Once upon a time – a couple of years ago in fact – I was so alarmed by the high cost of payday loans advertised by brands like QuickQuid and Wonga, that I started a small campaign called 2356percent (it’s a link to an article from the Independent, by the way, the 2356percent site is no more).
One thing led to another and, thanks to Greg Mulholland MP, an Early Day Motion, signed by about 30 MPs, was tabled in the House of Commons. Because of that campaign, I was invited to meet with Errol Damelin, the chief executive of Wonga. We had a fascinating conversation and the 2356percent campaign has been pretty much dormant since.
That’s not because Wonga persuaded me that their loans were a good thing; instead, I realised that campaigning against behaviour in a financial services ecosystem which spawns brands like Wonga is not the same as campaigning for an alternative kind of financial services industry.
I reached the conclusion that – no matter how persuasive the calls for the regulation of people like payday lenders from MPs like Stella Creasy – the financial services industry is unlikely to up its game until there’s an alternative way of doing things that really challenges the status quo.
I wonder whether the US and European economies would be in such a predicament today if Northern Rock or Lehman Brothers had employed a Chief Philosophy Officer?
After all, you’ll find plenty of Chief Economists dotted around the banks, trusts and fund management companies won’t you?
Had Northern Rock and Lehman boards routinely considered the moral and ethical dimensions of trading in collateralised debt obligations – or even the very existence of those instruments – alongside the economic, financial and regulatory case of doing so, would they have reached a different conclusion and made different choices?
Whether or not Professor Michael Sandel raises the question of the employment of Chief Philosophy Officer in business in his latest book What Money Can’t Buy, I have no idea. His book has only just arrived in the post, so I’ve not had chance to read it yet.
Somehow, I doubt it.
But at least Harvard University’s Professor of Government is asking a question that, not so long ago, might have appeared almost impertinent: what is the moral limit of markets?
His question is based on the idea that, over the past 30 years in particular, we have ‘drifted’ from operating ‘market economies’ to beinga ‘market society’ in which everything, it seems, has a price.As you’ll see in the video, Professor Sandel makes a connection between the creeping influence of economic theory and the corresponding erosion of the role of political reasoning in the public sphere.
Has economic thought proved to be so pervasive that it has led to a cultural transformation where the apparent abundance of market freedom has reduced the diversity of public debate?
So, though we may feel richer as consumers, have we become poorer as citizens?
If you balk at the very idea of philosophical reasoning having a role to play in everyday business, consider this: isn’t the staple of business planning – cost-benefit analysis – little more than a reduction of the utilitarian principles promoted by thinkers like Jeremy Bentham and John Stuart Mill?
(Except, of course, you are unlikely to hear businesses debate cost-benefit in terms of anything besides their own enterprise’s happiness.)
Professor Sandel’s intervention strikes me as being timely.
The election of French president, François Hollande, suggests that the French people wonder whether there’s an alternative diagnosis to the European economic malaise besides an apparently dogmatic adherence to spending cuts.
Meanwhile, in the UK, Ed Milliband’s address to the Labour Party conference last September drew a distinction between ‘predator’ and ‘producer’ businesses: business behaviour leading to outcomes which – economically and socially – are either ‘good’ or ‘bad’.
In other words, the hiatus of crisis means that the role of capitalism in the future of democratic society is up for grabs.
The question is as much a philosophical one as it it economic. It deserves reasoned debate.
Reasoned debate about the way businesses – of all shapes and sizes – choose to behave, about the role that governments play in our social and economic fortunes and – crucially – about the choices we make as citizens.
And Professor Sandel is not alone in seeking to influence the debate: have a listen to Professor John Tomasi’s lecture on Free Market Fairnessat the Royal Society of the Arts in London earlier this month as he seeks to find common ground in a debate that is traditionally characterised as an ideological clash between the left and right.
Meanwhile, economist Diane Coyle’s lecture – also at the RSA – on The Economics of Enough makes for fascinating listening.
If, like me, you felt a degree of queasiness over the way in which technocrats were annointed as presidents of Greece and Italy over the past few months, this is an important moment.
No matter how much we may wish it to be the case, there is no right or wrong answer to the current crisis in Europe. But one thing is for sure: the answer is neither entirely political nor economic.
Our democracies are founded on a fine tradition of political philosophy and economic debate; of contemplating the consequences for society of political and economic actions.
But, as Professor Sandel seems to suggest, the preeminence of economics over serious, considered, political debate, has its hazards.
Because the choices we make about Greece are not simply economic. And it won’t just be the economic consequences that echo beyond this week, this month, this year or this decade.
The consequences for social and political stability will be far more significant.
So, in the midst of all the impatient market-screeching for settlement of the Greek crisis, what’s the moral limits of markets over the future of the Greek people and of the rest of Europe?
What’s the right thing to do?
Had they been given the chance, that’s the kind of question a Chief Philosophy Officer at Northern Rock or Lehman Brothers might have asked.