ResPublica’s Caroline Macfarland concludes the Disraeli Room’s finance and economy week by exploring the potential for a community-based capitalism
More than ever, front page news stories deplore the modern economy and its consequences. Indeed ResPublica’s own Disraeli room has published repeated observations of an economic climate
which devalues morals and ethics and the loss of social purpose, an analysis as much as ease with conservatives as the Left.
The Occupy movement, met in its early days in
both Wall Street and LSX by general disinterest and even pity from the wider public, was nebulous, impotent even,
until it was boosted by the comments and actions of clergy at St Paul’s. With no forward-strategy to date, it is still not clear whether the movement represents any coherent narrative, or whether people both in London and across the
pond in Wall Street are showing solidarity for a hybrid of everything wrong
with their individual circumstances. Concurrently, the Eurozone crisis, whilst its implications are very real, has no serious emotional connection with the ordinary man on the street, and seen as part and parcel of a beleaguered model of financial services.
It is not remarkable that people feel the need to protest about something, with a generation facing uncertainty in their job insecurity, financial
capabilities, housing affordability, pensions, and rising prices of
commodities. However, whilst it was clear
what the protesters were against, what were they in favour of? Where are the solutions
and the recommendations? And what demands would a sympathetic listener be able
to support and be involved with? I’m not sure any of these questions were
answered, and this points to a potential paradox whereby grievances on the nature of the modern economy are voiced by many, whilst there
remains only a few on the fringe who would call themselves
anti-capitalist, and even fewer who are able to articulate suggested solutions to the problem at hand.
These people - normal people - are disappointed by tired systems and impersonal structures. But what if a 'compassionate capitalism' is the solution, what does this entail? This would be a capitalism for communities, the benefits of which are not just restricted to numerical and monetary terms, but focus on the everyday experiences of individuals in their localities, and the power of the markets to contribute to and enrich these.
Is the crisis which we are witnessing a market
failure? This is increasingly the consensus. But is this solely a problem
with the financial crisis or has meaning and purpose been lost behind the
blame-the-banker culture? Whilst Ed
Miliband has remarked on responsible financial services and distribution, and Tobin
tax supporters would seek to address the issues from the top-down, I am not
convinced that the holistic picture is addressed through such a narrow focus on
the financial markets. The Archbishop of Canterbury has emphasised investing in the ‘real economy’ – and of course SMEs, jobs and
growth are unquestionably relevant to the public – but for many individuals and
communities who make up the wider population outside the financial and professional
markets, the ‘real’ economy is the direct effect on their everyday social lives
and wellbeing in the context of their immediate space, place and community.
Values and ethics in the city is by no means
something to be sidelined. And arguments
such as Francesco Seghezzi’s call for an economy which
"rediscovers its ties to society and to individuals" point to future economic
perspectives which will no doubt increase in popularity and serious consideration. What is needed is a cultural change, shifting
attitudes and addressing a question not just around how all in society can
benefit financially from modern markets, how individuals, their peers, and
wider communities may benefit on a wider basis.
And how can they benefit? ResPublica’s work on community ownership of
renewable energy assets is one example of market benefit with social purpose
and value. Similarly, through innovation
in the social finance market, individuals are increasingly encouraged not just
to donate or support the causes they relate to, but to invest in the future of projects
and causes which will produce financial returns and impact on their everyday
lives. (And not necessarily in addition
to usual habits or expenditure, but through statutory pensions investments for
example.) Another forthcoming ResPublica project will examine the potential to
capture and distribute the profits of land value increase from regeneration and
urbanisation to local residents. These are very tangible outcomes to aim for
and which will be recognisable by the man quite literally on the street.
In his recent article, Adrian Pabst regrets the subordination of social to commercial
purpose, and this may hint at future solutions. Consumerist culture is based on
the benefit to the individual and his or her direct space, place, and peer
circle. The same priorities still exist
and in this way the commercial should move towards a values-based understanding
of people’s priorities.
Whether economic underclass or squeezed middle, we should be
widening the net for open, innovative, purposeful markets so that everyone can
reap indirect benefits interlinked with, but not limited to, the financial. Questioning market values requires
analysis of the latent potential for the social. And in addressing these
concerns, we can also achieve clarity on the age-old question of fairness and
social justice. That’s a topic for