Lord Griffiths: “Prosperity: better business makes the greater good” by Prof. Colin Mayer

Colin Mayer is a distinguished professor at the University of Oxford, former dean of the Said Business School and a Fellow of the British Academy . Throughout his career one of his fields of interests has been the business corporation and at present he is director of the Academy’s research programme into the Future of the Corporation.

However neither the title nor sub-title of the book do justice to its contents. The book is nothing if not ambitious. In examining the business corporation the claim is that “it will take you across history, around the world, through philosophy and biology to business, law and economics, and finance to arrive at an understanding of where we have gone wrong, why, how we can put it right and what specifically we need to do about it”.

The remarkable fact is that I believe he has achieved his aim. The book is wide in scope, has considerable depth and is not superficial. It is well written, interesting to read and draws on a lifetime of research into different aspects of the business organisation.

The book is first a sustained and vigorous attack on Milton Friedman’s claim that the sole social responsibility of business is to increase its profits, subject however to doing so in open and free competitive markets, without deception or fraud, while conforming to the basic rules of the society embodied in law and custom. For Mayer the public have lost trust in business precisely because business has followed Friedman’s advice and put the interests of shareholders above other stakeholders.

In its place he proposes a total reinvention of the corporation. Corporate law should be changed so that each company is required to state its ultimate purpose over and above  profit, redefine the responsibilities of directors to deliver these new objectives, develop new measures by which they can be judged and introduce incentives to deliver them.

In exploring the purpose of business Mayer distinguishes between ‘making good’ (such as manufacturing cars, or electrical products) and ‘doing good’ (treating employees well, cleaning up the environment, enhancing the well-bring of communities). The latter has a social public-service element which goes beyond the private interests of the firm’s customers and investors, and even beyond section 172 of the 2006 UK companies Act, which already imposes duties on directors to take into account the interests of stakeholders other than shareholders.  As examples of successful and enlightened corporations he mentions with approval “industrial foundations” companies such as Bertelsmann, Bosch, Carlsberg, Tata and John Lewis which are set up as foundations or trusts.

While I admire his ability to explore different dimensions of the business in one book, I have serious problems with his argument.

First, the pursuit of long term profitability is essential if a company wishes to prosper in the long term. Long term profit is a great discipline. This applies not just to publicly quoted companies; it applies equally to private companies, B-corps, partnerships, foundations and trusts. If companies of any kind make losses, capital will drain away and either they get taken over or go bust. This applies to all companies even those which are foundations and trusts. Not only that but long term profitability is a pre-condition of companies doing good: being able to reward employees well, help communities, develop new products and services for customers and invest to protect the natural environment. In this context it is important to distinguish between long term profitability and short term profitability.

The pursuit of short term profitability is bad business. Just recall the financial derivative products created by banks in the feverish boom years leading up to the 2008 crisis which ultimately led to some banks going bust and others being bailed out by governments. This was bad business.  British Home Stores was a classic example of short term profit maximization with inadequate investment in the business itself or the pension fund. Again short termism leading to bad business.

Pursuing long term profitability is not just a matter of management getting numbers right. Before they can do that it requires them to set out a vision which makes the firm “a great place to work”, ensures customers recognize value for money in what they buy, becomes known as an ethical organization by the way they conduct business and admired by shareholders for earning a superior long term return to capital.

A second problem with Mayer’s proposals is the sheer complexity of managing the diverse and frequently opposing interests of stakeholders. It is logically impossible to maximize in more than one dimension. If managers have to manage the interests of all stakeholders they need to be able to make meaningful tradeoffs between competing interests. Profit or change in long-term market value is a way of keeping score in the game of business. Michael Jensen and others have shown that in the long term prospective profit maximization and shareholder maximization amount to the same thing. The use by management of a balance scorecard is no better as it ultimately gives no objective way in which to weigh all of the elements in the scorecard to arrive at a single figure.

A third problem with Mayer’s argument is accountability. “Accountability to everyone means accountability to no one”. The author’s proposal is a revolutionary re-definition of property rights within a modern corporation to make it “trustworthy” but to whom is the board of this new “trustworthy” corporation responsible? And what are the rights of ownership over the funds invested in the business? Already in the US the number of publicly traded companies quoted on exchanges has roughly halved over the past 25 years. One reason is the increasing cost of regulation: another is the availability of private equity finance. If Mayer’s proposals were ever to be implemented they would constitute a major disincentive for companies to raise capital through the public markets and only accelerate the decline in stock market listings.

In Mayer’s proposal shareholders would become providers of capital to business rather than owners of the business. The general public have never had a great trust in business which is why ever since the Industrial Revolution governments have stepped in to control business through laws passed by parliament, regulation, mutualisation, nationalization and state ownership. Mayer’s proposals will downgrade the existing well defined ownership rights which exist in publicly traded companies and replace them with a form of ‘social’ decision making in which the leadership of the company is answerable to trustees but shielded from competition in the market place through take over bids. A sure way to create inefficiency.

In this respect these proposals are a far cry from an exercise in academic research, more a political statement. Far from having no objection to the existence of ‘trustworthy’ corporations as one of many different forms of corporate ownership, I welcome them. In terms of corporate structures let a hundred flowers bloom. If the author was making a case for the idea of ‘Industrial corporation’, fine. However he is doing more than that. He is making the case for eroding private property rights and restricting what companies can do, which is as much a political statement as one based on objective analysis.



“Prosperity: better business makes the greater good” by Colin Mayer was published in 2018 by Oxford University Press (ISBN: 978-0-1988240-08). 288pp.

Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.

Richard Godden: “Global Discord” by Paul Tucker

Global Discord does not fit neatly into any of the categories of book that are reviewed on this website. It is not primarily a book about business, capitalism or wealth and poverty. In fact, it is not primarily about economics. However, its focus is on something of crucial importance to all of these things: the global political order. Its author, Paul Tucker, the former Deputy Governor of the Bank of England, suggests that “the deep architecture of the international economy [is] influx for the first time in decades” (page 3) and he sets out to analyse both the causes of this and potential responses to it.

He never expressly identifies his intended audience. The primary audience is doubtless those responsible for formulating the policies of Western nations in relation to international affairs, including, in particular, international finance and trade. The issues that he discusses are, however, of crucial importance to a far wider audience. Unfortunately, the book is dense and heavy going in parts. This will limit its appeal but those who take the trouble to study it carefully will find it rewarding, particularly if they seek to reflect on how his suggested approaches to international engagement might be applied in their corner of the global political, financial or business world.

Tucker identifies three major differences between the kind of globalisation that we are now witnessing and that which existed in the past: first, derivative markets have separated cross-border flows of funds from flows of risk; secondly, after accumulating vast sovereign wealth funds, some states have acquired great influence in global capital allocation and, taken with state-owned enterprises, state-capitalist actors are operating on a scale that has not been seen “since Europe’s merchant companies traded and intervened around the planet half a millennium ago” (page 7); and, thirdly, today’s infrastructure for cross-border financial transactions create vulnerabilities that can be weaponised.

Tucker suggests that there is “a deep cleavage in modern international affairs” (page 78) and his overwhelming concern is China. He argues that the West needs to face up to the fact that, far from China moving in the direction of a liberal economic and political order, it is moving in precisely the opposite direction. Quoting the now well-known “Seven No’s” of the Chinese Central Committee, he points out that, “While Western states took different paths to [wielding power across their territories, the Rule of Law, and accountability], for China the destination is different” (page 220). Thus he argues, surely correctly, that “commentators in the West who insist current tensions are not ideological – and should not be allowed to become so – are deeply mistaken, while nevertheless pressing an important practical question: What to do?” (page 461).

He repeatedly accuses Western policy makers of wishful thinking in their dealings with authoritarian states and China in particular and he has many criticisms of current global institutions pointing to both specific design flaws and more general issues. Some of these criticisms relate to specific institutions: he describes the second Basel Capital Accord as “deeply flawed” (page 98) and suggests that the WTO is based on unrealistic universalistic rather than pluralistic concepts. Other criticisms are more general: he points to the hazards of delegation to international organisations, particularly in a world in which international treaties are what economists call “incomplete contracts”, and the dangers of what he refers to as “judicialization”.

His concern in relation to the latter is that international courts and tribunals are ruling on matters that ought to be left to political negotiation and are applying interpretations of treaties and even “natural law” concepts in a way that results in states being bound by things to which they do not believe they ever agreed. Some might argue that this is simply the concept of the Rule of Law applied in an international context but, as is the case in relation to some domestic systems (e.g. the role of the Supreme Court in the USA), it gives rise to a situation that is dangerously close to the Rule of Judges. In short, it is an example of judicial overreach and it has potentially serious political consequences for the perceived legitimacy of the world order, particularly when set against the context of the ideological divide to which Tucker draws attention.

Much of what Tucker says is thus critical of the existing order and those who have contributed to its creation. However, Global Discord is not a negative, destructive book. Tucker’s main aim is to assist in the building of a new global order that is based on coherence defensible principles whilst being capable of surviving in the real world. To this end he devotes a lot of space to analysing the theory of international relations and he suggests that we need to contemplate four broad scenarios for the next quarter to half century: “Lingering Status Quo (continuing US international leadership); Superpower Struggle (the scenario most resembling the long eighteenth century’s French-British contest); New Cold War (autarkic rival blocks); and Reshaped World Order (more Vienna 1815 than Washington 1990)” (page 115).

Against this background, he moves to more specific, concrete issues. The final part of the book includes chapters on the international economic system, the IMF and the international monetary order, the WTO and the system for international trade, preferential trade pacts and bilateral investment treaties and Basel and the international financial system, and the book concludes with an eight page appendix setting out, in numbered pithy points, Tucker’s suggested principles for constitutional democracies participating and delegating in an international system. No-one can accuse Tucker of merely dealing in abstract theory!

Tucker describes his approach as “realist” in the sense that it is “not a morality-first account deriving duties, rights, and legitimation principles from fundamental, externally given, universal principles, with some kind of morality system providing ultimate foundations” (page 268). However, he suggests that his approach does not “consign moral values to the side lines” since it requires “sociability with path-dependent, problem-solving norms, which leaves something to be said about the sources or mechanisms of normativity” (page 268).

Many will criticise this approach. Some will do so on the basis that it is insufficiently “realist”. Many others, especially Christians and others with strong moral compasses, will worry that morality plays an insufficient part in it and Tucker concedes that, in his view, the West has to adopt a “live and let live” policy and accept that engagement with illiberal regimes is necessary despite a possible desire to promote a universal morality-based international order.

Tucker is not a moral philosopher and he does not engage in detail with the moral issues. However, one does not have to accept moral relativism to conclude that there is a good moral case for his overall approach. A purist approach is highly unlikely to have the outcomes desired by its protagonists and could well result in outcomes that cause much suffering, whether by resulting in war or, more likely, by preventing co-operation over issues such as pandemics, mass-migration and climate change and by stifling international co-operation and trade, with the result that prosperity declines and poverty increases. Furthermore, Tucker bases his thesis on some fundamental tenets that are, at heart, moral: the desirability of peaceful co-existence; the idea that “order is not to be sniffed at: war and instability are quite a lot worse, as is fear of them” (page 323); the need to “stake out the ground that constitutional democracies should insist on to avoid sacrificing our deep domestic norms: to remain who we are” (page 356) whilst accepting that illiberal states will remain who they are; and the idea that perfection cannot be demanded, legitimacy is not binary and “Authority can be legitimate if it is the best realistically available” (page 287). Whilst this may not go far enough for some moral purists, there is, at least a strong argument to the effect that Tucker’s overall approach is likely to produce the best realistic outcome for the world political and economic order and is thus fundamentally ethically defensible.

The purists will also have difficulties with some of Tucker’s more specific statements. In particular, his suggestion that “We need to make judgements about the past only insofar as they materially affect the present (through institutions, norms, values, embedded habits, and so on)” (page 316) will not resonate well with those who are urging ever more delving into past wrongdoings. However, the purists have never explained how their approach leads to a world in which people are able to live together harmoniously and productively. Indeed, the proponents of the recent trend in legislation in the UK towards there being no time bar in relation to the raking up of the past should reflect on whether their proposals are as ethically pure as they like to believe. For example, Tucker suggests that “it is simply no good looking back to the Gulag” or various other dreadful episodes of the twentieth century (page 316) but this is precisely what the UK Prevention of Crime Act 2002 requires: it, unrealistically, regards an enterprise that has once been tainted by crime (e.g. those that benefitted from contracts with slave labour in the Gulags or those that assisted the Nazi regime) as forever tainted.

In developing his arguments, Tucker analyses in some detail different philosophical approaches to international affairs and different concepts and models of international co-operation (e.g. the nature of international law). He largely dismisses Thomas Hobbes’s extreme “realism” and criticises John Rawles’s demand for what he regards as an unrealistically “thick” and binary (“in or out”) international order, while acknowledging his debt to David Hume and Bernard Williams.

This analysis of the philosophical underpinning of Tucker’s concepts will enhance the attractiveness of Global Discord for some more academically minded readers. However, it is the primary reason why the book is dense and, in parts, heavy going. Tucker would doubtless argue that the analysis is essential to the development of his case and this is doubtless true. However, on occasions, the reader is left with the feeling that the analysis is a bit laboured and that the language could be simpler. This is a pity because it mars an otherwise excellent and important book that deserves to be widely read.


“Global Discord: values and power in a fractured world order” by Paul Tucker was published in 2022 by Princeton University Press (ISBN-13:9780691229317). 483pp.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary at the UK Takeover Panel and he is currently a member of the Panel. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the firm’s Executive Committee.


CEME Event: The Great London Estates – Lessons for Housing?, July 2023

CEME was delighted to host an event on the theme of The Great London Estates – Lessons for Housing. The event took place on 18th July 2023 at CCLA Investment Management Limited, One Angel Lane, London, EC4R 3AB.

The meeting was chaired by Nicholas Boys Smith, founding Director of Create Streets which aims to help the housing crisis through researching the links between urban form, well-being, sustainability and prosperity.


The speakers were:

Dr John Kroencke, Senior Research Fellow, Centre for Enterprise, Markets and Ethics, and author of Private Planning and the Great Estates – Lessons from London.

Rt Revd Guli Francis-Dehqani, the Bishop of Chelmsford and the Church of England’s Bishop for Housing.

Dr. Samuel Hughes, Head of Housing, Centre for Policy Studies.




University of Pennsylvania (Wharton)- Wharton Global Family Alliance (Wharton GFA)

Wharton Global Family Alliance (Wharton GFA) – The Wharton Global Family Alliance is a Wharton initiative that centers on a broad set of issues faced by global families that control substantial enterprises and resources. The Wharton GFA is globally recognized as the leading institution for the creation and dissemination of knowledge and practices of multi-generational families and their businesses; The Wharton GFA seeks to foster the longevity, harmony, and prosperity of multi-generational, multi-branch families and their businesses. The Wharton GFA transcends boundaries to enable collaboration and effective communication between researchers and families for mutual benefit and for the benefit of society at large; it enables thought leadership, knowledge transfer, and sharing of ideas and best practices among influential families; it publishes in a range of leading academic and practitioners’ outlets cutting edge theoretical, empirical, and field research on key issues affecting families and their businesses; and it initiates, manages, and participates in global forums and conferences.

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Family Firm Institute (US)

For more than thirty years, the Family Firm Institute (FFI) has been engaged in educating, connecting, and inspiring professionals who serve family enterprises. FFI is the leading association worldwide for family enterprise professionals and the organization of choice for the advisors, consultants, educators, and researchers who help perpetuate trans-generational family enterprise. In adopting a multidisciplinary and global perspective, FFI understands family enterprise as a fundamental driver of global economic growth, prosperity, and stability.

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CEME Video Podcast: God & Economics

In this latest episode of the CEME Podcast, Revd. Dr. Richard Turnbull (Director, CEME) interviews Dr Graeme Leach on the topic of God and Economics.

Graeme Leach is a professor of economic policy and a member of the Shadow Monetary Policy Committee (SMPC) of high profile UK macroeconomists. He has written numerous articles for The Times and The Daily Telegraph and had a weekly column in the City AM newspaper of London. He is widely recognised in the media, having participated in more than 150 live TV and radio interviews for BBC News, Sky News, CNBC, CNN, the BBC Radio 4 Today Programme, BBC Radio 4 World at One and many others.

Between 1997 and 2014 he worked as Chief Economist and Director of Policy at the Institute of Directors (IoD), which represented more than 30,000 company directors in the UK. He represented the IoD in talks with the Chancellor of the Exchequer and 10 Downing Street. In 2014 Graeme became Director of Economics at The Legatum Institute, a global think-tank focussed on identifying the sources of economic prosperity across the globe.

He is currently CEO & Chief Economist of macronomics, a macroeconomic, geopolitical and future megatrends research consultancy. He is also Director of Economic Futures at Global Futures & Foresight, a Senior Fellow of the Legatum Institute and a Life Fellow of the Institute of Directors.


Full video available below:

Richard Godden: “The Economics of Belonging” by Martin Sandbu

Martin Sandbu’s basic thesis in The Economics of Belonging is simple: Western liberal democracy (essentially, the post Second World War socio-economic model) is under threat from within, owing to a significant proportion of western electors losing confidence in it; this loss of confidence is caused by the erosion of a sense of economic belonging, which is the result of decades of economic mis-management by Western governments; and, if the threat is to be dealt with, these governments need to adopt a package of policies radically different from those that have been adopted to date.

The book is sub-titled “A radical plan to win back the left behind and achieve prosperity for all” and, having spent five chapters setting out and defending his view of what has gone wrong, in the remainder of the book, Sandbu sets out a long list of ideas for dealing with the issue he has identified: the establishment of what he calls a “high pressure economy” (involving fiscal and monetary policy designed to keep demand pressure high and other policies to secure high minimum wages); the introduction of universal basic income (UBI); the introduction of a meaningful wealth tax; the removal of tax relief for debt; the strengthening of collective bargaining (including giving unions bargaining rights on behalf of non-members); the provision of significant subsidies to disadvantaged regions; and a host of other, less dramatic, initiatives. He commends governments which, during the Covid pandemic, pursued policies “bolder than anything ever seen in peacetime” (page xii) and his only criticism of the asset purchase programme of the past decade is that it has not gone far enough. He wants more of the same sorts of economic stimuli and much more besides.

Sandbu is a Financial Times journalist and, although the book does not indicate its target audience, it gives the impression that it is aimed at the kind of people who might read the FT. They are certainly the kind of people who are likely to enjoy, and potentially benefit, from reading it. Economists will not find much new in it and, conversely, those who are not used to thinking about socio-economic matters may struggle with some of the analysis. However, non-specialists who are used to thinking about such matters should find it a worthwhile read especially since it deals with an issue that should be a great concern to anyone who values Western liberal democracy: the concern that Western electorates might become so discontented that they themselves destroy it.

This is not to say that the book can be given an unequivocal recommendation. It needs to come with a health warning: Sandbu writes well and with great conviction and there is a danger that readers will fail to notice leaps of logic and inadequately supported assertions that litter the book. Paradoxically, this danger is particularly acute because Sandbu commendably frequently mentions at least some of the main concerns about his proposed policies. The problem is that it is easy to miss the fact that, having raised some concerns, he often does not deal with them adequately or does not mention other material concerns. For example, although he acknowledges that there is risk associated with his proposed “high pressure economy”, he does not properly examine the nature and extent of this risk (e.g. the serious role of inflation and its consequences) let alone discuss how it can be mitigated. Furthermore, he never considers the issues associated with the transition from existing policies to those proposed by him. Those in the UK who remember Chancellor Anthony Barber’s “dash for growth” in the early 1970s or who have reflected on the impact of Kwasi Kwarteng’s disastrous recent budget will recognise that these are serious omissions.

In some cases, the absence of adequate analysis of potential issues results in Sandbu’s proposals seeming to be surprisingly naïve. For example, his arguments for the UBI are interesting and worth considering. However, his defence against the counter-argument that its cost would be exorbitant is that previous calculations have shown that a basic income of £6,700 for a couple with two children could be provided by abolishing tax-free income tax allowance (page 120). This may be true but Sandbu fails to explain how a basic income of this amount would provide the economic security that he is seeking.

Another example of apparent naivety is provided by his suggestions relating to collective bargaining and the role of trade unions. He acknowledges that the role of trade unions has not always been beneficial and that they can be a barrier to change and he recognises that what is needed is unions that “function well” (page 122). However, he fails to explain how it is that this can be secured. Once again, those with long memories will wonder how his proposals would avoid a return to the industrial paralysis of the 1970s in the UK.

On occasions, the book contains hints of romanticism or, at least, rose tinted spectacles. President Roosevelt and the post-war politico-economic consensus are its particular heroes. In fact, a reader who is unaware of post war history could be forgiven for believing that the period from the end of the Second World War down to the last 20 or 30 years was one of universal contentment and satisfaction. Unfortunately, the social tensions, economic problems and, in particular, industrial relations chaos of the 1960s to 1980s, tell a different story. Furthermore, some of Sandbu’s proposals seem worthy rather than realistic and world changing. Among these are his proposal for community banks (page 163), which are surely never going to have more than a marginal role in the economy, and his extoling of the merits of libraries and arts institutions (page 200), which one suspects are rather too middle class to deal with the problem of belonging which Sandbu is addressing.

Perhaps the reality is that Sandbu has tried to cram too much into 239 pages, with the result that his has been guilty of superficiality and a lack of convincing analysis. This is frustrating because he commendably takes issue with those who, simplistically, see globalisation or immigration as the cause of our current problems and, taken individually, a number of his points are interesting. For example, his defence of a net wealth tax as an alternative to other taxes is worthy of consideration and Switzerland provides an example supporting Sandhu contention that his proposal is not necessarily about high taxes. Likewise, his arguments in relation to the removal of tax relief for debt are powerful are supported by a number of respected economists.

These are, however, points of detail and Sandbu is not inviting us to tinker with the detail of our existing economy but adopt his radical package of change. He is clearly convinced that he is right in advocating it but one needs to ask whether all Western governments over the past general have really been quite as stupid as he believes. It is at least worth considering whether there might be a reason why his policy prescriptions have nowhere been implemented. He admits that the problem of belonging exists in almost all Western countries (pages 58-62) despite them having pursued very different policies over the years (e.g. contrast the USA, France and Sweden). Furthermore, although Sandbu is surely right that there is a problem relating to people feeling alienated (i.e. having lost their sense of belonging) and that economic factors have played a large part in the creation of this problem, his dismissal of cultural issues as a material contributor to the problem and his assertion that, despite globalisation, the solution largely lies in the hands of national governments (page 181) may justifiably be challenged.

That said, Sandbu rightly sounds a warning siren and those who cannot accept his prescription for dealing with the current Western malaise need to ask themselves what their solution to the problem is.


“The Economics of Belonging” by Martin Sandbu was published in 2020 (the paperback edition being published with a new preface in 2022) by Princeton University Press (ISBN-13:9780691228907). 239pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.




Brian Griffiths: Why Cutting Inflation Tax is the No. 1 Priority

Who can you trust to manage the public finances and cure inflation?

This is the key issue in this election campaign. Liz Truss wants to cut taxes, borrow more and start paying back after the next general election.  Rishi Sunak wants to get inflation under control first as a foundation for enterprise and growth.

Sound money was key to Thatcherism. Mrs Thatcher saw inflation as a tax on every household and every business but a tax never passed by Parliament.  For her inflation also had a moral dimension, as it does for Sunak. It penalises saving and pensions (other than index-linked pensions). It makes home ownership a pipe dream for younger people. It creates huge  disparities of wealth. In addition inflation creates a culture of distrust which invariably leads to social conflict, witness current rail strikes and ballots for strike action in the public sector, the Don’t Pay campaign opposing rising energy bills and the disillusion of youth, saddled with repayment of university debts, forced to rent and a despairing economic outlook – the official Bank of England verdict.

Margaret Thatcher took a particular interest in Treasury affairs but she never looked at economic policy in isolation. Her policies were founded on her basic beliefs – telling the truth however unpalatable, balancing the books and personal values such as thrift, living within your means, hard work and self-reliance.

Over the five and a half years that I worked as head of the No 10 Policy Unit she would discuss government spending, borrowing and monetary conditions constantly. She had an instinctive grasp of economics and the need to ‘balance the books’ whether in business, in the family or in government.

I cannot count the number of times Mrs Thatcher told me that one of her greatest fears was that one day one of her Chancellors would cut taxes and “gamble on the future of the economy”.

Cutting taxes today is just such a gamble. It would reduce the country’s rainy-day reserves.  We need reserves because of nasty surprises. Covid was a complete surprise. So was the Russian invasion of the Ukraine. So was Putin’s weaponisation of gas. So is the Chinese zero-Covid  policy. We need reserves as a country much as we need reserves in families and businesses. As the Bank of England must raise interest rates to curtail spending, cutting taxes would mean greater government borrowing with higher debt interest payments. Tax cuts worsen the fiscal outlook without any direct impact on growth.

Increased business investment is critical to increasing growth. In making a decision to invest business is not so much interested in the next six to twelve months as in the next five to ten years. The key to that decision is what will happen to inflation. How far will it come down? Does anyone think it will come back to 2%? When inflation does come down how volatile will it be? The current inflation has shocked people. Consumer spending is falling. Until business and consumers know inflation has been beaten we will have stagflation.

For business inflation creates uncertainty over interest rates, the cost of capital, exchange rates, wage demands and output. And also the stability of government.

Mrs Thatcher practised what she preached. When she became Prime Minister she did not cut taxes in the 1979 budget, the month after being elected.  Income tax was cut but VAT raised to offset it. In the 1980 budget taxes were not cut but modestly raised.  In the 1981 budget taxes were not cut back but raised significantly. This was despite the objections of 364 economists at British universities signing a letter, drafted by two senior Cambridge professors of economics.  In response, Professor Patrick Minford, who like me disagreed with the majority view, wrote in The Times (7 April 1981): “The essentials of the inflationary process are simple. It starts when government unwilling to cover expenditure by overt taxation and borrows from the public.”

Some economists advising Liz Truss judge that the situation today is different from Mrs Thatchers’s time, so it is possible for monetary policy to be tight and fiscal policy loose. They believe that the Bank of England already has inflation under control and should only start to pay back borrowing after the next election. Inflation was certainly higher in the early ’80’s than it is now but there is little evidence that people’s expectation of inflation or that the ambition of trade unions to claw back higher real wages is in any way diminished.  Attempting to engineer tight money and loose public finances is a major gamble with our economy.

As someone who discussed economic policy with Mrs Thatcher frequently and at great length,  it is inconceivable to me that she would ever have agreed to cut taxes at the present time. It was certainly her intention to cut taxes to create an enterprise economy but only when the time was right. At a time when public borrowing is 100% of GDP, annual interest on the debt alone is £80 billion, the labour market has more job vacancies than registered unemployed, the balance of payments deficit is very worrying, the pound shaky  and inflation not just high (consumer price index 10.1%, retail price index 12.3%) but forecast to rise, the one thing we can say with certainty is that under these conditions Mrs Thatcher would never have cut taxes.

Cutting across the board taxes like national insurance and corporation tax today while inflation is soaring is no basis for future prosperity. Inflation is a punishing tax levied on every household and small business, made worse by the very tight labor market. Rishi Sunak is right to argue that cutting the inflation tax is the essential pre-requisite for sustained economic growth. We are facing tough times and the case against tax cutting is overwhelming.


Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.







John Kroencke: The Next Prime Minister Needs to Care About Growth

The confluence of events in the last few years have done no wonders for the economic performance of any country, but the longer-term performance of the British economy in the wake of the financial crisis is even more worrying. With the prospect of a sustained fall in real disposable income due to general inflation and, in particular, the severe rise in energy prices, the importance of renewed economic growth is only clearer. Indeed, we need to be clear that economic growth is a moral imperative.  A growing economy is essential to the welfare and well-being of the whole nation, enabling all to flourish. Naturally, there will be political debate over the means and extent of the distribution or redistribution of the proceeds of growth, but the case for economic growth in principle needs to be made again and with clarity.

As Sam Ashworth Hayes argues by some measures the average employee earnings in the UK have never recovered since the financial crisis and won’t until at least 2027. One can debate the statistics but the fact that it is even debatable speaks volumes about recent economic performance. Other figures like the historic levels of taxation and the predicted steady rise in government spending in part due to demographic burdens only add to worries about the future. 

It is easier to wish than to will, of course, but a clearly articulated vision for growth rather than managed decline or intentional degrowth is at the heart of a moral vision for the economy. With the defenestration of Boris, whose magical thinking applied to both national and personal finances, there are some signs of serious interest in economic growth by all the leadership candidates.  Perhaps the most interesting was the now eliminated Kemi Badenoch who in her announcement said some interesting things about governing and economic performance in this context, one of which I reproduce below:

“Lower taxes yes, but to boost growth and productivity, and accompanied by tight spending discipline”.

The part I have italicized is important because it suggests an escape from both the more ideological support of all tax cuts and bean-counting pessimism; deregulation and tax cuts in support of growth and within a fiscal discipline is a responsible position.   Stian Westlake, also in the Spectator, situates the more pessimistic attitude in the unique institution of the Treasury which combines budgetary, financial, and economic policymaking, unlike similar institutions in other countries where these roles are split among government agencies. As Westlake writes:

“The accountant mindset goes hand-in-hand with a historic pessimism about the government’s ability to improve the UK’s economic growth. The Treasury’s prior is that tax cuts, deregulation, public investment and other policy changes can do little to increase the UK’s rate of economic growth. Better the bird-in-the-hand of the tax increase or the spending cut today than the two-in-the-bush of higher national income.”

As a result of a similar assessment, Badenoch suggested splitting up the Treasury and creating a new office to focus on improving economic growth to in order to weaken the role of the Chancellor whose incentive for the accountant mindset “creates,” as Westlake writes, “a sort of learned helplessness in the rest of Whitehall that ends up costing the taxpayer more.”

One hopes that candidates for the highest office in the land will reflect seriously on the opportunities for growth rather than simply continuing on with high spending, high tax and middling economic outcomes. Rishi Sunak, in his Mais Lecture suggests interest in reviving economic growth through some policy levers, but as Philip Salter wrote at the time there needs to be more work into the details (a point that applies to all candidates). The former Chancellor recently wrote that, “my ambition is that the UK should become by far the richest country in Europe within the next 15 years” before highlighting three areas of policy divergence with the EU that Brexit allows and that may enable growth.

It is a shame that it took the current situation to revive talk of economic growth, but thankfully arguments for economic growth are becoming more prominent among all plausible major candidates in the next general election (including Keir Starmer who recently said not only that “Labour will fight the next election on economic growth” but that “the first line of the first page of our offer will be about wealth creation”). Strange times, indeed. Of course, there are a great deal of hard-to-solve problems related to economic growth, but it is at least inspiring that there is more consensus about the major issue.

In a follow up blog post, I will address the crucial role of housing markets in contributing to the problem of poor economic performance (and their role in improving future economic performance).


John Kroencke is a Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.

