The Second Machine Age is Erik Brynjolfsson and Andrew McAfee’s best-known work. The book explores the profound implications of rapid technological advances, particularly in digital technologies, for society, the economy, and the labour market. Published in 2014, the book delves into the transformative effects of what the authors term the ‘second machine age,’ a period marked by exponential growth in computing power, the ubiquity of digital networks, and the rise of artificial intelligence (AI) and robotics (page 9). Through a well-structured narrative, Brynjolfsson and McAfee argue that while these technological advancements hold immense potential for economic growth and societal progress, they also present significant challenges, particularly in terms of inequality and the displacement of labour (pages 11-12). In this review we examine some of the book’s arguments, structure, and contributions to the wider ongoing discourse on technology and society.

Brynjolfsson and McAfee’s central thesis is that we are entering a new phase of technological advancement that is fundamentally different from the first machine age, which was characterized by the mechanization of manual labour through the invention of the steam engine and other machinery during the Industrial Revolution. The second machine age, in contrast, is driven by digital technologies that augment and, in some cases, replace cognitive tasks traditionally performed by humans (page 9).

Brynjolfsson and McAfee’s book is structured in a logical and accessible manner, making complex ideas about technology and economics understandable to a broad audience. The book is divided into three main sections: the first outlines the characteristics of the second machine age (chapters 1-6), the second discusses its implications for the economy and labour market (chapters 7-11), and the third offers potential solutions to the challenges posed by these technological changes (chapters 12-15).

The authors identify three key characteristics of the second machine age: (1) exponential growth in computing power, (2) digitalization, which allows information to be replicated at virtually no cost, and (3) combinatorial innovation, where new technologies are built upon existing ones, leading to rapid and often unexpected advances (page 37). The authors argue that these characteristics are driving unprecedented changes in productivity, business models, and the global economy (chapters 1-6).

A significant portion of the book is dedicated to discussing the implications of the technological changes for the labour market (chapters 7-11). Brynjolfsson and McAfee argue that while technology has always created winners and losers, the pace and scale of change in the second machine age are likely to exacerbate inequality. They point to the phenomenon of ‘skill-biased technological change’, where technology disproportionately benefits those with higher levels of education and skills, leading to a widening gap between high-skilled and low-skilled workers (page 134). This dynamic is further amplified by the ‘superstar’ effect, where a small number of highly skilled individuals and companies capture a disproportionate share of the economic gains from new technologies (page 150)

The authors also explore the potential for technological unemployment, where advances in AI and robotics could lead to the displacement of a significant number of jobs, particularly in sectors such as manufacturing, transportation, and even certain white-collar professions (page 173). However, they are careful to distinguish between short-term disruptions and long-term trends, noting that while some jobs will undoubtedly be lost, new opportunities will also emerge, particularly in areas that require creativity, complex problem-solving, and interpersonal skills (page 191).

One of the strengths of the book is its use of empirical evidence and real-world examples, the authors drawing on a wide range of data, from economic statistics to case studies of companies and industries that have been transformed by digital technologies. This evidence-based approach lends credibility to their analysis and helps to ground their sometimes abstract ideas in concrete realities.

However, a critic might argue that the book’s optimistic tone about the potential of technology to drive progress and prosperity is not sufficiently tempered by a consideration of the potential risks and downsides. While the authors do acknowledge the challenges posed by technological change, particularly in terms of inequality and job displacement, they tend to focus more on the potential benefits of innovation and less on the potential for negative outcomes, such as social unrest, the erosion of privacy and the proliferation of misinformation (e.g. fake news) in an increasingly digital world.

Moreover, while Brynjolfsson and McAfee offer several policy recommendations to address the challenges of the second machine age, such as investing in education, reforming the tax system, and fostering innovation (Chapter 13), some of the discussion around proposals such as higher tax rates, universal basic income and negative income tax may seem overly idealistic and difficult to implement in practice (Chapter 14). Some readers may find the patches of real-world naiveté throughout the concluding chapters off-putting.

Despite all this, The Second Machine Age makes a worthwhile contribution to the wider discussion on technology, economics, and society. Brynjolfsson and McAfee’s nuanced discussion of the potential for both job displacement and job creation provides a comparatively thoughtful perspective that is often missing from more alarmist accounts of technological unemployment. Their focus on the importance of education and lifelong learning in preparing workers for the jobs of the future is commendable and a valuable contribution to the wider policy debate.

In concluding, The Second Machine Age is recommended to all readers who are interested in the profound technological changes reshaping our economy and society. While the book is not without its flaws, particularly in chapters where the tone may seem overly optimistic, it remains an important contribution to the discourse on technology and society. As we continue to grapple with the impacts of AI, robotics, and other advanced technologies, Brynjolfsson and McAfee provide a useful framework for understanding the challenges and opportunities that lie ahead.

