Richard Turnbull: Taxing for the BBC


I write in defence of Her Majesty’s Customs and Revenue!

Intellectually I believe in tax incentives, a low tax economy, flexibility and so on. These, however, are matters of debate and policy upon which individuals may legitimately differ. Once a policy is set it is surely both reasonable and moral that the law is consistently applied.

Enter the case of the BBC presenters.

Christa Ackroyd was a regional BBC presenter contracted through a personal service company. Ms Ackroyd lost a case in the First Tier Tribunal (which hears tax appeals) on her employment status with the BBC. Her Majesty’s Customs and Revenue (HMRC) were seeking to recover tax and national insurance from the company through which Christa Ackroyd was contracted via a mechanism known as IR35 – the essence of the argument being that to all intents and purposes she was an employee of the BBC and should be taxed as an employee rather than an independent contractor.

The full judgement was released on 10th February 2018 and can be read here.

Ackroyd was under contract for 225 days a year to the BBC and the contract, which covered 7 years, could be ended only by ‘material breach.’ She was restricted from working elsewhere without permission and her company could not provide a substitute for Ackroyd. The Tribunal ruled that she was economically dependent on this contract (in fact it seems that between 95% and 100% of her income derived from this contract) and its’ nature was that of a contract of employment. This was in essence stable and continuous employment, not a series of short-term contracts.

The presenters are now up in arms. Firstly, they protest that the BBC forced them to take this stance and contract through personal service companies and secondly, that the BBC is now inserting clauses into contractual arrangements transferring the entire risk for any potential tax liability to the individual. Many, say the presenters, are now working ‘out of contract’ and could therefore be released from their posts with minimal notice.

Both parties are being disingenuous.

First, in principle, HMRC are surely correct. If a presenter was a genuine freelancer, presenting programmes for different companies in different places on a relatively short-term basis then there is a real case for that individual to be considered self-employed whether individually or via a personal service company. However, if that presenter works nearly exclusively for the BBC (both in time and economically), and has, say, presented the same programme for many years, it is difficult to see how that can be reasonably justified.

Second, both parties have benefited from these arrangements. If a contractor operating through a service company agrees a deal with a client then the fees are almost certainly going to be higher than if the person is employed. This is because the main saving in these arrangements is 13.8% employers’ national insurance. Self-employment or contracting deals usually share the benefit; so the BBC pays less than 113.8% of ‘base salary’ and the presenter receives more than 100% of ‘base salary’. Strange that doesn’t get mentioned.

The benefits accruing to the presenter do not stop there. The second real benefit is what can be claimed as expenses payable from pre-tax rather than post-tax income. In particular the presenters – if self-employed contractors – will be able to claim their travel commuting costs (whether from Macclesfield to Salford, or even London to Salford). That is because a genuinely self-employed contractor will be travelling from place to place, from job to job, so it is entirely reasonable for such costs to be tax deductible. However, a commute from home to the same place of work is not tax allowable for the rest of us.

I do not know whether any of the presenters employ spouses, partners or family members to administer their companies, do the accounts, make the tea etc. However, I strongly suspect that some will do exactly that. Hence more income can be paid into the household at standard rather than higher rates of tax. Payment by dividends may also lead to some further savings on national insurance.

Third, by refusing normal employment contracts, and with the presenters resisting, the situation appears to be that the BBC are employing presenters without contracts. There is no difference in substance here from a zero hours contract – the sort that the BBC condemns in its investigative journalism of, for example, Sports Direct. The fact that their presenters have some 000’s on the end of their salaries/fees does not change the principle. The BBC could offer ‘employment contracts’ if it chose to do so and there is a sniff of hypocrisy when they expose others who do not do so and then fail to act properly themselves.


Why does it matter?

For two reasons.

First, the reputation of the market economy. An innovative, enterprise, capitalist economy requires a good deal of freedom of action and organisation. However, if participants in the economy – whether corporate or individual – act immorally the damage is to the whole system of democratic, market-based capitalism. What do I mean by acting immorally in this case? What about holding oneself out as an independent, self-employed contractor (in the case of the presenters) or requiring your presenters to do so (in the case of the BBC) when in reality the arrangement is one of employment as indicated in the judgement.

Second, the importance of incentivising the genuinely self-employed. Small, self-employed businesses are the life-blood of our economy. They provide opportunity, employment, freedom and income. Self-employment is one way in which motivated individuals express their aspirations to be successful and grow businesses. They take risks that others would not and do not and their entitlements to various employment or welfare rights are less than with employees. Hence it is right and responsible that those in that position receive at least some degree of favourable tax treatment. For these arrangements to be either abused or blurred will ultimately be damaging to those whom the system is genuinely designed to assist.

By muddying the waters, the BBC and its well-paid presenters, may be damaging not only our economy and its basis, but the genuinely, hard-working, striving self-employed.


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.








Steve Morris: “Entrepreneurial Leadership” by Richard Goossen and Paul Stevens

I have to begin by declaring something of an interest. Before becoming a priest in the Church of England I was an entrepreneur and writer of business books. For the majority of the time I ran my brand agency I was a non-Christian. Looking back, I think we managed to be a highly ethical business with no direct input from Christian sources. At one point I hired an ex-priest who came to work for us. I remember him saying that we were far more ethical than any Christian organisation that he had ever worked for. In fact he said that we were the most Christian place he had ever worked.

So you’ll probably realise why I have a few problems with this book by Goossen and Stevens, who at times seem to make a claim for the moral high ground for especially Christian entrepreneurial leaders.

But let’s begin at the beginning. This is certainly an admirable enterprise and it sets out to ask and answer some pertinent questions. Are entrepreneurs born, not made? What difference does a Christian faith make to being an entrepreneur? Where does leadership come from?

The book begins with some interesting section on what entrepreneurialism is – what is its essence. This is clearly an important issue for the church. There is perhaps an inherent dualism whereby church is seen as a place of holiness and work a place of toil and compromise. The authors are keen to help us torpedo this.

The authors are persuasive in their conviction that entrepreneurialism is a process more than a genetic or societal disposition. This is liberating and helps us see that we all have the ability to innovate and embrace change. They draw on the work of that great hero of modern management, Peter Drucker who argues that there is no such thing as an entrepreneurial personality. The authors suggest there are five tenets that make up the essence of entrepreneurship – innovation, seizing opportunities, enjoying it, doing risk analysis and developing good habits.

The book is interesting in its dissection of what makes a leader and the particular challenges of being a Christian leader. This is especially true when we begin to grapple with what it is to be a servant leader. There could have been much more on this – perhaps a whole book.

Goossen and Stevens move onto the thorny issue of what exactly is the difference between the Christian entrepreneurial leader and the secular one. This had me gripped and although I didn’t agree with it all, it is a discussion that needs having. The authors highlight a major difference between the two categories in terms of worldview. Thinking back to my time as a non-Christian entrepreneur, that does hold water.

The authors suggest that the worldly entrepreneur tends to spin a narrative of self-making, eliminates God from the equation and does it mainly for self-fulfilment. I wonder if this is just too partial. Many non-Christian entrepreneurs I know are driven by far more complicated and also altruistic motives for their work. It is so easy to sound self-righteous. The authors position the Christian entrepreneur thus. They,credit God, they look to their faith for ethical anchors (the ten Commandments come in handy), and they develop spiritual gifts in themselves and others for the glory of God.

The book covers much important ground. It looks at how being a Christian adds meaning and purpose the work. It gives a blueprint for how to put practical Christian entrepreneurial leadership to work. And this is perhaps the most useful and cogent part of the book. This is no trot through the Bible it is a programme for how to become the leader God wants you to become. It is in these chapters that we begin to get a sense of the author’s passion and deep scholarship.

I have a few minor quibbles. The points for reflection and discussion are a little twee and seem grafted on. But this is the case for many Christian books that try to cram a bit of interaction and perhaps to open up their market to home groups and other discussion groups.

What does work well is the tone. The book is beautifully written by people who thought long and hard and prayed about it. There could have been more about being an entrepreneur in church perhaps, but the authors are on the money when they describe the world of work and commerce as the great mission field and testing ground. You have only to spend a few hours in the City of London at rush hour and see the tens of thousands of people going to work or returning from it to wish that we had more engagement here.

The City is steaming on, the world is moving apace and we can’t afford to be stuck in churches while ignoring the great opportunities that are out there.

This book will encourage people to see their calling and to go for it. In that it is positive. I would have liked to see more credit given to non-Christian entrepreneurs but probably that’s just me being fussy. Entrepreneurialism can be Godly. Thank God for that.


“Entrepreneurial Leadership” by Richard j. Goossen and R. Paul Stevens was published in 2013 by IVP USA (ISBN-10;0830837731). 185pp.

Steve Morris is the parish priest at St Cuthbert’s North Wembley. In earlier days he ran a brand agency, worked as a journalist and wrote books about management.


Richard Turnbull: Financial education is essential to a moral economy


Case Study 1

A friend of mine recently asked me about a possible investment in a bond returning 9%. He wanted to know if it was too good to be true.

Almost certainly.

I asked what other alternative rates he had researched – by and large these seemed to be between 0.75% and 1.25% depending on terms – the normal sort of range one would expect from a bond-based investment return today. That should have been the first warning bell.

I asked him how he understood the concept of a bond. It was, he said, when you hand over a sum of money to a financial institution in return for a guaranteed return in a rate of interest.

I suggested that this particular scheme may have been more an investment which put capital at risk rather than a fixed-rate bond. He may indeed get his 9% but only at the expense of the capital he has invested; essentially the interest includes a repayment of capital. It could even be worse than that. The investment may be ‘asset backed’ by investment in property or other assets or even directly in a business. The ability to obtain the repayment of capital depends entirely on the performance of the assets or business.

So capital repayment was unlikely to be guaranteed. The second warning.

The next question was whether the scheme was guaranteed by the Financial Services Compensation Scheme. This is linked to the previous point – a bond which is not a bond but an investment against assets will not be covered by the FSCS. The third warning.

I asked whether he had ever heard of the company offering the so-called opportunity. The fourth warning. I wondered whether an inexperienced, young retail investor without risk capital to spare should ever invest outside of the major household names.


Case Study 2

In 2017 the British Steel Workers Pension Scheme closed to future accruals. This was partially at least as a consequence of the deal reached with the current owners of the Port Talbot steel works, Tata Steel, to protect around 8,000 jobs in South Wales. All parties accepted that Tata would be unable to continue to fund the existing scheme. This meant that existing workers had to decide what to do with their pensions. The choices were essentially, entering the Pension Protection Fund, a new Tata scheme (both these options involving reduced benefits) or transfer out to other arrangements.

The BBC reported one worker claiming that they had lost £200,000 by transferring out. The BBC also reported that some £1.1bn and some 2,600 transfers had been made. The Work and Pensions Select Committee, chaired by Frank Field MP, reported on the case. The Report noted that ‘dubious advisers exploited BSPS members for personal gain’ supported by ‘unregulated and parasitical introducers’ (para 50). The issues were the level of advice fees, high transfer fees and high on-going investment charges – not to mention the suitability of the advice to transfer out. The full Select Committee report can be read here.


Financial and business education is essential to a moral economy

These two quite different incidences made me think about basic financial and business education for all – i.e. beyond those taking Economics or Business Studies. None of my children report to me any input or teaching at school about budgeting, how pensions work, savings, managing debt, the tax system, basic information about business and the economy. They all were scathing about lessons in Citizenship. I am not competent to comment on the latter, but it seems to me we are missing a trick.


  • – A moral economy certainly requires good behaviour by companies and corporate participants in the economy. It also requires good judgement calls by individuals and at least some ability to assess what they see and are told.
  • – An economy which works for everyone needs some commitment to saving and proper management of personal debt as well as national debt and borrowing.
  • – In order to exercise that judgement and manage saving and debt business and financial education is essential.
  • – Wary as I am of centralised curricula and demands, I wonder whether there should not be some form of Certificate of Business and Financial Education taken by all before leaving full-time education.
  • – This would also be a significant opportunity for the local business community to support schools in a practical way building perhaps an effective partnership for the future.


