redeeming capitalism...

My great friend, Ken Barnes (he’s an ordained minister who has conducted business on six continents as a senior executive; he also holds the Mockler-Phillips Chair in Workplace Theology and Business Ethics at Gordon-Conwell Theological Seminary, Boston, USA), has written a remarkable book which explores the history and workings of capitalism in a business world that, these days, frequently seems devoid of any core principles or ethical constraints.
It’s a truly fascinating, well-researched, intelligent book (and it’s very readable too). It deals with a highly complex subject in a way which is both comprehensible and hugely thought-provoking.  The book begins with the spectacular collapse of the New York investment bank Lehman Brothers in September 2008 (28,000 employees and nearly $700billion of managed assets). It outlines the financial mess the bank got itself into and describes the cheating, immoral ways in which it tried to cover its tracks. It also reminds us that, despite the catalogue of errors and deceptions, none of the senior executives of Lehman Brothers went to gaol or even faced criminal charges – because the prosecutors concluded that they hadn’t actually broken the law! As Ken puts it: “the motive for deception was strong, not because the penalty for failure was severe… but because the financial reward for success was extreme”.
Ken goes on to list several other instances of individual and corporate fraud and financial deception. He also provides an enlightening mini-history of economics and capitalism – taking in the likes of Adam Smith, Karl Marx and Max Weber – before moving on to ‘postmodern capitalism’ (which he described as “capitalism that is devoid of a moral compass and resistant, if not impervious to ethical restraint”).
I found myself constantly scribbling in the margins or highlighting fact after fact (not something I usually do with books, believe me) – SO many snippets of information and detail eg. growing wage gap between corporate CEOs and the people who work for them; 1% of Americans today have an annual income 38 times greater than 90% of their fellow Americans; 78% of the US economy is now in the service sector, including financial services; (I could go on for several pages like this!).

Perhaps not surprisingly, given his background at Gordon-Conwell , Ken is a great advocate for the need for a different kind of capitalism to emerge – one that begins to change the social, political, ethical AND religious drivers that have formed our economic system from the onset. He calls this “virtuous capitalism” and puts forward a compelling argument which re-imagines capitalism within a faith-based ethic. He maintains that “there lies in every breast of every human being a shrouded yet indelible knowledge of God and both an ability and a desire to reflect the goodness of God, which explains the fact that the overwhelming majority of people in the world (84%) still profess faith in God”. Although, as a Christian myself, I love the concept of “virtuous capitalism”, I’m afraid that I don’t quite share Ken’s optimism in people’s spiritual attitudes. Indeed (and I know one can quote research paper after research paper), a recent survey that indicates that more than half the population here in the UK has “no religion”.

Nevertheless, I absolutely DO agree with Ken that it is entirely possible to build a business ethic that is universally applicable and which incorporates such features as morality, mission, common good, openness, trust, fairness, thrift and mutuality (I think my own architectural practice was built on such a platform). There needs to be a change away from greedy, uncaring corporations towards business such as Danish company Novo Nordisk (where the CEO is paid a fraction of what similar ranked executives would make in the US; where the accounting focus incorporates environmental and social concerns; where economic performance is measured a 20-25 year view in mind).
There are far too many aspects of the book that I COULD refer to (eg. The Occupy Movement; the theology of wealth; tax avoidance; United Global Compact/the Religious Freedom+Business Foundation; the third world; world politics; rich and poor etc etc)… but you really do need to read this book for yourself!

Nearly two years ago, I read an equally fascinating book on capitalism by Paul Mason, entitled “Postcapitalism”… and, although written from very different perspectives and backgrounds, there are lots of similarities – even if their respective ‘solutions’ were fundamentally different. Much food for thought!

One of the passages in Ken’s book related to what he called “The Geography of Virtuous Capitalism”, namely: “Economics is indeed a global concern, and not just in our current postmodern context, but in all future contexts as well. The resistance of nationalists and those who gnash their teeth over the corruption and inefficiencies of both corporate and government pan-national organisations notwithstanding, railing against globilisation is akin to howling at the moon. The world is small and through interconnectedness getting smaller every day. The challenge facing our economies, political structures, and environment are becoming ever more complex and intertwined. To become a force for good in the world, virtuous capitalism cannot be based on a beggar my neighbour mentality or the weaponisation of economic policies designed to give one country an advantage over others. It must be based on a think-globally-act-locally mentality and an ethos of shared responsibility for each other and for the planet we call home”.

This struck a chord with me very locally (although perhaps not quite in the way Ken envisaged). Here in Bristol, we’ve taken an initiative to introduce what we call the ‘Bristol Pound’. It was introduced in 2012 and we have our own printed money (and it’s also accessible digitally via smart phones) to trade in Bristol, localising supply chains and keeping money circulating in our city. It’s a movement, an idea, a hope, a better way of doing money… and it works! Two years ago (this is just one example), an enlightened developer decided to construct a scheme next to the harbourside (Wapping Wharf/Gaol Ferry Steps) consisting of a mixed-use scheme of apartments and cafés/bars/shops/restaurants. The developer took great care to select those he felt would complement each other and, crucially, ensure that they were all independent, local businesses. It’s been a phenomenal success… it’s become the go-to place in Bristol (and many of the traders have also opted to use Bristol Pounds). The traders are happy and the developer plays his part by ensuring that the area is kept clean and that the development continues to ‘look the business’ (the scheme won a prestigious heritage design award last year). As a result, a real sense of community has developed – the traders all know each other and seem to get on wonderfully well. So, on the back of this success, the developer put forward ideas for further shops, a yoga/massage unit and other eating places – housed in converted shipping container units. Again, the result has been wonderfully successful… and the sense of community has continued to develop. The developer is now seeking permission to build a number of small, independent office/studio units (plus café/bar) at the opposite end of the site (again using converted shipping containers) – a hotel is planned within the heart of the development on the site of the old gaol. In normal circumstances, the developer might have struggled to obtain permission for this latest proposal but, because he has a) now developed a very successful track record, b) prospective occupiers are keen to be associated with a development which they know will enhance the area and its community and c) has the firm support from people who use the facilities, I have absolutely no doubt that this latest phase of the scheme will prove equally successful. Relatively small beginnings; a determination to do things as well as possible (from design, environmental and organisational perspectives); being prepared to engage with end-users AND the local community; the city council is delighted by its success (which ‘rubs off’ on them, so they look good too!)… Think globally, act locally? A model for the future perhaps… on a VERY small scale?

Returning to the book, I have to say I was both encouraged and delighted by what it had to say and how it said it. I’m one of those people who have really struggled to come to terms with the implications of the 2008 financial crisis (and beyond!). I’m not easily reconciled about such matters, and yet, I finished this book feeling hopeful and even optimistic(!) that redeeming capitalism IS possible – given time, commitment, faith, perseverance, a sense of serving the common good and an acceptance of the need to engage with fellow stakeholders.

I think it’s a brilliant book and, even though you might not think so, one that you should definitely read.