‘The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies’ by Erik Brynjolfsson and Andrew McAfee was published in 2014 by W.W. Norton & Co. (ISBN: 978-0-39-335064-7). 306pp.

Andrei E. Rogobete is Associate Director at the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

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.

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

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.

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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.

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

In a world where academic publications often descend into the microscopic world of nuance, there is a detectable trend towards volumes with the laudable objective of providing the aspiring amateur with an introductory overview of a subject. The author of Profit has undoubtedly taken this path and pitched for the macro-view: we find ultimately that that the intention of the book is to trace ‘the environmental aspects of capitalism’s germination and growth through human history’ (page 253).

We’re inducted into the argument via the ubiquitous ‘palm-sized technological marvel’ which is simultaneously the ‘environmental crime that is the Smartphone’ (page 2). At the outset, Stoll proposes to resolve this paradox by allowing the reader to judge where responsibility lies between humanity or that subset of guilty humans comprising the ‘capitalists and corporations’ who define the ‘Capitalocene’ (page 3). The verdict turns upon what the author calls ‘profit’. However, while from the outset it is clear that ‘profit’ is not to be equated with a synonym for capitalism, no more precise explanation is forthcoming and in that void, greater experience with the text encourages the reader towards a tentative definition of ‘cui bono?’.

Arranged in chronological order from the dawn of humanity, each chapter seeks to illustrate (if not fully illuminate) typical characteristics of the relationship between human activity driven by ‘profit’ and the natural resources involved. The deliberate choice to define ‘profit’ ambiguously ensures that any – indeed all – human activity becomes material for this study. While this may in itself appear ambitious, the decision to cover the entirety of human existence, from the first dawn of the Hominim, cannot help but have an echo of Shakespeare’s ‘vaulting ambition, which o’erleaps itself’. To navigate this scope would seem to necessitate a rigorous approach with a solid ‘backbone’ argument across the work upon which can hang the various elements of the narrative. Instead, the author has chosen to use a join-the-dots approach supported by potted biographies of a handful of individuals or publications which are used across the ages in a manner similar to posts carrying a string of lamps.

The opening chapter covers the first few hundred thousand years of Hominim activity and is naturally lacking in data points. Stoll runs this period of study up to the fifteenth century AD/CE; when the second chapter switches the focus to ‘Trade and Empire’. This division is a missed opportunity to explore the substantial trading empires of Greece and Rome; instead, with Columbus as the locus for the second period of study this enables the introduction of ‘America’, but brings in its wake an atypical focus on the development of the Genoese Republic, which is subsequently proposed as an exemplar. Chapter Three concerns ‘Coal and Machines’ – although first through the experience of the fifteenth century Dutch, introducing the first of many (ultimately disconcerting) chronological hops back and forth, and odd since the author suggests a reliance of the Dutch empire on wind-power, before moving onto the English, ‘Plantation Capitalism’, sugar and (unusually, perhaps) the contributions of the Scottish Presbyterians who, we are informed, ‘disproportionally administered the British Empire … and dominated shipping and trade’ (page 71). Chapter Four is formed around ‘Steam and Steel’, which acts as the bridge to introduce Andrew Carnegie, whose early life coincided with the Bessemer Process, but more fortuitously was of Scottish decent, which facilitated his career in an age of imperialism and industrial capitalism, soon to become a global phenomenon.

Chapter Five adds environmentalism to the narrative – in the last half of the nineteenth century and exactly halfway through the work. The topic is introduced through two works which Stoll considers pivotal: George Marsh’s Man and Nature and William Jevons’ The Coal Question. Stoll makes the claim that these are ‘books that shook the confidence of a complacent public’ (page116), which appears bold given their subsequent descent into obscurity – almost immediately, in Jevons’ case. While Marsh did later privately republish his text under a fresh title, neither of these prolific authors considered their topic of sufficient importance to engage with it again, and indeed the Stanford Encyclopedia of Philosophy manages to devote over six thousand words to Jevons without a mention of his pamphlet.

The focus moves through the twentieth century on the back of what Stoll terms ‘consumer capitalism’ – the origins of which are ascribed to (consecutively) the availability of mass finance, petroleum, electricity, plastic, disposable products and finally, advertising. Although this caused an increase in ‘waste’ and had a brief pause in the United States (the Wall Street crash, here described as a product of capitalism rather than speculation), this continues through the twentieth century (global conflicts are not discussed) until the rise of the bright and buoyant era known to historians as the Cold War, in which the motor car and electronics drove postwar prosperity hand in hand with central ‘government activism’, until this was attacked by ‘alarmed … wealthy corporate leaders’ who created ‘a propaganda network to promote weak government and low taxes’ (page 176).