An enterprise economy which rewards innovation and creativity is essential for the well-being of all, for the common good. It is unrealistic to think that we can abandon models of economic growth and wealth creation as the key provider of jobs, goods and services, a tax base and indeed the profits for further investment. However, for that economy to function as a moral economy we need to ensure, yes, appropriate regulation and law, but more particularly that all participants in that economy can take part, not with equal outcome, but with equal opportunity. This requires partnership, skills, and indeed a degree of economic freedom and liberty. Hence, education lies at the heart of this vision, equipping future participants, whether entrepreneurs, workers, consumers or citizens. The first step to a moral economy is educated participants.


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: Carillion was built on sand


First, welcome to the new weekly blog of the Centre for Enterprise, Markets and Ethics. We have published occasional blog posts in the past but from February 2018 we intend to publish a weekly blog, although exact timings may vary:

  • – Reflecting on any relevant news stories
  • – Establishing a series of posts on key ethical issues
  • – Over time developing a series of contributors

Our purpose as a Centre is to encourage deep thought in building an enterprise economy founded on ethical principles. We are passionate about business and believe business to be a key force for good, indeed for the common good, for the relief of poverty and the delivery of jobs, goods and services in the economy. Poor business practice and behaviour, however, severely damages the case. We want to think about the issues, ask questions and encourage participants to think. You don’t have to agree but do please reflect with us. We will avoid politics but not policy, draw on theology, philosophy and ethics as well as business and economics, and, try to dig deep, avoiding knee-jerk reactions!

What are the lessons from the failure of Carillion?

First, a confession. I did not know that Carillion, formed from a demerger of the Tarmac Group in 1999, had absorbed some of the major construction firms in the country, including McAlpines and Mowlams. The main remaining competitor was Balfour Beatty – merger talks were undertaken, unsuccessfully, in August 2014. So, the first question is that of size and competition. One simply asks how wise it is to have allowed a such a firm to grow to such an extent, not least as a major recipient of public sector contracts? Clearly bidding for a contract to build HS2 or a major hospital requires a company or a consortium of some size and significance. However, a lack of competitiveness may be disguised and indeed the public sector might be heavily exposed by a failure – as indeed has been the case.

Second, the nature and range of the company’s activities. In the 2016 Annual Report, the company describes itself as ‘one of the UK’s leading integrated support services companies, with a substantial portfolio of Public Private Partnership projects, extensive construction capabilities and a sector-leading ability to deliver sustainable solutions.’ One nearly falls asleep before the end. Of course, technically I know what it means, and more detail is given subsequently but it does leave one with the impression of a lack of focus. So the company that builds (with others of course) HS2 and is the prime receiver of Network Rail contracts also delivers school meals and cleans our hospitals. Whether the local unit is the school, the hospital, the local authority, the health trust or the academy trust, surely it is that local unit that is best placed to place contracts for supplies preferable in the local area with smaller and medium sized firms?

Third, the business model. From the point of view of the collapse of the firm these issues go to the heart of the matter. Large scale, extensive contracts – with all of the complexities of revenue recognition, the need for a constant supply of new contracts to keep the cash flow moving (and hence a likely deeply flawed risk analysis) and hence a dependency also on ever increasing debt funding requirements. There are constant references in the Annual Report to the quality of the order book and the pipeline of new contacts. In its 2016 accounts Carillion’s borrowing requirements rose by 29% to £219m. In its July 2017 profit warning the company wrote down its contract values by £845m. All of this also raises significant questions about public procurement – if the public purse always demands the ‘cheapest’ the outcome may be not the best ‘value’ especially if margins are so thin so the slightest problem with a contract (for example, discovering asbestos at the Royal Liverpool hospital) might send a company over the edge.

Fourth, this feeds into the problem of lack of transparency. Millions of pounds of contract values and the associated debt did not appear on Carillion’s balance sheet as projects were funded in joint ventures or were otherwise off-balance sheet. I would not be surprised (but I do not know) if there was substantial interest capitalisation and management fees hidden in the joint ventures. It was, presumably, these contracts that were written down. The impact fed straight through to Carillion.

The group also carried nearly £1.7bn of intangible assets in its accounts (effectively the ‘goodwill’ from previous acquisitions). Given that the group’s total net assets were merely £730m the perilous nature of the current funding demands facing the company are clear to see. The goodwill did not prove to be of much worth.

Fifth, punitive payment terms to its SME suppliers, in 2013 raised to 120 days – four months for its suppliers to be paid! To be honest I simply find that morally unacceptable. The small suppliers were funding the company. In the 2016 accounts trade payables were 25% higher than trade receivables and indeed were 20% higher than the previous year.

Sixth, the pension scheme deficit. In 2016 the Carillion pension scheme liability rose from £406m to £811m. Pension scheme problems have loomed large over many businesses and outside the public sector defined benefit schemes are now rare. Indeed such deficits (as with Carillion) are with now closed or partly closed schemes. Liabilities are now on company balance sheets – partly, I suppose, to make the company take responsibility. This is a double-edged sword. Companies have an absolute responsibility for their employees and, it is true, quickly take advantage if any such scheme is in surplus, but the burden of such deficits is almost certainly unsustainable. It is probably time to call time on defined benefit schemes in both private and public sector.

The importance of all of this?

Carillion displayed many of the characteristics of an overtrading contracting company. To continue to exist it needed cash and credit (borrowed, taken from suppliers, not properly funding the pension deficit) and new contracts and deals all the time. Margins were thin. Cash flow was key; the difference between success and failure was a fine line. Intangible assets that were, shall we say, highly intangible; off balance sheet items written down having devastating effect. Add to that the old chestnut of inappropriate remuneration policies. I have no objection to highly paid executives. What I object to is highly paid poorly performing executives. Golden parachutes without effective claw back mechanisms. The losers – the employees, the customers (not least the government) and the suppliers.

And, the case for capitalism.

First, there are regulatory, auditing and accounting questions. The accounts of large FTSE companies have become so complex and opaque that there is a serious need to review:

  • – The nature and purposes of financial reporting
  • – The question of ‘going concern’
  • – The transparency of disclosures around goodwill, debt, and off-balance sheet transactions

Many with business and accounting knowledge no longer expect the P&L account to tell the full story – the key lies in the cash flow – where the dangers to the company were spotted of course by the short sellers. However, surely one of our principles of corporate reporting should be clarity. Of course, I realise that this is not the first time that some of these detailed technical matters have been reviewed and ever more detailed accounting standards and disclosures developed to try and cover eventualities. I cannot rewrite an accounting standard in a sentence and neither should I try.

I am saying, it is time to stand back and ask some more basic, fundamental questions of purpose.

Second, it points to the continuing importance of corporate governance. In the same way that ethics statements on boardroom walls are no guarantee of an ethical culture, never mind of good behaviour, so also, ever lengthening reports from directors, remuneration, nominations and strategy committees, not to mention the directors’ report itself, and the auditors’ report may be missing the basic points about corporate governance. Carillion’s 2016 Financial Statements did not start until page 89 of its Annual Report. Honesty and integrity in governance, greater clarity over the independence shall we say of independent non-executive directors, transparency in reporting to avoid cliff edges, long-term decision-making and long-term, not short-term, rewards. Yes, I know we have had reviews of corporate governance before and I am hesitant about more bodies and regulators, but I do wonder if we need not another report, but a Standing Commission on Corporate Governance.

Third, if we want to avoid more and more pressure to return to another failed model (public ownership, large public sector contracting with its cost overruns and corruption) then we had better seek to develop a better private sector. We need to make again the case for an ethical capitalism. We need also to develop better, or at least healthier approaches to the public/private sector relationship. The reality is that private financing of public infrastructure is the only sure way of delivering capital projects. The social contract, however, needs renewing. Contracts in which the private provider exploits the public commissioner on minor matters stick in the public mind for decades. We need a new approach from both parties to the social contract – private and public.

Fourth, greater honesty and integrity from all parties. I doubt the Board of Carillion sought to do other than act in the best interests of the company, or there was any deliberate actions to deceive. Only rarely is that actually the case. However, there was a problem and the problem was simply kicked down the road, or put in the ‘too hard to handle’ pile. In that respect it is not only the Board, but pension trustees, government, banks and so on who also have some questions to answer.

Let’s build capitalism not upon sand, but upon rock.

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 Poverty of Nations” by Wayne Grudem & Barry Asmus


The Poverty of Nations comes with enthusiastic endorsements: Robert Sirico says that “The table of contents alone provides clearer instruction than many graduate students get in economics courses” and Rick Warren asserts that “It should be required reading in every Christian college and seminary, by every relief and mission organisation, and by every local church pastor”. The authors have high ambitions: they state that their goal “Is to provide a sustainable solution to poverty in the poor nations of the world” (page 25) and that their “primary audience” is Christian leaders in poor nations (page 31), and they hope that Christians in more prosperous nations will also read the book. Readers, therefore, start with great expectations. Unfortunately, however, many will end up disappointed. Although the underlying thesis is sound and the book contains sensible analysis, it suffers from serious deficiencies.

Wayne Grudem is a well known theologian and Barry Asmus an equally well known economist.  Both are committed Christians and are at pains to stress that financial well-being is not the ultimate goal in life. Indeed, this may be the only economics book that contains a call to trust in Jesus Christ (page 41). Nonetheless, the book’s subject is material well-being. The authors suggest that, once the fundamentals are understood, “it becomes evident that if we want to solve poverty, the correct goal is that a nation continually produces more goods and services per person each year” (page 45). They passionately believe that the best (perhaps, only) mechanism for achieving this is the free market but they also emphasise that “the right kind of economic system does not by itself bring a nation out of poverty” (page 107). They discuss the importance of political and legal systems (especially the rule of law, property rights, the absence of corruption and the provision of adequate education and healthcare), various different kinds of freedom (including freedom of movement and of establishment and freedom from excessive regulation) and core political values (i.e. cultural attitudes and norms).

The authors place the responsibility for pulling a nation out of poverty firmly with the nation’s own leaders. They recognise that wealthy nations have a part to play (e.g. by lowering trade barriers and stopping “commodity dumping”); they accept that limited, targeted use of foreign aid may be appropriate (although they repeat the well rehearsed arguments against its widespread use); and they recognise that some of the blame for Third World poverty rests with more wealthy nations. However, they conclude that “even if external factors or entities have had some negative effect in poor nations, they are still secondary causes of poverty today, not primary causes” (page 83). The poor are not poor because the rich are rich.

The authors recognise that what they are saying is not new. In particular, they owe a huge debt to David Landes, quoting “The Wealth and Poverty of Nations” several dozen times (perhaps, excessively). Nonetheless, it is good to see the core arguments for a free market system clearly re-asserted and the chapter on its moral advantages is particularly welcome. The authors defend the system against all comers and suggest that, even in relation to the evils of selfishness and materialism, it is better than the other options. Conversely, they attack these other options, quoting with approval Claire Berlinski’s summary of Margaret Thatcher’s view that “socialism was not a fine idea that had been misapplied, it was an inherently wicked idea” (page 198).

There are also shorter but nonetheless interesting discussions of the dangers of governments becoming monopoly purchasers and the moral issues associated with “wants” (i.e. desires), which the authors suggest should not be equated with greed but rather regarded as “a good thing, part of God’s original creation” (page 218). This leads to the conclusion that “it is important for people to think of an “ideal” life as one of joyful production that benefits both themselves and others” (page 345).

So what is wrong with the book? First, it tries to deal with too many different issues. It contains no less than 79 different recommendations and the result is that the second half of the book at times feels like a list. Many of the points overlap (which results in repetition) and some are not properly argued or developed. For example, the brief discussion of need for religious freedom fails to show how it connects with economic growth, whilst the discussion relating to the family (including sexuality in general) is shallow.

In principle, the idea of bringing together a theologian and economist is a good one, allowing the economic analysis to be firmly grounded in theological and ethical considerations. However, in practice, the result is that neither the economic nor the theological arguments are properly developed. In particular, some of the biblical analysis is disappointingly superficial and contentious. For example, Grudem argues that the Bible sees the role of government as being essentially limited but fails to explain why it is that the authors favour universal compulsory government provided education (which many Christians until the 20th century would have strongly opposed).