Edward Carter: “The Biblical Entrepreneur’s Experience” by S Leigh Davis

Much of The Biblical Entrepreneur’s Experience comprises a rather simplistic and selective use of scripture to support a particular world-view, namely a North American free market system. As such, it could almost be categorised as espousing a prosperity gospel, in which correctly following biblical methods will necessarily bring success in business (see Chapter 2 for Davis’s “system”). The examples given in the book, of entrepreneurs such as Sarah Breedlove (Madam C.J. Walker), Strive Masiyiwa and Scott Harrison, tell this story in an often engaging way, but at times verge on a parody, which attempts to represent the complex riches of the Christian faith in an unreflective manner. One example is the song “The Hairdresser’s Ode to Madam C.J. Walker”, to the tune of “Onward, Christian Soldiers”, which the author cites approvingly (pages 72-73). The ‘mission’ of beautifying hair is conflated completely with the great Christian Commission in a manner that I found both disturbing and shallow.

Davis’s central metaphor, akin to a sermon illustration, is that of ‘bees and fleas’, and the author uses the bee/flea imagery to invite the reader into his world-view. BEEs (Biblical Experiential Entrepreneur) are good, and FLEAs (in-Flexible Learnt Entrepreneurial Antagonist) are bad. At the heart of Davis’s analysis is the proposition that “A BEE creates; a FLEA takes” (page 22). The book is peppered with “fun facts”, such as, “The honeybee has a heart!” (page 143), and side-bar notes, for example, “Strive – to devote serious effort or energy; to struggle in opposition” (page 115). Taken together, the above makes the overarching style of the book quite propositional and un-nuanced.

However, at times the book is also informative and every now and again I was pleased to find an interesting comment or statement that, I felt, contributed in a thoughtful way to a theological consideration of the subjects of enterprise and of entrepreneurial behaviour. For example, on the theme of entrepreneurial endeavour, Davis suggests: “It is to prepare the entrepreneur for the next life: a venture more fulfilling than its worldly counterparts” (page 5). This statement sketches out an idea which could be developed into some deep vocational thinking on the kingdom of heaven, and the place for enterprise within God’s enduring purposes. In another intriguing statement Davis comments: ‘…through grace we are given a great opportunity to provide others with a needed product or service to glorify Him – not ourselves” (page 11). Here, the themes of God’s grace, human need (not desire), and divine glory are all connected together under the umbrella of enterprise.

In Chapter 6 biblical examples are used to support the practice of “active listening”, as a way of harnessing God’s messages imparted through others, and Davis interestingly adds some thoughts about the challenges of fear and pride (pages 46-47). This “active listening” to others is to be set alongside the need for regular meditation on scripture (Chapter 15), not mere uncritical proof-texting, which appears elsewhere in the book. Separately, Chapter 10 plays with the “beehive” imagery and the way hexagons fit together perfectly, an illustration of how a project should work, a line of discussion that concludes with this communitarian statement: “…an individual cannot save the world; however a swarm of BEEs in each city can rebuild areas, then blocks of areas, followed quickly throughout a city. Multiple cities make up a country. Multiple countries make up a region. Multiple regions make up the world” (page 104).

A different book might have taken some of these statements and developed them by placing them alongside (and sometimes in tension with) the thinking set out by other authors who have considered the place for enterprise within the Christian world-view. The reader is left to do this work for themself. For example, the rich and in my mind helpful concept of the vocation of the entrepreneur, as proposed by Davis, could have been explored within a more general discussion on vocational calling, and specifically the nature of work within God’s providence.

In a way, the most inspiring section of this book for me was Section 6 (Chapters 16, 17 and 18), which describes empirical research about the distinctiveness of Christian-led and Christian-inspired businesses. Such enterprises typically have greater productivity, staff loyalty, and general outperformance. In this regard, I found the story of Walker Mowers engaging, not least the way in which the owners and directors of this business deliberately attempt to tell the story of the company within the bigger context of the story of salvation history (page 155). An enterprise is thus no longer a means to an end (profit), but is part of an over-arching narrative that embraces God’s purposes. This theme alone could have been developed into a major piece of thinking that I believe would be incredibly timely and helpful for business in today’s world.

In sum, this is a “popular” rather than “scholarly” book. It is, in the main, an easy read with occasional thought-provoking nuggets. With rather less “prosperity gospel” and rather more theological reflection on the important themes that are hinted at, it would have been much improved upon.



“The Biblical Entrepreneur’s Experience” by S Leigh Davis was published in 2021 by River Birch Press (ISBN-13: 9781951561802).  260pp.

Edward Carter is Vicar of St Peter Mancroft Church in Norwich, having previously been the Canon Theologian at Chelmsford Cathedral, a parish priest in Oxfordshire, a Minor Canon at St George’s Windsor and a curate in Norwich. Prior to ordination he worked for small companies and ran his own business.

He chairs the Church Investors Group, an ecumenical body that represents over £10bn of church money, and which engages with a wide range of publicly listed companies on ethical issues. His research interests include the theology of enterprise and of competition, and his hobbies include board-games, volleyball and film-making. He is married to Sarah and they have two adult sons.



Richard Godden: “The Power of Creative Destruction” by P. Aghion et al.

French economist Philippe Aghion has long been associated with the model of growth through creative destruction – the so-called “Schumpeterian Paradigm”. In The Power of Creative Destruction he, together with his two French co-authors, seeks to summarise this paradigm and explain its implications. The authors believe, surely correctly, that “innovation and the diffusion of knowledge are at the heart of the growth process” (page 4) and they thus focus on the causes, impediments and consequences of innovation.

The scope of the book is vast and its pace breath-taking. The authors state that their purpose is to “Penetrate some of the great historical enigmas associated with the process of world growth… Revisit the great debates over innovation and growth in developed nations… [and] Rethink the role of the state and civil society” (page 2). The history of the world’s economy is reviewed in 20 pages and is followed by 13 further chapters dealing with issues as diverse as whether we should fear technological revolutions, whether competition is a good thing, the impact of innovation on inequality, whether developing countries can bypass industrialisation by moving immediately to a service economy, the impact of creative destruction on health and happiness, managing globalisation, the role of the state and the “golden triangle” of markets, state, and civil society. All this in 319 pages!

Inevitably, the result is broad but shallow and the reader’s reaction to it will depend upon what they are looking for. Those seeking insights based on new original research or indepth analysis of issues and carefully argued conclusions should look elsewhere, perhaps to some of Philippe Aghion’s other works; on the other hand, those who wish to think about a broad range of issues and to have some previously unexamined assumptions challenged will find the book stimulating and, probably, an inspiration for further exploration.

It is based on the authors’ lectures at the College de France and it could well serve as a student text. However, the preface strongly suggests that the real target audience is policymakers: it contains much advice, even instructions, for Western Governments, of which perhaps the most stern is that “they must accompany the process of creative destruction, without obstructing it” (page vii).

The book was written between late 2019 and mid 2020 against the background of the Covid pandemic. The authors suggest that the pandemic has acted “as a wake-up call by revealing deeper problems that plague capitalism” (page vii) and they argue that what is required is a reformation of capitalism. So many recent books have adopted this starting point that there is a danger of it being greeted with a yawn and the expectation that what will follow will comprise the standard left-wing prescription of more government intervention and redistributive taxation. However, as the emphasis on creative destruction should suggest, this is not what Philippe Aghion and his colleagues advocate.

They see a role for the state that is larger than that which many free market economists would support. In particular, they see a role for it in financing and generally promoting the development of certain technologies that might otherwise not be developed (particularly those associated with the transition to a low carbon economy). However, they accept that “Objections to industrial policy from the 1950s through to the 1980s are difficult to counter, all the more because later work, such as that of Jean-Jacques Laffont and Jean Tirole, pointed to several sources of inefficiency in state intervention” (page 68). In particular, they recognise that national industrial policy has the effect of limiting or distorting competition, that governments are not great at picking winners and that governments may be receptive to lobbying by large incumbent firms. Consequently, they recognise that we must look primarily to the market rather than to governments to secure economic prosperity.

Some parts of The Power of Creative Destruction are basic, even to the point of distortion. For example, the description of the drivers of the industrial revolution is hopelessly superficial and does not even consider the role of beliefs, ideas and culture (which Deirdre McClosky has analysed so carefully in Bourgeois Equality). There are also some irritating inaccuracies in the book. For example, James Watt did not invent the steam engine (as is stated on page 40), the wheel was not invented in China (as is wrongly stated on page 20) but most likely in Eastern Europe and there was no “year zero” (which is bizarrely referred to on both page 22 and page 26). However, these errors are minor and the book contains a lot that is of real substance. Most readers will, at the very least, find thought provoking material within it.

For example, the authors draw attention to a number of studies that should at least cause pause for thought among those who see greater equality and better social outcomes coming primarily from government action: a comparison among different American states that suggests that innovation increases “both the share of income of the richest 1% (top income in equality) and social mobility” (page 82); other evidence points to a very strong positive correlation between job creation and job destruction (i.e. that the preservation of “zombie” corporations is an obstacle to the creation of new jobs; page 214ff); and evidence from Finland suggests that parental influence remains a decisive factor in whether a child will become an innovator even in a country where the educational system is highly egalitarian and of high quality (page 199ff).

Other parts of the book presents challenges to those who favour less government intervention. For example, the authors present evidence that “strongly suggests that as a firm gains greater market power and moves towards market dominance, it focuses its efforts less and less on innovation and more and more on political connections and lobbying” (page 92). There are also some tantalisingly brief policy suggestions, perhaps the most interesting of which is the idea (originally put forward by Richard Gilbert in Innovation Matters) that antitrust authorities need to change the way that they look at mergers by not using the definition of existing markets as their loadstar and instead evaluating the extent to which a merger could discourage the entry of new innovative firms (page 123).

Much of the evidence supporting these assertions and suggestions is set out in innumerable graphs. These are interesting and informative but a few words of warning need to be sounded: the graphs require careful study and this is rendered more difficult in some cases by the inadequacies of their labelling; furthermore, in a number of cases, it is difficult properly to understand and evaluate the relevant graph without access to the book or paper from which it has been extracted.

More generally readers need to be careful that the readability of the text does not cause them to be swept along by the authors and fail to spot the points at which the evidence presented fails adequately to support the argument being made. This is not to say that the relevant arguments are wrong but merely to warn that, in many cases, the authors have not proved that they are right.

That said, The Power of Creative Destruction is a good read: it avoids overly technical language, does not assume a lot of prior knowledge, has been well translated by Jodie Cohen-Tanugi and clearly presents important ideas.


“The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations” by Philippe Aghion, Céline Antonin and Simon Bunel was published in 2021 by The Belknap Press of Harvard University Press (ISBN-13:9780674971165).319pp

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.


Daniel Johnson: On inflation, Britain is in peril. We should heed Brian Griffiths

This was first published in The Article.

The Article was proud to publish one of the most important pieces we have ever carried: a warning to the Bank of England from the economist Brian Griffiths that unless it acts now to curb inflation, the UK risks sinking into the mire of stagflation — as it did in the 1970s. 

In the latest of a series of essays on inflation, Lord Griffiths — who was head of Margaret Thatcher’s Policy Unit in the late 1980s and has recently retired from a senior position at Goldman Sachs — explains just how precarious the outlook now is. His first article, “The spectre of inflation” appeared well over a year ago, when the threat of a return to inflationary times was ignored or dismissed by those in authority. The official line has been that any rise in inflation above two per cent would be “transitory” and that prices would soon return their pre-Covid levels.

Now it is a very different story. Last weekend the Governor of the Bank of England, Andrew Bailey, indicated that the Bank would “have to act” on inflation and the markets now expect a rise in interest rates after the Monetary Policy Committee meets next month. Today, the Bank’s chief economist Huw Pill warns that the inflation rate could rise above five per cent early in 2022, which implies that the retail price index will exceed this figure by two or three per cent.

As Lord Griffiths explains, once inflationary expectations are baked into the economy, with markets, employers, trade unions and consumers all anticipating a significant decline in the value of money, the danger of a wage-price spiral becomes acute. Such inflationary expectations are difficult to eradicate. Only co-ordinated action between the Bank and the Treasury over a period of years rather than months will squeeze inflation out of the system. 

This means not only higher interest rates than we have been used to, but an end to quantitative easing and much stricter control of the money supply. That in turn implies tighter limits on government spending and borrowing in the run-up to the next general election, due by 2024. Tensions between the Prime Minister and the Chancellor are bound to resurface. The economic cycle and the electoral cycle may not align, but if inflation is allowed to get out of control, the Government will be blamed. Boris Johnson will not wish to be remembered as the Prime Minister who undid all Mrs Thatcher’s work. 

The alternative to taking action against inflation now does not bear thinking about. Stagflation is the worst of all possible worlds: stagnant growth, rampant price and wage inflation, high unemployment and low productivity. When Britain was last caught in this trap, during the 1970s, it was mocked abroad as “the sick man of Europe”. Even the momentous step of joining the European Economic Community, as it then was, did not bring salvation. That only came when the Thatcher government (of which Lord Griffiths became a key adviser) bore down on inflation by controlling the money supply. Initially the sacrifices were painful for the entire country: unemployment rose to more than three million and stayed high for years; taxes rose and spending was cut; inflationary wage rises ended. Strikes led to bitter, sometimes violent clashes as unviable industries cut labour costs. The Miners’ Srike in 1984-85 nearly brought down the Government. But Mrs Thatcher and her ministers held their nerve; as inflation fell, growth and prosperity gradually returned. Then, as the economy boomed, inflation rose again. This is the situation that the UK finds itself in today: an economic recovery, but with a sharply rising money supply and inflationary expectations.

The Bank of England now enjoys operational independence, as it did not in the 1980s. The risk of this is that the Government may try to evade responsibility for inflation. That, however, would be an illusion, both in theory and in practice. It is Parliament that is sovereign and which sets the Bank’s inflation target of two per cent, which in normal times functions as an anchor. If underlying inflation is now running at more than twice this level, the Treasury must answer for the consequences no less than the Bank. The global crisis caused by the Covid pandemic, combined with the localised dislocations occasioned by Brexit and the political imperatives of the Government determined to occupy the centre ground, mean that a return to austerity is unthinkable. Yet the tough choices that now face us cannot be shirked if we are to avert a plunge into the abyss of stagflation. 

For years, if not decades, the pendulum of economic orthodoxy has been swinging away from the monetarist ideas that influenced Mrs Thatcher and her colleagues. New Labour worshipped at the shrine of Keynes rather than Hayek or Friedman, while the coalition and Conservative governments that followed never embraced monetarism. Boris Johnson and Rishi Sunak have pursued classic Keynesian policies to kickstart the economy after the pandemic. Now, however, they need to pay heed to the voice of experience. The analysis and remedies offered by Lord Griffiths are supported by many other economists, particularly those with expertise in monetary policy. The fact that Huw Pill, the Bank of England’s new chief economist, is clearly worried about inflation getting out of control next year explains why the Governor, Andrew Bailey, is now talking about imminent action. 

Their tone has altered just since last June, when Lord Griffiths warned of “A new age of inflation” and the danger of delaying a course correction that could be “too little, too late”. “The major monetary policy lesson of the post-Second World War years,” he wrote then, “is that it is far better to take one’s foot off the accelerator now rather than slam the brakes on later, jeopardise the recovery and raise unemployment.” In June, Andy Haldane was still the Bank’s chief economist. Now Huw Pill has taken over. He appears to have taken that lesson to heart and persuaded Andrew Bailey to act. We are about to discover whether Rishi Sunak can persuade Boris Johnson to let him do the same.


Daniel JohnsonDaniel Johnson is the founding Editor of TheArticle. For two decades he was a senior editor, editorial writer and columnist for The Times and the Daily Telegraph, before leaving to set up Standpoint magazine, which he edited for 10 years. He contributes regularly to Daily Mail, Wall Street Journal, Commentary, New Criterion, National Review and other papers, magazines and websites.

Richard Turnbull: “Putting Purpose into Practice” Eds. Colin Mayer and Bruno Roche

This book is the product of an extensive research programme undertaken between Mars Catalyst, which is the internal think-tank of the Mars company, and the Saïd Business School at the University of Oxford. Professor Colin Mayer is a leading voice in the debates around business purpose and has written and spoken extensively in the field. His previous writing in this area includes Firm Commitment (OUP, 2013), and Prosperity (OUP, 2018). He is insightful and measured and this comes through in this volume. Bruno Roche was formerly the chief economist of Mars, Inc. and the head of Mars Catalyst. He brings both practical business experience and a commitment to thinking about and developing both the ideas and practices around business purpose. He developed the idea of the ‘economics of mutuality’ a surprisingly confusing concept, but one with a lengthy history in Mars. A fascinating and interesting project.

The book has four parts. The first deals with consists of an introduction and overview by the editors. Part II consists of seventeen contributions designed to deal with the core components of the ‘economics of mutuality’ including reflections on purpose, various aspects of non-financial capital (human capital, natural capital, social capital), accounting and measurement issues and the role of micro-equity, investment funds, partnerships, NGO activism and other matters. Part III includes 14 case studies and then Part IV is a conclusion.

The book contains some significant insights, offering areas for further research and useful debates on important topics, all of which build on current knowledge and research in this increasingly important area. However, the book seeks to achieve far too much and consequently ends up with disconnects between the debates in Part II and the subsequently case studies.

The book’s premise is that the classic Chicago economic model of profit/shareholder value maximization was misconceived in its very nature but that business is in a position to be a profitable force for good that transcends self-interest ‘for the benefit of people, planet and profit’ (page 4) which is labelled mutuality. There are merits, as well as flaws, in the Chicago model but few would argue with the second part of that statement.

The history of the idea of mutuality as it relates to Mars is set out by Jay Jakub in chapter 4. Forrest Mars Snr wrote, in a 1947 letter, that the aim of the company (page 57) ‘is the manufacture and distribution of food products in such manner as to promote a mutuality of service and benefits,’ listing consumers, suppliers, competitors, government, suppliers, employees and shareholders as all sharing in this mutuality.

The economics of mutuality takes specific account of a wider range of impacts on people and planet, not least through embracing human, social and natural capital (chapters 10-13). The term ‘economics of mutuality’ though is confusing. The ideas extend beyond the ideas of mutual ownership (see chapter 17) but that is what most people will immediately think of and hence might be distracted from the wider argument. The terminology cannot be readily grasped.  There remains a distinct vagueness when discussing the range and measurement of alternative forms of capital. The editors define mutuality as involving trust, a wider and more pragmatic view of the firm, measuring non-financial performance and developing simple metrics and reporting. The book would have carried more coherence if this definition had more clearly formed the shape of the book and then developed in the case studies. This would have given both a sharper and yet more in-depth analysis.

At the heart of the argument is the idea that the effective boundaries of the firm should be extended beyond the contractual definitions of the traditional corporation which then enables the establishment and pursuit of wider purposes. This argument merits much more discussion as it is a genuinely innovative and creative idea. Colin Mayer and Bruno Roche argue, ‘companies are part of larger business ecosystems and as such, have responsibilities to individuals, communities, and resources that contribute to business performance’ (page 14).  Few would disagree with that and yet extending the boundaries of the firm poses challenges for the structure and nature of the corporation and there remain several conundrums. What is the legal structure which will shape the future corporation? How will the various contractual relationships be reflected in that structure? Are there different possibilities for public, private and family companies?

Another area of significance identified and certainly in need of further research is the development of metrics of measurement for the wider range of capitals identified leading to the idea of a mutual profit and loss account. Chapters 13, 14 and 15 dealing with accounting for natural capital (Richard Barker), implementing a mutual profit and loss account (Robert Eccles and Francois Laurent) and the impact of mutual profit on business behaviour (Robert Eccles and Judith C. Stroehle) were all excellent chapters pushing at the boundaries. Yet, it remained theoretical. One was left wondering whether anyone had actually implemented this sort of accounting approach. As Eccles and Laurent note, to be ‘meaningful and effective, the mutual P&L relies on the selection of material issues and initiatives, the right metrics, and a certain degree of stability over time’ (page 197). This is essentially a rather vague and highly subjective set of criteria; accounting and measurement, however, depends on objective criteria. No concrete examples were actually given and the idea was not explored in the case study section.

The case studies are all examples of businesses which pursue wider purposes and objectives for the good of society, for people, for planet and also for profit. The examples range from supply change management, micro-equity initiatives, fair trade, alleviation of poverty and specific examples of business eco-systems designed for the good of society. Some are well-known. All are good, even inspiring examples of profitable business for good. What was much more difficult was to see the specific (rather than general) link between the earlier chapters and the case studies.

Overall this book is a helpful contribution to the wider debates and draws on a number of important areas for further development and future research. The question remains of how business, mainstream commercial business, can be refocussed in positive ways for the benefit of the various mutually inter-dependent players, rather than simply some good examples of business for good. This requires a more focused approach, reflection on legal structures, their limits and boundaries, and how to reflect new structures as well as the issues of measurement and reporting across a wider range of metrics.


Putting Purpose into Practice: The Economics of Mutuality, edited by Colin Mayer and Bruno Roche was published in 2021 by Oxford University Press (ISBN: 978-0-19-887070-8). 404pp.

Richard%20Turnbullweb#1# (2)Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.




Edward Carter: “Servant Leadership, Social Entrepreneurship and the Will to Serve” Eds. Luk Bouckaert & Steven C. van den Heuvel

This book is a collection of eighteen separate but thematically connected papers which were given at an international academic conference in Belgium in May 2018. The organising principle is an enquiry as to whether the ‘will to serve’ must always be ‘crowded out in the real economic arena of hard competition’ (page vi). The authors are very diverse, with global perspectives offered, although there is an inevitable impression at certain moments that one is eavesdropping on a room full of academics talking to one another and there is some repetition, notably when it comes to the description of what ‘servant leadership’ might be.

I found some of the papers stronger than others but I enjoyed reading all of them, and was left with ideas and questions about re-discovering a wider view of how businesses and companies operate within society. Originally the granting of ‘limited liability’ was seen as a privilege that brought responsibilities towards the community. Those responsibilities have at times been largely overlooked in the single-minded search for profit, which in turn has shaped the kind of leadership the corporate sector has embraced and this volume is a helpful contribution to a growing literature that urges a wider view of what makes for good leadership (whether described using ‘servant’ language or not), as well as a broader view of the very purpose of business and enterprise itself.

It is difficult to summarise such a diverse set of essays, and even the over-arching theme of servant leadership seemed not to be dominant. There are three sections: (1) Philosophical and Spiritual Foundations; (2) Social Entrepreneurship: Serving the Common Good; (3) Servant Leadership in the Context of Business. The general movement through the collection is from concepts to practice, although there is plenty of overlap.


Section 1 (Philosophical and Spiritual Foundations)

I found the most thought provoking of the seven essays in Section 1 to be Ipseistic Ethics Beyond Moralism: Rooting the “Will to Serve” in “The Reverence for Life” by Chris Doude van Troostwijk and The Dark Side of Servant Leadership: Power Abuse via Serving by Volker Kessler. 

Despite its title, the former is very readable. It uses Albert Schweitzer’s life-story as a vehicle for the author’s argument, which is an attempt to answer this question: ‘Is there a way that respects both the self-centered impetus of human life and the altruistic needs of life in general?’ (page 82) I was especially intrigued by the author’s appropriation of Darwin’s ‘survival of the fittest’ theme so as to re-evaluate ‘fit’ as a social idea – the cooperation needed for someone to be a ‘good fit’ within an organisation.

Volker Kessler’s paper contrasts strongly with the others, in that the author (a practitioner with his wife Martina) draws upon a data-base of stories to describe eight mechanisms of power abuse in Christian organisations. The main issues are those of inappropriate obligations and commitments, and a culture of dependency masked as being reciprocity. This sentence stood out for me: ‘Many of the misuses listed… could be avoided if leaders would not call themselves servants.’ (page 119) Every Christian leader would benefit from reading and reflecting on this article.

Several of the other essays are also interesting. Two take a Christian perspective: Patrick Nullens’ paper (The Will to Serve: An Anthropological and Spiritual Foundation for Leadership) looks at the moral aspects of servant leadership, and makes theological links to Christian love and Christ the servant/slave. Nullens raises human fallenness, and therefore the need also for justice – a wider concept linked to the common good; and Heiko Wenzel’s essay (Reading Exodus 18 and Robert Greenleaf) refers to Exodus 18 (Moses’ leadership) as a way of exploring the differences between hierarchical leadership and a ‘first among equals’ model. Issues of organisational culture and participation, and how they are shaped, are considered. In contrast, in Simone Weil and a Critical Will to Serve Michael J. Thate draws on Simone Weil’s thought, in which the theme of ‘creative attention’ is prominent – this being attention towards the world, and a kind of ethical awareness that avoids rigidity.

The other two essays in Section 1 are disappointing. First, Servant Leadership Beyond Servant and Leader: A Buddhist Perspective on the Theory and Practice of Servant Leadership by Ernest C. H. Ng sketches out a model called ‘Interdependent Leadership’. This suggests that changes can be delivered only when confronting thoughts are transcended and any place for opposites or ‘contest’ is removed, but I struggled with understanding how this analysis might become a practical tool.  Secondly, Christianity and Servant Leadership by Peirong Lin among other things considers the concept of the ‘leadership moment’ (page 124), and the need to hold leader, follower, purpose and context together. I liked the phrase, ‘Normal things have parable character’ (page 135), borrowed from Dutch priest and professor Tjeu van Knippenberg, but overall this article felt fairly general to me.


Section 2 (Social Entrepreneurship: Serving the Common Good)

All six essays in Section 2 provoke thought, especially for Christians. The section opens with Emilio Di Somma pushing back against the Milton Friedman version of economics, and seeking to find a place for power-relations, politics, and human dignity within the discussion (Protecting the Weak and Creating Community). Serving is therefore mainly characterised as relinquishing power, and the example of Adriano Olivetti as an exemplary and socially responsible entrepreneur is used. I found myself arriving at the interesting conclusion that ‘making things well’ might be more important than making a profit, although the two are of course not mutually exclusive.

Foundations for Social Entrepreneurship: An Integrative Indian Perspective by Sharda S. Nandram, Puneet K. Bindlish, Harsh Purohit, Ankur Joshi, & Priti Hingorani explores the idea that entrepreneurs might be drawn towards social entrepreneurial activities because of themes lying within Indian philosophy. There is some methodology and interpretation, although I was left wanting more of this. The most interesting concept is that of the ‘public domain’, and why some entrepreneurs seem willing to gift their ideas and creativity to the world, for example Tim Berners-Lee and the world wide web.

Workplace Spirituality in Social Entrepreneurship: Motivation for Serving in the Common Good by Natasha Gjorevska describes ‘spiritual entrepreneurs’ as a category, and explores a complementary relationship between the concepts of social enterprise and workplace spiritual leadership. ‘Spiritual’ here is not necessarily ‘religious’, but embraces themes such as ‘meaningful work’, ‘purpose’, and a ‘sense of community’. However, there are plenty of resonances with Christian thinking about vocation, and the common good.

Mindful Servant Leadership for B-Corps by Kevin Jackson provides some helpful (for me) background information about B-Corps, which are essentially public benefit companies that also exhibit non-instrumental motivations: ‘…ethics for their own sake…’ (p.213). The other main strand within this paper concerns ‘mindfulness’, which keeps a leader’s view wide, and therefore overlaps with the bigger societal purposes of a B-Corp. I translated this for myself into a Christian understanding of prayerfulness, and the big-picture view of creation, and new creation in Christ. With a bit of interpretation this article would be of interest to Christian business leaders and entrepreneurs as they look to the wider purposes of their organisation.

In The Religious Leader as Social Entrepreneur, Jack Barentsen begins by raising the concern that an apparently ‘servant’ religious leader might only or mainly be motivated by the need to proselytise. However, the argument is put that this is usually not the case, and that a broader view of the common good is in mind. One specific example is peacebuilding. Barentsen notes the well-known fact that people of faith are much more likely to volunteer (‘serve’), and therefore contribute to social capital, and he has a useful section, albeit descriptive rather than analytical, on religious leaders as entrepreneurs. I liked his final question asking, are religious leaders helped and trained to be social entrepreneurs, or common-good-builders. My sense is that in the church I belong to the answer is, ‘No’.

Serving the Poor: The Case of the EoC Enterprise ‘Mercurio Net’ by Mara Del Baldo & Maria-Gabriella Baldarelli is very different from the other essays. EoC stands for ‘Economy of Communion’, which is a network of companies initiated in Brazil in 1991 by Chiara Lubich, and which connects to the Roman Catholic Focolare Movement. Lubich’s vision was based on reducing poverty and the need for a broad understanding of happiness and ‘human flowering’. (page 256) She wanted to see a new generation of companies producing wealth on behalf of those in poverty by providing good work. The authors tell us that there are now almost 1,000 EoC firms around the world. I knew none of this, and was grateful to learn, as well as being reminded that the place for servant leadership is critical when it comes to an attentiveness to the poor.


Section 3 (Servant Leadership in the Context of Business)

The third section of the book begins with Jakob Willem (Pim) Boven’s observation (with which I agree) that a theory of leadership (entrepreneurship) is very under-represented in the standard neo-classical economic theories (Servant Leadership in Market-Oriented Organizations, Does that Make Sense? An Evaluation from an Economic-Organization Theory Perspective). The author therefore suggests that we need to take seriously the institutional reality of the company, and he points us to the growing body of research into Organizational Economics. His main point is that there are resonances between Organizational Economics and the theme of ‘Servant Leadership’.

The next two essays in this final section seek to learn from specific situations. The first, The Importance of Calling in Realization of Life Projects: The Case of Maverick and Serial-entrepreneur Hans Nielsen Hauge with Implications for Business Education by Knut Ims, Truls Liland, & Magne Supphellen is the more analytical.  It is essentially a very interesting case study of Hans Nielsen Hauge (1771-1824), who was an influential entrepreneur in Norway – a preacher and businessman whose impact is still felt today. I did not know his story before reading this article, and found it inspiring. Of note for me was the feudal context out of which Hauge sprang, and which he implicitly challenged, as was the link between the spiritual experience of his ‘call’ (described on page 313) and his practical entrepreneurship. The authors point to these key ingredients in Hauge’s life: self-determination (an intrinsic motivation); meaning; persistence. These combine to give prominence to a holistic view of life, rather than life as a series of attempts to optimise choices. This rallying cry towards the end of the paper seemed powerful and important to me: ‘We need a type of business education and business training, which assists students in defining life goals and life projects.’ (page 325).

Rethinking Fashion Retail: The Case of MrSale by Gabor Kovacs takes the form of a qualitative mini research project focused on a small private company called MrSale, which was founded in Budapest in 2000. Kovacs is seeking evidence about the source of genuine ethical commitment in business. The answer is to do with the motivations of serving society and contributing to social well-being, with a link to meditation and Buddhism. The often-observed benefits of an ethically run business are, in this case, seen to be those of satisfied employees, increased innovation, higher levels of trust with suppliers, growth, and ultimately profits. Case studies are always engaging, but I was hoping for more critical comment and interpretation.

The final two essays consider the thinking of two very different people: Aldous Huxley, who was famously the author of Brave New World in 1932, which took a pessimistic view of the rise of science and a mechanised economy; and John Wesley the prophetic teacher and preacher, who created a large-scale business and who had links to the world of commerce and trade.