Post-1970, the narrative in the chapter ‘Selling Everything’ leaps to hyper-market operations – exampled by Walmart and the web giant Amazon – both of which enjoyed unique success and so would be candidates for the atypical rather than the representative. Their success is set against the stagnation and decline in the US economy, a claim illuminated by the notion that more people entered the service sector in the eight years from 1973 to 1981 than the auto and steel industries combined. However, the author had already flagged the death of nineteenth century ‘industrial capitalism’ before the Second World War, so the shift towards ‘consumer capitalism’ would seem to be entirely in line with expectations, given the central notion of this volume that all and any economic activity is ‘capitalism’. Once again, a handful examples from across the globe are collated to suggest negative consequences from various categories of causes – coal and petroleum are singled out, which seems odd since coal would have presumably featured in the ‘industrial capitalist’ period (however ill-defined) – rather than that of the consumer or late consumer capitalist periods.

It is only at the end of Chapter Eight that we finally begin to see an attempt to discuss ‘Pollution, Air and Climate’; CFCs, Ozone depletion, permafrost methane, and oceanic acidification are introduced and concluded in rather less than one page (pages 223-224).

The last chapter is devoted to the formation of the Global Environmental movement, again through exploring the impact of two publications. The first, Silent Spring by Rachel Carson, is widely acknowledged as perhaps the most important environmental book of the twentieth century. The second, Only One Earth, is Barbara Ward’s influential contribution to sustainable development; both Carson’s lapsed Reformed Protestant heritage and Ward’s hybrid Quaker-Catholicism are given an airing: notwithstanding these volumes remain edifying to all readers. A summary of American developments post-World War II is joined to the rise of the West German Green Party in the 197Os, and the impact of the Seveso, Bhopal and Chernobyl accidents in contributing to a wider spread of environmental concern and the European rise of support for anti-nuclear groups. Half of the very short summary of the ‘Rise of the Greens’ is once again devoted to the influence of a (northern, Reformed) Protestant heritage, while in Catholic countries environmentalism becomes a ‘non-religious, non-moralistic environmental movement’ (page 239): some examples would help forward this claim, not least as it is contradicted by Stoll’s conclusion that in 2015 (and more than forty years after publication) Ward’s work influenced the pronouncements of Pope Francis (page 241).

Stoll’s concluding chapter states that the key question is: ‘does it profit us when someone else makes a profit?’ (page 251). He suggests – perhaps unsurprisingly – that the answer is unclear. However, what is missing here – as in the entire work – is a decomposition of what is meant by the question. Instead, what is presented – as in the entire work – merely adds fog to the lens. Stoll makes the claim that ‘in the pre-Modern Christian West profit entailed a moral calculus’ (page 251). This is both bold and belated: if the purpose of Profit was intended to be an exploration of this theme, it would have gained some coherence – but would have lost any right to be considered ‘An Environmental History’.

Stoll’s summary conclusion is disappointingly (but perhaps not surprisingly) a mirror of the introduction: capitalism (whatever the form in which it is labelled) is rooted in human nature, and the outcomes – including ‘profit’ – have always (historically) been realised ‘at nature’s expense’ (page 252). After 250 pages, the author’s final warning is both stark and something of a surprise: ‘we stop the machinery of consumer capitalism at our peril’ (page 254). Hope is at hand, however, evidenced by an increasing appetite for ‘experiences’ rather than ‘stuff’, with the implication that cruises, travel to foreign countries, climbing mountains, and diving coral reefs will prove less of an environmental issue. There is even a thumbs up for games on Smartphones. It is unfortunate that at the last, the focus falls entirely upon the consumption habits not of the globe, but on one segment of the American population.

Almost inevitably the overall tone of the work feels rushed – indeed superficial. Arguments do not have the space to be outlined, let alone developed, and thus the whistle-stop tour becomes a giddy and frustrating experience. Indeed, the major weakness arises from the absence of any sustained, central argument. Instead, often poorly constructed polemic is substituted. Possibly the strangest statement occurs in the conclusion, where the reader is invited to contemplate how very different ‘Modern consumer capitalism’ might have been ‘had the Genoese prevailed at the War of Chioggia’ (page 252): it is not easy to imagine a reversal of historic events which would have made less of a ripple beyond the late fourteenth century Adriatic. In the haste to apply the broad brush, some odd images appear: the period noted by historians for its tranquillity and known as the Belle Epoque is described as ‘the tumultuous era between the 1880s and the mid-1910s’ (page 137).

