As we mark the 70th anniversary of the Universal Declaration on Human Rights (UDHR) this week, we might pause to reflect upon how relevant it is today in a world dominated by finance. “Highly”, you might say. After all, surely the global financial crisis and its austerity-driven aftermath have made that painfully obvious?
Well, yes and no. Take the momentous G20 summit held in Washington DC in November 2008, just as the financial crisis was transforming into a global economic one. Bringing together the leaders of the G20 nations for the first time in the group’s history, the meeting’s Communiqué pointed the finger of blame at policy-makers, regulators and financial institutions; it lauded free market principles as the vectors of economic prosperity that have “lifted millions out of poverty and significantly raised the global standard of living”; and it committed global leaders to a series of immediate and medium-term actions for restoring “stability and prosperity to the world economy”.
What really stood out, however was what was not said. Within the Communiqué’s 3,582 words, the phrase ‘human rights’ was not mentioned once. The world’s most powerful leaders gather to address the most significant global economic event in a generation, with widespread social implications such as job losses, homelessness, poverty and welfare cuts, yet one of the crowning achievements of post-World War II international law did not warrant a single mention.
At least as shocking was the fact that no one seemed to notice. Indeed, far beyond the G20, human rights considerations were conspicuously absent from nearly all diagnoses and prescriptions that followed the crisis. What is it about finance (and even financial crises) that inures politicians, policy wonks and the rest of us from seeing the relevance of human rights? It was at that time and with that question that I - a human rights lawyer – ventured into the sometimes bizarre, often shocking, and forever intimidating domain of global finance, that lead eventually to a book - Necessary Evil – published earlier this year.
Certainly, finance’s complexity and esoterism is part of the answer. I soon learnt that even bankers are often flummoxed by the intricacy of their own products (see How Unlucky is 25-Sigma? for one especially embarrassing example). But equally, I could see that the human rights industry was guilty of shirking the vital task of decrypting finance in ways that make the relevance of human rights clear and convincing. Denouncing the venality and vice of finance – as I and others are wont to do – is all well and good, but that alone doesn’t open many bankers’ doors.
For me, getting my sandaled foot in the door required not only a concerted effort to understand what the more shinily-shod people inside were up to, but also some mastery of conveying a human rights message to which they can relate. On that score, it wasn’t enough to point to rafts of international human rights treaties and declare, hands on hips, that they provide a blueprint for financial policy goals. They don’t. Bankers can see this, and so must we.
The rights in treaties are merely the bare bones of what human rights are like on the ground. Fleshing them out in the myriad of real-life circumstances in which we live can be hard work, but it is essential if aspirations of the UDHR are to leap from paper into practice.
The most important step we must take in this direction, I believe, is to recognise human rights as the features of our everyday existence that make our lives worth living: safety and security, health and welfare, being treated with respect and as an equal, and exercising our basic freedoms to speak, associate, practice and learn as we choose. In other words, the staple ingredients of the good life.
True, which ingredients we enjoy and in what quantities are often determined by our financial capacities - individually and collectively - to secure them. But it is here that we see the potential in finance’s very own abilities to offer security, flexibility, convenience and choice, to build wealth and make the difference between sustaining people’s human rights and their neglect. Such common language, I’ve found, creates a bridge that financiers can relate to, even if they’re not yet quite sure how to cross it and what to do on the other side.That bridge can help us all better understand and tackle some of today’s toughest financial problems - including how an unbridled finance sector that has catapulted aggregate global wealth upwards over the past 30 years has also created unprecedented wealth inequalities within countries (as per the US chart above) while the regional picture is also inconsistent (as per the chart comparing average incomes in Asia and Africa below).
And why, when every major financial institution today has made an express commitment to the UDHR, and/or fealty to the UN's sustainable development goals, does walking the talk seem to be so difficult? Recent examples of socially harmful financial misconduct that fly in the face of these corporate promises include Goldman Sachs’ engulfment in the embezzlement imbroglio around Malaysia’s 1MBD (a state-owned development fund, no less), and Denmark’s Danske Bank (formerly considered one of Europe’s most squeaky clean banks) presiding over the world’s largest money-laundering scandal after years of turning a blind eye to more than €200 billion in total being deposited in a single Estonian branch by non-resident, Russian nationals.
High-minded proclamations of socially responsible intent, it seems, don’t cut the mustard in practice. Intent has to be rendered in terms that are familiar to both financiers and rights advocates alike, if the task of addressing the ‘S’ in ‘ESG’ (‘environmental, social and governance) compliance in finance is to progress beyond platitudes and rhetoric. Employing the everyday vernacular of human rights can help here by explaining what the social impact of everyday finance really means.
The result will benefit not only human rights; it will also benefit finance by providing it with a legitimacy of purpose beyond merely that of enlarging the wealth pool. Human rights and finance may seem an unlikely couple, but in fact they are more intimate than strangers. They’ve just got to find the right words to express it.