In Aldous Huxley’s Anarchist Entrepreneurship Based on Spiritual Capital, Gerrit De Vylder plays Huxley’s fiction off against the theme of servant leadership – a creative endeavour which yields surprisingly rich results. The idea which most caught my eye was the value ascribed to localism and the link to the ‘small is beautiful’ economics of E.F. Schumacher. This paper, and indeed the entire book, pre-dates the covid-19 pandemic, but I wondered if the new post-pandemic desire to build more resilient supply chains and to reduce dependence on global trade routes might have added to the discussion.

In the final chapter of the collection (John Wesley: Prophet and Entrepreneur), Clive Murray Norris gives a concise description of John Wesley’s ministry and observes that Wesley’s prophetic voice had a dual focus: personal spiritual renewal, and the need to address the problems and injustices faced by society. This in turn meant that Wesley avoided the trap of a ‘prosperity gospel’, and instead demonstrated a strong sense of stewardship and the fruitfulness of good works in a broad, societal sense. My knowledge of John Wesley’s activities was improved by reading this paper, and the conclusion, with four points for reflection aimed at today’s social entrepreneurs, made for a fine ending to the entire book. Summarised, these are: (i) the need for a holistic view of humanity’s spiritual and physical needs; (ii) the desirability of borrowing ideas from others, accepting that not every idea will work, and focusing on practical action; (iii) the importance of having friends and partners across the community, both rich and poor; and (iv) the imperative that all share a common purpose, that all are welcome, that anything is possible, and that action must start now.


“Servant Leadership, Social Entrepreneurship and the Will to Serve – Spiritual Foundations and Business Applications”, edited by Luk Bouckaert and Steven C. van den Heuvel, was published in 2019 by Palgrave Macmillan (ISBN-13: 9783030299385). 394pp.

Edward Carter is Vicar of St Peter Mancroft Church in Norwich, having previously been the Canon Theologian at Chelmsford Cathedral, a parish priest in Oxfordshire, a Minor Canon at St George’s Windsor and a curate in Norwich. Prior to ordination he worked for small companies and ran his own business.

He chairs the Church Investors Group, an ecumenical body that represents over £10bn of church money, and which engages with a wide range of publicly listed companies on ethical issues. His research interests include the theology of enterprise and of competition, and his hobbies include board-games, volleyball and film-making. He is married to Sarah and they have two adult sons.




Anne Devlin: “Reimagining Capitalism” By Rebecca Henderson

Reimagining Capitalism: How business can save the world is a very didactic, easy to read book. Unfolding like a captivating lecture, it is highly structured and each point is illustrated with a wealth of business examples taken from a wide spectrum of enterprises, old and new.

You can easily imagine Rebecca Henderson on the campus of the Harvard Business School answering the challenging questions of Millennials who fully embrace sustainability and inclusion topics. The resulting book challenges head-on the paradigm of business management theory over the last fifty years that held shareholder value maximisation as the most powerful way to increase general prosperity. She does not seek to list the shortcomings or fix the problems of the current model, rather, she is more ambitious. Tapping into her considerable experience of business consultancy and her knowledge of history of corporations and national institutions, she builds block by block a path to rethink or Reimagine Capitalism.

She takes stock of Shareholder Value Maximisation theory and highlights that the conditions deemed necessary by its early advocates are not always present: markets fail us because externalities are not properly priced, genuine freedom of opportunity is not available to many because of lack of fair access to education and health services and firms are increasingly able to fix the rules of the game in their favour. Uncontrolled free markets lead people to believe that they can do without government, “without shared social and moral commitments to the health of the entire society” on which however all market activity ultimately relies.

In her effort to build a path to “reimagine capitalism in practice”, she lays out five foundation blocks to lead us on the journey.

Firstly, she tackles the strong economic business case for creating shared value. It is somewhat abstract and ethereal as a theoretical economic concept, however, she effectively uses examples to illustrate how it can manifest itself and its importance in a business context. Reducing environmental damage and treating people well reduce reputational risk. Shared value can also help securing the long-term viability of a supply chain, increase the demand for your product and reduce costs. Achieving shared value however, is not a small feat. To help us project how shared value can be established in a company, she introduces the interesting concept of architectural innovation.

Following this logic, she highlights how the adoption by any enterprise of an authentic purpose “makes it easier to identify the kind of architectural innovations that enable the creation of shared value.” Rejecting the commonly held belief of profits and purpose being mutually exclusive, she sees purpose-driven organisations as better equipped to handle transition in disruptive market conditions. The clear sense of their mission in the world, the commitment to building an organisation in which every employee is treated with dignity and respect “release creativity, commitment and raw energy”. She does not elaborate much on the strong spiritual or political convictions that sustain “the courage and vision of the leaders necessary to manage with purpose” even though she recognises its critical importance.

She then turns her attention to the need for finance to focus on the long-term. Asset owners and asset managers might have a different appetite (and incentives) to hold assets long-term but investors in general need better data to be convinced to hold their interest longer. ESG metrics, especially those with potential significant impact on short-term profitability and long-term liabilities must continue to be rigorously developed and used. While the investment community as a whole may not yet be ready to wholeheartedly embrace the company purpose and ready to give time to its implementation, Rebecca Henderson suggests a possible limitation, even reduction of investor power to the benefit of other stakeholders. Harnessing the power and influence of investors is a key enabler to drive change at scale. The examples she cites demonstrate that this is beginning to happen within the investment community.

However, one company cannot do much on its own about genuine public good problems. Industry-wide self-regulation has been criticised in the past as a way to anticipate and diffuse the threat of government regulations or also to set up barriers to new entrants. Nevertheless, the powerful example of how Unilever and Paul Polman socialized the problem of palm oil sustainability shows that increasing everyone’s incentive to cooperate and being able to enforce cooperation can have a major impact and create collective shared value.

Her last avenue of reflection in Reimagining Capitalism is the role of government as a guarantor and enabler of a free and fair market. “While economic growth and social well-being are often enormously advanced by the presence of free markets, they are also critically dependent on a host of complementary institutions.” Denouncing the systematic campaign of the last 50 years to discredit government in the US, she suggests answers to the fundamental question she raises namely “how do we protect the institutions that have made us rich and free?”

Rebecca Henderson is determined to provide each reader with nothing less than a roadmap to find their own path forward towards changing the world. She is a staunch believer in the positive power of capitalism but is also clear about the dangers of unchecked capitalism, leading to the explosion of inequalities and the raise of populism. While the topics she develops could have justified further ethical considerations, she keeps the debate firmly in the logic of the business case, adopting a rigorous, business-like approach. She manages nevertheless to communicate and share a real passion for the issue at stake. This book is highly topical as demonstrated by the speech on March 15 2021, by the acting chair of the US Securities and Exchange Commission, Allison Lee who stated:

“That supposed distinction—between what’s ‘good’ and what’s profitable, between what’s sustainable environmentally and what’s sustainable economically, between acting in pursuit of the public interest and acting to maximize the bottom line—is increasingly diminished,” Lee told the audience at the liberal think tank Centre for American Progress. “[There’s] no historical precedent for the magnitude of the shift in investor focus that we’ve witnessed over the last decade.”

It is overall a very interesting and relevant book, well worth reading and reflecting upon.


“Reimagining Capitalism: How business can save the world” by Rebecca Henderson was published in 2020 by Portfolio Penguin (ISBN-13: 978-0241379660). 336pp.

Anne Devlin is a director of Terra Solar II, a former oil trader with BP and a member of the Board of CEME.









Richard Godden: “Capitalism and Democracy” by Thomas Spragens

Capitalism and Democracy is a short book and, as Tomas Spragens admits, it does not contain “a great deal of cutting-edge scholarship” (page vii). Nonetheless, it deserves to be widely read.

It comprises an explanation and analysis of “the sharp disagreement encountered these days between advocates of laissez-faire and champions of a more expansive welfare state” (page 10). Spragens suggests that, properly analysed, this debate involves disagreements in relation to three different issues: whether markets maximise prosperity; the moral defensibility of the distributions of resources produced by the capitalist marketplace; and whether the kind of society that free markets and minimal government produces would be a good place in which to live. Spragens analyses each of these issues in turn before attempting to draw some conclusions reflecting his own opinions.

Spragens states that his “general conviction is that reliance upon robust free markets as the principal mechanism for the allocation of a society’s economic efforts and resources is wise and proper” but goes on to say “I also believe … that governments need to regulate and supplement the distributive consequences of markets in a number of significant ways” (page 191). This view is apparent throughout the book and some readers will wish to challenge it whilst others will inevitably feel that their particular views or arguments are not accurately reflected. Nonetheless, Spragens has made a great effort fairly to present the opposing arguments in relation to each issue. He expressly disclaims having definitive answers to the issues at hand and, before expressing his own conclusions, explains why “those conclusions – and any of yours as well – have to be acknowledged as vulnerable to reasonable disagreement” (page 164). He is thus not trying to argue a specific case but rather “to narrow the geography of debate to a place where reasonable people may differ” (page 10).

In an age of political polarisation, this approach is refreshing, as is Spragens’ blunt reminder that “We cannot have it all” (page 185). However, it only takes the discussion so far. In the modern western world, the key issue is not whether there should be regulation, distribution and intervention by governments but how much regulation, distribution and intervention is necessary or desirable and Spragens has little to say about this. This points to what the book is and what it is not: it is intended to provide a framework for thinking rather than an analysis of contemporary problems and their potential solutions.

Spragens helpfully discusses what may be considered to be appropriate functions of government and suggests that “Our democratic debates … need to center on what the improvement and perfection of the mixed economy look like in concrete terms” (page 229) but he does not advance these debates (and, in the context of what he has said earlier in the book, his use of the term “perfection” may seem surprising!). Indeed, one is left with the uneasy feeling that he is broadly justifying the current balance between the laissez-faire and interventionist approaches that exists within the United States, subject to a few tweaks here and there. Essentially, his position appears to be similar to that adopted by Michael Greatz and Ian Shapiro in The Wolf at the Door (reviewed on our website) without the commendably specific proposals contained in their work.

The book is US-centric, but this is an issue to be borne in mind rather than a fundamental defect. Spragens is writing to a US audience and the arguments that he outlines and the things that he assumes reflect this. In relation to economic matters, the centre of gravity of US political debates is to the right of that in Europe. Hence, Spragens asserts that “few would challenge” the assumption that “enhancing wealth production is a good thing to seek” (page 69) whereas a European author might feel a need to defend such a proposition. Conversely, Spragens finds it necessary to explain some versions of laissez-fair philosophies that will seem extreme to European audiences. However, whilst this may result in those from Europe feeling that the book does not deal with some things that they would like to deal with, and deals with some things that they don’t consider to be relevant, it does not prevent the vast bulk of what is said being relevant to them.

Of course, it is possible to find fault with a number of things that Spragens says or does not say. Most of the issues in this respect are relatively minor but a few are more significant. For example, the book fails to analyse the distinction between society and the state and, more seriously, its discussion of the concept of “justice” lacks the precision of other parts of the book and is unsatisfactory. Spragens recognises the slipperiness of the concept and the problems in using it within the context of the laissez-faire versus intervention debate. He also draws attention to the serious problems in John Rawls’ much discussed concept of justice. However, he fails to identify clearly the major competing concepts of justice and thus to draw attention to one of the reasons that those discussing “economic justice” or “social justice” often talk past one another. From a UK Christian perspective, this is a pity because, in the UK, the concept of “social justice” is much talked about at the moment and many Christians discuss it as if their understanding of it incontrovertibly emerges from the Bible (particularly the Old Testament) without reflecting on their assumptions that underly that understanding.

Spragens seems to have sensed that there is something not entirely satisfactory about his treatment of these concepts because he returns to the subject in a four page postscript tagged on to his final chapter, which defends his “reticence to invoke social justice as an independent major basis” for the judgments and recommendations he has offered (page 230). He argues that it is “Impossible for anyone to claim convincingly that some specific distribution of resources would be entirely fair and just” having regard to the differences in people’s abilities, characters, upbringing and circumstances (page 230). He recognises that this might be seen as a counsel of despair or reflective of a lack of concern about unfairness but suggests that, in practice, for other reasons, much can be done and, indeed, is done to mitigate inequalities both at the level of government intervention and at a personal and community level.

Spragens says that he has two principal target audiences: the educated public who would like to improve their understanding of the proper role of the capitalist market place within a democratic society and college level students seeking an overview of issues that they will likely confront in economics, political science, moral philosophy and public policy courses. He may, however, have understated the range of people who will find the book of interest. At the very least, theology students should be added to the list of those who should read it and many others, who have previously thought about the issues, will benefit from a succinct overview of them.


“Capitalism and Democracy: Prosperity, Justice, and the Good Society” by Thomas A. Spragens, Jr was published in 2021 by Notre Dame Press (ISBN 978-0-268-20014-5). 234pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.






Richard Godden: “Divested: Inequality in the Age of Finance”, by Ken-Hou Lin and Megan Tobias Neely

Ken-Hou Lin is an Associate Professor of Sociology at the University of Texas at Austin and Megan Tobias Neely is a Post-Doctoral Researcher at Stanford University, studying gender, race and social class inequality. They are alarmed by the growth of inequality in the United States of America over the past generation and blame this on the “financialisaton” of the US economy, which they define as “The wide-ranging reversal of the role of finance from a secondary, supportive activity to a principal driver of the economy” (page 10, italics original). They assert that “To understand contemporary finance is to understand contemporary inequality” (page 2)  and that previous studies often touch only on fragments of the connection between finance and inequality. Hence, they set out to “provide a more comprehensive synthetic account of how financialisaton has led to greater inequality in the United States” (page 4).

The analysis which follows includes a whistle stop review of the world economic system since the Second World War and a closer examination of many trends over recent decades. Building on the work of others, they bring together copious statistics, particularly in the form of dozens of graphs indicating economic trends. Absorbing the statistics and considering their implications takes time, so this is not a book to be read fast. However it is not a heavy read and does not require a great amount of prior knowledge.

Lin and Neely make a number of interesting observations that deserve careful consideration. These relate to subjects as diverse as the implications of outsourcing, the reluctance of employers to provide on the job training and the risk implications of the modern dislike of investment managers for conglomerates. There is thus much in the book that is worthy of consideration.

Unfortunately, however, the analysis that the authors provide, which purports to bring the wealth of statistical information together, is most unsatisfactory. In particular, the analysis of causation is poor and unpersuasive even in relation to the core thesis of the book. Although Lin and Neely acknowledge the role of globalisation and the growth of IT in increasing inequality (at one point saying that former “is a broadly convincing explanation of rising inequality”, page 38), they dismiss these things as primary factors, regarding them as essentially background circumstances against which other things have resulted in growing inequality. Yet there is no satisfactory analysis to back up this position and their blaming of many US specific factors is somewhat undermined by their frank admission towards the end of the book that “similar trends have unfolded in Europe, Asia, and other countries” (page 181).

The book contains many statements designed to demonstrate that the authors recognise fundamental economic realities and do not wish to deal in caricatures: early in the book, they recognise that finance is indispensable for a prosperous society and dismiss populist claims that financial professionals are evil; they acknowledge that deregulation could be beneficial (citing evidence that suggests that relaxing the US intrastate bank branch restrictions in the 1980s was associated with local economic growth); they draw attention to the problems with Keynesian economics that emerged in the 1960s and 1970s; and they accept the value of many financial products, including derivatives. However, these promising statements are outnumbered by less balanced comments and, at times, careful analysis is replaced by extreme assertions, such as the statement that the profitability of financial ventures “depends on the harm they bring” (page 60, emphasis original) and that finance “has morphed into a snake ruthlessly devouring its own tail” (page 83).

On a number of occasions, the authors come close to Luddism. The statement that the Industrial Revolution “created … massive poverty” (page 29) is extraordinary but irrelevant to the argument of the book. However, other statements are less easily ignored. For example, it is clearly arguable that some of the cost cutting and other actions taken by the management of numerous companies over the past generation has been unduly influenced by short-termism (particularly short-term stock market considerations) and on occasion has been carried out in a way that many would consider reprehensible. If Lin and Neely had confined their comments regarding cost cutting to this then there would have been little to object to in what they say about it. However, they do not: they lump together all cost saving measures and thus fail to recognise the long-term economic benefits of continually increasing efficiency. Thus they comment adversely on those managers who had “a deep conviction that a firm’s performance could be optimised with sophisticated cost-benefit analysis” and that parts of companies should “be evaluated, eliminated, or expanded according to their profitability” (page 87). They also lament the fact that “new technologies have been adopted to replace unionised work forces” (page 110) and the fact that “To maximise returns for shareholders, firms have cut costs by automating and downsizing jobs, moving factories oversees, outsourcing entire production units, and channelling resources into financial ventures” (page 118).

Although in places, the authors acknowledge that things were not perfect in the past and they warn about romanticising it, there is a definite note of nostalgia in the book. On several occasions, they contrast current management attitudes unfavourably with what they perceive to be the objective of US industrialists in past years, namely “to broaden their market share – the prior gold standard for corporate management” (page 180). They also talk fondly of the historic “capital-labor accord” (e.g. page 45) and suggest that there was once “a fair-wage model” that sustained long-term employment relationships (page 47), seemingly blind to the confrontations that dogged industrial relations in the USA and elsewhere through much of the twentieth century. One wonders whether, deep down, they are nostalgic for the days of US economic hegemony and the prosperity that it bought in the generation following the Second World War.

Whatever the deficiencies in the book’s analysis one would have expected it to contain clear policy suggestions but it does not. Lin and Neely urge us to “scrutinise the rules of the game” (page 177) and call for “inventive and carefully considered policies” (page 184) but what follows is little more than a series of vague general comments and micro proposals. It is hard to understand what the authors are advocating. For example, in the introduction, they indicate that they believe that policies targeting high-earners, such as earnings caps and progressive taxes, are necessary but they never explain what kind of earnings caps they have in mind and, in their conclusion, appear to suggest that increasing tax may not be practicable or even the best approach. Likewise, having suggested on various occasions that the repeal of the Glass-Steagall Act (the US Banking Act of 1933) has caused many problems, the authors declare that “The Glass-Steagall era has passed and its restrictions are no longer sensible a century later” (page 184).

The book concludes in an anti-climax: “We suspect that there are many answers to the social question through which economic institutions could be organised and conducted so that all members of society more justly share their benefits. These answers must be imagined” (sic, page 190). Indeed they must, because there is little in the book to tell us what they might be.


“Divested: Inequality in the Age of Finance”, by Ken-Hou Lin and Megan Tobias Neely, was published in 2020 by Oxford University Press (ISBN 978-0-19-0638313). 190pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Richard Turnbull: Is There A Divinely Ordained Economic System?

Graeme Leach, formerly the chief economist at the Institute of Directors, has done us a great service with his expositions on ‘Thoughts on a biblical economic worldview or Godonomics.

Graeme is clear. The free market economy is ordained by God for our economic prosperity.

This is a point of view of some importance and which is rarely given the ‘airtime’ it deserves. One consequence of this is what one can only call an extreme laziness in economic pronouncements from denominational leaders. It is worth reflecting further on the debate.

– The essence of the argument is built around the creation narratives in Genesis 1 and 2. Creation principles are foundational for understanding much of God’s purposes for the world. The idea is that in these creation mandates God ordains principles applicable for all people for all time.

– In these chapters we find the mandate to work, to create, to combine raw materials.

– From Genesis 4 we see the principles of specialisation and the development of commerce.

– These concepts are built upon in Exodus with the production of goods, development of artisan skills and indeed the principle of human capital and education.

As a consequence of all of this, it is very difficult to conclude anything other than that God has ordained and provided the market economy to enable humanity to prosper, to trade, to develop skills, to manufacture and so on. What is more we see that God has endowed the human person with creative skill and ingenuity; since God is creative (in the creation itself par excellence), and humanity is created in the image of God, then humanity itself is creative from which flows the idea that innovation, enterprise and entrepreneurship are also essential elements of the divine economy.

The importance of this starting point cannot be underestimated. Of course, as we will see shortly, it is not the end of the story, the last word, but it is the first word. In other words if we approach the challenges and complexities, the problems and the distortions of the market from the point of view that the market is the basic divine building block then our conclusions might look very different than if we assume that the market itself is the problem, rather than the behaviours of the actors within the economy.

Indeed, that is the basis of Graeme’s warning of the dangers of an elevated view of the role of the state. The problem of sin and the fall means that the divine purposes are distorted, perverted though the sinful behaviour of fallen humanity. The point is that biblical Christians should surely be looking for solutions to the problems from within the divine economy rather than external to that which God has provided. Christians will, of course, debate the precise role and boundaries of the actions of the state but in relation to welfare provision and the solution to economic problems, we need to be aware of a number of dangers.

– There is a danger that voluntary welfare provision is squeezed out. Historically, the Christian church has been the main provider of health, welfare and education services. Clearly the need for scale and universality will require a positive role for state provision (indeed, even Calvin’s Geneva had a degree of centralised welfare provision through the ‘hospital’). Voluntary welfare provision has a number of advantages, primarily that it is local and relational and hence encourages personal responsibility. Lower levels of taxation encourage philanthropic giving and local social welfare provisions.

– We should be equally wary of the role of the state in regulation. An economy in a fallen world will need some degree of regulation. Some acts will be illegal and these should warrant appropriate legal actions. The assumption, however, that the state is capable of regulating industry, price, wages, production simply goes against the idea of God’s provision through the market. And regulation inevitably leads to the exponential growth and reach of the state, always adding another carriage, another layer. This is not to say there is no need for any regulation; rather a warning about assumptions and presumptions.

– Our economic policies should be shaped by the encouragement of enterprise and entrepreneurship. Indeed, this is part of the appropriate response to the point about regulation. Why not encourage freedom, liberty, competition, enterprise zones, new businesses, self-employment? Why not relax some of the excess of planning policies and constraints? Why not reform and indeed lower levels of taxation? None of this is incompatible with appropriate protections for people, the environment and the welfare of society.

Christians will, of course, debate economic and social matters, and rightly so. Not all will come to the same conclusions. The market economy, though, is good news, part of God’s provision for the world to grow and to prosper. We would do well to honour that provision.


Richard%20Turnbullweb#1# (2)Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.

Richard Turnbull: The Morality of the Trade-offs between Health and Economics

For the more libertarian among us, not least economic libertarians, the lifting of the lockdown cannot come quickly enough. Others are either fearful of the consequences of moving too rapidly or perhaps enjoying the restrictions rather too much. Yet again there are those fearful of the economic consequences of the state’s intervention and others suggesting it offers a model for the future.

How are we to makes sense of these differing perspectives and can we bring a moral voice to the discussion?

Even if individuals have differing perspectives are there ways in which we can reconcile the necessary trade-offs?

Indeed, perhaps the first point is that there are indeed trade-offs and in a fallen world there will always be so. The choices that we face are not between ‘health of the nation fully restored, no Covid’ and ‘economic prosperity as quickly as possible even if there are significant deaths.’ In reality there is a trade-off and too much shrill commentary fails to recognise this basic fact. In a world where we need economic prosperity in order to ensure the well-being of all people we have to find a pathway between the two poles which manages risk and ensures maximum return to economic activity within a responsible environment for the management of the pandemic.

Let’s start with some philosophy and theology. The reason for this is that we have to establish some base points for working out how to move forward.

Jeremy Bentham (1748-1832) is generally regarded as the founder of what is known as utilitarianism. There are different ways of characterising this approach; perhaps the ‘greatest happiness of the greatest number’ is the most common. Essentially utilitarianism requires all human life and activity to have purpose, or utility. That is why Bentham left his body to medical research; even in death there must be some use for the body.

Younger people appear less likely to suffer the more serious symptoms of Covid-19 and are, at least compared to, say, residents in care homes, more economically active. Well, you can probably work out where that leads….

Utilitarianism is antithetical to any concept of natural rights. Consequently, for those such as Gertrude Himmelfarb utilitarianism does not extend liberty but in reality restricts it. The source of our natural rights is God and as a result all people are regarded as being equally valuable in the eyes of God, with inherent rights, values and purpose, even if in a care home at the end of their lives.

So then, as all are equally valuable we clearly should stay in lockdown until no-one might die of Covid-19?

On the contrary. The same God-given natural rights also convey the rights of property, liberty, commerce and wealth creation. These are essential prerequisites for the well-being of all people in this imperfect world. They are necessary principles to ensure goods and services, employment, a tax base, the right to enjoy and to trade.

These principles should leave us very wary of those who think, for example, that government schemes which support 80% of a company’s wage bill (even if up to certain limits) are sustainable in anything other than a temporary way. The implications for the well-being of all, intergenerational sovereign debt and so on are inimical to any idea of natural rights. For the same reason the proper action of government in the short-term gives no mandate for some grand expansion of government activity.

This piece is not about what aspects of lockdown one personally does or does not support. Rather it is an exploration of methodology and then applying that methodology to some of the current policy prescriptions. We need, in conclusion, then to remember the following:

  • – There are trade-offs between all options in a fallen world (or, if you don’t like the theology, in a world of scarce resources)
  • – The theological idea of natural rights inherent to all people made in the image of God is preferable to concepts such as utilitarianism
  • – Natural or God-given rights include economic as well as social rights
  • – Consequently, there is something deeply moral about returning the economy to a functioning market which creates wealth as all people benefit from such moves
  • – Government interventions should only ever be viewed as temporary

No doubt a great deal more could be said! However, the ideas of creation or natural rights remind us of both our social responsibility to all and our economic responsibility to all. We would do well to recognise more explicitly the trade-offs we all face but to base those trade-offs on a properly articulated philosophy or theology in which both social and economic responsibilities are properly related to each other.



Richard%20Turnbullweb#1# (2)Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.






Richard Godden: “The Wolf at the Door” by Michael J. Graetz and Ian Shapiro

The publication of yet another left of centre book asking “What has gone wrong with American capitalism and what should be done to fix it?” may provoke a sigh or a yawn. However, in the case of The Wolf at the Door such a reaction would be misplaced. It is a constructive and engaging book that has things to say that are worth considering.

Its starting point is that there is a serious economic and consequent social problem in the USA that is giving rise to dangerous populism both of the right (Donald Trump) and of the left (Bernie Sanders). Those on the right of American politics are denying that there is a problem whilst those on the left are focusing on the wrong issue: taking their cue from Thomas Piketty, they focus on inequality and, in particular, the wealth of the top one per cent.  This, Graetz and Shapiro suggest, is a serious mistake since “Obsessing about the very top is a distraction from the more pressing problems of economic stagnation and insecurity among increasing numbers of the middle class as well as the poor” (page 28).  They acknowledge that “fighting insecurity might involve attending to some aspects of the growth of inequality” but insist that “the primary focus must be on mitigating the sources of economic insecurity” (page 7). They are surely right about this and their book thus gets off on a sound footing.

The authors aim to identify the various elements of economic insecurity and come up with a feasible agenda for addressing these. This result in a basket of proposals: a substantial expansion of the US Earned Income Tax Credit system (which provides a refundable tax credit for low to moderate income workers); the merger of the US Trade Adjustment Assistance and Unemployment Insurance programmes into one national programme (which the authors call “Universal Adjustment Assistance); major investment in infrastructure; the progressive expansion of Medicare starting by extending it to the youngest working age people, such that, over a generation, it becomes available to all; and the establishment of a system of universally available “pre-K” child care for young children under the age of five.

The authors recognise that many on the left will regard their proposed programme as unambitious, but they defend it on the basis that it addresses the right issue (i.e. economic insecurity) and is politically, economically and socially feasible. They are realists and pragmatists: they recognise that many on the left wish to return to what is seen as the utopia of the decades following the Second World War but, in the context of comments about the steel industry, warn that “this nostalgic yearning ignores the realities of lower-cost production abroad and of the technological transformations that now enable steel to be produced with a fraction of the workers once required” (page 18); they bluntly assert that the “unavoidable fact is that the good old days of well-paying, long-lasting employment are behind us, and they are not coming back” (page 115); they recognise that US politics is dysfunctional but seek to identify ways of achieving their goals despite this, in particular, by identifying “six features of successful distributive politics” (page 35) including building coalitions and pragmatically pursuing proximate goals; and on this basis they dismiss many policies favoured by the left both in the US and elsewhere including the establishment of universal basis income and a dramatic increase in the minimum wage.

This pragmatism results in a commendable absence of ideological shibboleths and the recognition of fundamental economic realities. Graetz and Shapiro are prepared to contemplate privatisation, they strongly favour free trade and they recognise the essential role of business both in the creation of prosperity and in the building of the coalitions that they recognise are essential for the implementation of their reform programme. They also refuse to take positions on a number of economic issues that divide left from right including the impact of statutory minimum wages and, perhaps most significantly, whether or not Piketty’s analysis and predictions are right. They dismiss Piketty’s suggestions of a global wealth tax and a trans-national European assembly with taxing and re-distributive powers as “so utterly deaf to anything that is feasible politically that it is hard to take them seriously” (page 261).

The book is wholly focused on the USA and non-Americans may fear that it will not be of interest to them. However, it is addressing issues that exist in many developed nations and, whilst much of the detail is likely to be relevant only to the USA, the analysis of the problems, the core elements of the proposals for solving them and the authors’ reflections on what is necessary to effect change should be of wide applicability. Furthermore, the insight that the book provides into the Byzantine complexities of the US legislative and governmental processes is of considerable interest in itself.

Of course, the biggest question to which the book gives rise is whether its proposals would work. Would they have the dramatic net positive effect that the authors’ hope for, even in the longer term? Unfortunately, this is open to serious doubt.

Graetz and Shapiro draw their inspiration from Roosevelt’s New Deal, which they mention on numerous occasions and which they credit with significant achievements. However, whilst unquestionably, there was much to applaud in the New Deal, it is far from clear that it dealt with economic insecurity. As Graetz and Shapiro admit, US unemployment remained above 20 per cent. through the 1930s and it was the Second World War that paradoxically transformed the US economy.

Some of the proposals are also vulnerable to other, more specific, criticism. In particular the authors never adequately deal with the economic issues associated with the subsidisation of wages that has been recognised ever since the Speenhamland magistrates tried this in late eighteenth century Britain. More fundamentally, they do not address issues associated with the control of mushrooming costs that have bedevilled social security systems around the world.

Leaving aside the economics, there must also be doubt over the US political feasibility of some of the proposals. In some cases, the authors give good reasons for believing that the coalitions necessary to secure the enactment of appropriate legislation could be assembled (e.g. in relation to the expansion of earned income tax credits). In other cases, however, they do not. Indeed, in relation to their proposed establishment of Universal Adjustment Assistance, they admit that “there is no obvious coalition to step in to the breach” (page 168) and their emphasis on infrastructure investment is somewhat undermined by their frank recognition that the apparent support for investment from across the US political spectrum has not prevented the visible decay of US infrastructure over a long period of time.

Those on the right of the political spectrum will also wonder how the proposals are to be paid for. Graetz and Shapiro are not classic “tax and spend” liberals. Indeed, they fear that left-wing populism could lead to “pressure for tax regimes that hamper competitiveness” (page 273). Furthermore, they acknowledge that the level of US government debt is already unsustainable yet raising income tax is politically impossible, having been rejected by both major parties in the US, and they dismiss wealth taxes as a solution on the basis that experience in other countries shows that their promise has been “oversold” (page 246). Hence they fall back on a basket of proposals that they suggest would, collectively, raise the necessary funds. Of these, the most dramatic would be the introduction of value added tax in the USA. Less dramatic proposals include the introduction of a gifts tax and the elimination of tax breaks for specific industries (although they do not generally favour raising business taxes.