The stated focus on Western Europe and the United States of America is inconsistent. Many examples are typical of the USA but not Europe, while China and Lake Nasser are the examples chosen to illustrate the possible negative effects of a building dams – irrespective of the atypical nature of both Chinese construction techniques, the Sahara sun and the relationship between Egypt and the Nile (page191).

Another oddity is the frequent intrusion of a religious (specifically Christian Presbyterian) theme. Many of the individuals featured are sprinkled with a reference to a ‘Puritan heritage which shaped their analysis and solutions’, even if the author immediately acknowledges that (as in the case of Jevons) he ‘neither embraced nor disavowed the religion of his forefathers’ or the ‘quite religious’ Marsh ‘who rarely attended’ (page 121). As Dr Stoll has previous published a book entitled Protestantism, Capitalism and Nature in America this may perhaps be inevitable, but it is ultimately regrettable since a more general discussion of the nature of profit fragmented through the lens of world religions – or even that of Christianity through the ages – is entirely missing.

Perhaps more importantly for ‘An Environmental History’, there is also very little history of the environment – rather, a small list of negative consequences of human existence are regularly recycled (forests denuded, rivers silted, air polluted) as the consequences of a wide range of activities. While the telegraph, mining, smelting, manufacturing, shipbuilding and consumerism are singled out for particular approbation at various points, the conclusions are largely homogenous: mining makes as mess; processing (from refining sugar to forging metal) burns wood; some people in various places used slave or indentured labour, while others traded or purchased the outputs, and both sea and air quality have got worse as both populations and the reach of advertising have grown.

However unremarkable these conclusions, it may be that there exists an audience for whom it needs re-stating. Given the almost hubristic scope and ambition, to note a lack of supporting data might appear to miss the point. But while the book scatters dates in profusion, there are no data points at all, nor graphs nor tables to illustrate any point. The illustrations are therefore all not only biographical but somewhat anecdotal, while the photograph illustrating Brazilians waving placards including ‘Pray for Amazon’ (page 241) sits somewhat uncomfortably with the earlier profile of Jeff Bezos.

Curiously, the author always falls short of a polemic against capitalism – and in the absence of supporting data it is hard to come to any other conclusion. The central, if missing, element in this work was fully identified in Ward’s work – engagement with the question: what is the mechanism by which we balance the (inner) individual’s right to an adequate standard of living with the (outer) limit of what the Earth can sustain?

An experienced academic editor was wont to point out to aspiring authors that it is ‘always easier to write a book than a paper’. The message was that, while structure – founded on a clear purpose and supported by evidenced argument – remains essential to both, the longer format can withstand a greater burden. Dr Stoll would appear not to have received this advice, and while possibly a good man with good intentions, unfortunately ‘An Environmental History’ was never a very good idea, and it has not resulted in a good book.

‘Profit: An Environmental History’ by Mark Stoll was published in 2024 by Polity (ISBN 978-1-50-953324-4). 280pp.

 

Dr Andrew Fincham is an early-modern socio-economic historian affiliated to Woodbrooke College, University of Birmingham, UK. His research is concerned with understanding the links between religious values, ethical business, and commercial success; and the implications for responsible corporate governance. His current areas of interest include a revision of Quaker historiography and an exploration of the underlying issues in Max Weber’s ‘Protestant Ethic’. He is a Fellow of the Royal Historical Society.

We have compiled some news, comment pieces and announcements that we hope our readers find interesting. In this instalment, there are stories relating to artificial intelligence, utilities, defence spending, public finances and the cost of borrowing, virtue and commercial success, pensions and the environment:

Artificial Intelligence

Artificial intelligence shows great potential for transforming businesses and generative AI models are used by millions of people each week, yet companies who have invested in AI pilot products are struggling to make effective use of them, with some 42% having abandoned projects in the last year. Disillusionment can stem from a lack of suitable IT infrastructure at the company purchasing the technology, a lack of available expertise to make the AI model effective or a fear reputational damage in the event of an AI failure. There are implications for the large scale developers as well as the companies that make use of their products but the question for each is the same: how can generative AI be usefully integrated into businesses in order to produce worthwhile returns on investments?

https://www.economist.com/business/2025/05/21/welcome-to-the-ai-trough-of-disillusionment

Evidence of AI-imposed unemployment is scant, with figures and research remaining inconclusive when it comes to the question of whether technology is driving redundancies. In leading economies, unemployment remains low and wage growth is reasonably strong. Perhaps, therefore, those companies who announce investment in AI are not using the technology for ‘serious’ work, or, when companies do adopt artificial intelligence, they do not let people go; rather, AI is used to assist rather than replace employees:

https://www.economist.com/finance-and-economics/2025/05/26/why-ai-hasnt-taken-your-job