The authors place great weight on the Biblical command to “Be fruitful and multiply and fill the earth and subdue it” (Genesis 1:28, which they quote a dozen times). This is a good starting point for a Christian view of economics but the authors place a weight on it that it cannot bear. In particular, it underlies their comments relating to the need to secure “freedom to utilise energy resources” (page 283) and other comments relating to the environment, some of which are highly contentious yet asserted in strident terms. This is a pity because (as Landes has pointed out), the Judeo-Christian subordination of nature to man has been important to economic development and there is a dangerous element of pagan animism underlying parts of the ecological movement today.

The statement that society needs to believe “that the earth’s resources will never be exhausted” (page 339) is another example of the same issue. There is a respectable case for this belief and it is important to challenge at the doom mongers who for two centuries have been constantly warning of catastrophe caused by excessive resource utilisation. However, the single page that the authors devote to this subject results in their claim appearing as an a priori belief rather than a carefully thought through conclusion.

More generally, despite the acknowledgement that the free market system is not perfect (page 207), the book contains little in the way of balanced critique of it and it is disappointing that, after some very good analysis and foundation laying in the first two-thirds of the book, the final third leaves one with the impression that the authors are inviting poorer countries to adopt the U.S. system wholesale, including things such as the right to bear arms (page 232) and the U.S. concept of patriotism (page 359), which do not appear to have much to do with economic development.

These are serious defects. They are likely to alienate many readers and fail to persuade others who might be open in principle to persuasion, including the Third World leaders who the authors claim are their target audience. Furthermore, those wanting detailed historic economic analysis would be better off with The Wealth and Poverty of Nations. Nonetheless, there is enough that is good within the book to make it worth reading and it might also be useful as a book to be critically discussed in the Christian colleges, seminaries, relief and mission organisations and churches to whom Rick Warren has recommended it.


“The Poverty of Nations: A Sustainable Solution” was published in 2013 by Crossway (ISBN: 978-1-4335-3911-4). 373pp (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.


Andrei Rogobete: “The End of Growth: Adapting to Our New Economic Reality” by Richard Heinberg


Richard Heinberg is an American journalist and author that has dedicated most of his writing career to environmental causes. His most notable works include publications such as, The Party’s Over: Oil, War, and the Fate of Industrial Societies (2003), and Powerdown: Options and Actions for a Post-Carbon World (2004).

Just from the book titles alone, an astute reader can gain a sense of Richard Heinberg’s environment angle. Indeed, there is a common thread that flows throughout his body of work and which is probably best exemplified in the book we are reviewing here: The End of Growth: Adapting to Our New Economic Reality (2011).

In a nutshell, Heinberg’s thesis is this: Global economic growth as we have become accustomed to over the past century or so is “…over and done with” (page 1). When talking about “growth”, Heinberg is referring here to the overall size and expansion of the economy, i.e. an increase in both consumption and production (ibid.).

So how come? Why will there be no more economic growth? Throughout the book Richard Heinberg builds his argument on three main assumptions. First, the depletion of natural resources (fossil fuels & minerals). Secondly, the negative environmental impact of exploiting resources (e.g. Deepwater Horizon, the BP oil spill disaster). And thirdly, the ‘financial disruptions’ caused by our defective banking and regulatory system and its inability to deal with both “resource scarcity and soaring environmental costs” (page 2). For these three main reasons, historical records of economic growth are no longer sustainable in the future.

Let’s turn slightly to the structure and content of the book. “The End of Growth” is well-written and thoroughly researched. From the onset, it becomes apparent that the author has a wealth of experience and knowledge of the subject. Indeed, Heinberg spent over two decades examining and writing about environmental issues and this clearly shows throughout the book.

The book is structured around seven main chapters. The first two open the discussion with a more generalised debate on historical economics and the influences of both Marxist and capitalist ideology in shaping the current state of global macroeconomics. Heinberg also talks about the financial crisis of 2007/8 and how the actions of the Federal Reserve (like Quantitative Easing) are akin to a “Ponzi Scheme” that could ultimately lead to rising interest costs and even currency failure (page 75).

Chapters three and four turn towards the environment and the limitations of earth’s natural resources. Economists and experts in the field have largely ignored the obvious: natural resources are finite. As they become increasingly scarce, the race and exploitation in finding them will have dire consequences on the environment. The BP Oil Spill is given as a clear example of how petroleum companies need to search in deeper and more dangerous areas to find oil. Heinberg goes through all the major natural resources and explains their limitations, including, Oil, water, food, and metals. In chapter four Heinberg remains sceptical that new technologies and innovations will be sufficient to promote growth and stop climate change. He asserts that, “Civilisations advance human knowledge and technical ability, but they also tend to generate levels of complexity they cannot support beyond a certain point. When that point is reached, civilisations decline or collapse” (page 187).

Chapters five and six move the discussion toward a more international dimension. Heinberg effectively sees China’s recent economic growth as a “bubble” (page 190). A bubble that is overwhelmingly dependent on favourable age demographics and a reliance on coal as a primary energy source. Chapter 6 talks about how ill-equipped our current geopolitical system is to both adapt and succeed in a post-growth, contracting economic climate.

Finally, chapter seven concludes with an explorative study in how society (especially civil society) can adapt and grow in a post-growth world. In short, Heinberg believes that organising and local community initiatives will have a crucial role to play. He speaks about “Transition Towns” and “Common Security Clubs” where “The work of local groups should include the sharing of practical skills such as food production and storage, home insulation, and the development and use of energy conserving technologies.” (page 270).

At the end of the day, Richard Heinberg’s “The End of Growth: Adapting to Our New Economic Reality” remains something of a paradox. On one hand, the core of his message rings true: we are consuming and in some cases, abusing resources that are by definition, finite. On the other hand, it feels like the book is too pessimistic and sceptical – it underestimates the power of new and innovative technologies and overemphasises the negative impact of consumerism. For instance, his analysis on electric cars in Chapter four (page 159) is superficial at best. Heinberg fails to consider the rapid advancement in battery technology and their ability to store power.

Readers in search of a gloomy, sceptical analysis on the future of the environment and economic growth should pick up this book. Those seeking a more balanced account should look elsewhere.


 “The End of Growth: Adapting to Our New Economic Reality” was published in 2011 by Clairview Books (ISBN-10: 1905570333). 231pp.

Andrei Rogobete

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

Richard Godden: “A Voice to be Heard: Christian Entrepreneurs Living out Their Faith” by Richard Higginson & Kina Robertshaw


A Voice To Be Heard is not a systematic economic, theological or historical analysis of Christian entrepreneurship, although it contains a number of economic, theological and historical observations. Instead, it comprises ordered reflections on Christian entrepreneurship based around the stories and thoughts of 50 contemporary Christian entrepreneurs interviewed by the authors.

The authors are the well-known Director of Faith in Business at Ridley Hall, Cambridge, Richard Higginson, and the rather less well-known Zambian entrepreneur, Kina Robertshaw. They say that the book is “for actual entrepreneurs, aspiring entrepreneurs and anyone who wants to know more about them” (page xvi) but they are being unduly modest in their expectation: the book provides food for thought for all Christians and, since it is readable, interesting and important, it deserves to widely read.

It begins with pen portraits of five Christians involved in business and uses their stories to clarify what the authors mean by the term “Christian entrepreneur”. They are not referring to “entrepreneurs who happen to be Christian” but rather to “Christians who see their companies as an outworking of their faith” (page 13).

The authors then provide some brief comments on what the Bible has to say about entrepreneurship, attitudes to entrepreneurship in the UK today and the history of Christian entrepreneurship in the UK. This part of the book comprises less than 50 pages, so it is not an in-depth study. However, it is useful in framing the discussion that follows.

The heart of the book comprises an examination of a series of issues that are of particular relevance to entrepreneurs the idea of a calling to business; the question whether business may contribute to the advance of God’s Kingdom; vision and purpose; risk taking; relationships; stewardship; integrity; prayer; and perseverance. Each section combines the stories and views of those who have been interviewed with the reflections of the authors.

Fortunately, the authors have resisted the temptation to provide statistical analysis of the answers to their interview questions or to include the answers of all of their respondents to every question. They have been selective in their quotes and used them to set up a dialogue on particular issues in which they have then inserted their own thoughts. The result is that business issues are brought to life by means of stories and the related theological and ethical issues are clearly laid out.

The authors are clearly reluctant overtly to criticise those they interviewed. However, the methodology used invites the reader to evaluate what is said and the authors gently correct some views and challenge others, perhaps recognising that they should not expect those they have interviewed to be as successful as theologians as they obviously are as business people!

The most interesting part of the book is that which considers the answers that the authors received to the question “Do you see your working business as contributing to the advance of God’s Kingdom?” They tell us that the answer “was a resounding yes” (page 77) but that the answers to the follow-up question – “If so, how?”, varied hugely. Some of the entrepreneurs focussed on their belief that they are contributing to making the world a better place, some on the way in which their companies are run (i.e. the embodying of Christian values), others on the opportunities to witness provided by their businesses and still others on the opportunity to give to charitable and Christian causes. The authors suggest that the Kingdom of God is being advanced in each of these four ways and urge entrepreneurs to have “a broad view of God’s Kingdom rather than a narrow one” and “to embrace all these different categories in a holistic understanding rather than limit themselves to only one” (page 89). This is surely right: we are called on to serve God not in spite of our work or even simply in addition to it but in it and through it (see Colossians 3:23).

The authors issue an equally big challenge to the Church as a whole. This arises from the answers to the question “How do you view the attitude of the church towards you? Negative or positive?” (page 189). A mere 20% of the answers were positive and a further 30% were broadly neutral. The rest of the answers were negative, a result that demonstrates that, despite progress in recent years, Christians who have been called into business are often “made to feel like second-class citizens in God’s Kingdom” (to quote Jeff Van Duzer, in Why Business Matters to God).  Many of the entrepreneurs interviewed “often feel appreciated only for the financial support they are potentially able to provide” (page 194) and there is very little evidence of positive support being provided to Christians in business.

Of course, some of the apparent problems may be a matter of perception and it may also be that people in churches naturally offer support to those who appear obviously in need of it (perhaps even emotionally fragile), overlooking entrepreneurs since they are the kind of people who appear self-sufficient. However, the Church needs to do better and the authors suggest that there are six things that the local Church ought to do: to listen; to give entrepreneurs a voice in the Church; to pray; to make biblical teaching more relevant; to be open to the fact that God might seriously be calling people beyond the confines of the Church and to recognise that entrepreneurs may have a significant role to play in Church leadership. These are all points that deserve proper consideration and action.

Overall, the book is broad rather than deep in its analysis: there are many books that examine the relevant history and underlying theology and ethical issues in greater detail and libraries could be filled with weighty tomes examining the economics relevant to entrepreneurship. Furthermore, the book does not have incisive new insights for those who have already looked at the theory in detail. However, these comments are not criticisms: they merely indicate the nature of the book. It focusses on the practicalities and real-life issues faced by Christian entrepreneurs and it does not merely look at the easy bits: bankruptcy and difficult issues relating to integrity are addressed in an honest manner. Of course, there are things that many would take issue with (e.g. the suggestion that God resembles an entrepreneur in having “a willingness to take risks”, page 28) and some parts of the book are weaker than than others (e.g. the chapter on prayer is of a very general nature and has little that is specific to entrepreneurs). However, these points are minor quibbles: the book is well worth reading.


“A Voice To Be Heard Christian Entrepreneurs Living Out Their Faith” was published in 2017 by Inter-Varsity Press (ISBN: 10: 1783595655); 208 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.




