We are seeing seismic shifts in Western society and social attitudes, against a decade-long backdrop of global economic crises and deep distrust in institutions – including big business. The received economic wisdom has been that the markets must by definition be morally agnostic, that supply and demand is all, that things are as they are, and that the macro is more important than the micro. All this is increasingly rejected – not least at the ballot box.
At the same time, we see a shifting articulation of priorities and values towards:
- Society, not just self
- Wellbeing, not just money
- Experiences, not just things
In some cultural cohorts, it’s also manifested by the overt rise of ‘ethical’ brands; provenance, purpose, local-ness, authenticity, and so on – amongst the public, and even amongst institutional investors.
In others, it is manifested by dissidence and a deeply ingrained distrust and resentment of business, public institutions, and the ‘elite’ with their ‘vested interests’.
All this plays out amongst an increasingly marketing-savvy audience via a growing contempt for and disinterest in mainstream advertising and PR. Brands don’t even own their image any more. People trust people more than they trust what politicians and companies say. Mostly, marketing is just shouting at the traffic. We see widespread cynicism and low salience around CSR and its like, coupled with an implicit desire for a better form of purpose.
People have begun to ask the next question. What are you for? Why do I need you? Who really benefits? Why is our world better for your presence?
The Economic and Ethical Perspective
Classical economics was once a branch of philosophy, and was born with an intrinsically ethical component. But at some point along the way, it began to aspire to be a ‘proper’ science. Concepts of utility defaulted to the purely financial. Economists became queasy about all these inconveniently difficult-to-measure social and ethical concepts.
Now, challengers to the orthodoxy – such as evolutionary economics – are experiencing a resurgence, for example rebutting the received wisdom of the primacy of ‘shareholder value’ and instead focusing on the paradigm of the organisational ecosystem. The underpinning theory is that a healthy corporate organism thrives through balance, and that any purely financial success, if achieved at too high a short term cost, will not be lasting.
Normative ethics – and especially the longstanding and influential theories around Utilitarianism – play directly into this. The ‘right’ action or behaviour is held to be the one that maximises utility, i.e. goodness on the wider canvas; this is what’s referred to as the sum total of human happiness. The debates have always been around defining and measuring this, and aggregating such measures across very different individuals, and indeed corporations.
Put the two together and we have the opportunity to construct a measurable model of what the team at The School of Life has termed (from the virtue ethics point of view) ‘Good Capitalism’. Also not forgetting a variant of the utilitarian model that focuses on the related concept of minimising negative utility: do as little harm as possible. Do not create misery.
Your typical classical economist might balk at the idea of introducing value judgements into a discipline that aspires to be a science. But the claimed absence of value judgements is in itself a value judgement. This is not physics: economic assumptions and decisions directly affect people and societies. Moreover, there are implicit value judgements within classical economics which are now being wholeheartedly challenged. Value judgements like:
- It doesn’t matter if people need your products as long as they want them.
- Shareholder value trumps all.
- The market is always right.
- All money is morally neutral.
In sum, our project aims to reframe the way business might look at itself in the mirror of society.
- What is its fundamental reason for existing? What is its place in culture, in society, and in the world at large?
- How do its products, services, and broader business behaviours affect staff; customers; the supply chain; wider society; the world at large…?
- Overall, does it increase or decrease the sum total of human happiness? Is it a force for good, or not? If not, what can it do to become one – both in fact and in perception?