It seems that artificial intelligence is disrupting employment in the technology sector, with numerous announcements of staff redundancies. However, further large scale lay-offs appear unlikely as new projects involving AI will take time to develop and be put to use (if they are not abandoned prior to implementation or subsequently reversed). In addition, new roles are likely to be created in order to use and manage artificial intelligence:

https://www.ft.com/content/cb9ea970-e6de-4daf-aa9e-7a48d5e648c3

‘Vibe coding’ enables people with no expertise in coding to create basic apps or games by giving basic instructions in natural language to large language models, which then produce an approximation of what has been requested, with the user then in a position to request amendments. Will this make it easier for people with ideas but insufficient technical expertise to launch start-ups, or for companies to engage in technical development without having to hire professional coders? Perhaps individuals will be able to create their own, personalised apps without having to buy or subscribe to existing offerings. Others criticise the lowering of barriers – but it remains to be seen whether this is self-interest or simply insight into the limitations of what can be achieved without genuine technical skill:

https://www.ft.com/content/f4f3def2-2858-4239-a5ef-a92645577145

Environment and Sustainability

Technology companies, banks and shipping companies are investing in a new method of reducing carbon emissions that involves spreading crushed silicate rocks onto farmland in order to increase the surface area of the rock, thus mimicking and accelerating a natural reaction between absorbent rocks and rainfall. As polluters look for methods to reach net zero targets, ‘enhanced rock weathering’ is growing in popularity and stands behind certain forms of carbon credit:

https://www.ft.com/content/ffc2d60d-49fd-4d8c-ba2f-ee55b0447dff

An area of debate surrounding renewable energy is that of zonal pricing, whereby different rates of electricity are charged according to local supply and demand dynamics. Those in heavily populated areas would pay more, while those closer to sources of energy, such as the wind farms in Scotland, would pay less. The idea is that a zonal mechanism would address inefficiencies in the existing network while also encouraging the location of solar and wind farms close to places of high demand. Arguments for and against zonal pricing centre on the likelihood of businesses relocating to areas of abundant renewable energy, the possible effect on overall prices resulting from uncertainty among energy providers about the revenue likely to be generated by a zonal system and the level of waste in the current system, whereby wind farms are paid to stop generating in order to avoid overloading the grid, with gas plants being paid to provide for consequent shortfalls elsewhere:

https://www.telegraph.co.uk/business/2025/06/06/net-zero-rebellion-spark-action-keir-starmer/

Utilities

Thames Water has been fined a total of £122.7 million by the water regulator, Ofwat, for breaches of rules relating to its wastewater operations and the payment of dividends. Given the company’s level of debt, further penalties for failures in performance may deter future investment and ultimately result in the company falling into special administration, which would amount to renationalisation:

https://www.thetimes.com/business-money/companies/article/thames-water-fined-record-123-million-by-regulator-hmcgms936

Public Finances and Interest Rates

With global economic conditions now being somewhat closer to how they were before the 2008 financial crisis, is it a mistake to expect that interest rates can be kept low? Along with increasing trade barriers and a reduced glut of savings, the world is also witnessing inflationary pressures such as labour shortages caused by ageing populations and shocks such as the war in Ukraine, as well

as increasing government debt. How will governments adhere to their commitments in a range of areas if the age of cheap money is coming to an end? 

https://www.telegraph.co.uk/business/2025/05/31/politicians-pay-price-for-getting-used-to-cheap-money/

Pension Reform

The Pension Schemes Bill contains measures designed to encourage pension schemes towards more adventurous, UK-based investing and there have been claims about the extent to which this will increase the value of the average British worker’s pension as a result. However, are these claims – and the Bill itself – based on sound predictions regarding returns on investments? If a great deal of cash is suddenly invested in any asset, returns usually fall over the longer term and it is far from clear that investment in infrastructure – one of the sectors that is favoured for investment, alongside private equity and private debt – is reliable at present. Has the modelling for the predictions been based on unjustified assumptions about continuing returns from these sectors on the part of those whose own pensions will not be subject to their performance?

https://www.thetimes.com/business-money/companies/article/dont-count-on-the-pension-schemes-bill-paying-off-for-you-lx2x67c2s

Defence Spending and Growth

With countries across Europe loosening their fiscal rules in order to increase their defence spending, the UK government has announced an aspiration for defence spending to reach 3% of GDP by the next parliament. Whether this will emerge as a source of jobs and prosperity will depend on how the additional funds are used. One suggestion is that over several decades, prioritising research and development in defence technologies by supporting start-up companies will yield better results in terms of raising the national income than will spending on personnel and equipment. Others have questioned whether increased military spending will have any serious effect on the creation of jobs in a sector which accounts for only 0.9 per cent of jobs in the UK and in which expenditure has increased marginally since the 1980s but employment has fallen by half:

https://www.thetimes.com/business-money/economics/article/can-the-economy-get-more-bang-from-higher-defence-spending-dmflldxgl