British readers will probably recognise echoes of Tony Blair’s approach to taxation in these proposals. Indeed, the whole of Graetz and Shapiro’s programme has overtones of New Labour (which, it will be remembered, drew inspiration from the centre-left in the USA). This should give pause for thought. Some may argue that the rejection of New Labour by both the left and the right following the Global Financial Crisis resulted in us being unable to evaluate the long-term impact of Blairite policies. However, it is clearly arguable that those policies only worked because the economy was expanding at the time and they ultimately failed to address the underlying issues that Graetz and Shapiro identify and also stored up both economic and political problems for the future.

There are thus many challenges that can fairly be addressed to Graetz and Shapiro. However, this does not diminish the importance of what they have written. The Wolf at the Door represents a challenge to those on the left to reconsider priorities and to focus on policies that are both capable of implementation and will make a real difference to people’s lives. It is also a challenge to those on the right to recognise the reality of economic insecurity and, if Graetz and Shapiro’s proposals are considered unacceptable, to come up with an alternative. Whatever one’s political starting point, The Wolf at the Door is worth reading.



“The Wolf at the Door” by Michael J. Graetz and Ian Shapiro was published in 2020 by Harvard University Press (ISBN 9780674980884). 285pp including glossary.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Lord Griffiths: “The Future of Capitalism” by Sir Paul Collier

The Future of Capitalism tackles one of the big issues of our time. Its impressive author, Sir Paul Collier, CBE, FBA is a distinguished member of the Blavatnik School of Government at the University of Oxford and a seasoned practitioner in development economics for which he received a knighthood. He is convinced that capitalism is the only economic system which can generate mass prosperity. Regrettably it has also divided societies, created dysfunctional democracies and posed risks to the planet. More than that he claims it is morally bankrupt. The challenge he set himself in this book is how to restore ethics within capitalism to prevent it drifting into either a totalitarian state (China) or populist nationalism (East European countries). In doing so, he eschews ideology claiming that all his policy prescriptions are based on evidence, analysis and pragmatism.

The inspiration for the book was Anthony Crosland’s The Future of Socialism, published in the 1950s, which set an agenda for the social democracy of the post war years in the UK. (To some readers Anthony Crosland might seem a minor figure out of a history book, but in his heyday he was the leading UK intellectual of the centre left and a Cabinet minister in the Wilson and Callaghan Labour Governments attempting to put his ideas into practice). Collier claims that the Crosland agenda worked well between 1945-70, even at one point describing it as the “miracle period”. It failed however because it neglected its roots in the ethical foundations of the nineteenth century cooperative movement.

 It was replaced by a combination of Utilitarian technocrats (mainly economists) intent on redistributing income to those below the poverty line (however defined) and lawyers committed to John Rawls philosophy which promoted the rights of disadvantaged groups based on race, gender, sexual preference and so on, which has become the basis for identity politics.

Both of these philosophical approaches emphasise the individual not the collective and differences between groups based on either income or disadvantage rather than the needs of persons and families. Each elevates a single moral prescription, “the greatest happiness of the greatest number” and “laws in a society must be designed for the most disadvantaged groups”. However, they neglect the normal moral instincts and values of people such as loyalty, fairness, obligation and desert which were central to the cooperative movement.

The philosophical foundation which Collier builds on is found in the writings of David Hume and Adam Smith (especially The Theory of Modern Sentiments) and the Pragmatism of nineteenth century American philosophers such as William James and Charles Peirce. After laying this down he devotes four chapters to restoring ethics within the state, firm, family and world. Then, in the final section he presents a plethora of ideas for restoring an inclusive society.

To tackle the geographical divide, he proposes taxing the metropolis and regenerating broken cities and regions through establishing local banks, local universities and business zones. Families can be strengthened by preventing them   from falling apart in the first place, supporting children in the early years, from pregnancy to the first day of school, raising standards of teaching in schools, offering improved post-school vocational education and extending home ownership. Tackling the negative effects of globalisation requires redistribution of resources to those areas which have lost out through free trade and technology.

In putting forward all these proposals he is not afraid to be controversial. He is scathing about the greed of investment banks. He argues for taxes on financial transactions and raise taxes on the incomes of highly skilled workers especially in finance and law. He wishes to see a new criminal law comparable to manslaughter which he calls bankslaughter. He backs immigration controls, strengthening traditional two parent families from whom they are genetically descended and having less state intervention through social policy dealing with the needs of children.

Although it is not fundamental to the main theme of the book I question Collier’s judgement that the period 1945-70 was as successful as he claims. It is certainly true that the new social contract devised by Beveridge, Temple and others which produced the post war Welfare State and mixed economy lasted the course. However, by the 1960s inflation was back accompanied by rising unemployment, prices and incomes policy were a failure and the nationalised industries were mired in the red, while by the end of the 50s the social infrastructure began to show signs of fraying through increased violent crime, illegitimacy and addiction. Meanwhile, some of Crosland’s policies were proving destructive; “If it’s the last thing I do, I’m going destroy every fucking grammar school in England. And Wales. And Northern Ireland”. By the time of his early death (58 years old) he became so disillusioned with the crisis of capitalism that he thought the creation of a ‘serious revolutionary socialist party’ was worth thinking about.

One question which needs to be asked is whether he has succeeded in the task he set himself, namely restoring ethics to firms, families and states. In the case of firms he devotes an interesting chapter to the way in which ethical firms of the past which he mentions – Imperial Chemical Industries (ICI), Cadbury, The Halifax Building Society – have given way to the vampire squids of today which are held in contempt as greedy, selfish and corrupt.

In order to achieve change he believes competition is an important discipline on business but increasingly limited because of the power of networks (electricity, water, railways) and the role of technology in creating unregulated natural private monopolies (Facebook, Amazon, Google, eBay and Uber). The conventional responses to these problems are regulation and public ownership, but both have severe limitations. As an alternative he suggests taxing economic rent, which by definition does not discourage productive activity or risk taking; reforming corporate law so that concern for the public interest should be mandatory for all board members, such as Public Interest Companies in the US; and introducing the new criminal offence of bankslaughter.

The problem with all these, which he recognises is that regulations can be got around by talented management, taxes reduced by clever accounting and laws fudged by legal argument.  After acknowledging that the cupboard is fairly bare he puts forward the novel suggestion that society needs to build a critical mass of ethical citizens who can judge the behaviour of companies, favourably or not. This is less than a specialised sub-police force and more a form of neighbourhood watch strengthened to have teeth. This may seem fanciful but the achievement of the women’s movement and climate change protests, based on evidence of discrimination or degradation show that great oaks grow from acorns. Post COVID-19 many questions will be asked about the future of our society, so his proposals may not be so fanciful.

To restore ethics to the state he rejects ethnicity, religion and shared values as a way to create shared identity because they are incompatible with modernity, despite the showing of how popular Judeo-Christian based ethics still remain. He plumps for a sense of belonging to place, something which is hard-wired in our psyche, especially the place in which we grew up and which we call home. Unlike Nationalism, Patriotism is an inspiring concept and he claims a good example of it is found in the politics of President Macron. A major raison d’etre of politicians should be to create narratives of shared belonging. To restore the ethical family, he suggests a greater acceptance of mutual obligations by parents in raising children rather than one focused on their own individual, personal success in work.

The one surprising weakness of the book is its treatment of religion. The book contains four references to religion and six to religious fundamentalism. All are wholly negative: religion leads to cultural separation, marriage is tainted by its religious association, it is the basis of a new nationalism, heir to fascism. Religion is almost always qualified by the adjective “extreme”. Jihad pogroms and other cultic, barbaric practices deserve the treatment he delivers and the Christian religion has many shameful episodes in its history. However, if restoring ethical behaviour in business, politics and society requires ethical citizens, ethical politicians and ethical family members, a rejection of self-aggrandisement, ‘freedom is not bound in servitude to the self but in escape from the self’ (p. 108), and strengthening a sense of obligation, surely a religion based on transcendence and true humanism must be a help to the cause.

On the evidence of nineteenth century history in the work of Gertrude Himmelfarb and Christie Davies, the irony is that ICI, Cadbury and The Halifax Building Society were deeply rooted in a late nineteenth century Christian culture, especially non-conformist, which was also an inspiration for the cooperative movement, friendly societies and the social reforms of the period. Non-conformity would also at this time have been a major force in Collier’s beloved Sheffield.

I enjoyed book but at the end it left me with a nagging question. It certainly respects the evidence, applies analysis to good effect and makes a number of interesting practical proposals. However, its conclusion is that religion has no place in the future of capitalism. In its neglect of the positive contribution of the Christian faith on British life and culture I fear it has strayed across the boundary of social science into ideology.



“The Future of Capitalism: Facing the New Anxieties” by Sir Paul Collier was published in 2018 by Harper Collins (ISBN 978-0062748652). 256pp.

Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.








Richard Turnbull: Will the poor always be with us?

This is a transcript of a lecture given at Hope College (MI. USA) in March 2020.


Well, good evening and thank you very much indeed for the invitation to speak this evening at Hope College. It is a privilege to do so. I come to you with a varied background and training, including economics and theology. I have both worked in the City of London and been the President of a Christian seminary at Oxford University. I have also written a biography of a leading Christian social reformer, Lord Shaftesbury. I am currently the Director of a think-tank called the Centre for Enterprise, Markets and Ethics and a visiting Professor at St Mary’s University, London. I take it as read that there is a solemn moral obligation for people of faith to care for the less fortunate, to demonstrate a compassionate generosity towards the poor. We have an indisputable responsibility.

Jesus’ statement, then, in Matthew 26:11, that ‘the poor you will always have with you’ is rather disconcerting. This saying of Jesus seems to have become either a launchpad for utopian schemes of poverty eradication usually involving redistributive taxation and government intervention or a mood of thankful resignation that because Christ uttered these words we have no responsibility.

What I want to explore with you this evening is the moral case for the market. To what extent does the market provide the means and mechanism for achieving the common good, contributing to human flourishing and creativity and at the same time providing the means for the relief of poverty? What are the moral limits of the market and how have Christians responded to this challenge?


The role of markets

The role of the market is contested territory.

Jeffrey Tucker describes the market as generating order and achieving the common good and goes on to describe the market as:

‘…the greatest force for achieving the common good: it is a moral teacher, it is humane, it is socially directed and future orientated in a way that no political institution, socialist or democratic, can ever be.’[1]

A bold claim. Similarly, Michael Novak has argued as follows:

‘Of all the systems of political economy which have shaped our history, none has so revolutionized ordinary expectations of human life – lengthened the life span, made the elimination of poverty and famine thinkable, enlarged the range of human choice – as democratic capitalism.’[2]

He goes on to define democratic capitalism as one essential defined by a market economy and a free society. Economic liberty and political liberty are closely related.

According to the United Nations, in their 2015 report on the Millennium Development Goals, between 1990 and 2015 the number of people in the developing world living on less than $1.25 per day fell from 47% to 14%. That is a startling change. In the period 2000 to 2015 the percentage of those gaining access to primary education in those regions rose from 83% to 91%.

To give a further example closer to home. I understand that Michigan, or at least registered Democratic Party electors, voted yesterday to choose between a 78 year-old Senator and a 77 year-old former Vice President, having seen off a 78 year-old former Mayor of New York and a mere 70 year-old Senator from Massachusetts in order to take on a 73 year-old incumbent President. According to the US Center for Disease Control and Prevention (CDC), life expectancy in the US rose from 68.2 years in 1950 to 78.7 years in 2018. Over a similar period GDP per head in constant dollars has risen nealy 2.5 times.[3] Rising wealth leads to improved health care and increased life expectancy.

It is difficult to contest that without the market economy we would have made significantly less progress in the fight against poverty, made less progress in terms of health, education and life expectancy and we would be living in societies that were substantially less free.

However, not all are persuaded. The British academic and former Labour Party politician, David Marquand, in his book, Mammon’s Kingdom: An Essay on Britain Now (2015) comments:

‘Today’s markets are constituted by States, sustained by states, protected by states and sometimes imposed by states…without the state’s laws, police officers, courts, prisons, patents, Fraud Offices, food and drug regulations, air safety controls and rules forbidding insider trading there would be no markets…the doctrines that legitimize untamed capitalism tell us virtually nothing about the way in which it works.’[4]

There are plenty of others who see the market as the problem, rather than the solution. And of course, we recognise that there is a proper debate to be had about the distribution of the benefits of the market.

What about public opinion? In the USA, the Public Religion Research Institute conducted the 2013 Economic Values Survey, with the following findings:


Reasons cited as to why capitalism is working:

Encourages Personal Responsibility – 33%

Provides Equal Opportunities – 29%

Promotes Individual Freedom – 24%

Creates Wealth – 11%

Other – 3%

 Reasons cited as to why capitalism is not working:

Encourages Greed – 34%

Does not provide Equal Opportunities – 28%

Creates Poverty – 14%

Creates Inequalities – 11%

Other – 13%

So, 44% of Americans agreed that capitalism encouraged personal responsibility and generated wealth, whilst 48% cited just two reasons why capitalism was, in their view, not working, that it generated greed and created poverty. Perhaps it is not surprising then that Pope Benedict, in Caritas in Veritate, argued that ‘in terms of the resolution of the current crisis, the State’s role seems destined to grow.’[5] This in itself raises all sorts of questions about freedom, taxation, the family and so on.

So, there is the dilemma for us. Does the market economy create wealth or poverty, does it generate opportunity or greed? What I want to show is that there is a clear moral case for the market, but that the creation of wealth also carries awesome responsibilities. Only when we have had this discussion can we effectively debate how social justice is to be met, the appropriate role of government and, of course, of the intermediate institutions of civil society.


How markets contribute to the common good

From a Christian perspective the idea of the common good is an intuitively appealing concept. It resonates with the teaching of Jesus (“love your neighbour as yourself”, Mark 12:31), St Paul (“let us do good to everyone”, Gal 6:10) and the Old Testament (“seek the welfare of the city”, Jer 29:7). Yet the idea is also tantalizingly elusive. The definitions of common good from within Roman Catholic social thought emphasise fulfilment and flourishing. If the common good is at all about human flourishing, then the economy has a central role to play.


Adam Smith and the common good

Before spelling out in more detail the moral benefits of the market we need to deal first of all with the paradox of Adam Smith. Understanding Adam Smith is an essential building block and he is very often misunderstood.

Adam Smith was born in a town called Kirkcaldy, 10 miles north of Edinburgh in 1723 and died in 1790. He mother was deeply religious, his father a customs officer, who died shortly before his birth. By 1750 Smith was lecturing in philosophy. Adam Smith is most well-known for his publication in 1776, entitled, An Inquiry into the Nature and Causes of the Wealth of Nations. Smith viewed the market as an ‘obvious and simple system of liberty’ (WN IV.ix.51) and that the creation of a prosperous civil society depended upon economic liberty and viewed government interventions as unnatural and oppressive. Smith offers us three lessons. First, he distinguished self-interest from selfishness. The Smithian argument is that the pursuit of an enlightened self-interest brings about not only the satisfaction of one’s own needs but also those of others and indeed the welfare of all. In this way a greater public good is achieved. That is very different from selfishness. Second, in his prior work to the Wealth of Nations, The Theory of Moral Sentiments published in 1759, Smith sets out a moral framework which sees sympathy as a moral principle and implants compassion for others in the human heart. The third lesson is that Smith viewed the role of government as necessary but limited and viewed excessive regulation and the existence of monopoly, whether public or private, as detrimental to the very economic activity necessary for the public good.

In Smithian thought then there is no paradox; the pursuit of self-interest alongside a natural propensity to barter does indeed lead to the common good. Social welfare is dealt with primarily through the moral sentiments implanted in the heart rather than by government. We will turn to that subsequently.

How then might we articulate a moral argument for the market.


First moral argument: enables human creativity

The first moral argument is that markets enable human qualities such as creativity, innovation, enterprise and risk-taking to flourish. The case for the market is not purely economic. Markets are part of a political and social order in which liberty is valued. It is essential to any idea of human dignity that human creativity and innovation can be enabled to flourish. That is precisely what a market mechanism achieves for the good of all. Smith’s natural propensity to barter, ‘the propensity to truck, barter and exchange one thing for another’ (WN 1.ii) such, as he put it, ‘that every man… becomes in some measure a merchant,’ (WN 1.iv), the desire for improvement, the place of enterprise and work all point to an imperative for wealth creation.

Consequently, freedom in economic life is an essential condition for the common good. Within the Judaeo-Christian tradition the human person is created imagio dei, possessed of infinite dignity, with the capacity to be creative, enterprising and innovative but at the same time responsible and accountable. We read in the book of Genesis of the imperative of enterprise and work, reflecting that essential divine dignity in the human person. People cannot realise their full development in a political and economic order which deprives them of freedom including economic freedom. When people are denied freedom human flourishing will wither. So will economic prosperity. We see that in command economics and socialist states.


Second moral argument: brings diverse interests together

The second moral argument for the market is that markets bring together the diverse interests of buyers and sellers, in a voluntary way, and to the benefit of all. Brian Griffiths, an economist and Christian commentator who worked in Margaret Thatcher’s government, takes as an example, a Farmers’ Market. Let me read his description. ‘Each participant in the market will have their own personal interests.  Some may be shopping for the best price.  Others will be prepared to pay a premium for a quality product. Some may value local convenience more than greater choice.  Certain stalls may be promoting new products, others selling old favourites. Some products may be home grown, others imported from different continents. Some may be of the finest quality, others the essential basics.  The important point is that markets are successful not because those who buy and sell have common objectives but because they are able to coordinate the different preferences of all concerned without central direction.  A farmers market may be a simple structure but the basic principle of coordination is something which applies to all markets.’[6]


Third moral argument: responsive to changing needs

The third moral argument is that markets promote the common good by encouraging suppliers to anticipate, respond and adapt to changing needs. Clothes shops respond to changing seasons. Food shops respond to new dietary standards and also consumer preferences. Financial markets developed derivative products to hedge uncertainty. Technology firms anticipated the demand for tablets, iphones and smart phones. The market and its pricing ensures consumers are served and suppliers are flexible and responsive. Firms which fail to respond in this way will invariably decline, fail or be acquired by others.


Fourth moral argument: result in lower prices and stimulate innovation

The fourth moral argument for the market is that competitive markets are favourable to the common good because they result in the lowest prices and stimulate innovation. The common perception is that competition produces aggression, rivalry, conflict, cheating and discrimination all of which are anathema to a Christian conscience. However, in a competititve market firms have to set prices and respond to market movements and the actions of other firms. Entrepreneurs innovate and compete for customers. Hence the fewer the barriers to entry, the greater the benefits of competition. Applying this to an historical example in England. Around 1845 there was, in the light of a potato famine and issues of poverty, a debate around tariffs on corn (which protected the incomes of the farmer) or removal such tariffs (which resulted in cheaper bread). The abolition of the Corn Laws is an example of a market responding to human need.


When markets fail?

So four moral arguments in support of the market as part of the divine provision to create wealth, produce goods and services, generate work, and dignify human beings. The case is a strong one but that does not disguise either the reality of market failure or the complexities of the challenge of poverty. Markets fail of course for may reasons, ranging from uncosted externalities (eg environmental pollution; how to price and who pays) to the growth of monopoly or at least oligopolistic power. There is also a moral argument about the limits of markets. Michael Sandell refers to an era of market triumphalism where everything is for sale, and markets expanding into areas of life they do not belong.[7] Society makes certain political and moral choices that certain things should not be bought and sold on markets; human organs, human beings, drugs of one type of another and so on. This discussion is probably beyond what we can cover this evening.


The response to poverty: government intervention or the voluntary principle

How then should the market and, indeed, society, respond to the continued existence of poverty? Jesus’ statement about the poor always being with us is a reminder of our responsibility. A moral view of the market and its response to poverty will have a healthy scepticism of the role of government – there is government failure as well as market failure. Mostly, and certainly historically, it is what is known as the voluntary principle which has shaped the response to poverty. Market failure, government failure and the impact of sin all point to the problem of poverty. Let me conclude this lecture with two examples of the voluntary principle.

The first is that of Thomas Chalmers (1780-1847). Chalmers invested Smith’s invisible hand with divinity.The market, Chalmers said, ‘strongly bespeaks a higher agent, by whose transcendental wisdom it is that all is made to conspire so harmoniously and to terminate so beneficially.’[8] And, the ‘greatest economic good…is obtained by the spontaneous play and busy competition of a thousand wills.’  He also developed the law of relative affection, following Smith’s moral sentiments, that a natural seed was implanted in humanity that gave the individual compassion for the distress and destitution of others.

Chalmers too was sceptical of government. Any extensive role for the state had the effect of taking over those things which truly belonged in the heart – the moral sentiments. As he put it ‘we cannot translate beneficence into the statute-book of law, without expunging it from the statute-book of the heart.’[9] Compulsion would remove goodwill from the heart.  The intervention of the state led to duties being replaced by rights, to dependency rather than freedom.

The response to poverty then was put into practice through the idea of the voluntary society, an intermediate institution sitting between the individual and governemt. In the changing industrial landscape of nineteenth-century Britain a wide spectrum of voluntary societies developed, ranging from visiting societies, savings clubs, loan societies (an early example of micro-finance) and poor relief societies to schools and both social and evangelistic missionary societies. These organisations were neither new nor exclusive to the nineteenth century but there was then a significant expansion. They were characterised by local control and independence from state aid. Social welfare was kept separate from the state. The local voluntary visitor would understand when people needed and deserved help which has always intended to be temporary rather than enshrined in law.

Although Chalmers himself sought to implement a voluntary welfare system when he was the minister of St John’s parish in Glasgow in the period 1819-1823 the example we will look at comes from the following century.

The seventh Earl of Shaftesbury (1801-1885) is the example par excellence of a Christian social reformer, who certainly did not exclude a role for government in legislating against the extremes of social evil but was high sceptical of government’s role to really effect social change and social welfare on the ground. Rather Christian people coming together in societies and associations was the answer – the voluntary principle in action. The whole story is in the book; we will look at just one example, education.

Shaftesbury led a Christian initiative in London to bring education to the poorest in London through the founding and staffing of what were known as ‘ragged schools.’ The aim of the Ragged School Union, founded in 1844, with Shaftesbury as President, was ‘removing every ragged, destitute child from our streets, and to the placing of that child in the path of industry and virtue.’[10] Note the emphasis on ‘industry and virtue’ – the aim was economic, moral and social transformation. One example of how this was put into practice was for these schools to employ tailors, shoemakers or other craftsmen as teachers of their trade to the children of the poor. The development of the Shoeblacks Brigade was another example; older children employed to clean shoes. The income was divided three ways, a third to cover expenses, a third as wages, a third banked as savings. Note the encouragement of responsibility and thrift.  Many voluntary societies were linked to these schools, Penny Banks to encourage saving, Barrow Clubs to provide cheap loans for small businesses. Learning, discipline and thrift would equip them for a better life; a life he always hoped would be dependant in a personal way upon God. Given this you will not be surprised at Shaftesbury’s opposition to the introduction of compulsory state education in 1870. He viewed the prospects of state intervention as disastrous and would be highly destructive to the voluntary Christian school, as indeed, it was. For Shaftesbury and others like him, however, the voluntary society was essentially local and relational, neither of which could be said of government interventions.



The case we have sought to argue is that markets make a contribution to the common good. They have a moral purpose. Not least in the light of Jesus’ words that the poor you will always have with you. In the Christian worldview a competitive market economy can be seen as part of the divine provision for wealth creation and a view of the human person as enterprising, creative, innovative and purposeful, but also possessing the moral sentiments of sympathy and compassion. That is the driving force behind the voluntary principle in social welfare. Markets succeed because they co-ordinate the diverse interests and demands of people, something no command economy could do. Markets though depend upon trust and integrity. Is there a role for government? Of course, but we should maintain a healthy scepticism about its efficacy. Perhaps we should rebalance the approach.


Revd Dr Richard Turnbull

March 2020

[1] Jeffrey Tucker, Markets as Extended Communities, in Samuel Gregg (ed), Theologian and Philosopher of Liberty: Essays of Evaluation and Criticism in Honor of Michael Novak, Grand Rapids, MI: Acton Institute, 2014, p21

[2] M. Novak, The Spirit of Democratic Capitalism, p13

[3] Humanprogress.org

[4] David Marquand, Mammon’s Kingdom: An Essay on Britain Now, p81

[5] Pope Benedict XVI, Caritas in Veritate, p49

[6] Brian Griffiths, Markets and the Common Good, in N. Sagovsky & P. McGrail (eds), Together for the Common Good, London, SCM, 2015, p144

[7] Michael Sandell, What Money Can’t Buy

[8] Ibid., page 137

[9] Chalmers, Natural Theology, volume, in Works, page 128

[10] RSU, Second Annual Report, 1846, page 35

Trey Dimsdale: “Missional Economics – Biblical Justice and Christian Formation” by Michael Barram

Some of the most important conversations in Christianity today involve questions of justice and how Christians should not only respond as individuals and as members of the “holy catholic church” to injustice, but also be positive catalyst of just societies and social institutions.  It is heartbreaking for those of us within the camp of Christianity to look into the past and see ways in which those who have come before in our tradition have sometimes actively contributed to injustice due to cultural blinders, a lack of familiarity with social or technological developments, or any number of other factors.  Economic issues are no exception to this and in an age of unparalleled prosperity among some, there is no doubt that questions of justice as they relate to economics is a necessary part of this conversation.  Barram is to be applauded for engaging in such a worthy dialogue.

In this work Barram begins by describing an emerging field in biblical studies that takes the name “missional hermeneutics.”  Given that I am not a scholar in the field, I can attest that his discussion is helpful for the non-specialist and there are some aspects of this approach for which I have great enthusiasm.  This approach recognizes that the church has a “calling as a community sent into the world to bear witness to God’s holistic purposes.” (page 25).  Such a corrective is needed in all traditions as Christians often become narrowly focused on particular aspects of our mission to the detriment of others.  It is also laudable that he turns to Scripture as a primary source of Christian formation. (page 12).

But not all that the author lays out is helpful in the analysis.  Primarily I am referring to his advocacy for “the contemporary Christian community as the locus of biblical interpretation.” (page 33).  I am always cautious to read such claims because, as Barram concedes, such claims often accompany a “loss of objectivity.” (page 34).  It is not possible, as the author argues, to approach hermeneutics without bias influenced by time and space, but the solution is not to understand questions posed to Scripture as novel and therefore demanding a “new” interpretation.  This approach seems to understand the Christian tradition as a strand of discreet epochs defined by the culture in which the church is immersed rather than an organic and interconnected flow of generations of the faithful in different times and places, which is inherent in the concept of catholicity.  Making this assumption leaves open the grave possibility of introducing contemporary biases without any external referent to provide a corrective.

Serious moral reflection guided by biblical considerations is vitally important for Christians if the church is to be a vehicle for accomplishing God’s mission in the world.  But the proper definition of the problems about which we reflect is the starting point for this reflection, and it appears in places that Barram makes assumptions that reveal a bias.  In fact, his conclusion to the book states it clearly.  He asserts that our “contemporary economic environment…encourage[s]” us to “choose death,” followed by a litany of caricatures of the positions held by proponents of free market capitalism. (page 241).  At one point he even suggests that the biblical ideal is a communal Christian socialism, an idea that has been addressed and rebutted by a number of authors (page 165).  The author also often uses terms critical to his arguments that are never clearly defined such as “justice” and “injustice” (page 120).

There is no doubt that there are excesses in our society that require moral and ethical correction, and for the Christian that correction should be rooted in Scripture. Barram makes these points well, but this project reads very much like a thinly veiled critique of market economics that never directly engages the field in an honest and fair way.  As stated above, Barram does makes some accurate and important observations, but does not do quite as well in attempting to diagnose the root causes.  But there are other sources from those within theological studies and the social sciences alike that more honestly and fairly examine the application of the biblical text to real and pressing social and economic problems.


Missional Economics: Biblical Justice and Christian Formation by Michael Barram was published in 2018 by Wm. B. Eerdmans (ISBN-13: 978-0802875075). 232pp.

Trey currently works for the First Liberty Institute, one of the the largest public interest law firms in the United States. He holds degrees in law, theology, and ethics and has worked as an attorney, educator, non-profit administrator, and pastor. He is the co-editor of Work in Christian Perspective (SCM, 2018), and the author of several articles, essays, and editorials on a wide range of topics. He has spoken around the world on issues as diverse as housing policy, philosophy of law, and religious freedom.








Kishore Jayabalan: “Aquinas and the Market” by Mary L. Hirschfeld


Aquinas and the Market: Toward A Humane Economy is a pleasant surprise because it takes both economics and theology very seriously. There are probably not many scholars who have doctorates in economics (Harvard) and theology (Notre Dame) and even fewer who can write an academic book that is almost entirely free of academic jargon. It is readable without oversimplifying the subject matter. Sensible and profound at the same time, Mary Hirschfeld’s work may be in a class of its own.

Even more surprising is that she began her career interested in feminist economics, admits to having learned “the wisdom of conservative and libertarian thought even though [she] never fully embraced it” and eventually converted to Roman Catholicism. Her dissertation director at Notre Dame, Jean Porter, steered her away from “pure theology” and towards theological, specifically Thomistic, economics.

Most theologians and philosophers tend to look down upon economics, but not Hirschfeld. She attempts to create a dialogue between theology and economics, something many religious leaders say is necessary but are themselves incapable of doing. How many of them would be able to see the economic downsides of rent control and the minimum wage as Hirschfeld does? The trick is in taking into account the objective reality of God and the subjective preferences of human beings expressed in the everyday operations of the marketplace.

Hirschfeld’s interest in feminist economics and especially theories of household consumption may have helped her bridge this divide. It is somewhat of an intellectual mystery how the ancient and medieval study of household management become the dominant, mathematical-laden social science of the modern age. While Christian concern for the human person and individual conscience had much to do with it, it is not a sufficient explanation.

If there is one shortcoming of this work, it is a neglect of the mediating ground between theology and economics, i.e. politics. Neither religion nor business is a completely private or individual affair; each takes place within a social context that at least implicitly aims towards some sort of common good. Hirschfeld is well aware of the need for a hierarchical ordering of goods in any kind of Thomistic economics. It seems unlikely that such an ordering can take place without some kind of authority behind it. Who this authority would be and how it would govern are matters of politics rather than economics. 

While theologians such as Thomas emphasized the need for order, modern political philosophers such as Machiavelli, Hobbes and Locke blamed them for its opposite and failing to deliver earthly peace and prosperity. Adam Smith described feudalism harshly in order to promote what he called the commercial society based on some combination of self-interest and sympathy. The Reformation and Counter-Reformation led to religious-political conflicts that eventually created the conditions for modern pluralism and tolerance.

Absent political mediation, the theological order of Thomas cannot coexist with the spontaneous order of the marketplace. Liberal democracy offers such one such form of mediation but, as our contemporary populist movements reveal, functions in an increasingly unsatisfactory way. As an economist, Hirschfeld knows the problems of command-and-control economies; as a feminist, she is a proponent of liberty and equality. One may ask if she does not also harbour a certain longing for a more aristocratic society that would be in tension with her liberal democratic preferences.