Ben Cooper: “An Idol Unmasked: A Faith Perspective on Money” by Peter Selby


Peter Selby’s polemic against modern money, An Idol Unmasked, was published a few years ago now, in 2014, but captures an attitude to money and modern finance that remains widely prevalent. It is, as he says, a book ‘about money, what it has become, and what it represents in our lives’ (page 3). His key claim, expressed repeatedly throughout the book, is that money has acquired the characteristics of an idol. It now rules peoples’ lives in a way it never quite did before. ‘The quite widely held view,’ he says, ‘that money is not in itself harmful, only the love of it or greed for it, is turning out to be out of date’ (page 3). Over two of the main chapters, Selby links this claim to the decreasing sovereignty of nation states over money, and the increasing role of global financial institutions in the creation and movement of money. More than that: ‘money has long since passed from the control of the public authorities and has become itself the major controlling force behind the organisation of society’ (page 30). Having identified the idol of money and its power over us, he then turns in the final chapters of the book to some theological reflection.

One immediately obvious flaw with Peter Selby’s claim to have unmasked the idol of money (expressed, for example, in the title of the book) is the inconvenient truth that associating money with idolatry is hardly a new idea. Identifying money as an idol or potential idol has deep roots in Judeo-Christian thought. It’s there in the Hebrew Prophets, in Jesus’ teaching about ‘Mammon’, in the apostolic teaching about greed (‘which is idolatry’, Col 3:5), and plays in important role in Christian ethical discourse thereafter. Selby clearly knows this, and even makes reference to some of this material, but seems strangely slow to acknowledge or engage with what others have said.

To be saying something new, Selby needs to demonstrate that money has changed somehow – that it has become ‘more of’ and idol, with a more powerful role over peoples’ lives than it has ever had before. But the argument here is unclear. One problem is that he never quite defines what he means by ‘money’, and seems to use the word in a number of different ways — sometimes referring to currency, sometimes wealth, sometimes ‘a set of ideas’ or even a ‘controlling force’. Another problem is the absence of any evidence or data beyond the anecdotal to back up the claims being made. These are basic issues of method. There also seems to be an insufficient grasp of some of the issues. For example, Selby argues that the globalization of money creation – removing some of the sovereign power once possessed by individual nation states over their currencies – has given money a destructive, anarchic life of its own, ‘acting only on its uncontrolled instinct to produce more of itself’ (page 53). It doesn’t seem to occur to him that the decentralization of money creation might have some good features – taking away too much power from any one player in the system, for example. No doubt there’s much more to say on this, and these are complex issues. The problem is: the issues and counter-arguments are hardly raised at all. Selby generates considerable heat as he develops his polemic – but not much confidence in his depth of understanding.

What then of the theological reflection towards the end of the book? This begins well enough with some reflections on the nature of idolatry. But we then get some very strained readings of Jesus’ parables as anti-market polemics (pages 98–110) – a classic case, if ever there was one, of someone reading into a text precisely what they want to hear. Weaker still is the proposed solution to the problems Peter Selby finds in modern money – what he calls ‘the mercy economy’ (pages 111–126). Given everything he’s said earlier in the book, this rather surprisingly doesn’t seem to involve getting rid of money altogether. It is in fact quite hard to work out quite what it is or might involve, beyond perhaps some debt forgiveness and maybe, perhaps, some kind of universal basic income (page 124). Whatever the ‘mercy economy’ is in detail, Selby seems to be suggesting that the solutions to the problems of money-idolatry lie in structural change or intervening to reform ‘the system’. For a theological reflection, there is precious little on the battle in the human heart behind our tendency to idolatry – and what can be done about that – which is where a deeper reflection on the Scriptures might have taken him.

Reviews of bad restaurants can be fun to read and I suspect they are quite fun to write (which then compensates, somewhat, for the critic’s experience of the meal itself). Every failed dish or example of poor service is described and unpicked with a darkly humorous glee and relish. One could probably do the same with the claims and arguments of An Idol Unmasked, picking over them one by one. But the practical purpose of a bad restaurant review is to advise readers to find a meal elsewhere. Likewise with this book. Anyone in search of a balanced and insightful analysis of contemporary monetary systems and markets, coupled with some deep theological reflection, is not going to find it here.


 “An Idol Unmasked: A Faith Perspective on Money” was published in 2014 by Darton, Longman and Todd Ltd (ISBN 978-0-232-53111-4), 140pp.

Revd Dr Ben Cooper is Minister for Training at Christ Church Fulwood in Sheffield. He holds doctoral degrees in both Theology and Economics. Before training for ordained ministry, he was a post-doctoral research fellow in economic theory at Nuffield College, Oxford. He is married to Catherine and has three children.




Andy Hartropp: “And the Weak Suffer What They Must?” by Yanis Varoufakis


In this book, Yanis Varoufakis (Professor of Economics at the University of Athens) gives a highly informative and very well-informed account of the austerity measures enforced by the institutions of the European Union (EU) since the financial crisis which began in 2007-2008.  He also sets these events and policies in the wider context and history of the EU, and especially of the economic relationship between the EU and the USA.  As the title shows, Professor Varoufakis is deeply concerned about the impact of these policy measures on the people who are weakest in a society: most plainly, the weak in Greece (his own country), but also in other EU countries.  This is a concern which Christians must of course share, given the many biblical injunctions to uphold the cause of the poor and needy.

Varoufakis’ account is especially well-informed because of his (short-lived) role as Greece’s Finance Minister between January and July 2015: he was directly involved in many lengthy meetings between the Greek government and the major EU bodies.  These negotiations were focused on the debt crisis which hit the Eurozone in 2010 (a direct consequence of the 2007-8 crisis in London and Wall Street), and in which the desperate finances of the Greek banks were a central part.  Prof Varoufakis was already well underway with writing this book when he chose to stand for election in Greece – motivated by precisely the concerns and arguments about which he was already writing.

More than half of the book is taken up with an account of the economic relationship between the USA and the EU and its predecessors: the European Coal and Steel Community, which evolved into the European Economic Community [Common Market].  The key aspects here centre on macroeconomic policy and the nature of global capitalism: and these are, as Varoufakis shows, central to the contemporary challenges for policymakers, for capitalism and indeed for democracy.

This material (chapters 1 to 5) often takes a fair amount of wading through (although it is thoroughly researched).  But the case he presents is a strong one.  In his own words (pp137-8): ‘The reason Europe seemed to be prospering in the late 1990s and until 2008, despite having introduced an unsustainable gold standard [i.e. permanent monetary union in the form of the Euro], had little if anything to do with the design of its single currency and everything to do with the fact that there was no need for political surplus recycling [emphasis added], as the world of private finance was doing plenty of fair-weather recycling’.  What Varoufakis means here by ‘recycling’ is nothing to do households with putting plastics and paper into bins of various colours (!).  Instead he is talking about macroeconomic and monetary flows between and within countries.  In essence, during the 1950s and 1960s, the ‘Bretton Woods’ economic institutions helped to ensure that no developed economy slumped into permanent recession or depression; and, even after the collapse of those arrangements in 1971, the large and growing ‘twin deficits’ of the USA (i.e. both a Balance of Payments current account deficit, with imports exceeding exports, and a public sector deficit, with government expenditure exceeding tax receipts) helped to enable economic growth to continue in the EU and the Eurozone.  There was no need for the countervailing current account surplus in countries such as Germany to be recycled by the hand of politicians, since the macroeconomic ‘weather’ continued to be fair – until 2008.  However, the 2007-8 crisis brought all of this crashing down; and the poor design of the Euro, Varoufakis argues, meant that the Eurozone countries had no defence against the ensuing crisis.

Varoufakis also makes a strong argument for what is many ways is a very depressing proposition.  The argument is that – in the light of the above history – the EU’s political, economic and monetary institutions do not have it in their DNA to provide a suitably flexible response to a crisis such as that of 2007-8 and its aftermath.  In essence the EU’s structures centralize power (e.g. in the hands of ‘bureaucrats’) and are incapable of being made democratically accountable.

On that basis, in the remaining chapters Varoufakis proceeds to explain the interconnections between the post-2008 debts of private (commercial) banks, the perceived need to bail out these banks, and the EU’s requirement that governments must introduce austerity measures as the price for the EU agreeing to complex packages to try to resolve the severe difficulties.   Crucially, argues Varoufakis, the ‘no bailouts of EU countries’ rule was at the heart of why the follies of bankers led to the price being paid by the weakest citizens (in the form of austerity measures), most especially in Greece.  ‘A clueless political elite, in denial of the nature and history of a crisis whose roots go back to at least 1971, is pursuing policies akin to carpet-bombing the economies of proud European nations in order to save them’ (p192).

Varoufakis makes no secret of his left-wing convictions, and his atheism is also evident.  He writes with passion and intelligence about some very serious challenges facing European and global capitalism, and the book is well worth reading.

Let me conclude with some questions that are raised by this book, especially from a Christian perspective.  First, are we sufficiently concerned for how macroeconomic and political forces impact on the weakest in our societies?  The title of the book, as Varoufakis explains on p19, is drawn from Thucydides’ Peloponnesian War: at one point the powerful Athenian generals explained to the helpless Melians that ‘the strong actually do what they can and the weak suffer what they must’ [translation by Varoufakis].  Substitute ‘politicians and bankers’ in place of ‘the strong’, and it is hard not to find this very chilling.

Secondly, what is the future for the EU?  This is evidently a question not only for the UK (whatever one’s views about Brexit).  Varoufakis is an internationalist, and sees nationalism as a great problem; yet he is deeply pessimistic about the EU.

Thirdly, how can global capitalism be better managed, so that the power of money and finance (we might even say ‘Mammon’) is circumscribed and a more truly democratic political economy is shaped?


“And the Weak Suffer What They Must? Europe, Austerity and the Threat to Global Stability” was published in 2016 by Nation Books (ISBN – 10: 1568585047), 368pp.


Revd Dr Andy Hartropp is an economist, theologian and church minister.  He has two PhDs, one in Economics and one in Christian Ethics.  He lectured in financial economics for 5 years at Brunel University, west London.  He also worked for a year with the Jubilee Centre in Cambridge, primarily leading a team doing research on families in debt.  He trained at Oak Hill College, London, for ordained ministry in the Church of England.  His (second) PhD was published as: What is Economic Justice?  Biblical and secular perspectives contrasted (Carlisle: Paternoster, 2007).  He has spent 13 years in parish ministry.  He worked for eight years with the Oxford Centre for Mission Studies, where he was the Sundo Kim Research Tutor in Mission and Economics.  In March 2016 he joined Waverley Abbey College as Director of Higher Education.  He chairs the Ethics and Social Theology Group of the Tyndale Fellowship.  He is married to Claire, and they live in Bicester, near Oxford.



Edward Carter: “Enlightened Entrepreneurs: business ethics in Victorian Britain” by Ian Bradley

This book’s subtitle is deceptive; it is not a volume about business ethics so much as a fascinating piece of social history. Ten great Victorian entrepreneurs are described in turn, with very little attempt to add any interpretation. The names of the ten speak for themselves: Thomas Holloway, Titus Salt, Samuel Morley, George Palmer, Jeremiah James Colman, Andrew Carnegie, George Cadbury, Joseph Rowntree, Jesse Boot, and William Hesketh Lever. Each chapter takes an essentially chronological view, with many delightful details set alongside a sweeping narrative of business-building, all within the context of the major social and economic changes that the Victorian era brought.

I was struck by how deeply these ten particular accounts of enterprise intersected with my own life history. For example, Thomas Holloway founded Holloway College in Egham, Surrey, which is very near where I grew up; the Colman factory site in Norwich, Nofolk, included nearby some purpose-built housing, one of which made a fine (albeit small) home for me and my wife when we were first married; and the Joseph Rowntree Charitable Trust (JRCT) is now a member of the Church Investors Group (CIG), which I chair, and one of the CIG Trustees is a JRCT nominee. More generally, many of the household products made or retailed by these companies are still to be found on our larder shelves. This is the kind of history that really does overlap with our lives in an ordinary, down-to-earth way.