Purpose, Virtue and Commerce

Might companies with a better sense of purpose, structures that lend themselves to success in what that company was set up to do and the exercise of what philosophers such as the late Alasdair MacIntyre would describe as virtues or excellences – shared values, goals and practices – be more enduring and ultimately more successful than those that focus narrowly on profit-maximisation alone?

https://www.ft.com/content/591ee1f2-2518-4ca4-a128-3c810f965782

A fascinating advance currently underway in the field of artificial intelligence is the development of models to assist with peace negotiations. In collaboration with the White House, a think tank in Washington has been developing a simulator that generates potential peace-agreements to end the war in Ukraine, and also scores the likelihood of each deal being accepted by the combatants and other stakeholders. Another project, the development of which is based on a partnership between the British Foreign Office and the University of California, Berkeley, is aimed at providing advice for negotiators by generating a range of possible ‘voices’ or perspectives. The idea is that the AI model will enable officials to anticipate possible responses from various parties, whether superiors back home or hostile interlocutors. This presents the possibility of their being prepared to reframe negotiating positions quickly and to maintain momentum in talks.

AI Hawks, AI Doves

Interestingly, in test runs of different negotiating models, some have proved to be rather escalatory, opting to use force too readily, while others have been somewhat risk averse – or overly conciliatory. What does it mean to say that an AI negotiator is too escalatory or excessively conciliatory? Such judgements make sense to us, but in what sense can we attribute these qualities to machines? Obviously, an AI model has no conscious grasp of a conflict situation or what is at stake for the various parties involved, so there is no sense in which it can really be either risk-averse or hostile. All that we can mean, therefore, is that its coding is such that it produces certain types of output in response to specific types of input. The important point here is that these judgements are human: an AI model can only be escalatory or conciliatory in our opinion, relative to our own perception of a situation and the ends that we wish to achieve. To say that a machine is too ready to resort to force means only that in the same situation – and given the manifold ends in view – we would have made greater efforts and perhaps been willing to concede more in order to avoid such an outcome.

The Human Factor

Artificial Intelligence models can of course be trained or programmed to respond differently. Indeed, there are projects underway to improve the responses of AI negotiation models, one of which aims to convert information about appropriate and inappropriate human language and actions into code. Thus, the aim is to render the model more human and to respond in a manner closer to our own. However, it is not clear what this would entail. As has been demonstrated in several contexts recently, negotiation is complex and there is no straightforward ‘human’ response to resolving conflicts. Different parties, while agreeing that they desire peace, will take radically positions on what the conditions are to be.

This, however, is the point: however sophisticated any negotiating model might become, however apparently human and however capable of foreseeing possible responses and generating alternative proposals, it can only function on coding based on our own preferences and judgements (or those of the parties by whom it has been trained). In matters of politics and in morality, complete neutrality is all but impossible. There is no such thing as complete objectivity or an objectively optimal outcome. Any outcome must always have its foundations in the judgement of the parties involved, and their weighing of considerations such as national interest, what constitutes a fair settlement, the significance of environmental damage, the value of human life and the availability and best use of resources, together with the strength of their desire for prosperity and peace rather than conflict.

For this, certain virtues ought to be exercised and we always hope for the display of qualities such as prudence, wisdom, justice and moderation. As excellences of character cultivated over time, these are uniquely human and cannot be possessed by machines. Where artificial intelligence can support leaders and negotiators in achieving peace, it is to be welcomed, but decisions can only ever be made by human beings exercising their faculties of judgement, hopefully informed by the requisite virtues – qualities of character that can shape the training of AI models, but never be replicated or replaced.

 

Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.

Image courtesy of Freepik (www.freepik.com)

This is a Vatican Press publication, which on one level is aimed at telling the story of the need for and successful actioning of reforms in the financial affairs of the Roman Catholic Church, especially the Roman Curia. As such, the preface by Sr. Raffaella Petrini, who is the Secretary General of the Governorate of Vatican City State, refers to good economics in the life of the church as an organisation and the management of its assets, and makes an early mention of Catholic social teaching as a rich and helpful resource. But the book also takes a broadly positive stance towards markets and enterprise, as Sr. Raffaella observes: ‘…a focus on the satisfaction of human needs points to economic systems that recognise the value of the market and entrepreneurship, the relevance of private property, freedom and human creativity, but also a concept of efficiency that includes the possibility for all to participate in the process of distribution and consumption’ (page 11). In this vein, the editors end their Introduction by expressing the following hope: ‘If the book inspires some readers to delve deeper and undertake further inquiries, perhaps even admire the social science of economics, encourage young Christians to study it and serve their country as entrepreneurs, then we would be overjoyed’ (page 22).

