualized economy removes financial responsibility from the lower levels of social organization. In most cases, families and small communities, as entities in their own right, are held together more by choice or custom than by finance;  they are merely collections of individuals who are financially connected to forces that operate at a much higher level.  This loss of financial overlap in relationships means that money weakens rather than strengthens social cohesion.

Living off future generations

Financial decisions by Government can also impact on relationships between generations. Increases in national debt in effect constitute a promise that future generations will meet the cost of the interest payments and eventually repay the debt.  What would be considered a grossly unfair transaction between contemporaries is waved through because future generations have no voice.