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Feeding the
conversation
April
2020
I was brought up in the tail end of empire which I could arbitrarily designate as passing when Rhodesia became Zimbabwe.
In those days I could say I was a believer still in hierarchical ordering but that is not the case now.
However, if I were to have a fun hierarchy of entities it would probably run like this with the most valuable first:
People
Animals
Buildings and art works
Institutions
Companies
The lower down the list the more they are there just to serve those higher up!
I am not worried about moth-eaten institutions but the only ordering I have problems with (which is one of the reasons that hierarchies are awkward) is animals above buildings and art works.
I am not going to let the woodworm eat the building and in your institution you are not going to let the dog chew the Rubens because without the Rubens you may no longer deserve to exist.
You could make your institution act more like a company, as many do, but do do not expect us to defend you when you are asset stripped for your Rubens.
THE ETHICAL DIMENSION
Reviewed by ANDRE BEAUMONT
If you want to change the world, you can do worse than build things. Buildings and other structures usually last longer than you do and concretely influence the environment in which your fellow humans live.
If you wish to achieve more change than can be brought about by building, or on a grander scale, there are other disciplines that can deliver, but more often than not, to bring about results, you are inexorably drawn to engage with politics.
An engineer of genius like Brunel did not build the Great Western Railway without an Act of Parliament. To recreate his achievements in contemporary society would involve a lot more politics.
In a world that has moved towards job specialization and is slightly anti-individual, it would be hard today for an engineer to achieve as much as he did.
So the biggest canvas most people can potentially access to paint on is the political one.
Just occasionally, though, an ethical innovator, like Luther, emerges who paints on a bigger canvas than politics.
However, such historical figures' innovation has been predominantly in the field of morality and, at present, ethical innovation in areas other than morality is especially needed.
For instance, the world needs an ethical understanding that businesses should seek to serve customers well and have adequate profitability to ensure their continuance whilst governments should seek not to be paternalistic in their provision of services.
Without ethical understandings of this kind, irrational positions can build up that even law cannot restrain.
The idea that quoted companies should usually seek maximum profitability in pursuit of shareholder value is one such position.
In practice it can mean a board can act as it wills and reward itself too handsomely because it can claim that nearly all its actions are in the interests of shareholders - even though, because of the croupier's take of finance and other reasons, the legal beneficiaries of the shares, pensioners and others, benefit significantly less from the rising profitability.
At the other end of the formulation, governments can provide services, supposedly in the interests of citizens, where the best rewards go to the administrators.
More generally, paternalism in the provision of services rarely meets the varied needs of individuals.
One must ask, for instance, whether the National Health Service can match the high standards of its best competitors if it remains the paternalistic institution it has been for at least two decades.
Law cannot provide such ethical understandings amongst large numbers of the global community, spread across multiple jurisdictions.
One of the core arguments in a book redolent with ideas, Harry Redner's Ethical Life, is:
Law and ethics are in inverse relation to each other - the more there is of one the less of the other.
Philosophers who argue that we should be brave enough to be normative in the ethical sphere are surely correct, too.
Who, though, will spearhead ethical innovation?
Best equipped to do so, on the face of it, would seem to be leaders of traditional ethical communities but a problem for them is that they may already be embroiled in disputes about morality and the role of their institutions.
Philosophers might fill the gap.
Also, it is possible to imagine ethical understandings springing up over short periods of time in a global community.
Take the plight of bees, under threat from the varroa mite, neonicotinoids and other dangers. It is in the economic and ethical interests of human beings that their numbers do not collapse.
It is entirely feasible that a good percentage of the global population becomes seized of the problem early on, before legislation is able to make much impact, and offers moral support and encouragement to those who act ethically to protect bees and increase their numbers.
A good thing about ethical action is that it is frequently individual action.
As Redner puts it in another context:
In art we create alone and appreciate together; in ethics we deliberate together and act alone.
Not that opening a hive with someone else around might not be a good idea.
It is theoretically possible that something similar could happen quickly in the economic sphere. If the world's financial journalists came to a consensus that the shareholder value justifications were illogical, change would become necessary.
Did the political protagonists of the third way in Britain get it more wrong than they realised?
The introduction of Redner's book describes a society that clearly existed in parts of the world when the book was published in 2001 but it is not really recognizable as the society that existed in Britain then.
However, it does portray a society that looks like Britain at the end of the decade.
A passage like the following does at least bring a flicker of recognition:
In a society driven by market forces, career and status ambitions, and general greed, people prey on each other in all sorts of ways and get away with it where the law is blind. There is no ethical community to call them to account.
The worsening ethical behaviour that arguably became apparent in Britain during the first decade of the millennium need not be described retrospectively.
It was described in advance.
This begs a question. If the third way political ideologues had been working from a wider frame of reference, could they not have prevented us sleepwalking into a type of society that, while not disastrous, was not appealing?
The third way appeased quasi-monopoly interests in order to leave the state free to tax and spend, then later to borrow, tax and spend, in pursuit of paternalistic goals.
Both sides of this equation squeezed the individual. Rising taxation, rising profitability and a rising debt load were predominantly at the expense of the individual.
The administrative culture never really understood business and vice versa. Despite this, government knew how to cut a deal with corporations because it was continually lobbied by them and not particularly so by small business.
This lack of understanding had not mattered when Margaret Thatcher was in power. She, at least, understood the importance of the individual in a dynamic economy.
State industries were revitalised and sold off to their customers and to the public at a discount. If the allocations of shares in these industries had to be scaled back because of oversubscription, it was the institutions who were scaled back most, or allocated nothing, not the individuals.
Right to buy legislation placed municipal housing in the ownership of people who might not otherwise be able to afford property. Once again the individual was given a discount.
Direct personal taxation was also on a downward trend relative to corporate taxation. Where the votes lay was obvious.
With the third way, the process of squeezing out small business began. Tenderers for government work had to have unbustable balance sheets. Smaller companies, as a broad rule, had to be sub-contractors to these to get any business. Once sub-contracting, their innovative approaches and lower costs were hidden from view.
Without much competition from smaller entities, the larger tenderers, on numerous occasions, have had government over a barrel and, in a very few cases, their balance sheets have not been unbustable.
In bad times, corporations now generally squeeze the customer. Of wealth generated by corporations, employee pay is a declining percentage of the whole. The latter is not necessarily a bad thing - one cannot stand in the way of greater productivity.
Nonetheless, there is a warning here. There are some similarities with the thirties in the developing global economic situation. Much has been learnt so the denouement will be different. Radical changes in the way people work in the advanced economies might be the real outcome.
Travelling in the direction of further squeezing of the individual, whether as customer or taxable employee, is not particularly safe.
To avoid dislocations, the real third route is not to favour corporations or government, or a combination of the two, but to return economic power and decision making to the individual.