The book itself is a collection of ten separately authored chapters, and I offer some comments on each in turn.

Martin Schlag begins with a discussion of the contribution of Christian Humanism to economic thought. This sets the scene by making the important claims that economics does have an ethical aspect, and that there is a place for faith-based (Christian) contributions. I picked out a couple of thought-provoking statements. First, Schlag observes that: ‘Money apes God’ (page 35). This connects to the way in which money powerfully claims our attention and desires. Secondly, he claims that things like commerce, money and markets would have existed before the Fall (pages 37-38). I’m not sure I agree, but I’m pleased to have been stimulated in my thinking. Perhaps the most helpful section is a succinct and clear description of Catholic social thought, with its principles and norms (pages 48-51).

Joseph Kaboski gives the reader the first of three chapters which all touch on economic history. His focus is ‘growth’, and the ways in which economic growth can be balanced and sustainable (or fail to be). He gives a good survey of what we know about economic growth (pages 56-64), reminding us that it is a comparatively recent phenomenon of the past 200 years and rehearsing the extraordinarily powerful effect this growth has had on the world and human society. Mention is made in passing of Artificial Intelligence, but I would have liked more on this. He then considers the issues of sustainability and then balance, and in so doing introduces various themes that will be picked up by other contributors in subsequent chapters. While claiming that ‘The Lord did not want us to be part of a stagnant world…’ (page 78), Kaboski also observes that how we grow the economy is key, if this growth is to be a spiritual blessing.

Philip Booth’s chapter is entitled ‘Globalization and the Universal Church’. He begins by noting reasons why globalization can be unpopular, but his line is robustly positive, based on free movement of goods and services, as well as open migration. As comparative advantages are developed, this should be seen as a cooperative endeavour, and I had the feeling that Booth sees any political or societal push-back against globalization as being irrational. Whether his view stands up in the actual world of 2025 is an open question at best. I also felt his argument was weak when it came to the issue of local culture and traditions, and the way they are valued. I’d hoped that his title would open up scope for a reflection on the universality of the (Roman Catholic) Church, and how this might assist our thinking about the homogeneity of the global economy, but in fact he only mentions this briefly (page 89).

The final chapter on economic history is by Giovanni Farese, who looks at the development and evolution of economic systems. He begins with a wide-ranging list of fourteen ‘factors’ that may be important (number ten is ‘religion’), and then moves into a broad-brush narrative which describes the move away from feudalism to a modern capitalist economy. He is honest about the challenges within this story, for example the First World War and the arrival of ‘big government’. These challenges are unfurled in the form of a descriptive list, with not a great deal of interpretation, but are helpful none-the-less. The Ukraine war makes it in, but not the second Trump presidency. However, Farese flags up what he calls the ‘trilemma’ (page 133) of democracy, openness to globalization, and national sovereignty; which three things he observes are hard to reconcile.

The next three chapters are concerned with the power of market economics, but the ways in which they can ‘fail’, and in this spirit Brian Griffiths takes as his title: ‘Markets and Prices: Are They Always Efficient?’ His initial answer is, not always, but they are ‘…far more effective than any other economic system that has been tried’ (page 140). This helpfully earths the discussion in the reality of experience rather than simply the realm of theory. Griffiths sets himself three main questions. The first asks, ‘Why do markets create prosperity?’, and I was pleased to see him deploy not just the solid ‘economic’ arguments connected to flexible prices, competition and enterprise, but also to draw in the Christian perspectives of social liberty, human dignity, the goodness of work, and the care for God’s world. The second question asks, ‘Why do markets fail?’, and he touches on the familiar subjects of externalities (spill-over costs), public goods (which need a collective decision), and monopoly power (supply restriction). Griffiths does also mention the problem of markets encroaching on territory that they properly should not, and the particular challenge of the 2008/9 financial crisis: ‘…a huge subject…’ (page 154). The third question asks, ‘How should government respond to market failure?’, the answer involving use of the tax system and rationing (statutory and perhaps tradable quotas). But Griffiths expresses caution and points to unintended consequences. Instead he makes warm mention of the work done by Elinor Ostrom on community self-regulation (page 157), something which I noted to follow up with interest.