While Bradley himself does not offer much interpretation or synthesis, I found plenty of themes that emerged. First, each story included accounts of what I call ‘attentiveness’: the ability to spot an opportunity and to be persistent in following it up. The entrepreneur is not someone who will carefully construct a five-year strategic plan for the future. Rather, she or he will be alive to opportunities. For example, we read of Titus Salt: ‘One day in 1834, while on a buying visit to Liverpool docks, he noticed a pile of 300 or so dirty-looking bales lying in a corner of a warehouse. They turned out to be fleeces of the alpaca…’ (p.28). As the account unfolds we discover how an attentive entrepreneur made the most of an opportunity that started a new industry. The technological advances needed came from someone else (the inventor), while the entrepreneur had eyes on changes in society, on ways in which resources could be mobilized, and how people’s imaginations could be caught and aspirations met.

Secondly, the connection to a certain kind of Christianity is very striking. Quakerism and Congregationalism, with their focus on temperate living, self-help, lack of privilege and simple hard work had a tremendously formative influence on all these ten men. Although they were restless in seeking out profitable business opportunities and in being competitive, they were never personally greedy for riches. Their lifestyles were in many ways frugal, and they all showed extraordinary generosity as benefactors.

Thirdly, all of them were to a greater or lesser extent paternalistic. In nearly all of the businesses described there is a ‘family’ feel, whether through care of employees who fell ill or through the well-known model villages such as Saltaire, Bournville, Earswick and Port Sunlight. One of the significant things about this is the way it anchors a business in a locality, and gives depth to its history. Although Bradley does not discuss this aspect, it seems to me that this ‘rootedness’ of enterprises is one of the hallmarks of the Victorian era. These were companies that had a good sense of where they belonged, both in time and in place, something that is generally much weaker now, when production facilities are relocated because of marginal cost advantages. It is simply inconceivable that George Cadbury would have moved his Bournville factory to Eastern Europe or the Far East to reduce costs.

Fourthly, each of these ten men was involved to some extent in public life. They wanted to make a difference to society, often in local or national politics. They saw business as an integrated part of how society works, rather than an ‘external’ source of tax revenue or some kind of threat to government or the people.

I enjoyed this book, but would have valued some kind of attempt to interpret these themes. Even more interesting would have been a discussion about how entrepreneurs today might help society rediscover its roots in time and place, but without the paternalistic baggage that belongs to a different era. Although it is tempting to describe the Victorian period as a golden age for enterprise, the truth is that businesses such as Facebook and Google have stories that are just as fascinating. However, such analysis doubtless belongs in a different book.

The writing style is clear and easy to read. Most of the book was written in 1987, with additional material added in 2007. It is therefore occasionally out of date, for example when describing the Cadbury business of today.


“Enlightened Entrepreneurs: business ethics in Victorian Britain” was published in 2007 (Revised Ed.) by Lion Books (ISBN-10: 0745952712).

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.



Andrei Rogobete: “The Wealth and Poverty of Nations” by David Landes


American essayist and novelist William Styron once said that “A great book should leave you with many experiences, and slightly exhausted at the end.” If we judge the late David Landes’ ‘Wealth and Poverty of Nations’ by this criterion, it most certainly fits the bill of a ‘great book’. It is a majestic display of his deep insight and vast knowledge of global economic history. It comes as no surprise, therefore, that the book has been all but universally acclaimed by literary critics.

David Landes was Professor of History and Emeritus Professor of Economics at Harvard University.  His other works include Bankers and Pashas, Revolution in Time, The Unbound Prometheus and Dynasties. As one might expect, therefore, ‘Wealth and Poverty of Nations’ is no short and easy read: half a millennia of global economic history are covered in over 600 pages and 29 chapters.

Landes’ primary aim in the book is to better understand how nations have evolved to reach their current state. Landes’ main thesis of the book is that cultural traits and cultural values play a key role in determining whether a country fails or succeeds economically. As he points out in the Preface, the analysis is not one of a “multicultural, anthropological sense of intrinsic parity: all peoples are equal and the historian tries to attend to them all. Rather, [to]…understand how we have come to where we are, …[through] making, getting, and spending” (page xi).

In this sense, ‘The Wealth and Poverty of Nations’ provides a fascinating and distinctive historical angle that considers the cultural circumstances, as well as the economic trends of the time – thus, viewing economic history through a cultural lens.

Landes opens up the discussion with the premise that the old dichotomy of the West vs. the East, or better said, West vs. the ‘Rest’ has largely dissolved (page xx). The more pertinent split in today’s ‘globalised’ world is between ‘Rich’ vs ‘Poor’ countries. The common thread of questioning that is present throughout the entirety of the book is this: why have some countries come to be so poor and some so rich?

In the opening chapters Landes presses the idea that the technological and cultural advancements enabled the (relatively small) nations of western Europe to significantly punch above their weight (page 137). The Industrial Revolution in Europe brought technological innovations that had tremendous long-term impact on economic development. Basic advancements cotton manufacturing for instance, enabled the creation ‘washable’ clothes. This in turn led to better personal hygiene and therefore, better health and an increase in life expectancy. The technological advancements improved all areas of life in the Continent

Landes also points out that throughout the late 17th Century and 18th Century, England’s relative open society enabled it to flourish at a faster pace than its European counterparts, many of whom were deeply embattled with religious persecution (page 223). As a result, England managed to ‘profit from other nation’s self-inflicted wounds’ (ibid).

Yet arguably one of the most powerful and convincing arguments of the book is raised in Chapter 12 (page 175 – 181). Here David Landes reinstates Max Weber’s thesis on the Protestant work ethic. The core argument here is that the Protestant revolution in Europe brought with in a change in the role and responsibility of work. The influence of Protestant thinking encouraged people to value, creativity, hard work, timeliness, and free-thinking. This in turn acted as a catalyst for economic growth not only in Europe, but also in the early development of America (CEME’s Director, Richard Turnbull, wrote on the impact of Quakers in Quaker Capitalsim: Lessons for Today)

The latter half of the book bring the discussion back to the impact of culture on economic performance and how the two are intrinsically linked. In Thailand for example, young men are encouraged to spend a few years in religious (Buddhist) monasteries before entering the world of work. Landes argues that this sets their priorities right – and makes them more effective once the do enter the ‘materialistic’ world of work, where money plays a major role (page 517).

Landes concludes the book with a discussion on the current tensions between globalisation and the nation-state, but also the merits of free-trade and some of the benefits and dangers of international aid (Page 519-521). In a nutshell (and without giving too much away), the book argues that free trade between nations is disproportionately beneficial and foreign aid can do as much damage as it does good. Landes overarching conclusion is that the adoption of a free market economy (especially by poor countries) is the surest and safest way to long-term economic development and wealth creation.

‘The Wealth and Poverty of Nations’ leaves its reader with a completely new, and unique understanding of the role that culture plays in the historic economic development of countries. Finding criticism for this book is a challenge in itself, I have found myself nit-picking at best. One possible observation is that, even in 600+ pages, it remains difficult to comprehensively capture half a millennia of world history.

Some may say that it is too Eurocentric. Yet the book’s apparent Eurocentrism is part of the presentation and hypothesis that is put fourth – it is the angle that the author adopts rather than an inherit bias. In response to this perceived ‘Eurocentrism’ and being a ‘Westerner’, Landes himself acknowledges that, “I feel surer of my ground” (page xxi). Nonetheless, one could argue that the cultural intricacies of each geographical region can, and deserve to be explored in greater depth.

‘The Wealth and Poverty of Nations’ has become a staple in the field of economic history.

A definite read.


“The Wealth and Poverty of Nations” was published in 1999 by Abacus, ISBN-10: 0349111669, 672pp.

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

Richard Godden: “Public Good by Private Means” by Rhodri Davies


Rhodri Davies is the head of “Giving Thought”, the in-house think tank of Charities Aid Foundation. He believes that, “Although philanthropy is growing in prominence, there is still a real lack of clarity about its overall role in our society” (page 7) and in Public Good by Private Means he seeks to affirm its continuing role and clarify what that role is. The result is an interesting, though provoking and readable book that could assist people who wish to provide material support for charity or wish to influence public policy. Unfortunately, however, the book suffers from a number of deficiencies, which diminish its overall impact.

The most fundamental of these deficiencies relates to the thing that Davies is analysing. He expressly declines to give a precise definition of “philanthropy” (page 8). Instead, he says that he considers “the characteristics that typify philanthropy in its modern form” (page 8) and he leaves us to absorb his understanding as we read on. He distinguishes medieval religious alms giving “where the focus was primarily on what it meant for the donor and their immortal soul” from modern philanthropy, which he regards as giving “focussed on addressing the problems of society” (page 8) and it is clear that he does not have religious motivation or giving to religious causes in mind. Furthermore, although there is some discussion of support for the arts and education (e.g. page 99ff), it is clear that he is thinking mainly of the alleviation of poverty in much of his discussion. Indeed, his focus appears to be primarily on poverty in the UK (and, to some extent, the USA) rather than in the world as a whole.

Of course, an author may define his subject as he pleases. However, it is questionable whether Davies’ restricted focus is helpful and, more seriously, his lack of precision leads to conclusions that, on their face, appear to apply to a broader range of charitable activity than is justified by his arguments.

Parts of the book are tightly argued but Davies has a tendency to make sweeping assertions that lack support. For example, he asserts that “Philanthropy, properly understood, is about trying to improve society by tackling the root causes of problems, rather than just addressing their symptoms” (page 12) and thereby, dismisses disaster relief from its ambit. Likewise, a few lines later, he asserts that “tolerance for risk is one of philanthropy’s greatest assets” and later rhetorically asks “If philanthropy is unwilling to break the bounds of convention or afraid to think beyond the status quo, then what is the point of it?” (page 173). Whilst few would deny that there is a place for risk taking and “breaking the bounds”, this dismissal of other forms of philanthropy is surprising.

More seriously, important assumptions that underlie some of the book’s statements and conclusions are never properly examined or even, in some cases, stated. The most pervasive of these is the acceptance of what might be called the “post war consensus” regarding the role of the state. Davies appears to believe that the only theoretical alternative to the state doing those things that it does at the moment is for charity to do them and he rightly regards this as being impractical. However, he never considers the possibility that some of the things that are done ought not to be done at all, since they do more harm than good.

Davies also appears to accept the view that poverty is, at least largely, “something stemming from the wider failings of society” (page 35) and to regard the view that it may result in part from the failings of an individual as being hopelessly out of date. Indeed, he appears to believe that the poor are poor because the rich are rich since he states that “While the rich might not be entirely to blame for society’s failure to distribute wealth more evenly, the very fact that they are rich while others are poor is the root of the problem” (page 158). This is a disappointingly naïve approach.

The book suffers from a disturbing schizophrenia when it comes to individual choice. Davies asserts that, “The freedom for individuals to choose where they direct their gifts lies at the heart of philanthropy and gives it much of its strength” (page 11). Yet elsewhere he suggests that “what constitutes and acceptable charitable purpose is an ongoing source of debate” (page 192) and he states that “Philanthropy poses a fundamental challenge to democracy: by offering individuals a way of furthering their own priorities outside the normal democratic process, it potentially subverts the authority of elected officials and allows a small minority of those with significant wealth to exert a disproportionate influence on the direction in which society is travelling” (page 85). This implies that society should only allow philanthropic giving in line with some centrally determined priorities, which would require authoritarian governmental interference.

In relation to this and a number of other matters, it is unclear precisely what Davies’ views are since it is unclear whether he is merely reciting the arguments of others or endorsing these arguments. Overall, however, the book has a decidedly left-wing flavour. For example, the adoption of Finlayson’s view that levels of trust in charity fell following the 1926 general strike because of the efforts of volunteers (including Oxbridge students) in “strike breaking” (page 64) is contentious. Likewise, the suggestion that “the empowerment of women through charitable activities” is something that was seen in “the experience of women during the British miners’ strike of the 1980s” (page 90) is, to say the least, a strange choice of example.

These deficiencies may leave some wondering whether the book has any value but this would be an unduly severe judgement. It places modern philanthropy firmly within an historical context and the short “case studies” inserted in the text bring the history to life. By describing approaches in past centuries and views and arguments expressed in the past, it allows the reader to consider possibilities that might be ruled out by the prevailing twenty-first century consensus. Furthermore, whatever one may think about the arguments that have been and continue to be made against philanthropy, it is essential that we understand and address these arguments.