Like all modern rationalists, the economist tends to aim for mathematical precision precisely because theology and philosophy are so disputatious and politically utopian; the economist favours the practical over the theoretical. Modern economics has done much to raise material living standards all over the world, failing only where it has not yet been implemented. Such progress is real and ought to be celebrated, as Hirschfeld does.

Economists, however, cannot avoid theorizing in order to be able to predict human behaviour and influence public policy. They start to create “rational choice” models that are as abstract as those developed by the Scholastics minus the metaphysics. These models neglect virtue ethics as unrealistic if not hypocritical, never asking if some good did not come from at least pretending to be good. We are materially well-off but spiritually destitute. The result is what Leo Strauss called retail sanity and wholesale madness.

Hirschfeld the economist is aware of the costs as well as the benefits of modernity. Her theological training has given her the language and concepts to address these concerns. A convert’s faith makes her realistic about what may be possible here on earth and what is not. It is very rare to see such common sense and deep learning in one place.


“Aquinas and the Market: Toward A Humane Economy” by Mary L. Hirschfeld was published in 2018 by Harvard University Press (ISBN-10: 0674986407). 288pp.

Kishore Jayabalan is Director of Istituto Acton, the Acton Institute’s Rome office. For more information about Kishore please click here.








Lord Griffiths: Is there a Christian Alternative to Capitalism and Socialism?

This is a transcribed lecture given at the Morlan Pantyfedwen Annual Lecture 2018.

I count it a great privilege to be invited to give this lecture not least because of the number of distinguished clergy, theologians and historians who have given it over the past half century. The idea for the subject of the lecture was the seeming incompatibility of being a Christian and for five and a half years the Head of Margaret Thatcher’s Policy Unit at 10 Downing Street, advising the Prime Minister on all domestic policy issues, including those associated with the advocacy of a market economy. The original suggested title was ‘Mrs Thatcher, Zacchaeus and Me’. I tried it out on two undergraduates here at Aberystwyth University but neither of them knew who Zacchaeus was! Hence the current title.

Before tackling the subject however I feel I owe it to you to provide some personal background.

While at Dynevor Grammar School in 1959 I stood as the Labour candidate in the schools mock election. As the school motto was ‘nihil sine labore’, mine was “nothing without Labour!” I went to the London School of Economics primarily because of its political left-leaning reputation and after graduating joined the staff and specialised in monetary economics and competition and regulation in banking. In my twenties I voted twice for Harold Wilson, the Labour Prime Minister.

Throughout the nineteen sixties I became disillusioned with the Labour government: first because of the failure of its economic policies, the devaluation of sterling, the national plan, neglect of monetary policy, failure of incomes policies, nationalised industries poor performance and high taxation, and second, because of the cavalier way in which the Home Secretary, Roy Jenkins, radically reformed social policies with seemingly scant regard to their unintended consequences.

The momentum driving change in the late 1960’s seemed to me to be thoroughly secular. Economic issues were increasingly couched in Marxist categories of class conflict, exploitation and state control in which the performance of the economy was perceived as a zero sum game. If some benefited it was of the expense of others. By the late sixties I had become an unofficial adviser to Harold Lever, a member of Wilsons Cabinet. One day I put the question to him “If you were a young man entering politics today which party would you join”, to which he replied with remarkable candour, “probably the Conservative”. I then fought the two general elections in 1974 as a Conservative candidate and informally advised Margaret Thatcher, Geoffrey Howe and Keith Joseph in the years before joining the No.10 Policy Unit in 1985.

Over this time and as a result of teaching and research in the field of economics I became convinced of the value of a competitive market economy in which prices and wages were free to move, of private enterprise rather than state enterprise and of a strong but limited regulatory framework for business. I came to realise that a Keynesian prescription of deficit spending was relevant to an economy suffering a great depression or a severe deflationary shock, but that a medium term financial plan, involving control of the money supply along with rules for fiscal policy, was crucial to ensuring a low rate of inflation and full-employment in more normal circumstances. Given the serious inflation the UK faced in the mid-1970’s (an annual rate of 27% in 1974) it was refreshing to find Margaret Thatcher, Keith Joseph and Geoffrey Howe prepared to break out of the post-war consensus of a mixed economy and propose a serious alternative agenda.

It took me longer however to realise that among some of those championing freedom of choice and free enterprise were libertarians who were just as secular and ideological as those on the Left of politics. This particularly struck me at a meeting of the Mount Pelerin Society in the early 1970’s in a fierce debate between Milton Friedman, Friedrich von Hayek and Irving Kristol on the difference between a free society and a just society. Friedman and Hayek argued that we knew what a free society was but we did not know what a just society was, while Kristol claimed that a free society was not sustainable unless underpinned by some conception of social justice.

This form of economics was extended by Gary Becker from the University of Chicago. One day he was running late for a departmental meeting and desperate to find a parking space. He took a chance, weighed up the economic costs and benefits – the probability of being caught, fined and towed away – and decided to park illegally. Reflecting later on what he had done he realised he had made a perfectly rational cost-benefit calculation without any reference to a concept of morality. The decision to be honest or not was based purely on economic considerations. Morality was irrelevant.

He then extended this approach to explore the impact of economic incentives in areas such as crime, divorce, fertility, family, migration and discrimination. The role of values and social custom in economic life were impounded under ceteris paribus (other things being equal). In other words ignored. Once more morality was irrelevant.

The point I wish to make is that my disillusion with libertarianism and a reductionist economic approach to analysing social problems was because of their incompatibility with the Christian faith. As a result I found myself drawn increasingly to distinguished American academics and commentators such as Peter Berger, Irving Kristol, Michael Novak and Richard John Neuhaus, all of whom were convinced of the merits of a market economy but made the case within the framework of a traditional Judaeo-Christian approach.


The Current Crisis of Liberalism

Today the issues facing us are different from what they were in the 1970’s.

There is an increasing sense that liberalism and with it economic liberalism is in crisis, if not meta-crisis. We are still living in the shadow of the 2008 financial crisis and the public have not forgiven banks for privatising the huge profits made in the boom years but socialising the losses when they failed and had to be bailed out by tax payers. Ever since the industrial revolution there have been business cycles, trade cycles, stop-go cycles and financial crises. They were painful but nothing like the financial crisis of 2008 which nearly led to global banks closing their doors as happened in the US in the early 1930’s.

After ten years of austerity speculation is now rife as to when the next crisis might occur, with no shortages of possible catalysts, such as the faulty structure of the Euro, (the result of creating a monetary union without a fiscal union), the Italian budget deficit, the scale of global debt, the huge deterioration in the standards of corporate lending and the escalating trade war between China and the US.

Subsequent to the crisis global banks have been fined more than $250 billion for wrongdoing but few bankers have ended up in jail. Even after the crisis there have been new scandals involving interest rate fixing in Libor markets, price fixing in foreign exchange markets, the widespread abuse of selling payment protection insurance (PPI), (which has cost the four leading UK banks fines of £37.5 billion), and the scandal in the US of the opening of 3.5 million ‘fake accounts’ by staff at Wells Fargo bank.

Another issue facing liberalism is growing inequality in the distribution of income and wealth.

In the UK:

  • – There is a six-fold difference between the incomes of the top 20% of households and bottom 20%
  • – Richest 1% own 14% wealth while 15% have no wealth or negative wealth
  • – Average earnings (real media employee) in 2018 are 2-3% below their 2007-8 level
  • – Intergenerational inequality has risen sharply – millennial families (those born between 1980 and 2000) are only half as likely to own their own homes by the age of 30 as the baby boomer generation (born 1945-65) and four times more likely to be renting
  • – Median incomes in North West, North East, West Midlands, South West England and Wales are more than 30% lower than in London and South East.

More generally: 

  • – In the 1950’s CEO compensation was typically 20 times the salary of the average worker in the US: in 2017 CEO pay at an S&P firm was 365 times the average rank and file worker. For Fortune 500 companies the ratio was 20-1 (1950), 42-1 (1980), 120-1 (2000).
  • – The same trend incidentally was true of the prize money for the Wimbledon Mens Champion – in the first year that prize money was offered, 1968, it was £26,150, this year £1.8 million.

A further challenge in modern capitalism is the pace of technological change. Whether through automation, robotics or artificial intelligence, technology is driving innovation and change in all sectors of Western economies. This creates new products and has potential to raise productivity more generally. However, it also leads to what Joseph Schumpeter described as a process of “creative destruction” which has potentially huge implications for existing jobs. Technology will create new jobs but destroy others. On present evidence it is difficult to predict its net ultimate impact but whatever its final impact it creates great uncertainty over future employment. Large technology companies such as the fanngs – Facebook, Apple, Amazon, Netflix and Google – have raised a number of public policy issues: potential monopoly power, failure to pay fair taxes, loss of privacy, risks of data mis-management and given the amount of time children spend using machines, the impact of technology on society,

A further concern underlying the crisis is the charge that as a result of Reagan and Thatcher’s economic policies there has been a fundamental change in our culture. Michael Sandel a Harvard academic has expressed it as a move “from having a market economy to being a market society” (p.17). Over these years the concepts used in the market place such as revenue, cost, profit, return, productivity and bonus have been extended into areas such as health, education, the police, the provision of blood, family life, art and so on.

The change is that in the process of commercialising a service there has been a greater emphasis on audits, targets and league tables which has led to a change in the nature of the services themselves: a loss of informal conversation between parents and teachers, between doctors and patients, between police and the public, a decline in altruism, mutual obligation and trust and of great importance a devaluation prestige of public service. The greater emphasis placed on financial incentives the greater the danger that they crowd out moral concerns.

In political terms liberalism and the international rules based order which has existed since 1945 has been threatened by the rise in populism in Europe and the US, the Brexit vote, the growth of the extreme alt-right, the growing conflict between China and the US and the disregard for the trading rules of the World Trade Organisation: all of which only add to a sense of crisis.


The Christian Faith as a World View

Against the background is there anything distinctive that the Christian faith can provide?

At a personal level I should declare an interest.  While I was brought up in a religious family, it was not until I reached my teenage years that I made a decision to affirm the Christin faith for myself. This is something which has only grown stronger over the years and has been the major reason for my interest in the relationship between the Judaeo-Christian faith and economics, politics and society. The home in which I grew up was shaped by a pietistic evangelical tradition and because of its geographical proximity to the source of the 1904 religious revival in Wales was strongly influenced by the revival itself. This meant that when I started my professional career I lived in two separate worlds – the world of academic economics, social science and the London School of Economics and the world of the church and para-church organisations.

The key point I wish to make is that I had not attempted to integrate my faith with my approach to my academic discipline of economics. They ran on parallel lines. Without appreciating it I had been heavily influenced by eighteenth century deism (Adam Smith), nineteenth century utilitarianism (John Stuart Mill) and twentieth century philosophy of science (Karl Popper) but without ever really trying to work out how they related to my faith.

A crucial meeting for me was attending a dinner party hosted by the Chancellor of the University of Rochester, Allen Wallis, in the early nineteen seventies in which the key guests were Jacob Javits, Senator for New York and Milton Friedman, Nobel Prize winner from the University of Chicago. Towards the end of the evening Friedman challenged me with the question “with your interest in religion you remind me so much of Frank Knight (who has been the founder of the Chicago School and Friedman’s mentor, but brought up in a deeply religious family). How is it that you as a Christian can support the market economy when Jesus said it was easier for a camel (the largest animal) to go through the eye of a needle (the smallest aperture) than for a rich man to enter the Kingdom of God”. I mumbled some reply but his question challenged me and sent me on a long search into the text of scripture and theology, in which I am actively still involved.

In this search the first thing I discovered was that the Christian faith is a world view.

It is not just about Jesus and me. Or doing good deeds. Or regularly receiving the sacrament of holy communion. Or just attending church or chapel in the way one’s parents and grandparents did. It is about seeking to answer the most basic but difficult questions of life, Who are we? Why are we here? What is the purpose of life? The Christian answer to these questions is provided for us in the context of a story which Leslie Newbiggin captured well by stating that: “the way we understand human life depends on what conception we have of the human story. What is the real story of which my life is a part?”. The biblical story is a meta-narrative. It deals with origins and destinies. It encompasses creation, fall, redemption and restitution. It involves real people, in known geographies and at specific times in history. It is a story with a beginning and an end. The story helps us understand the way the world is, who we are and what is our place in it. It is a unique story and crucially different from other world views.

The next thing I discovered was that although the Christian faith is a world view it is not a blueprint for a modern economy or political system.

It does not provide a detailed plan for the policies that a Prime Minister, Chancellor of the Exchequer or a Secretary of State for Work and Pensions should pursue and it is certainly not about building a utopia through political action. However it does provide insights into many of the different perspectives of capitalism and socialism which deal with the nature of work, fairness and social justice, the purpose of economic life, the temptation of money, the responsibilities of ownership, the priority of helping the poor to name but some. And it offers a direction of travel.

For example, to my surprise I found that the Hebrew Scriptures contained a wealth of material on these subjects. I suppose it is natural that our primary focus as Christians is on the life and teaching of Jesus in the gospels. In doing so however we frequently fail to take into account the Jewishness of Jesus himself. He was born into an orthodox Jewish family, circumcised on the eighth day, presented in the Temple, taught the Hebrew scriptures in the synagogue and attended congregational worship. He had a complete grasp of the Old Testament and summed up Old Testament teaching in two precepts: first and greatest, love the Lord your God with all your heart, soul and mind and second, love your neighbour as yourself (Matt 22:37-39). In his greatest address, the Sermon on the Mount, he stated categorically “Do not think that I have come to abolish the Law and the Prophets (that is Old Testament teaching). I have come not to abolish them but to fulfil them”.

The Genesis narrative of creation offers us a profound understanding of the nature of our world and ourselves; the meaning of work, creation of wealth, stewardship of planet earth, as well as the source of our failure to live up to our ideals. The Mosaic law sets out Gods intention for how his chosen people were to live and organise their political and economic life. Although the establishment of the law is located in the specific history and geography of the period, the political economy of Israel contains statements of moral principles of much wider relevance: the equitable allocation of land to each family as they entered the Promised Land, the prohibition of usury (Deut: 23:19,20), the gleaning laws which prohibited harvesting the edges of fields to allow those without access to property to benefit, (Deut: 24:19-21), the Sabbath as a day of rest, the obligation as a matter of justice to meet the needs of the widow, the orphan, the stranger, the fatherless and the poor and in the year of Jubilee, the freeing of slaves, the forgiveness of debt and the redistribution of land to its original owners. (Lev.25:9,10). It is interesting to reflect how much of this we have taken on board in our society through imposing price caps on payday loans, Sunday trading laws, the protection of property rights and the welfare model in the Pentateuch as an inspiration for the modern welfare state.

By contrast the Wisdom literature of the Old Testament and the Apocrypha offer us practical wisdom on how to manage the challenges of daily life: who to do business with and who not to do business with, the consequences of recklessness, pride and laziness, the virtues of honesty, diligence and hard work, the secret to successful relationships and the source of wisdom itself – “the fear of the Lord is the beginning of knowledge” (Prov 1:7). The most remarkable insight of the prophets is the way at different times in history and in different circumstances they nevertheless trace the root cause of economic and social crises to moral decline and the abandonment of religious faith.

In the gospels Jesus announces that he has come to establish a Kingdom, the Kingdom of God.  This is Gods new society, which was wholly different in character to the Kingdoms of his day, in which Kings lived in wealthy places. In his parables he sets out the danger of materialism. By naming money as Mammon he elevated it to the status of a deity whom people worshipped. In the Acts of the Apostles and the Letters written to individual churches, the early Christian church is portrayed as a charismatic community serving the poor but at the same time suffering from all of the frustrations which characterise our fallen world. In the Revelation to John, the final grand denouement of the human story is set out in graphic terms in which the new Kingdom Jesus established finally realises its fulfilment.

I also discovered a third thing. There was no point in trying to re-invent the wheel. The challenge was how to use it.

Over the last two millennia Christians have wrestled with these issues: the early church fathers, Augustine, Thomas Aquinas, Luther, Calvin and the reformers, John Wesley and Methodists. In the late nineteenth and first half of the twentieth century Anglican Social Thought associated with Scott-Holland, R.H.Tawney (who incidentally taught at the London School of Economics) and Archbishop William Temple among others, had a major influence on economic issues. Temple’s short book Christianity and Social Order, published in 1942, and interestingly with an acknowledgment in the preface to Mr.J.M.Keynes, was a statement that the whole of economic and social policy should be founded on the Christian faith. The book was hugely influential and a major inspiration for the post-1945 welfare state. More recently Anglican social thought has languished even though Professors Millbank and Pabst in their book The Politics of Virtue have made a major contribution in setting out the contemporary case for ethical socialism.

However today I believe there are two leading approaches to a Christian world view.

One is in the tradition of the Reformation, of Luther but especially Calvin, and more recently of Abraham Kuyper. He was a pastor in the Dutch Reformed Church, experienced a remarkable spiritual experience, left the ministry, entered politics and became Prime Minister of the Netherlands from 1901-1905. He established the Free University of Amsterdam and outlined his approach to political economy in the Stone Lectures given at Princeton Theological Seminary in 1898. His influence has continued in the twentieth century through the writings of Francis Schaeffer, Cornelius van Til, Alvin Plantinga, Nicholas Woltersdorf, Charles Colson, Timothy Keller and the Welsh Nationalist historian, R.Tudor Jones.

The alternative approach is Catholic Social Teaching which in its modern form stems from the encyclical Rerum Novarum 1891 issued by Pop Leo XIII, which addressed itself to the “new things” which had emerged from nine-teenth century industrialisation and in particular “the misery and wretchedness pressing so unjustly on the majority of the working class”. Since then there have been numerous encyclicals dealing with economic and social issues, three of the most recent and influential being Centesimus Annus (1991) following the downfall  of Communism by John Paul II, Caritas in Vertitate (2009) commenting on the financial crisis 2008 by Benedict XVI and Laudato Si (2015) dealing with the environment by Pope Francis.


Principles for a Christian World View

Both these approaches have profoundly influenced my thinking and I believe that over the last few decades there has been something of a convergence between them even though significant differences remain. Based on biblical teaching, theological reflection and my own experience in academia, banking, business and government I believe there are certain principles which are at the heart of a Christian world view and of great relevance to current political, social and economic issues, even for those who may not share our religious beliefs.


(a) One is the centrality of the human person and human flourishing.

In the poetic narrative of creation in Genesis, there is the ringing declaration,

“God created individual mankind in his own image, in the image of God he created him; male and female he created them” (Gen 1:27)

Unlike the rest of the created order human beings have a transcendent dignity because they alone are created with a divine likeness, imago dei.  The biblical text does not define the nature and extent of Gods image but the context shows God as purposeful, holy, rational, creative and loving. This God-like image is true not just of some individuals, the wealthy, the talented, the powerful, the glamorous, celebrities. It is equally true of the poor, the homeless, drug addicts, the abused. It includes each individual regardless of race, gender, ability, wealth, lifestyle or background.  Because each human being is a child of God, a person loved by God and someone for whom Christ died, then each person has infinite dignity regardless of their economic contribution to society.

The Hebrew Scriptures stress the notion of human flourishing, a life of happiness and contentment, a full life, a life lived well. The wisdom literature which we referred to earlier explores this in some detail. Incidentally a similar idea is found in Aristotle’s Nichomachean Ethics when he uses the word eudaimonia.

It is because of the importance which scripture attaches to human flourishing that it must be a yardstick by which to judge economic life. The Christian faith is not about the integrity of a spontaneous order or an idealised market economy. An economic system should be judged pragmatically by whether it serves people and not by whether people are being made to serve the economic system: in this context particular concerns for me are the increase in stress and mental illness in work, the contractual status of employment in the gig and sharing economy, gender imbalance in the work place and work-life issues.

This understanding of the person is unique. It is the basis for human dignity and human freedom, religious, political and economic. It is the foundation of religious liberty, parliamentary democracy and the market economy. The God who created us endowed us with the freedom to choose and as a consequence accept responsibility for the choices we make.

One aspect of human flourishing is the creation of wealth. The natural world with its wealth of resources, diversity and beauty is God’s gift to human kind. For the people of Israel this meant,

“a good land – a land with streams and pools of water, with springs flowing in the valleys and hills; a land with wheat and barley, vines and fig trees, pomegranates, olive oil and honey: a land where bread will not be scarce and you will lack nothing; a land where the rocks are iron and you can dig copper out of the hills” (Deut. 8:-79).

Wealth was something intrinsically good not bad. We were not created to live in poverty, eeking out a meagre existence and living off bare necessities. We have been delegated to have both dominion over Gods creation as well as stewardship for its sustainability. Mrs Thatcher used to remind those of us who worked for her that we were tenants of God’s creation with a full repairing lease. We are leaseholders but we are not owners.

It is important in this context to recognise that Jesus never condemned wealth as such. He was born into a household which had a small family business. He himself identified with wealth creation through work. He dignified manual labour as a carpenter, a word translated from the Greek tekton which could also mean mason, cartwright and joiner all rolled into one. He enjoyed the hospitality of friends and mixed with all classes of people including the wealthy.

When He taught “you cannot serve God and Mammon” he was not condemning wealth as such but warning that money had the power to crowd out the spiritual life by elevating it to the status of a god. For an attractive wealthy young politician he met the demand to sell all his possessions before following Jesus was more than he could take.


(b) A second principle is the importance of a market economy.

The reason I stress a market economy is because I believe it is more compatible with Judaeo-Christian teaching than the only serious alternative on offer, namely an economy in which the state is the engine driving economic activity. In the eighteenth century this took the form of Mercantilism. In the nineteenth century it produced the Communist Manifesto and Marxist economics. In the twentieth century it resulted in the wholesale nationalisation of companies and indicative planning by governments. In the twenty first century the danger is that it will take the form of vastly greater government regulation of private business and markets which will blunt incentives and place a mortmain on enterprise.

One element of compatibility between a market economy and Christian faith is that it offers the greatest scope for each person to make their own decisions regarding what job to aim for, where to live, how much training to undertake, how hard to work, how much risk to take on with a mortgage and family and so on. In other words it offers great personal freedom as well as the responsibility which accompanies it.

Next markets, cannot exist without well defined property rights and a rule of law which enables contracts to be made and enforced within a legal system which is independent of politicians. The rule of law protects individual’s liberty against the arbitrary power of the state. Well defined property rights mean that individuals and families are able to prosper by retaining the rewards they earn from work and risk taking.

Third, markets work with the grain of human nature. Every economic system, feudalism, slavery or communism has had at its core an implicit anthropology. It makes assumptions regarding human motivation, the nature of a human being, the place of the individual in society. Feudalism, slavery and communism were all command and control systems. Their basic assumption was that people needed to be coerced into working, disliked taking responsibility and longed for security. By contrast one reason markets are successful is that they enable the creativity, and enterprise of individuals from all kinds of backgrounds and abilities to flourish.

Adam Smith is widely considered the father of the modern market economy. In making the case for a market economy Smith postulated a certain view of the human person. In his early work, he stressed that each person was endowed with ‘certain moral sentiments’ such as prudence, sympathy, benevolence, self-control, charity, friendship, generosity, and gratitude. However, when it came to explaining the growth in the wealth of nations he mentioned two further characteristics: ‘the propensity to truck, barter and exchange one thing for another’, so that ‘every man…lives by exchanging, or becomes in some measure a merchant’; and the ‘desire of bettering our condition’, which ‘comes with us from the womb and never leaves us till we go into the grave’.

If there is a case to be made for a market economy it must be made in the world as we find it, warts and all, a world inhabited by sinners not saints, rather than in an ideal world of our imagination.  The Christian faith stands outside of every economic system and is a benchmark by which to judge each.  In the same way that there is a Judaeo-Christian basis for the rule of law and the institution of government, even when in practice it may be far from ideal, as was true of the Roman Empire in New Testament times, there is also a Judaeo-Christian basis for an economy based on the freedom to exchange and trade, to own property, to save and invest, and to set up new businesses, even when such an economy may be far from the ideal.

Let me stress that I am not blind to the fact that market economies have faults.  They are prone to cycles in which downturns involve costs and distress.  They can permit cartels, oligopolies and monopolies to flourish. They can create unacceptable inequality in the distribution of income and wealth.  They can focus on the short term and neglect the long term.  They can under provide “public goods” such as basic scientific research and public health. Harmful environment practices may not be properly. Because of this a market economy needs the framework of an effective government, an independent judiciary and regulation of markets and companies which protect consumers and workers.

Finally if people are serious about creating prosperity as a way to lift people out of poverty, the market economy is the only economic system we know in history which has produced mass flourishing. No other system comes anywhere close to it.

When I first started studying economics in the early 1960’s the prevailing consensus was the mixed economy: markets were fine for items such as food, clothes, household necessities and luxury products but not for important things such as coal, steel, ship-building, gas, water, electricity, railways, airlines, all of which were in state ownership. There was no great enthusiasm for markets. Hayek, Friedman and the Institute of Economic Affairs were curiosities. The perception that markets were more effective than state ownership grew over time because of the contrast between the success and failure of East and West Germany, that of Hong Kong and China, that of North and South Korea, countries with similar populations and cultures but different economic systems. There was also the rapid take-off of the Asian tigers (Hong Kong, South Korea, Singapore and Taiwan), the dead hand of regulation in India and the poor performance of the public sector in the UK.

More recently in the last 40 years China has witnessed a staggering reduction in poverty and growth in prosperity, probably greater for one country than at any time in history. Most important of all is the record of market economies since the beginning of the Industrial Revolution in the late eighteenth century in raising the standard of living of its populations accompanied by remarkable developments in education, health and life expectancy.


(c) A further Christian principle is a concern for the mutual flourishing of society.

The Christian faith starts with the individual but it is not an ethic of individualism. It is about the flourishing of all individuals and the way we live as communities whether, in families, villages, towns, cities, work places nations. Catholic Social Teaching has expressed this as the pursuit of the common good and defined it as

“the sum total of social conditions which allow people, either as groups or as individuals, to reach their fulfilment more fully and more easily”.

This is not simply the sum total of the good of each person, but viewed as a whole the good of all people and for each person the good of the whole person. Being fulfilled as a person means being in a relationship with others and doing things for others. The common good as the mutual flourishing of the whole involves economics, politics and society. It also involves a spiritual dimension as each person is constituted body and soul. Pope John Paul II emphasized the moral features of the common good as self-control, personal sacrifice, solidarity and the promotion of the common good itself. The common good is about inclusion – an inclusive economy, an inclusive society and an inclusive political system. It is never about exclusion.

Ever since Rerum Novarum (1891), the concept of the common good has made a priority of improving the condition of the poor. Most recently Pope Francis has stressed,

“We have to state without mincing words, that there is an inseparable bond between our faith and the poor. (48)…Each individual Christian and every community are called to be an instrument of God for the liberation and promotion of the poor, and for enabling them to be fully a part of society: this demands that we be attentive to the cry of the poor and come to their aid (187)” Evangeli Gaudium 92013)

Kuyper was like Leo XIII passionate about tackling the condition of the poor. Their oppression angered him as he was convinced that God was on their side. “You do not honour God’s word, if you ever forget how the Christ (just as his prophets before him and his apostles after him) invariably took sides against those who were powerful and living in luxury and for the suffering and oppressed” (Markets and Morality, Vol 5. No.1, pg38) or again,  “How entirely different things would be in Christendom if the preaching of Jesus were also our preaching and if the basic principles of his kingdom had not been cut off and cast away from our social life by virtue of over-spiritualisation” (pg.38)

By drawing attention to hunger in modern Britain, the suffering caused by the transition to universal credit and the extent of modern slavery the common good lays down a standard. My own reservation is the extent to which it weakens individual responsibility. The modern concept of the common good emphasising different interest groups grew out of the corporatist movement of the nineteenth century with its roots in an idealised view of Medieval society. The result is that we think of society as made of distinct corporate identities – business, the city, trade unions, universities, the military and so on – rather than the individuals within the categories; and end up paying more attention to the views of the leaders of these entities than their members.


(d) A fourth principle is limited but effective government.

The way Kuyper thought about society was in terms of its different spheres: family life, fine arts, the university, science, trade unions, guilds, the church.  Each sphere had its own place, its own identity and its own unique tasks.  These organic spheres have autonomy or ‘sphere sovereignty’ as he phrased it and needed to be kept separate and protected from excessive government interference “The state must never become an octopus, which stifles the whole of life” (Stone Lectures). In this he was concerned because of the centralisation and consolidation of state power which was taking place in the unification of Germany under Bismark.

By cautioning the role of the state Kuyper still maintained that the state had responsibilities with respect to these spheres; to protect the boundary limits when spheres clashed, to defend individuals from the abuse of power and to levy taxes to maintain the unity of the state. In the regulation of business today government has a most definite role to play, but in other areas and especially the family, the extent and intrusiveness of government intervention, which has grown enormously over the past half century needs to be critically challenged.

Alongside the importance of sphere sovereignty is the Catholic emphasis on subsidiarity so that ‘higher’ structures should not direct, control or take over “lower” structures. Subsidiarity is important because by preserving preserves the dignity of individuals and communities it strengthens institutions civil society. I believe that the devolution of government to Northern Ireland, Scotland and Wales within the UK, as well as further devolution of central government to local government are successful examples of the principle of subsidiarity.


(e) A fifth principle is the Importance of Seedbeds of Virtue.

A market economy and a democratic political system cannot exist without a culture built around certain values. A market economy requires honesty, self-discipline, a sense of adventure, personal responsibility, prudence, hard work, saving for a rainy day. Without these values there will be less trust in economic life and markets will be derided as “crony capitalism”.  These values will not be generated within the market economy. They may be reinforced in markets but their source lies outside of markets.

In the political sphere, political involvement and debate requires respect, civility and decency. Representative democracy must be seen to respect the decisions of the electorate. Politics must attract people of character concerned with the public interest. Politicians themselves, by their behaviour and the way they speak in public provide examples of leadership in public life. When this is debased, public life is coarsened, the political community fractures, people lose trust in political leadership and ultimately political life becomes a war of all against all. In the process public service is devalued. As in a market economy the values which enhance political life have their origin outside of politics.

What is the source of these values in business and public life? Mary Ann Glendon, a professor of law at Harvard Law School has described the institutions which generate these values as “seedbeds of virtue”. She identified among others, the family, school, community, religious congregations. I would add voluntary organisation. The growth of secularism and the ‘adversary culture’ of the nineteen sixties have had positive benefits: the enhanced role of women, concern for the environment, challenges to hypocrisy, standards and stuffiness. Today however we are reaching a point of crisis through the rise in dysfunctional families, the growing prison population, and the inability of the school system to cope with the demands being made on it. Reversing the trend by strengthening the traditional family and the teaching of moral values in schools and churches, synagogues and temples will not be easy, but is an important challenge.



Let me Know conclude.

I have tried to argue that the Christian faith is a world view which encompasses politics, economics and society. It is not a detailed blueprint for economic and political structures, but it provides us with principles which underline policies and a direction of travel.

One of the major lessons to emerge from the political economy of ancient Israel for me is the need for every family to have a stake in economic life. When people have a stake in society they feel enfranchised and take greater interest in its public life and its future. If capitalism is to survive it must be an inclusive capitalism which offers opportunities, an increasing standard of living for everyone and prosperity but widely shared. At present this is not the case.

