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The Morality Of The Markets

Should markets define the common good? If not, how can we shape markets to take account of what we most cherish?

What are the moral foundations of a capitalist economy? It is a simple yet searching question which demands a better answer than the implication that its morality is inherent; in other words, that the outcomes the market delivers are unimpeachable for it is the best way of delivering economic efficiency. 


The sudden and euphoric collapse of European communism led to hubris in some western policy makers who saw this as a vindication not just of democracy and the rule of law, but of the essential virtue of an unfettered market economy. The lack of coherent thinking around this question, stemming from complacency and a sustained period of global economic growth, allowed certain inherent flaws of the system to be magnified. Among these, greater inequalities within society and environmental depletion are legacies the generation after ours may face fully-formed.


Governments instinctively privilege economic growth among their priorities. There are good grounds for this, as it makes people better off materially, preserving society from high levels of unemployment which in the last century were seen to be at the root of social discord and poisonous ideology. Furthermore, the electorate is quick to punish any government which fails to deliver growth, at least in an era of prosperity.


We are now several years into the longest economic downturn since the 1930s and much energy has been expended over why this happened. Some blame governments for borrowing and spending too much; others accuse speculators of taking on more and more risk because they (rightly) assumed that central banks would have to bail them out if things turned ugly. Central bankers and politicians are criticised for failing to regulate banking properly. The former Chairman of the Federal Reserve, Alan Greenspan, argued that derivatives and hedge funds should be unregulated, taking his philosophical cue from the libertarian Ayn Rand, who thought that government regulation was an immoral activity. Blame may fairly be shared out in the current crisis, but the public of which we are part was participant in this squalid spectacle as we were beneficiaries of the cheap and unsustainable availability of credit.


Debate is currently focussed on how to rid ourselves of the recession. Much of this is in the realm of technocratic, managerial politics: do we cut or do we spend; do we raise taxes or reduce them? This is the terrain of post-ideological politics and they are essential questions, not least for Europe which has been awarded the Nobel Prize for Peace at just the wrong moment as it glances nervously over the shoulder at the whisper that its history of factionalism may be about to repeat itself. However, the situation is calling out for more honesty. Is this really the best form of capitalism that we can hope for? In a way it mirrors a related question about parliamentary democracy, whose current form we complacently accept even though in practice it gives power to people once every five years, leaving the more adept, connected and articulate to mould it to their own ends the rest of the time. Genuine, participatory capitalism, which spreads the same opportunities across society, feels a long way off today. The market is not inherently fair and nor are we slaves to it; to paraphrase Jesus: the market was made for man, not man for the market. Like other forms of idolatry, submitting ourselves uncritically to a human invention allows it to shape us in its image.


Rowan Williams has done much to address these questions in his tenure as Archbishop of Canterbury, yet there is a sense that much of the thinking we crave has come from sources outside the Church. There would be nothing to regret in this (for God liberally uses us) but for the feeling the Church may have squandered this opportunity to recall for people the nature of human flourishing in God. In the last year, Michael Sandel (What Money Can’t Buy: the Moral Limits of Markets) and Robert and Edward Skidelsky (How Much is Enough?) have posed searching philosophical questions. Sandel believes we confuse market reasoning for moral reasoning, where economic efficiency is conflated with the common good. He also critiques the way economic reasoning has spread beyond its boundaries into the public imagination, affecting social relations (what he terms the transformation of the market economy into the market society). Given the indeterminacy of economic science and the current crisis which surrounds the discipline, it is extraordinary that we have allowed its rationales such leeway in our lives.


Robert and Edward Skidelsky discuss what we should mean by ‘the good life’. Noting that human happiness is linked to income growth for a certain span (thus confirming the lifting of people out of poverty as one of the most valuable of global goals) but that after this modest point, happiness and income levels are de-coupled, they question the assumed value of endless growth and posit a different way of looking at the common good.

The coalition government has been ridiculed for its mapping of happiness across society, even though there is an emerging science of human flourishing which demonstrates that people are able to give an accurate account of how happy they are and in ways which can be measured. We should resist the disparaging of this agenda, for behind it lies an old and broken assumption that a good society is only formed by what can be materially measured by Gross Domestic Product. Christians should acclaim any index of well-being which encompasses values which cannot be seen, for it is suggestive of the golden rule: that it is in loving others and not just ourselves that we find God’s purpose for our lives.


Any system of capitalism worthy of acceptance should be formed by the priority of human relationships. We take human relationships so much for granted that we do not see the integral part they should play in the shaping of the markets and institutions which would otherwise govern us without pity. These relationships form several overlapping circles: families; neighbours; at work; between the genders and generations; in institutions; between ethnic groups; between rich and poor. 


Unless these are given priority, they are mangled out of shape by blind economic forces. We should make the market take account of what we cherish the most. It is no argument to say there are no ways of measuring relationships, for efforts are being made to do this and to suggest these cannot succeed is willingly to conspire in the ruin of what makes us human in God.



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