The book also contains valuable discussions of some important policy issues. These include the perennial hot potato of the involvement of charities in political activity, the justification for tax breaks for charities and giving to charities and the question whether charities should accept money from tainted sources. As regards the first of these, Davies states that “one of the main points of this book is to argue that involvement in the ‘political’ arena through campaigning and advocacy has always been one of the most important aspects of philanthropy organisations” (page 95). However, he later criticises some Victorian philanthropists on the grounds that they “brought ideological baggage with them” and he refers to “The necessity to look beyond ideology in picking philanthropic approaches” (page 188). It is unclear how these statements are to be reconciled and one is left with the impression that Davies supports an ideological approach provided that he agrees with the ideology! Nonetheless, by laying out the issues, he has assisted the debate.

Much the same could be said for many aspects of Public Good by Private Means. One does not have to agree with Davies’ assumptions, statements or conclusions to benefit from reading it. Provided that it is read in a critical manner, it should stimulate valuable thought and discussion. That is why it deserves to be read.


“Public Good by Private Means” was published in 2015 by Alliance Publishing Trust (ISBN 978-1-907376-24-5). 207 pages (excluding bibliography and references).

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.


Andrei Rogobete: “Saving Capitalism: For the Many, not the Few” by Robert Reich


Saving Capitalism – For the Many not the Few is the latest addition to Robert Reich’s cohort of publications. He is perhaps best known for his previous work, The Work of Nations (1992) which raised the issue of growing inequality to the public sphere. Alongside his writing, Robert Reich is also a Professor at the University of California, Berkeley, and has served in various positions under the administrations of Gerald Ford and Jimmy Carter. Most notably, he was US Secretary of Labour under the Presidency of Bill Clinton between 1993 – 1997.

At the age of 71, Reich brings a lifetime of experience in both academia and politics to the table. As a true social-democrat, Reich’s Saving Capitalism is a continuation of the themes he discusses in previous publications – some of which include: rising inequality, the not so ‘free’ marketplace, the over-concentration of political and economic power in the hands of a few, the disenchantment of the masses, and others.

As the title may suggest, Saving Capitalism is a critique of the free market structures and modern-day capitalism. Reich argues that decision-making power is increasingly concentrated in the hands of a few, at the expense of the ‘many’. The very rich get richer and more powerful, while the middle and lower classes get weaker and poorer. The entire system is rigged against the majority in favour of a concentrated few. The solution to this injustice, Reich suggests, is an “…activist government that raises taxes on the wealthy, invests the proceeds in excellent schools and other means people need to get ahead, and redistributes wealth to the needy” (page xvii).

Does this narrative sound familiar? To many it certainly will. Robert Reich’s Saving Capitalism is therefore one among numerous publications that champion the social inequality-class warfare thesis. In that sense, the book brings little to nothing new to the debate. Nonetheless, it is well-written and its use of colloquial language grapples the reader. This does however make the book read like more of a socio-political novel rather than a macroeconomic or political account. One cannot help but feel that Reich’s desire to push his own personal narrative has come at the expense of rigorous analysis.

But before jumping to any conclusions, let’s briefly touch upon the structure and content.

Saving Capitalism is comprised of three main parts. The first chapter, entitled “The Free Market” aims to show how in fact ‘free markets’, are not ‘free’ (page 85).

As you may have already guessed, Reich argues that this is due to them being controlled by a select, powerful few that both establish and control rules in which a ‘free market’ operates. He argues that there are five ‘building blocks’ of a free market: property, monopoly, contracts, bankruptcy and enforcement. Each of these require human governance and can be used to either, promote a fair and decent society or can be manipulated to benefit a select few (page 9). This first part of the book argues that the latter has occurred. The stronghold on patent laws by pharmaceutical companies, the large lobby budgets of corporations to maintain dominant market positions, the abuse of bankruptcy laws, are all cited as evidence that the entire system is rigged in favour of on elite few.

The second part of the book is dedicated to showcasing the consequences of such a rigged system. Here Reich argues that free market meritocracy is in fact, a myth. Those at the top increase their own wages whilst those at the middle and bottom see their wages stagnant and in many cases, decline (pages 134-167).

In the third and final chapter, Reich argues for a restoration of countervailing power, or in layman’s terms, bringing power back to the people. The means by which he believes this can be achieved are certainly not new: an increase in the minimum wage, amending labour laws to favour unions, and changing contract laws as to encourage employees and workers to take action against unjust employers (pages 153 – 217).

So while Robert Reich’s latest work presents a compelling critique of the challenges facing 21st century capitalism, it brings little new to the table. Moreover, any truly impartial reader that has some basic understanding of economics would be quick to observe that Saving Capitalism is unabashedly lopsided. There is no doubt that western capitalism is at a crossroads, and the aftermath of the financial crisis has left millions feeling disenfranchised. However, Robert Reich portrays injustices within the free market (as real as they may be), as characteristic of the entire economy. It’s a bit like saying, we can’t play football anymore because one of the players faked an injury.

He also seems to portray an over-the-top form of class warfare: the elite vs. the rest. As if the classes are statutory and unitary groups with no movement or change between. The rich and powerful only stay rich and powerful while the rest suffer the consequences of their actions. We know this is simply not the case – a free market economy does indeed reward creativity and work. Whether, intentional or unintentional, Reich left out any deeper economic discussions, such as aggregate supply/demand and its impact on market meritocracy. This brings us to what is perhaps the most significant pitfall of the book, it is far to rooted in empirical storytelling rather than political or economic analysis. No matter how broad Robert Reich’s experience may be, personal examples should always be an addition to the argument and not its foundation.

Having said that, Saving Capitalism offers some captivating thoughts on the current state of free market. Provided that its rather superficial and politicised arguments are viewed through a critical lens, the book is certainly a worthwhile read.


 “Saving Capitalism: For the Many, not the Few” was published in 2016 by Icon Books Ltd. (ISBN: 9781-78578-0677). 279pp.

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

Richard Godden: For the Least of These by Anne Bradley & Art Lindsley


For the Least of These comprises a collection of short essays. Its purpose is clearly articulated by Arthur Brooks in the first paragraph of the Foreword: “The Christian Gospels make it abundantly clear that Jesus called on us to care for the poor. What is not at all clear, however, is the best means by which Christians living in a modern, industrial society … can and should carry out the Lord’s directive. This volume takes on the challenge of beginning to answer that question” (page 7).

The book seeks to fulfil its task through twelve chapters grouped under three headings: “A Biblical Perspective on the Poor”; “Markets and the Poor”; and “Poverty Alleviation in Practice”. As might be anticipated by those aware that its editors are Vice-Presidents of the Institute for Faith, Work & Economics, its basic thesis is that a free market economy is the best foundation for the alleviation of poverty. The authors are careful to avoid suggesting that the market automatically provides the solution or that the market is in some way an end in itself but they see it as having inherent potential. As Robert Sirico puts it in his chapter, “The price system in a free economy does not provide a moral foundation for a society. It does not remove opportunities for ill-gotten gain. What it does do is beat every form of socialism at generating moral socially beneficent options for escaping poverty” (page 179).

Negatively, the authors take issue with what Jay Richards (in the Conclusion) calls the “untutored intuition” that “if there are some rich people and some poor people, we can cure poverty by taking some of the wealth of the rich and giving it to the poor” (page 247). It is suggested that both government action (e.g. foreign aid) and some charitable activity (e.g. some gifts by churches to support people in the third world) is misconceived, if well meaning.

Positively, the promotion of trade and enterprise is advocated as the best long-term solution to poverty. For example, Brian Griffiths and Dato Kim Tan suggest that “Intentionally building a new factory close to a slum, creating jobs, and contributing to the local economy through its monthly wage bill, is far more effective in tackling poverty than all the CSR activities that companies can ever do” (page 145).

Most of the book is relatively high level. There are some interesting specific proposals for change. For example, Griffiths and Tan suggest that it is illogical to allow tax deductions for donations to charity but not to apply the same tax incentives to impact investing that builds social enterprises among the poor (page 151). However, proposals of this kind are few and far between. This is a pity since the inclusion of some more would have improved the book. In particular, the book’s suggestion that a lot of government action has produced drug like dependency cries out for proposals as to how the patient should undergo detoxification without dying in the process! On the other hand, the authors might legitimately respond that it is necessary to win the conceptual battle at the macro level before moving to the detail and that this is a small book devoted to that conceptual battle. Furthermore, by its very nature, a market based approach is likely to involve a multitude of approaches informed by general principles rather than large over-arching policies centrally implemented. That, indeed, is one of its advantages.

Of course, the essay format has some drawbacks. In particular, as might be expected in a book with fourteen different contributors, the arguments are not developed in a linear manner, the chapters overlap and not all of the arguments are consistent with one another (e.g. there are differences of view as to how bleak or otherwise the outlook for global poverty really is and different levels of optimism are expressed regarding micro-finance initiatives). In addition, some of the authors have tried to cram too much into their chapters, with the result that they are longer on assertion than argument and adopt language which, at least to UK ears, is unduly polemical (e.g. Jay Richards won’t win many friends by suggesting that Lyndon Johnson’s “War on Poverty” could just as well be called the “War on the Poor”, page 250).

Most readers will want to take issue with at least some of the arguments that are advanced, although they may not agree which arguments should be challenged! For example, David Kotter’s distinction between “wealth” and “riches” (page 60) and Robert Sirico’s suggestion that something is disordered “when it is imbalanced and disregards reason as well as the mandate of scripture” (page 176) are contentious interpretations of the bible. More generally, with the exception of Brian Griffiths, Dato Kim Tan and Richard Turnbull, all of the authors are based in the USA and the book has a clear US perspective. Indeed, some of the chapters relate almost entirely to the US experience (e.g. Anne Bradley’s chapter on Income & Equality). This US experience is important and interesting. There is much to learn from it. However, it would be good to consider other perspectives.

That said, each author contributes something worth thinking about and some of the contributions are very good: the chapters examining historic attitudes and actions in the UK and the USA (by Richard Turnbull and Mark Isaac, respectively) are particularly interesting since they allow the past to challenge contemporary attitudes; Art Lindsley’s short chapter on wealth redistribution comprises a concise demolition of superficial interpretations of the Old Testament Jubilee laws and of the practices of the New Testament Church; and Marvin Olasky’s chapter on the US welfare system, although in some respects perhaps over journalistic, raises a number of issues that deserve careful consideration.

For the Least of These is not a book for those looking for careful engagement with academic debates. Those looking for a systematic explanation of the potential of the free market to alleviate poverty should also look elsewhere. However, it is well worth reading. Few readers will come away without being challenged in some respect and the range of subjects covered should be a spur to further reading and thought.


“For the Least of These” was published in 2014 by Zondervan (ISBN – 10: 0310522994). 252 pages (excluding notes and 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.

Lyndon Drake: Capital Markets for the Good of Society

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of Capital Markets for the Good of Society: A Christian Perspective by Lyndon Drake.

The publication can be downloaded here. Alternatively, paperback copies can be ordered by contacting CEME’s offices via email at:


Edward Carter: “How Will Capitalism End?” by Wolfgang Streeck


This book is a collection of previously published articles and one unpublished conference paper, with a new 46 page long introduction. It is therefore not a book that develops an argument skillfully and steadily, rather it hammers away at certain themes, sometimes repetitively. Streeck acknowledges this in his Note on the Text, where he admits to an ‘occasional overlap between chapters’ (p. ix). Having read through them all I did feel that at times this repetitiveness was unfortunate, although there is undoubted value in having the various articles gathered in one place.

The organizing theme taken by Streeck is that capitalism is collapsing because of certain internal contradictions. What is more, the author believes that we are living in a period of ‘deep indeterminacy’ (p. 12) in which it is difficult to predict what will happen, and that there is nothing obvious to replace our contemporary capitalist system. Other than at two brief moments, the prophetic message given is one of doom and gloom throughout the entire book, with no real sense of hopeful possibilities. In an emotional sense, and perhaps also because of its repetitive nature, I therefore found that reading this book left me dispirited, but also with a sense that the analysis might be incomplete or flawed.