Jobs matter to people and provide a stake in a society. In the UK business has been successful in creating jobs with record highs for employment and lows for unemployment. By contrast housing is a glaring problem. A generation of discontented renters is a recipe for social conflict. Many detailed proposals for building more houses and helping first time buyers exist, some of which were put forward in a House of Lords Select Committee on Economic Affairs Report last year, on which I sat. It is for decision makers to choose the way forward but for me the Christian imperative in this area is the need to take action now and create wider ownership.

Alongside wider ownership is the challenge of strengthening those institutions which are the seedbeds of virtue in our society. The family can be strengthened by empowering parents during pre-school years, creating a level playing field in taxation between mothers who do paid work outside the home and mothers who stay at home and are not paid and by supporting initiatives to increase social mobility.

Finally, the Christian faith is a living reality not just a cultural heritage.  Jesus promised that those who follow him would discover a new kind of life. When challenging his followers two of his most engaging metaphors were those of salt and light.

“You are the salt of the earth…you are the light of the world. A city on a hill cannot be hidden. Neither do people light a lamp and put it under a bowl. Instead they put it on a stand and it gives light to everyone in the house. In the same way let your light shine before men, that they may see your good deeds and praise your Father in heaven” (Matt 5:13-16)

I believe strongly that the renewal of political life and the raising of standards in business is intimately bound up with the renewal of the church. In view of the scandals of the Christian church and the increasingly secular nature of the world in which we live, people resent being preached at. They want first to see the deeds done by Christian people.  By being salt and light in a thousand small ways Christians can earn the right to be heard by showing something of the vitality of a living Christian faith. This for me is the real alternative to both Capitalism and Socialism.



Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.

Richard Godden: “Bourgeois Equality” by Deirdre McCloskey

The past 200 years have seen a huge increase in aggregate global wealth, which has benefited the vast majority of people around the world. Conservative estimates suggest that average real wages have increased ten-fold and the increase in wealth has probably been considerably greater than this (perhaps thirty-fold or even a hundred-fold). Why has this happened? Why are we now so rich? This is the fundamental question that Deirdre McCloskey seeks to address in Bourgeois Equality, the final volume in her trilogy relating to bourgeois values.

Those who have not read it may doubt that we needed yet another book about “the causes of the Industrial Revolution”. Those who have read it will disagree. Its scope is breath-taking: in which other book about economic development would you find 20 pages of analysis of the novels of Jane Austen, two chapters relating to the historical change in the meaning of the word “honest” and its equivalents in other languages, a discussion of the economic impact of post-millennialism and comments on subjects as diverse as the philosophy of the mind and the economics of the temple systems of the Ancient Middle East? McCloskey is Distinguished Professor of Economics, History, English and Communications at the University of Illinois in Chicago and her inter-disciplinary approach to her subject is anything but conventional.

She begins by attacking almost all of the widely accepted explanations of what she calls “The Great Enrichment”: trade and export lead growth (whether or not accompanied by political domination); the accumulation of capital; consumer lead demand; the scientific revolution; the growth in modern institutions; and much else. The role of some of these things is dismissed in summary terms, often with a quotable quote. Other factors (such as property rights, the accumulation of capital and trade) are recognised as being, to some extent at least, necessary for economic growth but dismissed on the ground that they are historically commonplace. As McCloskey puts it, “Oxygen is necessary for a fire but it would be at least unhelpful to explain the Chicago Fire of October 8-10, 1871 by the presence of oxygen in the earth’s atmosphere” (page (xiii)).

In place of the normal list of explanatory factors, McCloskey puts “ideas”. The book is subtitled, “How ideas, not capital or institutions enriched the world” and McCloskey asserts that the key thing that changed in the period leading up to the start of The Great Enrichment was “ideology” (page xxii). Her claim is “that the initiating change leading The Great Enrichment was in words” (page 235) and she spends hundreds of pages defending this thesis. She argues that aristocratic values were replaced by bourgeois values (“The new ethic was of betterment, novelty, risk taking, creativity, democracy, equality, liberty, dignity”, page 279) and this led to the wave of innovation that she calls, “trade-tested betterment”, which directly resulted in The Great Enrichment, first in the UK and then elsewhere.

So is McCloskey’s theory simply Max Weber revisited? Although, unsurprisingly, McCloskey dismisses Webber’s view of the role of anxiety caused by the doctrine of predestination, her approach is clearly related to that of Weber, probably more closely than she would admit. It is based on ideas rather than material causes and recognises the profound role of religion in the creation of the relevant ideas. However, there are important differences between Weber’s and McCloskey’s approaches including their opinions as to precisely which religious beliefs gave rise to the key ideas and the relationship between, on the one hand, these ideas and, on the other, psychology and sociology.

Speaking generally, it would be reasonable to assert that McCloskey believes that the crucial change between 1600 and 1800 was a cultural change. However, she vigorously objects to this characterisation of her view, saying that calling ideas “culture” is “the vague way people talk when they have not actually taken on board the exact and gigantic literature about ideas, rhetoric, ideology, ceremonies, metaphors, stories and the like since the Greeks or the Talmudists or the Sanskrit grammarians” (page 122). She also, and perhaps with more justification, is at pains to point out that she is not asserting that there was a psychological change but rather that there was a sociological change.

McCloskey writes passionately and this passion points to a key issue: deep down, this book is not about the causes of Industrial Revolution but about how we should behave today in order to ensure that The Great Enrichment does not stall. McCloskey says that she is an optimist but she is clearly worried that things could go badly wrong. As she puts it, “Modern politics is a four-way tug of war between liberalism in the sensible part of the elite, socialism in the rest of the elite, traditionalism in the peasantry, and populism in the proletariat” (page 136). She turns aside from her central thesis to attack the left’s focus on equality of outcomes (and specifically the Gini coefficient), the power of the state to secure economic betterment (which she contemptuously dismisses), the idea that mechanisation and betterment causes poverty rather than wealth, regulation in general and what she refers to as “well-intentioned but erroneous policies that make us feel helpful even when they in fact damage the people we intend to help” (page 73).

She reserves her most savage comments for what she calls “the clerisy”, a term that she uses to refer to academics and intellectuals who sneer at Bourgeois values and promote either socialism or, on the other side of the political spectrum, nostalgic paternalism or worse: “The liberty of the bourgeoisie to venture was matched by the liberty of the workers, when they got the vote, to adopt growth-killing regulations, with a socialist clerisy cheering them on. And the dignity of workers was overmatched by an arrogance amongst successful entrepreneurs and wealthy rentiers, with a fascist clerisy cheering them on. Such are the usual tensions of liberal democracy. And such are the often mischievous dogmas of the clerisy” (page 404).

A book written with such passion and having such a broad scope inevitably has its defects. McCloskey has a tendency to overstate things (e.g. her assertions regarding the ubiquity of the rule of law including, surprisingly, in the empire of Genghis Khan, page 111, cannot go unchallenged); many other academics could legitimately feel bruised by the strength of the language with which she attacks them; and the book is too long, the final 150 pages in particular containing much material that repeats earlier points. There are also less important issues: errors of fact (e.g. Rev John Newton was not a Quaker as it stated on page 306); ex-cathedra statements that many will dispute (e.g. “Ordinary Europeans in the Middle Ages were barely Christian”, page 333); and statements that will only be comprehensible to a minority of readers (e.g. the reference to Ian Botham hitting a six, page 126).

However, these defects should not put anyone off. The book is essential reading for those who want to broaden their perspective on the causes of our current prosperity and to consider possible solutions to current economic and societal issues in the light of the lessons of the past. McCloskey’s passion is justified by the importance for her subject for the modern world. The onus is now on those who disagree with her arguments to answer them and on those who agree with these arguments to refine them.




“Bourgeois Equality” by Deirdre McCloskey was published in 2016 by The University of Chicago Press (ISBN-13:978-0-26-52793-2). 650 pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.








Kishore Jayabalan: “God and the Evil of Scarcity: Moral Foundations of Economic Scarcity” by Albino Barrera

God and the Evil of Scarcity: Moral Foundations of Economic Scarcity was written in 2005, its central question is timeless. Why would an omnipotent and benevolent God permit evil? Theologians and philosophers have long struggled to explain why God would permit the suffering of innocents or natural disasters. Most conclude that God permits evil so some greater good may come forth. Ultimately, however, it is the belief that such a God exists and that He knows what is best for us which settles the argument. “Where were you when I laid the earth’s foundation?” is the beginning of God’s answer to Job (38:4).

Stronger faith and trust in God’s goodness is a pious response to the problem of evil, one that is perhaps most applicable to overwhelming evils such as those that afflicted Job. But what about those “lesser” evils, where the good God seeks involves human action of the mundane economic sort? Could it be that we are too fatalistic in the face of evil, cursing the stars when the fault is in ourselves? On the other hand, those who think they can “solve” the problem of evil may come to see themselves as gods, the self-creating masters of their own existence rather than humble servants of God.

Albino Barrera is a theologian as well as an economist. He grapples with the problem of material scarcity as a “participative theodicy” as opposed to a Malthusian one. Malthus (wrongly) predicted that population growth would outstrip the supply of the earth’s resources, leading to widespread penury and death. Barrera sees scarcity as an opportunity for human beings to partake in God’s goodness by learning through economics how to allocate scarce resources with alternative uses and sharing the resulting wealth for the common good of all, especially the less fortunate.

Actually, for Barrera, fortune has little to do with it. Material poverty is a moral evil that God wants us to eradicate through the redistribution and transfers of wealth to the poor. God commands that we care for the poor. Since we now have the means to lift people out of poverty, any shortcomings must be someone’s fault. (Presumably, the greedy rich are to blame, rather than certain policies that may keep their poor destitute.)  Barrera’s economics is moralistic, in contrast with the technical studies of mainstream economics today. It is therefore part of an older tradition than modern social sciences which refuse to make “value judgments” about how human beings should live.

God gave us the material world to thrive and flourish together. Contra Malthus, Paul Ehrlich and other population control advocates, human beings are more than mouths to feed; they also have minds that can think and hands that can build, as well as hearts that feel pity for the poor. God does not simply give us what we need without our own effort and striving; faith and works complement each other. Barrera makes a strong case of the Catholic work ethic and the spirit of capitalism.

The bulk of this book, however, deals with metaphysics, not economics. The appendices contain extensive discussions of the three types of causation (formal, efficient and final) to explain how God can exercise providence, govern and still leave human beings free to act in accordance with His will. Human activity takes place within a twofold order (the whole and its parts) of the universe. These are philosophically dense but necessary treatments if one desires to bring the worlds of theology and economics together.

Yet between theology and economics, there is a yawning gap. Politics, the question of who should rule, determines the types of communities we have, how we promote the common good and much more. Law and history shape how we divide our public responsibilities. Who, for instance, will protect property rights and enforce contracts that make the creation of wealth possible? Who will ensure that wealth is not only produced but also adequately distributed? In addition, who will decide when goods such as national defense or social cohesion, to say nothing of religious observances, take precedence over material prosperity?

Barrera’s treatment of politics, law and history focuses on the Bible, especially the Old Testament. The covenantal politics of Israel offers many insights into its persistent disobedience and ingratitude towards God as well as His unbounded mercy and love for His chosen people. The political drama of the New Testament is less evident but vexing issues of Church and State are still with us. Jesus repeatedly denies to rule as an earthly king, despite the subsequent attempts of Christians to rule in His name. There have been many different forms of Christian rule, i.e. monarchic, aristocratic and democratic, through the ages. It is hard to believe that they shared the same metaphysical principles of economics, irrespective of their political arrangements.

It is unfortunate that Barrera does not engage with thinkers other than Malthus, who explicitly denied divine providence and turned out to be mistaken about economics as well. John Locke would have been a much worthier adversary, since he formulated a theological-political economy in the Two Treatises of Government, yet he only receives two brief mentions in the book. Adam Smith similarly receives short shrift, with just one citation. Both were much more influential in prescribing the transformation from feudal to commercial societies, likely contributing to the decline of metaphysics among the moderns.

It is unfair to criticize Barrera for the book he chose not to write, so let me conclude by recommending this important work to anyone seeking a deeper foundation to economics than self-interest or the profit motive. As an academic work, it is primarily intended for those who have had some exposure to, and some taste for, metaphysics and therefore not for the average entrepreneur and businessperson. It will serve its purpose if it helps high-minded theologians and philosophers understand the importance of economics in doing God’s will.



“God and the Evil of Scarcity: Moral Foundations of Economic Scarcity” by Albino Barrera was published in 2005 by University of Notre Dame Press (ISBN-10: 0268021937). 304pp.

Kishore Jayabalan is Director of Istituto Acton, the Acton Institute’s Rome office. For more information about Kishore please click here.












Richard Godden: “Neither Poverty nor Riches” by Craig Blomberg


Craig Blomberg (Distinguished Professor of New Testament at Denver Seminary, Colorado, USA) is a prolific author and his books are generally worth reading. Neither Poverty nor Riches is no exception. It is, to quote from Don Carson’s preface, “an extraordinary achievement” (page 9) and, having been published in 1999, it is well on the way to passing the test of time. However, this does not mean that it is an easy read. It is not. Parts of it need to be read in short chunks with the relevant bible passages being considered alongside them and its real value may be as a work of reference to which readers can return as they grapple with the issues that it discusses.

Blomberg says that he set out “to write a ‘biblical theology’ of material possessions” (page 28). His focus is on how Christians in the West should view their own possessions in the light of the existence of widespread poverty in the world. As Blomberg puts it, “this is a book by the rich for the rich” (page 11).

He begins his task with a brief overview of the problem of global poverty before, also briefly, outlining the range of Christian responses that have been seen over the past half century. These include Catholic “liberation theology”, left of centre Evangelical thinking typified by the work of Ronald Sider (e.g. Rich Christians in an Age of Hunger) and conservative responses to these approaches.

Someone reading only this introductory part of the book could be forgiven for believing that Blomberg is firmly aligning himself with Sider, since he has some harsh words for a number of Sider’s critics, but the rest of the book proves that this impression is misleading. It may be the result of Blomberg’s recognition that his readers are likely to be on the conservative end of the theological (and, possibly, political) spectrum and his desire to challenge them and distance himself from those who come dangerously close to seeking to justify materialism.

The core of the book comprises a detailed survey of the relevant biblical material. The survey of the Old Testament is broadly thematic. It contains some useful contributions to well-known debates (e.g. those relating to the charging of interest and debt cancellation) and, more fundamentally, an analysis of the Old Testament’s attitude to the ownership and use of property. Blomberg concludes that “Neither the amassing of riches nor their lack is seen as a necessary good (or evil)” (page 82) and he disagrees with both those who denigrate riches as such and those who (to use Gossai’s phrase) “place the poor on a pedestal and proclaim the advantages of being poor” (page 74). He particularly takes issue with those who assert that “God has a preferential option for the poor” (page 49) but also warns that “one can hardly claim that God’s [Old Testament] people were free to enjoy unbridled prosperity from their material resources” (page 47).

Following an interesting, if brief and marginal, examination of the inter-testamental historical background, Blomberg turns to the New Testament and, in particular, considers his subject from the point of view of redemption. He concludes that “A necessary sign of life in the process of being redeemed is that of transformation in the area of stewardship” (page 244).

Most of this part of the book comprises a detailed examination of passages in the New Testament relating to wealth and poverty. In essence, it is a biblical commentary with a difference: it is examining passages relating to a particular theme rather than commentating on a particular book of the bible. It is thorough, thought provoking and contains a number of helpful insights (e.g. the suggestion that, in the parable of the rich man and Lazarus, Jesus intended Lazarus to be understood as the prototype of the pious poor in Israel; page 123).

Unfortunately, however, it is at this point that the book becomes heavy going. Blomberg wishes to examine every single relevant New Testament passage and the result is a lack of a clear sense of direction in the analysis. Indeed, readers may feel exhausted by the end of it. The desire to conduct an exhaustive analysis is also probably the reason for the author’s final conclusions being squeezed into a dozen pages, which is a pity since the book cries out for a more detailed thematic statement of these conclusions.

Space limitations may also account for some of the book’s other deficiencies. Blomberg states that “the appropriate role of Christian involvement in the state or in the international systems of economics” is almost entirely outside the scope of the book (page 247). In reality, the same is true of the role of the state and economic systems in general. However, Blomberg has a tendency to make brief statements relating to these issues that are at best contentious and in some cases naïve (e.g. he appears to assume the effectiveness of foreign aid and, on one occasion, appears to endorse the view that the poor are poor because the rich are rich, although elsewhere he appears to contradict this; pages 158 and 68, respectively).

Blomberg also has a tendency to make assertions of fact without producing adequate supporting evidence. For example, it would be good to understand the basis for his conclusion that, at the times when the Old Testament prophets were writing, “Rent capitalism (the paying of rent to one or several owners of various factors of production) had led to upper-class exploitation of the peasants” (page 73) and his assertion that many of the Christians to whom the apostle James was writing were “day labourers on the large farms owned by rich absentee landlords” (page 152).

Some of his biblical interpretations are also surprising. The most extraordinary is his attempt to draw a point relating to social justice from Romans 3:22 (page 199). Other examples include his suggestion that the parable of the sower would have reminded a Palestinian farmer “of how much of his produce was ‘unfruitful’, going off to pay rent, tax and the like” (page 114/5) and his tentative endorsement of the suggestion that Jesus’s comments about the widow’s mites “at a secondary level may reflect an ironic lament about a system that allowed the woman potentially to divest herself of any further resources” (page 144/5).  The best that can be said about such views is that they are speculative.

These deficiencies are frustrating since this is an important book. It contains a challenge to all Christians. Those who may be attracted to “liberation theology” or Ronald Sider’s approach should consider whether they have truly absorbed the biblical material or merely over reacted to Christian complacency; those who reject “liberation theology” and Sider’s approach and have a more positive assessment of property and wealth should consider whether they have in practice forgotten biblical teaching about the obligation to help the poor, the purpose of wealth and the obligations it brings with it. Blomberg is keen to avoid false senses of guilt but it is doubtful that anyone who reads this book carefully will end up comfortable and that is probably for the good.

In short, although it is hard unconditionally to recommend this book, it is so important that Christians should read it.


“Neither Poverty nor Riches” was published in 1999 by InterVarsity Press (ISBN-978-0-85111-516-0); 253 pages (excluding bibliography).

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.


The Business World

List of Books Reviewed:

A Voice to be Heard: Christian Entrepreneurs Living out Their Faith by Richard Higginson and Kina Robertshaw

Business for the Common Good by Scott Rae and Kenman Wong

Business Ethics: An Economically Informed Perspective by Christopher L. & Matthias U.

Business Ethics: What Everyone Needs to Know by J. S. Nelson and Lynn A. Stout

Business Ethics and Catholic Social Thought edited by Daniel K. Finn

Complicit: How We Enable the Unethical and How to Stopby Max Bazerman

Enlightened Entrepreneurs: business ethics in Victorian Britain by Ian Bradley

Entrepreneurial Leadership by Richard J Goossen and R Paul Stevens

Faith Driven Investing by Henry Kaestner, Timothy Keller et al.

Firm Commitment by Colin Mayer

Ethical Machines by Reid Blackman

Humans as a Service by Jeremias Prassl

Management as a Calling by Andrew J. Hoffman

Managing as if Faith Mattered by Helen Alford and Michael Naughton

Putting Purpose into Practice eds. by Colin Mayer & Bruno Roche

Prosperity: better business makes the greater good by Colin Mayer 

Quaker Capitalism by Richard Turnbull

Quakers, Business and Corporate Responsibility edited by Nicholas Burton and Richard Turnbull

Reimagining Capitalism: How business can save the world by Rebecca Henderson

Servant Leadership, Social Entrepreneurship and the Will to Serve eds. Luk Bouckaert and Steven C. van den Heuvel

Social Entrepreneurship: New Models of Sustainable Social Change edited by Alex Nicholls

Spiderweb Capitalism by Kimberly Kay Hoang

The Biblical Entrepreneur’s Experience by S Leigh Davis

The Ethical Algorithm by Michael Kearns & Aaron Roth

The Gospel at Work by Sebastian Traeger and Greg Gilbert

The Moral Case for Profit Maximization by Robert White

The Moral Responsibility of Firms By Eric Orts and N. Craig Smith

The Power Law: Venture Capital and the Art of Disruption by Sebastian Mallaby

The Power of Regret by Daniel Pink

The Shareholder Value Myth by Lynn Stout

The Social Dilemma by Jeff Orlowski

The Social Licence for Financial Markets by David Rouch

Tides of Life by Bill Pollard

Who Cares Wins by David Jones

Why Business Matters to God by Jeff Van Duzer


The Purpose of Business:

We have reviewed a number of books that focus on business purpose: The Moral Case for Profit Maximisation by Robert White,  Firm Commitment and Prosperity: Better business makes the greater good by Colin Mayer, The Social Licence for Financial Markets by David Rouch, The Shareholder Value Myth by Lynn Stout, Business for the Common Good by Scott Rae and Kenman Wong, Why Business Matters to God by Jeff Van Duzer, Managing as if Faith Mattered by Helen Alford and Michael Naughton, Management as a Calling by Andrew Hoffman, Tides of Life by Bill Pollard and The Gospel at Work by Sebastian Traeger and Greg Gilbert. All are worth reading. With the exception of The Social Licence for Financial Markets, none is long or difficult to read and none assumes prior specialist economic or other knowledge or education.

The Moral Case for Profit Maximisation (published 2020) is the odd one out of these books.  It is unnecessarily polemical, particular in its second half.  However, this polemic is in defence of a rational and well-founded set of ideas and the book establishes a sound basic framework and asks some central questions. It is an important book.

All of the other books listed above that focus on the purpose of business consider the view  that the basic purpose of public companies is to maximize shareholder value. All consider it to be wrong and suggest that it needs to be abandoned. However, the reasoning that leads their authors to this conclusion varies, as do their positive suggestions. The specific business issues focussed on in the various books also differ, although there is a considerable amount of overlap between them.

Firm Commitment and The Shareholder Value Myth (published 2013 and 2012, respectively), come from a secular perspective which those interested in business purpose may find it helpful to consider before moving on to consider specifically Christian contributions to the subject. The former focuses on the UK (the only one of the six reviewed books to do so) and the latter on the USA. However, neither book is as good at formulating ideas as it is at undermining other people’s ideas.

Prosperity: better business makes the greater good (published 2018) is a more recent book by Colin Mayer. It covers some of the same ground as his earlier works and is a vigorous attack on Milton Friedman’s claim that the sole social responsibility of business is to increase its profits. However, it also seeks to develop Mayer’s idea for changes to UK company law in order to implement his ideas.  Many readers will have serious reservations about these proposals but the book is well written, interesting to read and draws on a lifetime of research into the business organisation.

Putting Purpose into Practice (published 2021) is the product of an extensive research programme undertaken between Mars Catalyst, which is the internal think-tank of the Mars company, and the Saïd Business School. It seeks to achieve far too much and would have been more coherent if it had contained and been shaped by a clear definition of what it calls the “economics of mutuality”. However, it contains some significant insights, offering areas for further research and useful debates on important topics.”

Reimagining Capitalism: How business can save the world (published 2020) covers some of the same group as Mayer’s work. Rebecca Henderson is a staunch believer in the positive power of Capitalism but she argues that its defects are such that it is necessary to “reimagine” it.  She then sets out a five foundation blocks for this reimagination, including abandoning the concept of shareholder value in favour of the creation of shared value and the adoption by enterprises of an authentic purpose.  Whilst these ideas are not new, Henderson has provided a readable and passionate discussion of them.

The Social Licence for Financial Markets (published 2020) is, as its name suggests, focussed on banks and other financial institutions. David Rouch seeks to develop the concept of the “social licence” that was coined by the former Governor of the Bank of England, Mark Carney. The book is not an easy read and there are some serious issues with its basic thesis. Those who persevere will, however, find much food for thought and, probably, plenty to applaud in what Rouch says.

Business for the Common Good and Why Business Matters to God (published 2011 and 2010, respectively) come from an Evangelical Protestant starting point. In contrast with the secular books, they provide a clearly argued opinion as to the true purpose of business. Both are very readable and Christians of all persuasions should find them a good starting point. Those who are not Christian might also find them illuminating. The many Biblical quotations in Why Business Matters to God may put some readers off but Prabhu Guptara’s comment in his endorsement of Business for the Common Good is applicable to both books: “Nothing in this book prevents it enriching the lives of Hindus such as myself – or, as far as I can see, Buddhists, Muslims, agnostics or atheists!”.

Managing as if Faith Mattered is an older book (published 2001). It addresses some of the same issues from the perspective of Catholic Social Thought and, as its title implies, ranges widely into management issues generally. Non-Catholics (and even Catholics who are not familiar with Catholic Social Thought) may prefer to start elsewhere, since the book is heavy going in places. However, it adds a useful additional perspective to the other books and, as would be expected, is carefully argued and builds on previous thinking. Further analysis is provided by “Rethinking the Purpose of Business” (Cortright and Naughton Ed.), which we have not reviewed but which comprises a series of essays on the purpose of business from a Catholic perspective.

Management as a Calling (published 2021) is not written overtly from a religious perspective although the author speaks with evangelistic fervour, challenging business students and those involved in business to embrace fundamental values and thus address the challenges of modern business, including especially climate change.  The book is brief and at times superficial and utopian but it contains much that is thought provoking.

The Gospel at Work addresses questions such as: What role does a person’s faith have at work?  How should work be understood by Christians?  How can we develop a biblical understanding of work?  It is an excellent resource for anyone interested in the topic of faith within the workplace, combining practice and theory well and using clear examples and principles that are backed up by Scripture.

Tides of Life (published 2014) is very different from the other books. It comprises the reflections of a Christian who has spent his life in business (including managing a Fortune 500 company). It is perhaps best to read this either immediately before or immediately after Why Business Matters to God (which Bill Pollard, the author of Tides of Life, describes as a “must read for those who are seeking to glorify God as they do business”). Readers who prefer to start considering a subject by sharing personal stories and experiences should start with Tides of Life; readers who want to have a theoretical framework before plunging into the practicalities should start with Why Business Matters to God.

It is impossible to say that one of these books is “the best”. Readers who only have time to read one of them should probably plump for Business for the Common Good, since it presents a clear and coherent vision of business purpose in a manner that should be accessible to all serious readers. However, those who want to think seriously about business purpose should read several of the books – and then move on to others that we have not (yet) reviewed.


Entrepreneurship and Business Values:

We have reviewed a number of books that consider business motivations and values and which, therefore, consider business purpose, albeit less directly than the books described above. Most of these focus primarily on entrepreneurialism.


Historic Entrepreneurialism

Quaker Capitalism by Richard Turnbull, the director of the Centre for Enterprise, Markets and Ethics (published 2014), considers the Quaker businesses that played a significant role in 19th Century British business (including businesses such as Lloyds Bank, Barclays Bank, Cadbury, Rowntree, Fry, Friends Life, Clarks and others). Their world was very different from that which exists today but their approach to business should provide a challenge to some of today’s unexamined assumptions and, potentially, ideas and inspiration for modern Christian entrepreneurs.

Quakers, Business and Corporate Responsibility edited by Nicholas Burton and Richard Turnbull (published 2019) comprises a collection of essays relating to Quaker business practices and their economic and social views.  Although the essays are of uneven quality, there is plenty in the book to engage any intelligent reader who is interested in business and social issues.  It focusses on the historical model of the Quakers in order to draw conclusions and raise questions that are relevant today.

Enlightened Entrepreneurs: business ethics in Victorian Britain by Ian Bradley is an older book (originally published in 1987 with additional material added in 2007). It describes ten great Victorian Entrepreneurs, some of whom are also considered in Quaker Capitalism. Although there is little interpretation provided, the history itself is challenging and inspiring.


Christian Perspectives on Entrepreneurialism and other Business

Business Ethics and Catholic Social Thought (published 2021) contains a disparate collection of essays by 12 authors, which explore the moral assessment of business in a deeper way than the more usual debates around personal integrity or assessments of capitalism and socialism. The writers are theologically informed and are able and willing to engage with economics and business. The result is an interesting book that can be recommended not merely to Catholics but to a wide range of readers.  

Entrepreneurial Leadership by Richard J Goossen and R Paul Stevens (published 2013) comes from a US perspective.  The authors argue that entrepreneurialism is a process more than a genetic or societal disposition and suggest there are five tenets that make up the essence of entrepreneurship. On occasions, they are perhaps over negative in their assessment of secular entrepreneurs but the book is inspiring and well worth reading.

A Voice to be Heard: Christian Entrepreneurs Living out Their Faith by Richard Higginson and Kina Robertshaw  (published 2017) is an easy and enjoyable read.  It comprises ordered reflections on Christian entrepreneurship based around the stories and thoughts of 50 contemporary UK based Christian entrepreneurs.  It examines a series of issues that are of particular relevance to entrepreneurs and contains challenges for both entrepreneurs and local churches.

The Biblical Entrepreneur’s Experience by S Leigh Davis (published 2021) has a number of defects. Its use of scripture in support of the North American free market system is simplistic and selective and it almost espouses a prosperity gospel, implying that correctly following biblical methods will necessarily bring success. However, it contains some informative material and thought provoking comments and the discussion of the distinctiveness of Christian-led and Christian-inspired businesses is inspiring.

Faith Driven Investing is not another “how to” guide to investing.  Its seventeen contributors explore who faith driven investors are and what they are called to do. They stress the intrinsic worth of work and explore what faith driven investors are for rather than merely what they are against.  The main audience is Christian investors and entrepreneurs but those with a wider general interest in business as a force for good will find it worthwhile.”



Other Perspectives on Entrepreneurialism 

Servant Leadership, Social Entrepreneurship and the Will to Serve (published 2019) is a collection of eighteen separate but thematically connected papers which were given at an international academic conference in Belgium in May 2018. The organising principle is an enquiry as to whether the “will to serve” must always be “crowded out in the real economic arena of hard competition” but the essays are diverse and raise a range of important issues from a variety of perspectives.


Secular Perspectives on Business Issues

The Power Law: Venture Capital and the Art of Disruption (published 2022) is examines the fascinating history of the venture capital from its early days in the 1950s to today.  It contains much that will challenge popular perceptions of the industry.  It is very readable and does not assume prior knowledge. It examines that mindset and business practices of venture capitalists as well as the range of approaches that they have adopted.  Those who wish to be better informed about the industry that has incubated many of today’s biggest companies should read it.

Spiderweb Capitalism describes and draws conclusions from the Kimberly Kay Huang’s research into business in Myanmar and Vietnam. It has serious failings, not least the fact that Huang over generalises and draws unsupported conclusions.  Nonetheless, it should be read by anyone who wishes to be aware of the problems associated with business in emerging markets. 

Although it is not an easy read, Business Ethics: An Economically Informed Perspective provides a comprehensive overview of the essential concepts of business ethics and a wide-ranging analysis of the issues and tools that corporations need to be aware of as they consider the ethical and moral dimensions of their activities.

Business Ethics: what everyone needs to know interweaves the field of business ethics with components of law and legal practice and branches out into subjects such as philosophy, psychology and organisational management.  It is a worthwhile read and, although it is predominantly aimed at business and legal practitioners, those outside the field will find it thought provoking and worthwhile.

