It's been an interesting few days in the media for thinking about business, finance, capitalism and politics.
This morning, listening to the Today programme, I heard that Philip Gould has died. Ed Miliband has of course done the decent thing and lavished praise on him, as one of the 'co-founders' and drivers of New Labour, also dearly departed.
Interestingly the Today programme re-played an interview they did a while ago with Gould, after the onset of his cancer, in which he was asked whether he thought that the 'nastiness and aggression of politics' had been a factor in getting cancer. He said, "That's true."
Ed Miliband: business, finance and politics are out of touch with peoplehttp://www.guardian.co.uk/commentisfree/2011/nov/05/ed-miliband-business-finance-politics
St Paul's protests have highlighted the biggest issue now: the gap between ordinary people's values and the City's
by Ed Miliband
This is a frightening time for Britain: unemployment at record levels, inflation going up, living standards squeezed; a European crisis, lurching from Athens to Brussels to Cannes, adding to the sense that the economy is on the brink; a government sitting on the sidelines, unwilling or unable to help.
That is the backdrop for the protests at St Paul's and hundreds of similar demonstrations in cities across the world.
They present a challenge: to the church and to business – and also to politics. The challenge is that they reflect a crisis of concern for millions of people about the biggest issue of our time: the gap between their values and the way our country is run.
The role of politicians is not to protest, but to find answers. I am determined that mainstream politics, and the Labour party in particular, speaks to that crisis and rises to the challenge.
Many of those who earn the most, exercise great power, enjoy enormous privilege – in the City and elsewhere – do so with values that are out of kilter with almost everyone else. The warning lights on the dashboard are flashing. And only the most reckless will ignore or, still worse, dismiss the danger signals.
The problem – as I said in my Labour conference speech at the end of September – is a system of irresponsible, predatory capitalism based on the short term, rather than productive, responsible behaviour which benefits business and most people in the long term.
Just think about the last couple of weeks: the energy companies making record profits per customer, and the top directors getting a 50% pay rise while everyone else feels their living standards squeezed. Banks not heeding the lessons of the financial crisis: still dishing out big bonuses and still not lending to the entrepreneurs our economy needs.
You do not have to be in a tent to feel angry. People feel let down by aspects of business, finance and politics which seem in touch with the richest 1% – but badly out of touch with the reality facing the other 99%. They wonder if things can be different — and whether politics can make a difference.
There is much about what David Cameron and George Osborne are doing with which I disagree. But our problems go deeper than any one government. "Take what you can." "In it for yourself." "The fast buck." Most people never embraced these values but we were told they would help us, and Britain, to succeed. But too many thought they could do whatever they wanted, and pay themselves whatever they wanted. And some became so powerful or so big, they believed no one would dare challenge them.
When people at the top show such irresponsibility, it should be not be a surprise to find it elsewhere in society too. We must make big changes in the way our country works. And that is why the choices we make now to address people's immediate worries should also pave the way to a better economy, society and country in the long term.
Any family would find it impossible to pay off a mortgage or a credit card bill if no one in that household is earning an income. That is the immediate problem in our economy. With unemployment at a 17-year high, there are not enough people in work to help pay down the deficit. Nowhere is this more true than for young people.
Business as usual is not an option. In every generation, there comes a moment when the existing way of doing things is challenged. It happened in 1945. It happened in 1979 and again in 1997. This is another of those moments because the deeper issues raised by the current crisis are too important to be left shivering on the steps of St Paul's. We cannot leave it to the protesters to lead this debate.
But we can only win this debate with a movement which stretches beyond politics. That is why in the months and years ahead Labour is determined to construct and to lead a coalition which includes business and civil society to make the case for a responsible economy, fairer society and a more just world.
Incidentally, this is what Oxzen said about Ed Miliband in September 2010 -
He spoke well. His delivery was good. His voice is not unpleasant. Infinitely better than Blair or Brown. A decent effort. And he will probably get better.
He deserves support at least for what he said about inequality, the gap between rich and poor, re-regulating the City and financial services, values, work-life balance, civil liberties, Palestine, Iraq, support for the Alternative Vote, creating new businesses and industries, and above all redistributing prosperity, tackling low pay, and introducing a living wage.
This is indeed a new beginning. Bye bye New Labour. Well done Ed.
How time flies.
Brother Ed talks a lot about "a more responsible capitalism in future".
Clearly capitalism is now well and truly under the microscope. It doesn't seem all that long ago that New Labour was terrified of even using the word 'capitalism'. Can anyone remember Blair or Brown or Mandelson ever using this word?
Nowadays we have Michael Portillo - once seen as the most right-wing of Tories - making 2 hours of Radio 4 documentary on the crisis in capitalism, and saying it has to change.
Nowadays there are smart people like Portillo questioning the role of the State, the failure of its supervision, and the need for much greater regulation of the City and financial institutions..
Nowadays we hear the likes of Nigel Lawson, Thatcher's Chancellor of the Exchequer for several years, talking about the need to separate High Street banking from Casino banking, and the need to break up "huge, unmanageable banking conglomerates" - because "regulation alone can't beat greed".