One of the recurring strands running through the book is that of the relationship between economics and sociology. This is addressed through the lenses of economic history, the nature of money and debt, the difficult relationship between capitalism and democracy, commodification and inequality, and a consideration of the class structures within society (Marx certainly gets several mentions). This is summarized admirably concisely and clearly in the final paragraph of Chapter One, which bears the same title as the book itself, and which started life as a lecture given at the British Academy on 23rd January 2014.

At heart, although he never exactly states it in this way, Streeck presents a vision of capitalism as an epoch within history, whose time was always going to be limited, rather than accepting a view of history that must fit within a capitalistic meta-narrative. In order to sustain this argument, the author needs to describe capitalism in a certain, rather dysfunctional, way. So for example, Streeck sees innovation as something that ‘attacks and destroys in particular firms and markets that operate to everybody’s satisfaction.’ (p. 39) I was not convinced by this. It seemed to me that the author’s structuralist view of society had left little space for human creativity, and left him unable to see individuality as anything except a problem. However, prompted by Streeck’s analysis I did find myself asking about the nature of a wholesome vision of collective life within which individuals can flourish, and what kind of ‘progress’ this would mean.

The two moments, hinted at above, when Streeck himself ventures into the territory of suggestions or answers to these questions come at the end of Chapters Eight and Nine. Chapter Eight considers the troubled relationship between democracy and capitalism, taking the work of Wolfgang Merkel as a foil, but I was heartened to discover the suggestion of ‘de-globalizing capitalism’ (p. 198) and the idea that ‘restoring embedded democracy means re-embedding capitalism’ (p. 199) (italics in the original). For me, this idea offers the genesis of a new piece of work, different in tone to the current collection, and I would encourage Streeck to reflect on how this could be developed. Rather different, but equally important, is the moment at the end of Chapter Nine when Streeck feels for ‘…a non-capitalist politics capable of defining and enforcing general interests in the sustainability of human society’ (p. 225). I took this to be a call for the complex relationship between politics and economics to be re-imagined.

This brings me to another problem that I had with this book; it has in a sense been overtaken by the events of the Brexit referendum and the election of Donald Trump. The relationship between politics and economics is being re-drawn before our eyes, the old assumptions are unraveling, and faltering attempts at what could be called a ‘non-capitalist politics’ are emerging. I feel sure Streeck must now be writing something new, and I would encourage him to do so. From a Christian perspective, deep questions of identity connected to the individual and to society are very resonant with theological reflections on the nature of life itself, and the way in which societies and economies are arranged. I was therefore pleased to have been stimulated in my own thinking as I read this book. I look forward to a more cohesive, less repetitive, and post-Brexit sequel.

The book is nicely presented with a good index. The author is the Director of the Max Planck Institute for Social Research in Cologne and Professor of Sociology at the University of Cologne.


How Will Capitalism End? Essays on a Failing System – by Wolfgang Streeck, 2016, ISBN 13: 978-1-78478-401-0

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.





Ben Cooper: The Economics of the Hebrew Scriptures

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of The Economics of the Hebrew Scriptures by Ben Cooper.

The publication can be found here.

Alternatively, for hardcopies please contact CEME’s offices  via email at



Lord Griffiths: Restoring Trust in the Banking System

This is an excerpt from the The Mais Lecture: Restoring Trust in the Banking System at Cass Business School, May 24th 2017. For the full text, please click here.


It is a great honour to be invited to deliver the Mais Lecture this year, the 38th occasion on which it has been given.  It is also a particular personal pleasure.

I was appointed to the Chair in Banking and International Finance at The City University in 1976. The funds for the chair had been raised by a previous Lord Mayor, Lord Mais and so out of recognition for his contribution I felt it appropriate that we establish a lecture in his honour. Hence the Mais Lecture.

The first Mais lecture was given in 1978 by Sir Gordon Richardson, the then Governor of the Bank of England, who told me that it was the first time a Governor of the Bank of England had set out in detail the design and implementation of UK monetary policy. The event was a huge success and the text of the lecture was reproduced in full the following day in The Times newspaper. (The lecture has subsequently been given by central bank governors, finance ministers, prime ministers, a French president, a journalist, a chief rabbi and a number of distinguished academic economists including Frederich von Hayek and Lord Robbins. This year I’m afraid you come down to earth!)

The subject I have chosen for this lecture is restoring trust in the banking system and by the banking system I mean central banks, bank regulators and commercial banks. I should make it very clear that this lecture is my own personal view and not that of Goldman Sachs, though I acknowledge a great debt to my colleagues at the firm for their valuable insights.

Since the financial crisis began in 2007 the reputation of the City, and trust in the banking system, have never been more challenged. The UK Parliamentary Commission on Banking Standards described the crisis as “a collapse of trust on an industrial scale.” (Paul Tucker, A deputy governor of the Bank of England has described (with hindsight) the associated failure of regulation as “shocking, astonishing…catastrophic” which “left the credibility of financial regulation in tatters!” (Paul Tucker, Brookings Institution, Regulatory Reform, Stability & Central Banking, January 2014)).    A review of what went wrong in one major UK commercial bank concluded that trust in the commercial banks had been “decimated” by the crisis.

(The pre-crisis factors which led to this loss of trust have been well documented in books and research papers and commented on in plays, novels, films and the news media by academics, journalists, novelists, playwrights and filmmakers.) Since the crisis each of the countries involved has undertaken a sweeping review of its regulatory structures, resulting in the creation of new institutions (the PRA and FCA in the UK), new regulations (covering capital, liquidity, compensation, resolution planning, governance and conduct) and more comprehensive and intensive supervision (UK Senior Managers Regime). Internationally, countries have worked together through the G-20 Financial Stability Board to facilitate harmonization and cross border regulation.

Yet ten years later and after this immense effort, trust remains low. Only 20% of the UK population think banks are well-managed, down from 80% in the 1980’s. (In a recent survey in Germany only 26% of the population expressed confidence in the banking system).  The independence of central banks has been challenged in the US, the Eurozone, Japan and the UK. The view of the new regulatory structures by academics and commentators is ‘could do better’.

(One respected commentator concluded a recent piece on the UK claiming “the haze of mistrust continues to hang over the whole City”, (Juliet-Samuels, D-T, 7th April 2017), while in the US context another remarked that “the world has not come to terms with the crisis of 2008. Justice has not been seen to be done. Remedies to prevent a repeat have not been seen to be applied. Dodd-Frank has failed to instill confidence.” (John Authers, F.T., April 15th 2017))

If a modern advanced economy is to function effectively it needs a sophisticated financial system which is trusted by the public. They must believe that it benefits society as a whole, and not just bankers. They must believe that the services sold by banks are appropriate to their needs and competitively priced. They must have faith in the competence and integrity of bank leadership, and respect for banks’ corporate cultures. The financial system must be seen as making a contribution to society, not being an island within it.

Against this backdrop I wish to explore three challenges which I believe must be met if trust is to be restored and maintained in the banking system.


To continue reading the full text of this lecture, please click here.

Brian Griffiths (Color)

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

Richard Godden: “Wealth, Poverty and Politics” by Thomas Sowell


How much of modern Western social and economic policy is based on properly interpreted factual evidence and how much on unexamined assumptions and ideology? In Wealth, Poverty and Politics, Thomas Sowell, the venerable Senior Fellow at the Hoover Institution at Stanford University, sets out to demonstrate that rather more than is healthy is based on the latter.

Sowell divides opinion. He shuns labels but he is a hero of those on the right who favour small government and free market policies. Conversely, he is castigated as a villain by those on the left, although since he is black and was brought up in poverty in North Carolina in the days of segregation, he is a rather unusual villain!

Wealth, Poverty and Politics is unlikely to lessen this division of opinion. It largely repeats things that Sowell has been saying for decades and sets out to slay a number of liberal sacred cows, ranging from affirmative action, through the welfare state to foreign aid.

Sowell’s starting proposition is that, because the humanitarian goals underlying many policy proposals are important, “it is crucial that these proposals be based on an understanding of the actual facts about the causes and consequences of economic inequalities” (page v). He then considers the role of geography, cultural factors, social factors and political factors, recognising that they overlap and interact with one another .

At a high level of generality, all of this is unexceptional. It is when Sowell begins to consider its implications that the radical nature of what he is saying becomes clear. He takes issue with those who start with the premise that “the poor are poor because they are exploited by the rich” (page 257), a view that he demonstrates failed to die when Communism collapsed a generation ago. He takes issue with those, such as Professor Angus Deaton and the late Professor John Rawls, who equate equal prospects of success with equal opportunity, suggesting that Angus Deaton’s statement that there would be no correlation between the earnings of parents and their children in a society with perfect equality of opportunity “is in defiance of both heredity and environment” (page 180). He points out that, even in a society with perfect equality of opportunity, the factors that he identifies are likely to prevent an equality of outcomes.

Specifically, he points out that all cultures are not of equal economic value: “different groups living in the same external environment can have very different productivity if their internal cultural values produce very different priorities as to what they want to do, and at what sacrifices of other things” (page 97). He draws attention to differences in attitudes to learning (provocatively noting that, in the USA black parents in the highest socio-economic quintile have slightly fewer books in their homes than white parents in the lowest socio-economic quintile), differences in attitudes to work (noting that whole societies, such as Spain in the 16th to 18th centuries and the Southern States of the USA until recent times, have regarded work as degrading) and differences in ambition (noting that some social groups, including some white groups in the UK, lack ambition). Perhaps most controversially of all, he suggests that some groups have greater mental capacity than others, although he is careful to stress that the evidence suggests that this is not to do with genetic pre-conditioning but cultural and social factors.

Sowell suggests that “the ultimate wealth of a society does not consist of its tangible output, as such, but the ability – the human capital – to produce that tangible output” (page 413) and that the failure to recognise this leads policy in the wrong direction: efforts to advance economically lagging groups should be directed not so much at correcting society and its institutions as “getting members of lagging groups to reorientate themselves towards acquiring more human capital” (page 181).  This is perhaps best summed up in Henry Hazlitt’s statement that “The real problem of poverty is not a problem of distribution but of production” (page 8).

On this basis, Sowell attacks modern liberal economic and social policy. He lays into US welfare policy, suggesting that it produces counter-productive lifestyles that reduce the need to develop essential human capital and that “having promised progress towards ‘social justice’” it has “delivered instead retrogressions towards barbarism” (page 305). Foreign aid, affirmative action and identity politics are dealt with in a similarly robust manner (e.g. he suggests that multi-culturalism “has often been carried to the point of encouraging lagging groups to proudly cling to their own culture, or even resurrect it in some cases, with little concern that these groups’ economic and educational lacks might be – at least in part – a result of the cultures that they were being encouraged to cling to”, page 166).

Wealth, Poverty and Politics has significant defects. Its argument does not develop in a clear linear manner and it would benefit from severe editing, since many points are made on more than one occasion and some on multiple occasions (e.g. Sowell’s point regarding the lower I.Q.’s of mountain based people). It would also benefit from the inclusion of positive suggestions for policy that interact with the moral issues raised by poverty.

These issues are annoying but Sowell writes in an engaging manner. He has a penchant for quotable quotes and, more importantly, an ability to provide thought provoking illustrations of the points that he is making drawn from a variety of different places around the world and a variety of different periods and contexts in the past 1000 years. This results in interesting comparisons (e.g. between some black communities in the USA and low-income white communities in the UK and between early modern Spain and the contemporary Middle East). Furthermore, his use of statistics is sufficient to back up his arguments without overwhelming the reader and the addition of a number of personal anecdotes adds a human dimension.

The result is a readable book aimed at the intelligent non-specialist that raises issues of critical importance in the West today. Many on the left will want to take issue with what Sowell says but they will need to demonstrate why he is wrong. Many on the right will agree with much of what is said but even they will need to ask themselves whether their policy prescriptions might be counter-productive.