The subject of Complicit: How We Enable the Unethical and How to Stop is important and relevant to many areas of life as well as the business world. Unfortunately, however, the book is not well organised and is ultimately disappointing.  Readers should not seek it out.

The Power of Regret is not a business book but it has clear application in a business context. Pink aims to challenge the US obsession with positivity and reclaim regret not just as an unavoidable part of mature human living but also as a means of improving decision making and performance.   A wide range of people will benefit from reading it.”

In Humans as a Service, Prassl re-evaluates the merits and pitfalls of the “gig economy” and seeks to discover ways that society might benefit from it without falling into extreme forms of labour force commodification. The book focusses on regulatory solutions and lacks a discussion of broader considerations but it is nonetheless a good and informative read.

The holding of corporations to account for their actions has become a major issue in recent years but there remains confusion as to the appropriate basis for this and, hence, the extent to which corporations (rather than individuals associated with them) should be held responsible for wrongdoing. As its name suggests, The Moral Responsibility of Firms edited by Eric Orts and Craig Smith (published 2017) addresses an important aspect of  this issue.  It comprises 12 high quality essays from leading academics who have a variety of different views.  It deserves to be widely read.

Who Cares Wins by David Jones, the former CEO of Havas, the global advertising agency (published 2011) is not about entrepreneurs. It considers the link between social media and socially responsible business. Its basic thesis is revealed in the title and, although some may doubt whether this is always true, no-one can doubt the basic practicability of the points made in the book. It is also helpful to consider ethical issues in the harsh light of modern communications and mass markets.

As its name suggests, Social Entrepreneurship: New Models of Sustainable Social Change edited by Alex Nicholls (published 2006) relates specifically to social entrepreneurship. It is not an easy read. In particular, some of the academic chapters are somewhat turgid and repetitive. However, it is a first class reference book that brings together in one place, and for the first time, the exciting stories of social entrepreneurship, analysis of issues and the academic research agenda.

The Ethical Algorithm addresses the ethical issues arising out of the ever increasing use of algorithms in decision making, from issues of privacy and fairness to the social outcomes of algorithm design. The authors are, on occasions, overly zealous in viewing the world exclusively through the lens of computer science and many questions are left unanswered but anyone with an interest in these ethical implications should read this book.

Ethical Machines (published 2022) considers the moral questions associated with the use of artificial intelligence and machine learning.  It is aimed at the business community and seeks to dispel myths and scepticism relating to ethics in the context of AI, encouraging businesses integrate ethical questions into their consideration of AI issues and suggesting how they might do so. It offers plenty of food for thought.”

The Social Dilemma is not a book: it is a Netflix documentary directed by Jeff Orlowski (released September 2020).  It is structured around interviews with pioneers at leading social media platforms who believe that things have gone wrong and its thesis is that the tech industry has lost its ethical bearings and, specifically that the social media platforms have sacrificed ethics in the pursuit of profit. The documentary provides a succinct introduction to this issue.





List of Books Reviewed:

A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries by Pranab Bardhan

After Piketty edited by Heather Boushy et al.

An Idol Unmasked: A Faith Perspective on Money by Peter Selby

And the Weak Suffer What They Must? by Yanis Varoufakis

Aquinas and the Market: Toward A Humane Economy by Mary Hirschfeld

Capital and the Kingdom by Tim Gorringe 

Capitalism and Democracy by Thomas Spragens

Capitalism Without Capital by Jonathan Haskel & Stian Westlake

Christianity and the New Spirit of Capitalism by Kathryn Tanner

Crumbling Foundations by Guy Brandon

Democratic Capitalism at a Crossroads By Charles Boix

Economics for the Common Good by Jean Tirole

Faith, Finance, and Economy by T. Akram and S. Rashid (eds.)

Free Trade Under Fire – Fifth Edition” by Douglas A. Irwin

Global Business by Mahesh Joshi & J R Klein

Global Discord by Paul Tucker

Good News to the Poor: John Wesley’s Evangelical Economics by Theodore Jennings

How Will Capitalism End? by Wolfgang Streeck

Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century by Vernon L. Smith and Bart J. Wilson

In Defence of Public Debt by Barry Eichengreen et al.

Platform Capitalism by Nick Srnicek

Redeeming Capitalism by Kenneth J. Barnes

Saving Capitalism: For the Many, not the Few by Robert Reich

Money and the Rule of Law by Peter J. Boettke, Alexander William Salter and Daniel J. Smith

The Community of Advantage by Robert Sugden

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

The Economics of Belonging by Martin Sandbu

The Ethical Capitalist by Julian Richer

The Future of Capitalism by Sir Paul Collier

The Job by Ellen Shell

The Politics and Ethics of the Just Price edited by Peter Luetchford & G. Orlando

The Power of Creative Destruction by P. Aghion et al.

The Rise of the Robots by Martin Ford

The Second Machine Age by Erik Brynjolfsson & Andrew McAfee

The Spirit of Democratic Capitalism by Michael Novak

The Wealth of Religions by R. M. McCleary and R. J. Barro

The World Made Otherwise by Timothy J. Gorringe

Winners and Losers by Diana C. Mutz

With Liberty and Justice for Whom? by Craig Gay


Christian Viewpoints:

Christians have long debated the merits or otherwise of the free market without ever reaching a consensus. With this in mind, we have reviewed the two books that, better than any others, reflect the two main approaches that Christians have adopted over the past century: The Spirit of Democratic Capitalism by Michael Novak (published 1982) and Capital and the Kingdom by Tim Gorrince (published 1994).

The Spirit of Democratic Capitalism strongly advocates a free market approach. It was published at a time when the terms “capitalism” and “the free market” were used in many Western Christian circles with contempt and many Christians believed that socialism was the only legitimate Christian option. It played a leading role in changing that position and it is still worth reading today as a clear justification of what it calls “Democratic Capitalism”.

Capital and the Kingdom comes from an essentially Marxist viewpoint and it may be felt that this is now so dated that it can be of no more than historic interest. However, the ideas set out in it are often heard from the mouths of bishops and other church leaders and there are signs that they are making a political comeback. It is thus important that their theoretical basis be understood and analysed and this book contains a clear exposition of them.

Timothy Gorringe’s more recent book, The World Made Otherwise (published 2018) repeats his call for radical, political, economic and social change and environmental issues have added to the imperative tone of his appeals for this. Unfortunately, his proposals are Utopian and the book is unlikely to prove persuasive to those who do not share his liberal Christian and Marxist views.

Christianity and the New Spirit of Capitalism by Kathryn Tanner (published 2019) also comes from a left of centre starting point.  It purports to offer “an imaginative counter to the whole world of capitalism” but its description of capitalism is a muddled caricature and it lacks suggestions that would help people in relation to their everyday work and other actions. Those looking for help in relation to these things would be better off reading some of the other books reviewed in the section of this website entitled “The Business World” (see, in particular, those mentioned under “The Purpose of Business”).

Faith, Finance, and Economy (published 2020) is a fascinating miscellany of essays exploring the relationship between fair and financial or economic matters. Its focus is on Christian perspectives but it also contains interesting essays relating to consumerism in China, Islamic finance and faith in the work place.  Although not all the essays will interest all readers, it is a good introduction to various important issues.

Those interested in the range of Christian views should also read With Liberty and Justice for Whom? by Craig Blomberg. It analyses the spectrum of conservative protestant views about capitalism. It is also quite old (published 1991) but remains valuable as an overview of the various approaches and the issues raised in it are of continuing importance. Indeed, there would be merit in reading it before reading any Christian analysis of capitalism since it will help lay bare the theological and other factors underlying such analyses.

Good News to the Poor by Theodore Jennings (published 1990) provides an historical perspective. It is an examination of the economic views of John Wesley. It is thus a more specialist book than most of the others that we have reviewed and many people will feel that they can give it a miss. Furthermore, as Richard Turnbull’s review indicates, the book does not always reflect Wesley’s thinking in a balanced way. However, it is wise to allow the views of Christians from past centuries to challenge our views today and consideration of John Wesley’s views on economics may still have a role to play in developing our thinking.

The other books that we have reviewed all set out recent Christian thinking on the economy but they have very different angles on the relevant issues.

Redeeming Capitalism by Kenneth Barnes (published 2018) sets out to point the way to the reform of current western capitalism.  Barnes suggests that this suffers from serious flaws that derive from a “moral vacuum”.  However, he does not reject capitalism as a whole.  Rather he suggests that we need to replace “post-modern capitalism” with “virtuous capitalism”.  Unfortunately, although it is interesting in parts, the book is superficial: it is long on eye-catching statements and short on justification and it presents no ideas as to how in practice the desired change might be effected.  It does not advance the debate about practical reform.

Aquinas and the Market: Toward A Humane Economy (published 2018) is certainly not superficial.  Mary Hischfield has doctorates in both economics (Harvard) and theology (Notre Dame) and she seeks to bring Thomist thought to bear on current economic issues. This may suggest that the book is heavy going but, although complex, it is readable and worth reading. It offers a perspective on the underlying purpose and functioning of a market economy that is very different from those with which most people are familiar.

Crumbling Foundations (published 2016) is only 40 pages long and it focuses on a single, specialist subject: it is, it claims, “A biblical critique of modern money”. Many people will wish to take issue with its application of a number of passages of the bible and others will find some of the issues too specialised for them. However, it is a good introduction to some of the issues raised by the modern global financial system.

An Idol Unmasked: A Faith Perspective on Money (published 2014) is by Peter Selby, the retired former Anglican Bishop of Worcester. It is a polemic against modern money and sets out an attitude to money that is widely held within the Church. It may be worth reading for this reason alone. However, it does not have anything materially new to say on its subject and it does not contain a balanced appraisal of the complex issues that arise out of the modern monetary system. Hence, those wishing to consider these issues are probably best advised to start elsewhere.


Contemporary Issues:

We have reviewed a number of recently published books relating to current issues in western economies. Some of these relate to the overall direction of travel of these economies whilst others focus on specific issues (frequently related to the impact of technology). Many are critical and a number are hostile to capitalism as a system (at least in the form currently experienced in the West).

Capitalism and Democracy (published 2021) should provide a good introduction to the issues that underlie contemporary disagreements about the role of the market and of government in the economy. It is aimed at the general public who want to improve their understanding of the relevant issues and university students and many others will benefit from its succinct overview of the relevant issues.  In an age of political polarisation, Spragens refreshingly argues that reasonable people may differ and that we need to bear in mind that we cannot have it all so we need to balance differing objectives.

The Economics of Belonging (published 2020) appears to be aimed at the kind of person who reads the Financial Times. Sandbu argues that Western liberal democracy is under threat from within owing to the erosion of a sense of economic belonging. He presents a radical programme for dealing with this threat and, although much of what he says is contentious and unconvincing, the problem is real and those concerned about the current situation will benefit from reading what he has to say.”

The starting point of A World of Insecurity is similar to that of The Economics of Belonging.  The author. Pranab Bardhan, adopts a broader perspective than Sandbu, focussing on India and China as well as the West, and the book is interesting in parts.  However, it appears to be primarily written for those on the Left who are in search of a programme. It is unlikely to convince those who don’t share its ideology and even those on the Left would be better off reading The Wolf at the Door.

Thomas Piketty’s Capital in The Twenty-First Century has achieved almost cult status but its arguments require careful critical evaluation.  After Piketty edited by Boushy, DeLong and Steinbaum (published 2017), is a significant academic contribution to this process.  Most of its authors are left-leaning but the book as a whole is by no means uncritical of Piketty’s thesis. It suffers from a number of flaws and there are parts of it that non-economists will find challenging but it is well worth reading.

Economics for the Common Good by Jean Tirole (English edition published 2017) is an excellent book written by one of the finest minds of our time. It is long (563 pp) but it is aimed at the general public and Jean Tirole, is masterful in using simple language to convey highly complex issues. It focuses on both the purpose of economics and the challenges that the world now faces. Although no book is value free and few readers will agree with all that Tirole says, he does not adhere to any clear cut ideological line, leaving the readers free to make up their own minds.

The target audience of The Power of Creative Destruction (published 2021) is less clear but anyone who is interested in the economics of innovation and is not put off by innumerable graphs will find it valuable.  The authors draw attention to a number of studies that should challenge those from all parts of the political spectrum and challenge policy makes to accompany the process of creative destruction without obstructing it.

Capitalism Without Capital (published 2018) is an ambitious attempt to analyse the influence of the growth and influence of intangible assets. It is perhaps best suited to a reader who has a specific interest in the world of financial markets and it requires some basic literacy in finance and macroeconomics but it does not make excessive use of technical jargon. It brings a compelling perspective on the implications of the intangible asset economy and there is a lot in it to applaud.

The Ethical Capitalist by Julian Richer (published 2018) is by no means uncritical of modern capitalism but Richer believes that it is the only viable economic system and, when pursued responsibly, a force for good.  He thus focusses on what “good capitalism” looks like, drawing on his experience as a successful entrepreneur.  Some of his comments lack depth but he makes many challenging points and the result is a book that, overall, is compelling, well evidenced and convincingly nuanced.

Although recently published, How Will Capitalism End? by Wolfgang Streeck (published 2016) largely comprises a collection of previously published papers, which gives it an unstructured feel. It is deeply pessimistic in tone and the author’s structuralist view of society pervades the analysis. This viewpoint needs to be understood and considered but this book does not provide positive suggestions and its approach is philosophically flawed.

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg (published 2011) is also gloomy in tone.  It suggests that economic growth as we have become accustomed to it over the past century or so is over and done with.  It is well written and thoroughly researched but those looking for a balanced account of the long-term economic outlook should look elsewhere.

The Future of Capitalism by Paul Collier (published 2018) overtly builds on the philosophical foundations laid by David Hume and Adam Smith and nineteenth century American pragmatists.  Collier believes that capitalism is the only economic system that can generate mass prosperity. He seeks to restore ethics with the state, firm, family and world and presents a plethora of idea for restoring an inclusive society.

Platform Capitalism by Nick Srnicek (published 2017) has many defects and, were it longer, these might outweigh its merits. However, it is short and is worth reading as a brief analysis of the digital age phenomenon of “platform companies”. It should assist understand of the way in which the business world is moving and reduce the risk of outdated solutions being proposed to modern business problems.

The authors of Global Business (published 2018) come from a business background and, unsurprisingly, come from a very different viewpoint form Srnicek.  The book is short (158 pages) but attempts to cover a wide range of issues relating to the world economy. It is thus lacking in depth but it sets out great deal of material in a concise and readable way and may well act as a reasonable introduction to a number of contemporary issues.

Saving Capitalism: For the Many, not the Few by Robert Reich is another recent contribution to the debate (published 2016). It also comes from the left of the political spectrum (although it is not Marxist) and it sees redistribution of wealth and other activist governmental intervention as the solution to the issues that it perceives exist in capitalism. It is more polemical and directly political that most of the other books that we have reviewed but it is a worthwhile read. Although we have categorised it as a book about capitalism, much of its concern is about poverty and might be read alongside Wealth, Poverty and Politics by Thomas Sowell (see our reviews relating to “Wealth and Poverty” in the tab below) which advocates a radically different, free market, approach to the alleviation of poverty.

And the Weak Suffer What They Must? Europe, Austerity and the Threat to Global Stability (published 2016) was written by the Professor of Economics of the University of Athens (Yanis Varoufakis) who, as Finance Minister of Greece, was at the heart of the bail out negotiations between the EU and Greece in the first half of 2015. It analyses key aspects of modern European economic and political history and draws some depressing conclusions as well as implicitly imposing some important questions relating to the direction of politics and economic policy in Europe.”

The Job by Ellen Shell (published 2018) considers the issue of the future of work in the digital age.  It is an easy read and includes memorable stories and phrases.  Unfortunately, however, it is deeply flawed.  Whilst many will enjoy reading it and will be stimulated by parts of it, those who are seeking careful analysis and clearly worked through proposals need to look elsewhere (perhaps to some of the other books that we have reviewed).

The Rise of the Robots and The Second Machine Age address broadly the same issue:  the impact of technology upon work, business and society.  Both recognise the benefits that technology has brought but the former is largely pessimistic about its future impact whilst the latter is largely optimistic.  They both contain serious thought and insight and they are worth reading together, allowing one to challenge the other.

Democratic Capitalism at a Crossroads (published 2021) is a further book that considers the impact of technological change on society.  It does so by exploring 19th Century Manchester capitalism, 20th Century Detroit capitalism and 21st Century Silicon Valley capitalism. It is well written, comprehensively researched and undogmatic, presenting arguments both for and against its various proposals.

Free Trade under Fire (fifth edition published 2020) is, as the title suggests, a defence of international trade. It aims to explain some basic economic principles and empirical evidence regarding international trade and trade policies.  In an age of increasing nationalist rhetoric, we need to examine afresh the issues, to re-educate ourselves and this book is an excellent step in that direction.

Money and the Rule of Law (published 2021) is more specialist than most of the books that we have reviewed: it deals with the question, whether discretionary central banking is a good or a bad thing. It nonetheless deserves to be widely read since it raises issues of societal importance that deserve to be debated far more widely than they are.  The authors argue that there are practical reasons for rejecting discretionary central banking and, more fundamentally, that it is inconsistent with the rule of law and thus incompatible with liberal democracy.  The book is US centric but the issues are of general applicability and, despite being technical in part, is not a difficult read.

In Defence of Public Debt presents a thorough history of public debt from its origins in Greek city-states, weaving in a history of taxation and monetary systems. The book promises a “balanced account” but in fact it fails adequately to analyse the evidence of a negative link between public debt above a tipping point threshold and economic growth or the moral issues associated with such debt. Nonetheless, it contains much of value to those interested in economic history.

In Global Discord, the former Deputy Governor of the Bank of England, Paul Tucker draws attention to the deep cleavage in modern international affairs and suggests how Western democracies should respond to this.  The book is not an easy read and is not specifically about capitalism, business or wealth and poverty but the issues that it discusses are of crucial importance to all of these thing and those who take the trouble to read it will find it rewarding.”


Behavioural Economics and Anthropology:

We have reviewed two very different books that consider the implications of the findings of modern behavioural economics:

Humanomics by Vernon Smith  and Bart Wilson (published 2019) resurrects Adam Smith’s first book, The Theory of Moral Sentiments, to explain the results of modern two-person trust gain experiments. The authors suggest that Adam Smith’s theory has a predictive force that is lacking in the concept of utility maximisation, which has been a governing model in economics for many years. The book is thought provoking and, although not an easy read for the non-specialist, should be read by those who want to think further about human economic behaviour.

The Community of Advantage by Robert Sugden (published 2018) also addresses the results of modern behavioural economics.  It aims to meet head on the challenge that these present to the liberal tradition.  Robert Sugden shares Hume’s scepticism about human rationality and rejects previous attempts to meet this challenge on the basis of assumed “latent preferences”.  He suggests that the use of what he calls the “Individual Opportunity Criterion” is the key to doing so. The book is heavy going and many will question Sugden’s moral relativism but it is worth persevering with it.

Our final review relates to a collection of essays in economic anthropology: The Politics and Ethics of the Just Price edited by Peter Luetchford and Giovanni Orlando (published 2019).  The approach of the authors is academic and some of the language is unnecessarily turgid but the book is fascinating and the essays include real insights, extraordinary contexts, complex history and genuine engagements with the relationship of social and economic considerations in markets and pricing.

The Wealth of Religions (published 2019) is an unusual book.  It explores both the interplay between religion and economic growth and issues associated with the connection between religion and the political economy. There is an element of miscellany about it but it addresses interesting and thought provoking questions and the diversity of its material should ensure that a wide range of readers will be interested in at least some parts of it.

Winners and Losers: The psychology of foreign trade (published 2021) seeks to understand what determines public attitudes to free trade (which tend to be far more negative than those of economists). Mutz summarises her own research and considers the evidence gathered by others, draws conclusions and reflects on their implications.  The result is fascinating and should be considered by all those who wish to see democratic countries pursue free trade.


Wealth and Poverty

List of Books Reviewed:

America’s Untold Story of Immigrant Success by Ran Abramitzky and Leah Boustan

Anglican Social Theology – Renewing the vision today edited by Malcolm Brown

Bourgeois Equality by Deirdre McCloskey

Christianity & Social Service in Modern Britain by Frank Prochaska

Divested: Inequality in the Age of Finance by Ken-Hou Lin and Megan Tobias Neely

Faith in Markets? Abrahamic Religions and Economics edited by Benedikt Koehler 

For the Least of These edited by Anne Bradley and Art Lindsley

Global Poverty: A Theological Guide by Justin Thacker

God and the Evil of Scarcity by Albino Barrera

How the World Became Rich by Mark Koyama and Jared Rubin

Missional Economics: Biblical Justice and Christian Formation by Michael Barram

Neither Poverty nor Riches by Craig Blomberg

Poverty and Compassion: The Moral Imagination of the Late Victorians by Gertrude Himmelfarb

Public Good by Private Means by Rhodri Davies

Remaking One Nation by Nick Timothy

Rethinking Poverty: Income, Assets, and the Catholic Social Justice Tradition by James Bailey

Rethinking Poverty: What makes a good society? by Barry Knight

The Populist Temptation by Barry Eichengreen

The Poverty of Nations by Wayne Grudem & Barry Asmus

The Wealth and Poverty of Nations by David Landes

The Wolf at the Door by Michael Graetz and Ian Shapiro

Theology for Changing Times edited by Chris Baker & Elaine Graham

Theology Reforming Society – Revisiting Anglican Social Theology edited by Stephen Spencer

Wealth, Poverty and Politics by Thomas Sowell


Economic History:

Those seeking to deal with issues relating to poverty need to comprehend what has historically produced wealth. With this in mind, we have reviewed two magisterial works that address that question:

The Wealth and Poverty of Nations by David Landes (published 1998) is a modern day classic (and our review is thus an exception to our normal principle of not reviewing the “classics”).  It considers what makes nations and peoples rich and what makes them poor from an historical perspective, focusing on culture as a key determinant.  All subsequent discussions of this subject have had to interact with it (e.g. it is frequently referred to in Wealth, Poverty and Politics and The Poverty of Nations). It is a “must read” for anyone who wishes seriously to consider the causes of wealth and poverty and, fortunately, its style and approach makes it accessible to all serious readers.

Bourgeois Equality (published 2016) is the final volume in Deirdre McCloskey’s trilogy about Bourgeois values.  It is a “must read” for all who wants to broaden their perspective on the causes of our current prosperity and to consider possible solutions to current economic and societal issues in the light of the lessons of the past.  McCloskey is Distinguished Professor of Economics, History, English and Communications at the University of Illinois in Chicago. She asserts that it was “ideas” not material causes that lay behind the Great Enrichment and defends her thesis by reference to everything from the novels of Jane Austin to nineteenth century post-millennialism.

Those who are seeking a high level overview of the conflicting explanations of wealth creation are likely to be helped by How the World Became Rich (published 2022). This provides an accessible introduction to the competing explanations for sustained economic growth in a mere 240 pages.  Despite its brevity, it draws on recent research from around the world.


Philanthropy and other Voluntary Action:

Many modern approaches to poverty assume that is has to be tackled by state action. However, the effectiveness of this in many cases is open to doubt and the side effects of it are considerable. Hence, it is worth considering the extent to which there is a role for philanthropy and other voluntary action and we have reviewed several books (all secular) which assist in this:

Christianity & Social Service in Modern Britain by Frank Prochaska (published in 2006) looks at the voluntary provision of social services by Christians in the UK in the nineteenth century and the decline in that provision and of Christianity itself since then.  It has a number of failings but it is engaging and an eye opener in relation to the historic extent of voluntary action. Any discussion of the Welfare State today needs to take account of what Prochaska describes and interact with his arguments.

Poverty and Compassion: The Moral Imagination of the Late Victorians by Gertrude Himmelfarb is now quite old (published 1991) and it is not an easy read but it is worth reading.  It considers how the Victorian era understood the moral ideas and concepts of poverty and compassion and responded to them both practically and intellectually.  The Victorians are not presented as a solution to today’s problems but those who wish to participate in the debate about the possible solutions would do well to consider the ideas and concepts that Himmelfarb analyses.

The subject of Public Good by Private Means by Rhodri Davies (published 2016) is much narrower. It considers issues associated with UK (and, to a lesser extent, US) philanthropy and its main (though not exclusive) focus is on philanthropy as a means of tackling poverty. It contains a good historical overview of its subject and is worth reading, not least in order to understand the attacks on philanthropy and philanthropists that have, rightly or wrongly, been made over the years. Some of its underlying assumptions are unstated and it needs to be read with care but it is both interesting and important in the context of our overall response to poverty.


Christian Viewpoints:

We have reviewed various books that consider, from different perspectives, aspects of the theology of wealth and poverty, including the appropriate Christian response to poverty. Some of these also consider aspects of economic history or the role of voluntary action and thus their subject matter overlaps with the books listed above.

Faith in Markets: Abrahamic religions and economics  edited by Benedikt Koehler (published 2023) offers a series of studies of the ways in which the Abrahamic faiths have steered adherents towards practices that tend towards markets and sheds light on the ways in which market concepts are embedded in or developed by religious thought. It also examines tensions that arise with the contemporary application or interpretation of religious authorities in these areas.

For the Least of These edited by Anne Bradley and Art Lindsley (published 2014). This is a collection of essays mainly from a US viewpoint addressing the question how Christians should address poverty. It is not a systematic treatment of this subject and it has deficiencies (including, in some places, an overly polemical style) but it is challenging and interesting and should inspire reflection and further reading.

Neither Poverty nor Riches by Craig Blomberg (published 1999) is described by its author as a “biblical theology of material possessions”.   It is not an easy read and its analysis of every single New Testament passage relevant to its subject may leave the reader feeling exhausted but it is an important book that deserves to be read even if this takes time.

The Poverty of Nations by Wayne Grudem and Barry Asmus (published 2013) sets out, in the words of its authors, “to provide a sustainable solution to poverty in the poor nations of the world”.  It is a flawed book and its defects may well alienate some readers.  Nonetheless, there is enough that is good in the book to make it worth reading.  It contains a robust defence of the free market (including its moral benefits) whilst also stressing the institutional aspects of any solution to poverty.

Global Poverty: A Theological Guide by Justin Thacker (published 2017) seeks to set out a systematic theology of global poverty.  It could be read to provide a contrast with the views expressed by Grudem and Asmus in The Poverty of Nations (which Thacker attacks).  However, whilst the book contains some worthwhile analysis (particularly of the theologies of some Christian aid agencies), its defects are serious and those wishing to consider an economically and theologically sound approach to poverty would be well advised to look elsewhere.

God and the Evil of Scarcity by Albino Barrera (published 2005) addresses a timeless question: why would an omnipotent and benevolent God permit evil? Barrera is both a theologian and an economist and he interacts with Malthus and others, viewing material poverty as a moral evil that God wants us to eradicate through the redistribution and transfers of wealth to the poor. It assumes some prior exposure to metaphysics and is heavy going in parts but it is important in seeking to understand economics in the context of God’s will.

Anglican Social Theology – Renewing the vision today edited by Malcolm Brown (published 2014) comprises an four essays which wrestle with the idea that there is a distinctive Anglican social theology.  The essays are of high quality and the introduction and conclusion of the editor are helpful but the book’s intended audience is unclear and there is a danger that it may prove to be too abstract and theologically dense for politicians or those engaged in practical social action and too general for theologians.

Theology Reforming Society – Revisiting Anglican Social Theology edited by Stephen Spencer (published 2017) has a similar subject focus but is very different.  It largely comprises adapted versions of papers presented at a conference in January 2017.  The papers are properly scholarly but lively and the book provides a challenging but good introduction to Anglican Social Theology for those who know relatively little about it.

Theology for Changing Times also looks at the Anglican tradition, in this case relating to public theology.  It comprises essays by twelve different authors and is a piece-meal book which does not describe a systematic Anglican approach to public theology or economic issues.  However, it illustrates the kind of ways in which the Church might continue to engage in public theology and contains a good number of valuable nuggets.

Missional Economics: Biblical Justice and Christian Formation engages in the dialogue regarding questions of justice as they relate to economics. It is aimed at Christians and begins with a discussion of “missional hermeneutics”, the totality of the mission of the Church, before moving on to the author’s view of that mission and its implications.  There is much that is helpful in this but it is flawed and Christians wanting to consider the application of the bible to social and economic problems would be better advised to start elsewhere (e.g. with some of the other books that we have reviewed).

In Rethinking Poverty: Income, Assets, and the Catholic Social Justice Tradition (published 2010) James Bailey argues that public policy in relation to poverty has placed too little emphasis on assets and savings. He uses concepts in Catholic Social Thought to build his case, including Catholic teaching on ownership, material well-being and the common good.  In parts, many will take issue with some of Bailey’s more ideologically inclined statements and, in parts, the book is US-centric but it is clear and well researched, promotes an under-explored thesis and is a worthwhile read.


Secular viewpoints:

We have reviewed various secular books that look at modern social and economic issues.  These are very different from one another. In particular, some adopt an historical perspective whilst some seek to establish or defend contemporary political programmes. Streets paved with gold:

Streets of Gold: America’s Untold Story of Immigrant Success is a highly engaging and accessible book that offers a blend of the authors’ pioneering original research and broader social science literature. It should be read by anyone who wishes to make informed statement about the often contentious subject of immigration.

Nick Timothy was joint Chief of Staff to British Prime Minister Theresa May in the run up to the 2017 general election and was the main author of the Conservative Party Manifesto for that election. In Remaking One Nation: The Future of Conservatism (published 2019) he seeks to analyse what is currently wrong in the UK and to change the political weather from a right of centre perspective.  Although some may question whether what he suggests will survive Covid-19, it is arguable that it is more relevant now than ever and the book has something to say to those in all parts of the political spectrum.

Rethinking Poverty: What makes a good society? by Barry Knight (published in 2017) comes at the issue of poverty from a left of centre perspective. It considers the nature of a good society without poverty and the way of building such a society.  It underestimates that transformative power of free enterprise and overestimates that benefits of central government but it refrains from being overtly propagandistic and it is a useful contribution to the discussion on poverty in the UK.

The Wolf at the Door by Michael Graetz and Ian Shapiro (published 2020) also comes from a left of centre perspective and is also commendably free of dogma.  The authors suggest that the left has become transfixed by inequality at the expense of focussing on the real issue: economic insecurity.  They aim to identify the various elements of economic insecurity and come up with a feasible agenda for addressing these.  One may challenge the detail of their proposals but this is a constructive and engaging book that has things to say that are worth considering.”

Divested: Inequality in the Age of Finance by Ken-Hou Lin and Megan Tobias Neely (published 2020) focusses on exactly the issue that The Wolf at the Door claims is a distraction (i.e. inequality).  The authors lay blame at the door of what they call the “financialization” of the US economy.  They provide a wealth of interesting statistics and raise some interesting points. However, their analysis is most unsatisfactory and by their own admission those who, despite the warnings in The Wolf at the Door, are seeking solutions to modern inequality will need to look elsewhere.”

