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What do we want capitalism to do for us?

Yesterday [Sunday 15th January] marked three months of the ‘Occupy’ movement in London. Whilst in its early days public attention to the movement was boosted by the actions of clergy at St Paul’s Cathedral, only half-hearted media commentary and vague interest surfaced this week.

In a blog for ResPublica’s Disraeli Room in November, I drew on a recurring theme in colleagues’ observations of an economic climate which sidelined ethics and social purpose, with an attempt to analyse the nebulous nature of the Occupy movements in Wall Street and London. The protests may have spread to 951 cities in 82 countries, but they were only united against everything wrong with individual circumstances, with no coherent solutions.

In a global climate of job insecurity, housing shortages and rising living costs, it is not at all remarkable that people across the globe feel the need to protest, and the pace and scale of the movements was impressive, sociologically speaking. It was the lack of ideas, not the sentiment, which disappointed the - originally sympathetic - public. Whilst relatively few onlookers would identify as anti-capitalist, many are wary of tired economic systems and impersonal structures.

Is the crisis which we are witnessing a market failure? This is increasingly the consensus.  But has meaning and purpose been lost behind the blame-the-banker culture which focuses solely on financial markets, rather than recognising the potential of wider economic structures? And if a 'compassionate capitalism' is the solution, what does this entail? 

At a ResPublica public discussion before Christmas, Professor John Milbank described the Occupy protestors as rebelling in the name of ‘common good’. Jesse Norman, MP for Hereford and leading ‘Compassionate Conservative’, echoed this in his critique of the modern financial sector’s ‘crony capitalism’ that is detached from the public interest. There emerged a consensus on the panel that financial institutions are too far removed from the societies they serve. Professor Lord Robert Skidelsky – a Labour Peer – argued that the market crisis was caused by capitalism’s promotion of ‘wants’ over ‘needs’, and argued for regulation to counteract this phenomenon. Also speaking was the Reverend Canon Giles Fraser, formerly of St Paul’s Cathedral, who indicated that the ‘Big Society’ narrative could potentially address this hiatus between financial and ethical values, and stressed that any attempt to re-moralise the economy should move beyond notions of growth alone. The question he posed was, ‘How can we reconstruct what we are for?’

It thus follows that a capitalism for communities would value economic benefits beyond monetary gain, accounting also for the everyday experiences of individuals in their localities, and the power of the markets to contribute to and enrich these. Whilst of course growth and jobs are imperative to everyday individual circumstances, 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 and social relations.

Ethical practice in the City is important, but over and above these ‘practical’ concerns what is needed is a cultural change, shifting attitudes and addressing a question not just around the distribution of profit, but how individuals, their peers, and wider communities may benefit on a wider basis. As Jesse Norman remarked at the ResPublica discussion, what do we want capitalism to do for us?

The degree of cross-party consensus is exemplified beyond the convergence of our own panel of speakers. Today, Deputy PM Nick Clegg announced plans to increase employee share ownership in British businesses, to give individual employees a stake in their firms and benefit productivity and workplace culture and wellbeing. A concept that ResPublica recommended in 2009, the idea was also recognised in the 2010 election manifestos from the Conservative and Labour parties. Rather than fuelling the divisive executive pay debate, this is the sort of policy which recognises all the members of a community and drives their associative benefits forward.

In his recent article on the resurgence of the social, Adrian Pabst attributes the disconnect between markets and society to the subordination of social to commercial purpose. This approach gives rise to a new vision beyond consumerist culture whereby the commercial – applicable to employers, retailers or service providers - should move towards a values-based understanding of people’s priorities.

Clegg’s announcement today is a welcome one, but there is a long way to go to achieve a seismic shift in the meaning and understanding of the ‘economic good’ across all sectors.

See original article here 

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Detailed Summary

Date Published
19 January 2012

New Economies, Innovative Markets

About The Authors

Caroline Macfarland

Caroline was the Managing Director of  the ResPublica Trust from January 2012 until March 2013. She joined Re...