Maybe a tipping point really has been reached when the decent people on the right wing in politics begin to talk publicly about the need for finance to not only 'oil the wheels of wealth creation' but ALSO to 'make a better world'.
On the Today programme this morning there was an excellent interview with Ken Costa, The former Chairman of Lazard International, who's the man asked by the Bishop of London to "start a dialogue" on how ethical capitalism might work.
Here's a few examples of what he had to say -
"We split up the human person and forget there's an ethical and a spiritual dimension."
"Ethics is both caught and taught."
"Bankers CAN behave morally and ethically."
"There are many people who are concerned about where we are going with the market economy."
"We cannot just consider maximising profits for shareholders."
"How to change it? BY CHANGING THE CULTURE, BY EXAMPLE WITHIN COMPANIES, AND BY UNDERSTANDING THAT EVERY COMPANY OPERATES WITHIN A COMMUNITY"
"We need to change the way we do business . . . "
"There needs to be fairness, and clearly we've got got to a tipping point where we need to encourage employees to do good things and to do the right thing."
Oxzen's view is that we can't expect the world of business and finance to change its ways overnight, and we can't leave it to that world to teach its workforce about the moral, the ethical and the spiritual. Clearly we need to educate young people whilst they're still at school - to the extent that they don't just learn about values and ethics and virtuous behaviour and social justice until AFTER they've left school and have gone to work in the City, or wherever.
Ken Costa: The City must rediscover its moralityOne of the UK’s most senior investment bankers and the man charged by the Church of England with reconnecting “the financial with the ethical” has demanded that the City rediscover its moral compass and engage in one of the most fundamental reforms of the market system to regain public trust.
Ken Costa, the former chairman of Lazards International, says that one of the foundation stones of the capitalist system – maximising shareholder returns – should no longer be the “sole criteria” for judging how a company is run.
Last week Mr Costa was asked by the Bishop of London, Dr Richard Chartres, to head a team of leading figures in the financial and religious world to “start a dialogue” on how a form of ethical capitalism could work.
Mr Costa says that markets have lost sight of their moral duty and gives details of how the Church initiative will work.
“It will be an interactive dialogue that will aim to bridge the differences between protesters and the City,” Mr Costa writes.
“It will look at how the market has managed to slip its moral moorings and explore pragmatic ways of uniting the financial and the ethical. And it will be an opportunity for making connections between people and ideas that have come to forget or dismiss one another. It will ask some penetrating questions about shareholders. Is it still the case that the promotion of shareholder value is the object of all companies?”
St Paul's initiative: 'It's time for radical change'There is worldwide a new awakening of civic consciousness. It recognises that we cannot go on as before.
by Ken Costa
There is now an urgent need to reconnect the financial with the ethical. This is the key challenge facing capitalism today. And it could yet prove to be one of the most exciting and productive movements of modern times.
The events of the last week have reminded us, as if we needed reminding, that there is, as Rowan Williams put it in the Financial Times, “widespread and deep exasperation with the financial establishment”.
For some time and particularly during the exuberant irrationality of the last few decades, the market economy has shifted from its moral foundations with disastrous consequences. I cannot recall when public feeling worldwide has run so high, and even if only a minority takes its anger on to the streets, no-one should imagine that the majority is indifferent to their cause.
We are mistaken if we believe legislation will solve our problems. You cannot regulate into existence a culture of honesty, integrity, truthfulness and responsibility and, at the end of the day, it is precisely these values that we need.
Bob Diamond, the chief executive of Barclays bank, rightly observed in the inaugural BBC Today Programme Business Lecture last week that banks can and must learn to behave as “good citizens”. It is an instructive illustration because we all know that it is not the law that makes a good citizen. Rather, it is a commitment to honesty, fairness, trust, integrity, and so forth. In short, citizenship is a moral attribute.
[We need to]re-embed the financial spirit, our drive to do well, with the moral spirit, our desire to do good.
Above all it is to reconnect the various different silos of our humanity – economic, moral and spiritual – so that we live as whole people all the time and not simply as money-makers on weekdays and morally concerned citizens at the weekend.
The present duty put on all boards to maximise shareholder value as the sole criterion for satisfying the return to shareholders cannot continue. I am aware that this is a big change that will need detailed discussion but we need to start with big ideas.
As we have those discussions we could do well to remember what Jack Welch, the former head of General Electric, said on the issue. Shareholder value, he said in 2009, is “the dumbest idea in the world”.
St Paul, I believe, would have been quite at home in the protesters’ camp this week. He is, however, a man more (mis)quoted than understood, as epitomised by that best known of biblical aphorisms: money is the root of all evil. Paul, of course, thought the love of money, rather than money itself, was the problem. It was when money became separated from the moral and spiritual foundations that gave it its meaning and purpose that serious problems arose.
The financial world today faces just such problems and the only way we can hope to address them is if we overcome our tendency to divide the world into them and us. Now is the time to work together to reconnect the financial system that we all need with the moral framework that we cannot do without.