The Populist Temptation:  Economic Grievance and Political Reaction by Barry Eichengreen (published in 2018) aims to look at Western history in order to identify the economic, social and political circumstances under which populism tends to take hold together with the most effective policies to combat it.  Eichengreen’s view that government action and regulation is the solution is open to challenge but the book contains much that is likely to enhance the reader’s understanding of populism and provides much needed historical perspective.

Wealth, Poverty and Politics by Thomas Sowell (revised edition published 2016) is overlong and largely repeats things that its author has been saying for many years. However, it is worth reading as a robust and systematic attack on the prevailing liberal approach to the tackling of poverty that is supported by a wealth (but not an overwhelming quantity) of quantitative and qualitative material. It could be read alongside Saving Capitalism: For the Many, not the Few, which presents what might be called the standard left of centre approach (see our reviews relating to “Capitalism”).



Richard Godden: “Firm Commitment” by Colin Mayer

Colin Mayer is Professor of Management Studies at the Saïd Business School in Oxford. He believes that “the corporation is failing us” and that dramatic changes in the rights and obligations of those who control corporations are needed. Firm Commitment explains why and makes proposals for change.

Mayer uses the term “corporation” to refer to the kind of limited company that is commonly used by large businesses. He recognises the huge benefits that corporations have brought but he considers them to be seriously flawed. Indeed, he describes his book as “both a tribute to and a condemnation of this remarkable institution that has created more prosperity and misery than could have ever been imagined”. He perceives the main problem to be that corporations are seen as the creatures of their shareholders, rather than as independent entities, and this leads to the pursuit of shareholder value over the interests of stakeholders other than shareholders. In support of this, he cites numerous well-known corporate scandals.

The primary focus of his book is the UK and Mayer appears to believe the position here is worse than elsewhere. However, he is not starry eyed about any currently available option. Notably, he recognises that family and other tightly owned companies may have their own problems and scandals (citing Parmalat) and, in any event, family ownership “is not the resolution to the 21st–century corporation’s problems”. He is also dismissive of the attempts that have been made in recent years to correct problems through regulation (which, he asserts, “promotes immoral conduct”) or through enhanced corporate governance (which, he suggests, may promote increased shareholder control to the further detriment of other stakeholders). He suggests that what we need is “to find mechanisms by which companies can demonstrate a greater degree of responsibility themselves without relying on others to do it for them”. Specifically, he suggests that “we need to establish the means by which corporations can demonstrate more commitment to their stakeholder community”.

Salvation is in what he calls “trust firms”, which would be like existing corporations subject to three adaptations: entrenched within their constitutions would be corporate values (which might reflect the values of their founders, public policy or other things); there would be trustee boards to act as custodians of these values; and the corporation would have “time dependent shares” whereby the voting rights of shareholders would depend upon the extent of their commitment to hold their shares for the longer term (e.g. a share which its holder is committed to hold for a further ten years would have ten times the voting rights of a share which the holder is only committed to hold for one more year).

Mayer does not want any compulsion to be applied in relation to this. He argues that diversity in corporate forms should be permitted. He does, however, suggest that there be tax incentives to encourage the use of trust firms.

There is a lot to applaud in this book. In particular, there is depressingly little evidence that increased regulation or the focus on corporate governance in recent years has materially improved the corporate world and, against this background, Mayer’s stress on the importance of “commitment” as opposed to “control” deserves serious consideration. It links with ideas derived from the work on “relational thinking” that has been undertaken in recent years by, amongst others, the Relationships Foundation and Tomorrow’s Company. Furthermore, the concept of a “trust firm” is an interesting one that could contribute to the development of a broader view of corporate purpose and responsibility.

Unfortunately, however, this is a flawed book. Perhaps Mayer has tried to cram too much into 250 pages. Whatever the reason, almost every page contains contentious statements or statements that require significant qualification. Although there are plenty of footnotes referring to past research, there are also many ex cathedra statements as well as many assertions and assumptions with which specialists will take issue. For example, some of the statements of law are, at best, partial and Mayer seems unaware that much of what he proposes can already be achieved through existing law (as, for example, the entrenchment of editorial independence within the constitution of The Economist Newspaper Ltd illustrates). He also accepts dubious interpretations of past events. In particular, his long description of the Cadbury takeover accepts the views of its former chairman, Sir Roger Carr, without examination. This is a pity because others involved in that takeover (including former Cadbury directors) have different views and consideration of these might have led to Mayer modifying some of his suggestions.

More seriously, Mayer’s analysis of the objective of corporations is unhelpful. He states that “shareholder value is an outcome not an objective” and even quotes former GE CEO Jack Welsh in support of his views. However, his argument only addresses the use of short term share prices as the test of shareholder value and his suggested alternative as a corporate objective is demonstrably inadequate. He asserts that a corporation’s “first and foremost objective is not to its shareholders, or to its stakeholders. It is to make, develop, and deliver things and to service people, communities, and nations”. It is unclear from where he derives this overarching normative assertion and, in any event, it is no more useful than saying that the objective of corporations is “to do things”! It does not help a corporation’s management to decide whether they should remain in heavy engineering or move to IT or whether to be a volume manufacturer or a niche player.

Finally, Mayer’s evident confidence that the trust firm does not suffer from serious flaws and is the solution to the myriad of issues that he has identified is not backed-up by careful analysis. He appears to recognise this since he says that his ideas need to be “subject to careful scrutiny”. They certainly do and, whilst they are undoubtedly worth such scrutiny, it may be seriously doubted whether they are the “cure all” that Mayer appears to believe.

That said, provided that the book is read critically, it is well worth reading.


“Firm Commitment” by Colin Mayer was first published in 2012 by Oxford University Press (ISBN-10: 0199669937).

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Lord Griffiths: The public expect business to be ethical

This is a talk given by Lord Griffiths of Fforestfach at an event organised jointly by the Centre for Character and Values at the Legatum Institute and Clifford Chance LLP. and Chaired by Christina Odone, Chair of the Centre. (May 9th 2016).


I am a great admirer of Alasdair MacIntyre. He is one of the world’s greatest living philosophers, invariably provocative and controversial but never without interest or depth of thought. A few years ago he gave a lecture with the arresting title “The Irrelevance of Business Ethics”. He set out to argue that the financial crisis of 2008 was not the result of a lapse in ethics by bankers but that the very nature of dealing in financial markets was to offload risk on to a counterparty or client with no ethical consideration whatever, “the better the trader the more morally despicable”. The result is that trying to teach ethics to traders was like reading Aristotle to a dog.

From the evidence of opinion polls the very expression ‘business ethics’ in an oxymoron. The fact that since the financial crisis banks have been fined over $300 billion, Volkswagen has admitted cheating on emission tests on potentially 11 million cars, Mitsubishi has acknowledged that it intentionally mislead regulators, shareholders of blue chip companies have revolted over executive pay and the House of Commons Select Committee has investigated the sale of BHS for £1 which was subsequently put into administration with a huge pensions deficit the following year, all suggest that ‘business ethics’ is for the general public a contradiction in terms.


Why Ethics Matter for Business

Ethical behaviour by business is important for a number of reasons.

One is that the public expect business to be ethical. They expect business to be conducted in an honest, fair and transparent manner, which serves the greater good of society and not just the interests of management and shareholders. They expect the senior managers of business firms and the entrepreneurs who set up private companies to have a moral compass which respects the dignity of those who work in the organisation and those they serve as customers. They expect that businesses will have standards which do not seek to mislead or misinform customers regarding the true price and the quality of the products and services which they provide.

The fact that the public hold such views is important because through their elected representatives who pass legislation in parliaments it is the public ultimately who grant business a license to operate. Without such a license for example, limited liability companies would not exist. That license can be changed at the will of Parliament. What has become increasingly clear is that the public will not put up with unethical business. Without ethical business regulation will increase. Just look at what’s happened in banking following the financial crisis. Regulation is at best a blunt instrument in that it cannot easily be tailored to meet the needs of individual companies. Not only that but regulation is a form of taxation and like most taxes it has a deadweight cost to society.

A second reason why ethics in business matters is that it underpins the legitimacy and attractiveness of a market economy. From the latter half of the eighteenth century and Adam Smith’s great work on the causes of the growth in the wealth of nations, a market economy which fosters enterprise and freedom and allows markets to work and is by far the best driver of prosperity that we know not only that but a market economy entails a degree of economic freedom which is a key element of political freedom. Business without ethics and values therefore undermines the appeal of a market economy and a free society.

A third reason why ethics in business matters is a personal observation. Working in a company with ethical business principles and a culture built around strong values is far more fulfilling than working in a company which turns a blind eye to ethical standards and in which the culture is based principally on success and money. I have sat on the boards of fifteen companies in the private sector since working for the first 25 years of my career in the public sector. These companies were varied. Some were main boards with shares traded on the NYSE, NASDAQ or LSE; others were wholly owned subsidiary boards; some were large, others medium, some small in terms of size; two were joint ventures. The products and services covered were extensive: banking, broking, rail freight, care homes, music, cable communications, television, cleaning, killing bugs.

For me and I suspect for most of those who worked for the companies the most distinguishing factor in terms of a company being ‘a great place to work’ was the respect shown to fellow employees, the pride the firm took in its products and services, the sense of community which existed in the organisation, management’s commitment to help people develop to their full potential and the fact that it served a greater purpose than just focussing on maximising the bottom line. It is because of these qualities that such a company is trusted by its customers and the community in which it operates. It is also the reason it is able to build up a culture of trust within the organisation so that management can be trusted to make the right decisions.


Three Questions Business Leaders Must Ask

If businesses are to act ethically there are three questions business leaders must ask themselves.

First, Who Are We? Put differently, What do We Stand for? What is our Purpose?

This I believe is the most fundamental and difficult question for any business leader to ask. To explore the purpose of a business is to go beyond profit. Without profit – which is the financial return to those who provide equity capital – a business will not survive. However asking about purpose raises broader issues than the bottom line. Does the company take pride in the product or service it provides? Is being part of the firm a source of human flourishing? How does the company contribute to the common good by what it does?

The reason it is difficult to ask these questions is that they in turn ask each of us to turn inward and ask ourselves a far more searching set of questions, Who am I? What am I doing with my life? What is the purpose of my existence? Most of us most of the time want to park such questions and get on with the day to day challenges of running the business. Far better and more productive to log on and check what the markets have been doing overnight. Then respond to e-mails. After that a look at today’s calendar with slots filled in from early morning to late at night.

I served for 21 years on the Board of a US company, Herman Miller which designed and manufactured office furniture. It was in the twentieth century a world leader in its field both in terms of design (it attracted great designers such as Eames, Ngouchi, Nelson, Gehry, Stumpf and environmental stewardship well before that became an important item on corporate agendas. The Chairman who invited me to join the board was Max de Pree. It was only many years later that I came across an essay written by Nicholas Wolterstorff, a distinguished Yale professor of philosophy, that I became aware of the importance of the purpose of a business. This is what he said;

“About ten years ago now I served – quite amazingly – as a philosophical consultant to the Herman Miller Furniture Company in New Zeeland, Michigan. Max de Pree, the executive officer of the company, had invited an architect, a physician, a journalist, a furniture designer, a theologian, and me to an all-day session with him and about five of the top officers in his company. At the beginning of the day he posed ten questions that he wanted us to discuss, in whatever order we wished. He asked us not to concern ourselves with trying to say things that we thought would be useful to the company; he wanted the discussion to take whatever shape it wanted to take. I remember three of the questions. “What is the purpose of business?” he asked. Some of his younger executives were saying that the purpose of business was to make money. He himself didn’t believe that; but he wanted to talk about it. Second, he wondered whether there was “a moral imperative”, as he called it, for companies to produce products of good design. And third, he wanted to discuss whether it was possible to preserve what he called “intimacy” in a large company.

It became clear, in the course of the discussion what de Pree himself regarded as the purpose of business. The purpose, as he saw it, was twofold: to produce products that serve a genuine need and are aesthetically good, and to provide meaningful work in pleasant surroundings for those employed in the company. He added that these purposes had for a long time shaped his operation of the company.

Now it seems to me that these two purposes are, or can be, an expression of charity – that is, both consist to promote the welfare of the other. As a matter of fact, it became clear in the course of the discussion that it was de Pree’s religious commitment – specifically, his Christian commitment – that had led him to embrace these goals. He saw his operation of the company as an exercise of charity – though he didn’t use the word. His own case, at least as he presented it, was a case of “transcendental faith” shaping economic activity.

Was he prevaricating? Or deluded?”

Second, is the question What are our values? Have they been set out explicitly? Are they so general as to be vacuous? Who in the firm owns the values?

It is easy to write down a set of values for a business. Indeed nearly all large companies have similar sets of values: respect for the individual, honesty and integrity, social responsibility to the community, environmental stewardship and so on. Far more difficult is to assess their effectiveness. How do the values shape the way I work and the decisions I make? How do I behave differently because these values are set down and I am a member of that firm? What responsibilities do I now have because of these values? Do I treat colleagues differently? Do I treat clients differently?

I have found that the key to effective values in business is that they must be lived by the leadership of the company. The leadership must walk the talk. Without that the values are empty and the leaders guilty of hypocrisy. Preaching one thing but practising another. The leaders of a business cannot rely on regulation. Leadership cannot outsource the values of a business to regulators.

One test is what the leaders of a business think their values really are? Would that be shared by the average employee? Would it also be the perspective of clients and suppliers?

I was reminded of this recently in an article which appeared in Forbes magazine by Professor James Heskett, professor emeritus at Harvard Business School on the subject of servant leadership which is a more used term in the US than in Europe. The concept of servant leadership places great emphasis on the role of a business leader serving employees. Heskett recalls an incident at a ServiceMaster board meeting at which I was present and remember distinctly when the Chairman and CEO, William Pollard spilled a cup of coffee prior to the board meeting. “Instead of summoning someone to clean it up, he asked a colleague to get him a cleaning compound and a cloth, things easily found in a company that provided cleaning services. Whereupon he proceeded to get down on his hands and knees to clean the spill up himself. The remarkable thing was that board member and employees alike hardly noticed as he did it. It was as if it was expected in a company with self-proclaimed servant leadership”. (Forbes 5/01/2013. “Why Isn’t Servant Leadership More Prevalent?”)

The third question is ‘What is going on in our business?

As a non-executive director of a company whose board meets four or six times a year, one of the most frustrating challenges is obtaining sufficient information to really find out what is happening in the business. I believe it is very important that non-executives meet not only senior but middle management and even junior staff. Only once have I ever found senior management reluctant to allow non-execs talking directly to management. Frequently the binding constraint is the time non-exec’s are able to devote to meeting employees. However it is only then that they find out what is really happening in the business.

In small companies finding out what is really going on in the business is not really a problem. In large multi-nationals however the issue is a major challenge. In the money laundering activities carried on by certain banks the sheer size, organisational structure and large number of countries in which the bank operated have proved a major obstacle to effective control.


Practical Steps to Making Values in Business Effective

A number of steps are necessary in making values effective in business.

First, it is important to set out explicitly the purpose of the business. For this a one-time mission statement is typically far too general and vague and begs the question of what the purpose of a business really is when spelt out in practical terms.

Second, it is important to set out in some detail the ethics, values and business principles of the firm. The temptation is to frame these in general terms. Management must accept that the actions of today will be judged by the standards of tomorrow, which means being ahead of the curve.

Third, on the basis of its purpose and values, it must build a culture with implications for all employees, affecting every aspect of the business; reporting, firing, promotion, human resources, selling, buying, accounting, auditing and so on.

Fourth, senior leadership must show through ‘the tone from the top’ that they live the values and they are committed to ensuring that the same values permeate the middle and lower echelons, the ‘permafrost’ of the firm.

Fifth, the leadership must be able to constantly appraise the effectiveness which its values, code of ethics, business principles have on conduct. They must trust but verify. This will include keeping a close eye on disciplinary matters and terminations, with regular surveys of staff and clients. Such information is important in compensation discussions and promotion recommendations.

Sixth, in all of this non-executive directors have a key role to play in that on behalf of the shareholders and stakeholders they are the guardians of the purpose, values and ethics of the company.


Size, Ownership, Competition

The challenge of implementing values in a business can be made easier or more difficult by certain factors, namely size, ownership and the extent of competition in the markets in which the firm operates.

The size of a business matters. Implementing values in a small firm is easier than in a large firm. In a small firm it is much easier for senior management to know what is going on. A large firm needs systems of control and trust in those responsible for them. It may also be easier in a firm delivering a single product or service rather than in a conglomerate in which there are different kinds of businesses with different business cultures, something which becomes even more challenging when the company has operations in different countries.

Different forms of ownership will face different challenges. A private firm and especially a family business may find it easier to develop an effective culture than a publically traded company. A partnership may have built in checks and balances to maintain high standards. That any concept of intimacy has disappeared.

The competitiveness of the markets in which a firm operates is a further factor to be taken into account. Competition is beneficial. It drives down costs and will lead to lower prices for consumers. It allows new firms to enter the business. It encourages innovation. However, in a highly competitive market when margins are under pressure, hiring staff is difficult and expensive; if competitors begin to use questionable methods (“tolerated practice”) ethical standards will be under pressure. This raises an important issue for public policy. What is the optimal degree of competition? Reducing barriers to entry and opening markets to foreign companies is beneficial but is there a point at which competition becomes excessive and undermines ethical behaviour? Will the market itself be self-correcting? Should it be left to regulation? And if it will, at what social cost?



I believe that the subject of maintaining ethical standards in business, of creating business cultures in firms which make them “great places to work” and of punishing wrongdoers for illegal activity is fundamental to a market economy and a free society. I am grateful for this opportunity to raise some issues associated with it this evening and look forward to our discussion.

Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.

Andrei Rogobete: Business Values must be practiced, not preached

This is an excerpt of a speech given at the GSM Annual Conference on the 12th May 2016.


I would like begin by saying it is an absolute pleasure to be with you today. I was originally born in Timisoara but I have lived for most of my life in the UK – so it’s always great to come back home and see my family and friends.

In the brief time that I have at my disposal I hope to convince you of the importance of ethics and moral behaviour in our Globalised world of Business.

Most economists and news agencies like to claim that we are currently living in the “post-financial crisis era”.

But I would like to argue that at heart of the financial crisis was not just a crisis of finance but a crisis of morality – with reckless behaviour driven by greed and the pursuit of ever faster and larger profits. This was well illustrated in the gross and artificial subprime mortgage bubble in the United States.

Despite this challenge, the free market remains the most effective form of wealth creation: more people have been lifted out of poverty in the last century than any other time in recorded history. The United Nations reports that extreme poverty has been reduced by over 50% since the early 90s. A market economy gives people hope, purpose, and a genuine sense of achievement – but clearly we have a remaining problem: human greed and misconduct.

What would a solution to the problem of greed look like? Should the Government impose higher taxes and regulations on the private sector? Should the penalties be so high that no company would risk illegal or corrupt activity? Would a highly regulated market protect consumers without slowing innovation and growth? These are approaches that have been tried and tested, and failed time and time again.

It is my belief that we need a free market economy, but one that is built upon a foundation of ethics and moral values.

In business we are often encouraged to look forward – And rightly so. Whether it’s planning for a new product or service, it is crucial to be forward-looking in the world of business.

However, we must also be aware of the past. History is a blessing because it shows what works, and what doesn’t.

If we are not aware of the events that have occurred in the past, we end up repeating the same mistakes over and over again – And sadly, that is often the case.


It is for this reason that I would like us to take a look at the Quakers of 17th Century England. Here we will see how deep-rooted values played a critical role in business success.


But who exactly are the Quakers?

The Quakers were a group of English Puritans that emerged in the midst of the Civil Wars of the 17th Century. It was a time of fertile ground for the emergence of new ideas in the political, social and religious spheres.

One man named George Fox was a substantial provider of such new ideas. Very much a product of his time, George Fox became deeply disconnected with the teachings of the Church and its approach to faith. More specifically, the fundamental clash with the Established Church came when he advocated the notion that each individual can have a direct relationship with God without the need of ordained clergy.

Born in a ‘middle-class’ family, Fox grew up in an environment of tough religious discipline and Christian teaching.  However, Fox went beyond the formalities of doctrine and his faith a deeply personal affair – one that would dictate his path in life.


But how did the Quaker’s faith shape their business values??

  1. The first and fundamental belief is that all humans are of equal value.

Equality of value should not be confused with uniformity. Clearly, human beings are different, each unique in their own traits. However, historically Quakers believed that “There is that of God in everyone”.

This belief effectively translated into a practice of equality and respect within the workplace in stark contrast to the customary hierarchy of the time. A ‘flat’ organizational not only allowed Quaker businesses to be effective organizations on the inside, it also enabled them to build long-lasting relationships on the outside.

The reputation Quaker businesses established in society would go before them in the marketplace, almost guaranteeing their success in building a network of trust and ultimately, ensuring profitability.

  1. The second core Quaker belief is in a genuine, personal relationship with God. 

In claiming that each individual can have a direct, personal relationship with God, the Quakers found themselves under systematic persecution from the Church and State. However, it was their personal faith that guided their moral business code of conduct.

  1. The third and final core belief is love and respect for one’s neighbour. 

This core Quaker belief is rooted in a strong sense of community with other human beings – all sharing together in God’s creation. This led Quakers to organize in fellowships and large groups where they would meet regularly and share in the faith that united them.

For business, it translated to a great sense of responsibility and stewardship toward their entire business ecosystem. Whether work or private, a sense of collective responsibility and respect entered all aspects of life.


So were the Quakers successful in business?

Highly Successful. Here are some examples..

Barclays – UK’s largest retail bank

Lloyds – Major UK bank

Clarks – UK’s largest shoe manufacturer

Cadbury – Major chocolate manufacturer

And others…


However, what happens when companies forget about upholding the ethical values the proclaim to believe in?


CASE : Volkswagen

One example that I’m sure you are all familiar with is the Volkswagen Emissions Scandal.

Although not a Quaker business, the Volkswagen emissions scandal was arguably the defining corporate story of 2015. It came as a shock not only because millions of customers were deceived (11 million according to VW), but rather because the culprit was the ‘peoples-car’, Volkswagen.

The Volkswagen group has over 550,000 employees and a presence in more than 150 countries worldwide. Over the decades the Volkswagen brand has established a global reputation of reliability, robust ‘German’ engineering, and value for money.

VW built a reputation of being a brand that you can wholeheartedly trust. The company prided itself on upholding the very highest ethical values and business practices.

The Emissions scandal caused colossal damage to the Volkswagen Group. Like the Barclays LIBOR scandal, the damage was both financial and reputational.

If on the Friday, the 18th September 2015 VW’s shares were trading at 161 euros per share; by the end of Monday, the 21st September Volkswagen’s share price dropped to 111 euros per share, losing almost 30 per cent of its market value. That’s close to a 30-Billion-euro devaluation in one day of trading. Fig. 1.2 illustrates the share price plummeting.

It is a big price tag to pay for something that other car manufacturers like BMW, Toyota and Mercedes have been able to comply with. Therefore, we can only conclude that it is not an issue of technological knowledge but an attempt to maximize profit through illegal business practices.

As damaging as the financial costs are, the reputational damage even worse. It will take years for Volkswagen to win back trust from its customers and the general public. As Warren Buffet once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”.

The Volkswagen Emissions scandal is a clear example of a company failing to uphold an ethical culture and paying the price for it.


So then, what are some lessons that we can learn from the Quakers and the example of Volkswagen?


  1. Purpose is greater than profit

Purpose trumps profit. The successful business of the 21st Century is one that sets its aims above profitability. While profit is crucially important, the objective of financial profit should become the result of a purpose-driven business model. The Quakers set up businesses in obedience of God and fair treatment of others. Their main objective was not just profit.

But it is not only Quaker businesses that were successful because they were driven by purpose. Arthur Guinness, the founder of Guinness Beer wanted to help alleviate the severe alcoholism in Dublin so he introduced a lighter beer as an alternative to gin or the other strong spirits. Henry Ford envisaged a nation on wheels and in 1908 he introduced the first mass-production car, the Ford Model T.

The vast majority of long-term, successful businesses have one thing in common: they are driven by a purpose that goes beyond profit.


  1. Moral values must become an intrinsic part of the business

Companies must truly uphold a set of moral values in the pursuit of achieving their purpose. In the global marketplace of the 21st Century, a company’s set of values must be seen as a critical part of the long-term business plan.

Values must be practiced, not just preached. They must be truly lived out in the day-to-day activity of the business.

Chief executives and senior managers have the responsibility to influence the rest of their staff and employees. They must strive to embody of the company’s culture and shared values.


  1. Companies that fail to implement an ethical culture will suffer

Businesses that fail to implement a sense of morality will sooner or later, have to pay the consequences.

This is mainly due to two global forcesglobalization and the widespread use of social media.

In this sense the rapid growth of social media can be seen as an effect of technological Globalization. Social media has become a global platform of discussion and sharing of information at lightning speeds. It has brought millions of people closer together regardless of geographical distance. It has democratized information, giving tremendous collective power to online communities – A power that can expose morally corrupt companies.


I would like to end on saying that ultimately, a business should not promote a moral culture simply out fear of social media or the online backlash – it should because it is the right thing to do: for the long-term prosperity of the business, as well as the wider society it operates in.


Thank you!

Andrei Rogobete

Andrei Rogobete is a Research Fellow with the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

The market and morality

The market economy is not perfect. However, we do sometimes forget that it is the market that has delivered significant prosperity to the world and lifted millions of people out of poverty. Improvements in literacy and sanitation have contributed to a significant reduction in the number of people existing on the benchmark measurement of $1 a day. Enterprise, trade, micro-credit and social venture capital are, however, foundational to a global reduction in poverty. This reminds us that there is a moral case to be made for the market.

Capitalism is built upon four moral principles. These principles are rooted in the Judeo-Christian tradition upon which a market based enterprise economy is constructed.

First, the principle of creativity. This idea is expressed through the creation of wealth and the flourishing of human creative skill. Wealth creation is about the harnessing of human capital, skills and innovation to add value to the productive capacity of the economy. So, the combining of raw materials to make goods for sale, the delivery of services, entrepreneurial skill in developing and applying new ideas lie at the heart of enterprise. Wealth creation has to precede the debate on distribution.

Second, the principle of responsibility. Encouraging dependency denies the essence of humanity. Human flourishing means recognising humanity’s uniqueness and capacity for innovation and learning.

Third, the principle of freedom. Free human expression is only possible within a context of both economic and political freedom. That is one reason why Marxist command economies don’t work. It is also why excessive economic control constrains enterprise and innovation. Entrepreneurial skill and risk needs recognition and reward.

Fourth, the principle of fairness. The fairness of the capitalist system stems from the fact that the market allocates goods and services fairly and efficiently between willing buyers and sellers at agreed prices. Excessive levels of taxation in this respect are intrinsically unfair.

The market economy also generates moral problems. Issues of greed, excess, monopoly and oligopoly mean that there is a proper place for regulation. However, because we seem to have lost sight of the intellectual case for the market, regulation and taxation seem to have become ends in themselves, rather than as means or tools to act as moral restraints in an essentially free economy in a free society.

Richard%20Turnbullweb#1# (2)

Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.

Newsletter – October 2014

A message from the Director,

Dr Richard Turnbull: The market and morality

Richard%20Turnbullweb#1# (2)The market economy is not perfect. However, we do sometimes forget that it is the market that has delivered significant prosperity to the world and lifted millions of people out of poverty. Improvements in literacy and sanitation have contributed to a significant reduction in the number of people existing on the benchmark measurement of $1 a day. Enterprise,trade, micro-credit and social venture capital are, however, foundational to a global reduction in poverty. This reminds us that there is a moral case to be made for the market.

Capitalism is built upon four moral principles. These principles are rooted in the Judeo-Christian tradition upon which a market based enterprise economy is constructed.

First, the principle of creativity. This idea is expressed through the creation of wealth and the flourishing of human creative skill. Wealth creation is about the harnessing of human capital, skills and innovation to add value to the productive capacity of the economy. So, the combining of raw materials to make goods for sale, the delivery of services, entrepreneurial skill in developing and applying new ideas lie at the heart of enterprise. Wealth creation has to precede the debate on distribution.

Second, the principle of responsibility. Encouraging dependency denies the essence of humanity. Human flourishing means recognising humanity’s uniqueness and capacity for innovation and learning.

Third, the principle of freedom. Free human expression is only possible within a context of both economic and political freedom. That is one reason why Marxist command economies don’t work. It is also why excessive economic control constrains enterprise and innovation. Entrepreneurial skill and risk needs recognition and reward.

Fourth, the principle of fairness. The fairness of the capitalist system stems from the fact that the market allocates goods and services fairly and efficiently between willing buyers and sellers at agreed prices. Excessive levels of taxation in this respect are intrinsically unfair.

The market economy also generates moral problems. Issues of greed, excess, monopoly and oligopoly mean that there is a proper place for regulation. However, because we seem to have lost sight of the intellectual case for the market, regulation and taxation seem to have become ends in themselves, rather than as means or tools to act as moral restraints in an essentially free economy in a free society.

Research, publications, events

Quaker Capitalism: lessons for today

We are excited to announce our major conference on what business can learn today from the Quaker-run companies of the industrial revolution. Are there lessons for integrity and the restoration of trust? What can we learn today about different models of business ownership.

Speakers include Deborah Cadbury, on the Cadbury story, Richard Turnbull on the lessons from the Quakers and Professor Colin Mayer on restoring trust.

The date is 26th November, the location One Great George Street, London SW1. All participants will receive a copy of CEME’s first publication, Quaker Capitalism: lessons for today. Details from office@theceme.org.


Enterprise not Aid?

Dr Kim Tan, one of CEME’s Trustees, has extensive experience of how enterprise can be a more effective tool than inter-government aid in the relief of
poverty. Around 50 people gathered at the Said Business School in Oxford to hear from Kim and also reflections from Professor Alex Nicholls of the Business School and Penny Fowler from Oxfam.

The increase in inter-government aid has been inversely related to growth in GDP. Although there might be several reasons for falling GDP this statistic is a reminder of the limitations of aid. For example, the World Bank reports that some 60% of aid remains in donor countries.

Enterprise can provide at least a partial solution. Social venture capital invests in commercial projects that have significant
social impact.

The Kuzuko Game Reserve in South Africa is an example. Although built on commercial principles, impact measurements include the percentage of the work force with housing with running water and fair terms and conditions. Staff also hold shares in the business.


Lord Shaftesbury: radical conservative? Lessons for social welfare today

CCLA Investment Management sponsored a lecture by the Director on Shaftesbury’s approach to social welfare. Richard described how Shaftesbury sponsored legislation to prevent the most horrendous of evils in Victorian England but then adopted the ‘voluntary’ principle in dealing with poverty – a strong and effective voluntary sector combining both philanthropy and commercial principles to address social problems such as housing.

To view our latest research please click here.

How can you help us?

We aim to both educate and transform. We seek to change opinion and make a practical difference. Our passion is for an effective, enterprise economy shaped by ethical values so that the world can be a better place.

We are an independent Centre, and rely entirely upon donations to fund our work.

In the UK donations can be sent payable to the Centre for Enterprise, Markets and Ethics, 31, Beaumont Street, Oxford OX1 2NP. We will supply a Gift Aid form and higher rate taxpayers can claim further relief via their tax returns

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Please advise us of any donation so we can thank you promptly and properly.

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