Richard Turnbull then takes up the baton, with a closer treatment of externalities and the potential role of public bodies to intervene. He starts by listing various types of intervention: price controls; minimum service standards; lowering barriers to market entry; fines and subsidies; control of monetary policy. These are tools available in the face of various kinds of market failure. He then weaves together a discussion which draws on a theological perspective as well as a stance typically taken by economists as they feel for a proper role for government. The Christian element of this discussion is by necessity concise and perhaps rather selective, but rich none-the-less, drawing notably on the ‘two kingdoms’ approach of the Reformers. Turnbull’s conclusion is that ‘…the state has a proper role, in welfare and economics, but not to the exclusion of our personal responsibility and accountability’ (page 179). This set me wondering if this balance is itself a political decision, or something that emerges more organically. Ultimately Turnbull himself comes down slightly more on the side of market solutions to the problems of externalities, and gives theological reasons for this stance (pages 186-187).

Carlo Bellavite Pellegrini and Andrea Roncella then take as their title ‘Money, Finance and Banking: Can They be Ethical?’, and use this as a launchpad to sketch out both a technical and an ethical framework. The treatment of ‘money’ draws upon conventional observations, but adds in some interesting reflections. For example, there is a claim that without money the economy and human existence would ‘regress’ (page 196); also the statement that ‘…money is a set of possibilities…’ (page 197), which reminded me of the power implicit in money; and the observation that money is ‘…the best symbol of our free control of time…’ (page 197). I found these reflections stimulating, even if they were left somewhat hanging in the air. The authors then progress to ‘finance’, and the comparatively recent development of financial capitalism. They flag up problematic issues which arise when financial instruments are ’corrupted’ (page 202) and are no longer used for the common good, for example the mortgage securitization processes which ushered in the 2008 crisis. The third topic is ‘banking’, the concept of which is explained nicely, as well as the need for good capitalisation and reserves if stability is to be found. Pellegrini and Roncella describe the need for good structures and regulations, as well as ‘virtue’ on the part of the people involved: ‘…a transformation of the hearts of individuals’ (page 203). For me, this conclusion was perfectly reasonable but perhaps rather uncritically presented as springing out of Catholic social teaching. I would have enjoyed more in the way of engagement with the richness of the Christian tradition.

The final three chapters turn more overtly to church practice. Marta Rocchi borrows from (or provides?) the title of the whole book in her chapter: ‘Business Ethics for Ecclesiastics: A Virtue Ethics Perspective’, noting the extent and variety of ‘business ethics’ methodologies, and asking how this wisdom can be employed when it comes to the running of ecclesiastical structures. Rocchi’s chosen tool is virtue ethics, and she provides a useful description of how the four cardinal virtues can be mapped onto church management issues. I was especially struck by the link she makes between the virtue of ‘courage’ – even ‘magnificence’ and ‘perseverance’ (pages 228-229) – and enterprise. This would make a whole thesis of its own! Her conclusion points to the need for education aimed at improving church management, with the suggestion of teaming up with business schools. I wondered if this might be a rallying cry for organisations such as the Centre for Enterprise, Markets and Ethics.

The next chapter, authored by Luca Mongelli and Fernando Crovetto, is entirely concerned with telling the story of one example of the institutional church in entrepreneurial mode. This is an account of the ‘Salto di Fondi’ project, involving some land near Rome that was acquired and developed over a number of years before being sold. The premise set out by the authors is that the church ‘…needs to adapt with skill, creativity and innovation to historical and cultural changes’ (page 238). I enjoyed the narrative, but felt more interpretation could have been offered. One thing that caught my eye was the importance of a specific encounter and conversation, and the need for attentiveness when it comes to spotting opportunities – something that in my mind connects closely to enterprise.

The final chapter, by Carmelo Barbagallo and Giuseppe Schlitzer, is focused entirely on a description of the changes made in the financial systems in the Vatican City State since 2009, when the Euro was adopted. No doubt these changes were necessary and important, and the technical narrative is detailed. I must confess to having skipped through it somewhat, and I found the section detailing the recent external assessment of very satisfactory progress rather self-congratulatory, but I imagine that for some in the Roman Catholic Church the detail set out here is key, and the progress made reassuring. I did not have the sense that the earlier chapters led up to this concluding piece, but perhaps the various reflections set the context within which the reforms at the Vatican are clearly right.

In sum, I was pleased to read this book, and have taken away several snippets to ponder. Parts of it would serve very well as a primer for Christians who want to know more about how the economy works, and about how theology can contribute. Taken as a whole, it might well also succeed in the aim of the editors, in encouraging young Christians to study economics, and to ‘serve their country as entrepreneurs’.

Economics for Ecclesiastics: A Guide, edited by Martin Schlag and Giuseppe Schlitzer was published in 2024 by Libreria Editrice Vaticana (ISBN 978-88-266-0921-8). 286pp.

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 is a former Chair of 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, ‘acrylic resin’ art, and film-making. He is married to Sarah and they have two adult sons.