The revised and expanded edition of “Wealth, Poverty and Politics” was published in 2016 by Basic Books (ISBN-10:0465096763). 565 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.


Cameron Hepburn: Carbon Trading – Unethical, Unjust and Ineffective?


Carbon Trading – Unethical, Unjust and Ineffective? by Cameron Hepburn was presented at the “Green Markets, Sustainable Business” conference on Thursday 2nd March 2017, at One Great George Street, London.







Richard Turnbull: What is the purpose of a company?


In 1987 ICI, one of the leading chemical conglomerates at the time, described its purpose as follows:

ICI aims to be the world’s leading chemical company serving customers internationally through the innovative and responsible application of chemistry and related science. Through the achievement of our aim we will enhance the wealth and well-being of shareholders, employees, customers, and communities which we serve and in which we operate.

In 1994 the company objective had changed to:

Our objective is to maximise value for our shareholders by focussing on businesses where we have market leadership, a technological edge, and a world competitive cost base.

So, what changed? What changed so that ICI no longer aimed to be the world’s leading chemical company? What changed such that ICI’s application of science was no longer to be the innovative and responsible application of chemistry and related science, but only that in which they had a technological edge? What happened to the employees, customers, and communities which we serve, to be replaced by to maximise value for our shareholders?

The answer requires a book rather than a blog but the case of ICI is illustrative of the way in which business has become separated from ethics, values and a truly holistic purpose which historically served the economy and society well.

The Quakers represented, in 1850, no more than one half a percent of the population. Thus it is even more extraordinary just how many of our household names had Quaker origins – not least in financial services – Barclays, Lloyds, Friends Provident, Cadbury, Rowntree, Clarks (as in shoes), Huntley and Palmer (biscuits). The successful iron smelting that formed the basis of the Industrial Revolution came from a Quaker family, the Darbys.

I am not suggesting that the solution to the problems of business purpose and intent today is solved if we all became Quakers! However, what I am saying is that by understanding the key reasons why the Quakers were successful (mostly) in business can inform our contemporary debates in a helpful manner.

There were four key reasons behind Quaker business success, all of which have wider application today.

Understanding the culture shapes purpose and identity

Entrepreneurs do not flourish alone. Professor Mark Casson of Henley Business School has argued that the quality of entrepreneurship depends upon the quality of business culture. A strong culture is built upon trust, confidence integrity and quality. The strength of the Quaker culture had a direct impact upon their business success. The Quakers – among others – had by 1800 faced around 150 years of oppression, crucially including exclusion from the Universities. Hence many Quakers turned their minds to business. This persecution made them close-knit communities and it was within this setting that apprenticeships were developed, trust and confidence built as the major families all knew each other, with dishonesty and especially bankruptcy viewed in highly negative terms due to the impact on Quaker reputation. A strong culture which enhanced positive behaviour of honesty and integrity (quality products at fixed prices) and discouraged negative behaviour.

A willingness to talk and act morally

A major complexity today is that we have become so individualistic that moral behaviour is reduced also to the behaviour of each individual. We need to recover not ‘moralising’ but ‘moral character’ and ‘moral action.’ The reality is that much of the Quakers integrity derived from their spiritual principles. Their moral codes included injunctions against overtrading, honesty, payment of debts, caution over indebtedness, transparent and accurate accounts and understanding of the business. These principles derive from the Quaker ‘Advices’ and ‘Queries’ on trade issued between 1675 and 1793. Many Quakers became wealthy, but often had to endure the long and patient wait of the entrepreneur for success. As a result, they were not ostentatious with their wealth and certainly exercised personal discipline and frugality in the wait for a return. There are clear lessons for us today and we must become more willing to talk about moral values.

The central role of the family business

Generally speaking, negative views of business are aimed at the big corporates and more positive views of business related to smaller, local and family businesses (SMEs). All the successful Quaker businesses began as family businesses. Indeed, most involved the capital of the founders and owners being placed at risk. The opposite of limited liability. Growth inevitably led to a dilution of the family business and the need for capital ultimately led the leading Quaker businesses to adopt limited liability. However, the idea of the family business lay at the heart of the Quaker vision. The business was seen as part of the family and as a result concern for both quality products and the employees – so, everything from sport, to societies, savings clubs but also pension funds, sick pay and even bonus schemes.

Understanding the wider responsibilities of business and capital

The compartmentalisation of business from society is disastrous. The Quaker businesses had a much more holistic view of their purpose. Profitability was essential, but so were reputation, customers and the society of which they were part. The days of company’s building model villages providing housing – not charitable, but commercial – as well as ensuring community green space, fresh air and light may be over but the principles still provide lessons. Social purpose and commercial profitability and success are not mutually exclusive. Real relationships – between owners and managers, managers and workers, companies and customers and so on – are infinitely more purposeful than the remoteness and the contractual nature of so many business relationships.

How far we have come. Without a sense of ethical responsibility, disciplined moral behaviour and character and a recognition that capital and its economic return carry responsibilities as well as rewards, we will continue to increase the divide of business and society. However, we must also recognise that all of this can only be achieved in the context of a free economy where wealth creation is celebrated rather than despised and where the limits of government are recognised to be as significant as its regulatory and redistributive roles. A concern for society and the responsibilities of wealth do not need to be separated from a wealth-creating, efficient business enterprise. Profit is virtuous, but does not need to be maximised at the expense of all other demands.

Culture, ethics, family relationships, purpose, values, employees, responsibility – for all these things we can thank, at least in part, the Quaker businesses. All of those things are essential in restoring confidence in business today.

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.

Green Markets, Sustainable Business – March, 2017

The Centre for Enterprise, Markets & Ethics (CEME) held a conference on ‘Green Markets, Sustainable Business’. Hosted by CEME and sponsored by CCLA Investment Management, the event focused on the green economy, investment trends in sustainable energy, and the environment.

It proved to be a terrific debate with passionate engagements from both the speakers and the audience. The distinguished panel of speakers included: Michael Liebreich (Chairman, Advisory Board, Bloomberg New Energy Finance), Rt Revd James Jones (Bishop of Liverpool 1998-2013), Baroness Bryony Worthington (Former spokesperson for Energy & Climate Change, Executive Director – Environmental Defence Fund Europe), Prof. David Vines (Ethics & Economics, University of Oxford), Andy Darrell, (Chief of Strategy, Environmental Defence Fund), Kingsmill Bond (Energy Strategist, Trusted Sources), and others.

The event took place on Thursday 2nd March 2017, at One Great George Street, London SW1P 3AA.


Conference Resources:

Andy Darrell – Investor Confidence

Michael LiebreichGreen Markets, Sustainable Business

Kingsmill Bond – The New Energy Revolution – From Morality to Market

Cameron HepburnCarbon Trading: Unethical, Unjust and Ineffective?

Erin Priddle – Environmental Defense Fund – EDF Oceans


Picture Gallery:


Richard Godden: “Platform Capitalism” by Nick Srnicek


Those who have studied modern technology based or enabled companies will doubtless consider Platform Capitalism to be superficial. Srnicek does not provide any worked through suggestions that will be useful either to the makers of public policy or to those involved in the management of business and many of his conclusions are contentious and appear to be based more on his prior left-wing accelerationist philosophical position than on the evidence presented in this book.

And yet: the book is interesting and thought provoking. Leaving aside the eccentric use (or, rather, minimal use) of paragraphing, Srnicek has an engaging style and presents a readable and helpful overview of the impact of technology on economic activity and of the strategy of technology companies. The book is short (l29 small pages) and can easily be read carefully in a couple of evenings. It is worth devoting this time to it.

Srnicek’s subject is the effect of digital technology on capitalism. He claims that “the platform” has emerged as a new business model and his aim is “to set these platforms in the context of a larger economic history, understand them as a means to generate profit, and outline some tendencies they produce as a result” (page 6). After a reasonably orthodox (if very obviously left-wing) review of economic and business trends since the 1970’s (primarily focussed on the USA and UK), he moves on to consider the emergence of “platforms”, which he defines as “digital infrastructures that enable two or more groups to interact” (page 43). He distinguishes five types of these: advertising platforms (e.g. the Google search engine), which allow their owners to extract information on users, undertake analysis, and use the product of this to sell advertising space; cloud platforms (e.g. Amazon Web Services), which comprise hardware and software that is rented out to digital-dependent businesses; industrial platforms (e.g. that of GE), which comprise the hardware and software necessary to transform traditional manufacturing; product platforms (e.g. that of Rolls Royce), which transform a traditional good into a service; and lean platforms (e.g. that of Uber), which are like product platforms but whose owners attempt to reduce their ownership of assets to a minimum.

The analysis of each of these business models is much the most interesting part of Platform Capitalism. Srnicek concludes, perhaps surprisingly, that lean platforms “seem likely to fall apart in coming years” (page 88) but he recognises that the other types of platform are here to stay. He sees some benefits in this (e.g. better products for customers) but his main focus is on the concerns to which the emergence of platforms gives rise.

His biggest concern is the perceived monopolistic tendency of platform capitalism. He returns to this on a number of occasions and asks “Will competition survive in the digital era, or are we headed for a new monopoly capitalism?” (page 94). This is certainly a question that needs to be addressed but, Srnicek’s analysis points to various factors that suggest that there will continue to be significant competition among the platform providers. Nonetheless, his prognosis is bleak. “Let us be clear,” he says, “this is ….. the concentration of ownership” and, he continues, “Far from being mere owners of information, these companies are becoming owners of the infrastructures of society” (page 92). This is surely unduly apocalyptic.

Srnicek’s other major concern relates to labour. It is here that his left-wing philosophy is most apparent. He points to some real concerns (e.g. the mis-labelling of employees as independent contractors with a view to avoiding employment protections) and he dismisses the absurd idea that user-created data comprises the exploiting of free labour. However, he makes many statements that rely on assumptions that are at best dubious. For example, his suggestion that “In a healthy economy [people such as Uber drivers] would have no need to be micro-tasking, as they would have proper jobs” (page 82) seems to be based on the assumption that the job market of, perhaps, 50 to 70 years ago is the only acceptable model and smacks of left-wing nostalgia for the days of manufacturing-based factory capitalism. Likewise, his suggestion that companies such as Airbnb have “off-loaded costs from their balance sheet and shifted them to their workers” (page 83) suggests preference for the rigidities of integrated corporate monoliths over the more flexible models permitted by modern technology.

The book also suffers in some places from loose use of terminology. For example, Srnicek several times mentions (with apparent disapproval) the “cross-subsidisation” that he believes is inherent in some platform business models (e.g. Googles) that involve providing a free service that enables advertising space to be sold. This use of the term is eccentric. Google is no more involved in cross-subsidisation than are the owners of commercial television stations or free local newspapers that have historically survived by selling advertising space. It is hard to see what is wrong with the Google “cross-subsidisation” model from a competitive or any other point of view.

More seriously, Srnicek’s frequent attacks on “tax evasion” are mis-directed. Many people are rightly concerned about tax evasion but he confuses illegal evasion with legitimate tax minimisation. In particular, he seems unaware that, pursuant to express US law, US corporations may legally avoid the payment of US tax on foreign profits for so long as these are not repatriated. He may not like the relevant US legislation but there is logic behind it and, in any event, companies can hardly be criticised for making use of it. His statement that “The leaders of tax evasion have …… been tech companies” (page 59) followed by a list of well-known names, without any supporting evidence, is both disturbing and disappointing.

The final section of the book (relating to what the future may hold) is less disturbing but equally disappointing. One idea is piled on another. In less than two pages, there are suggestions of: co-operative platforms; anti-trust action; regulation of, or even the banning of, lean platforms; co-ordinated action on tax; the creation of “platforms owned and controlled by the people”, which must nonetheless be “independent of the surveillance State apparatus”; “post capitalist platforms” (whatever they might be); and the collectivisation of platforms (pages 127/8). None of these ideas is explored and one may doubt the realism of at least some of them and the practical benefits of others.

This is a pity because there are many issues arising from “platform capitalism” that should be explored by both policy makers and those involved in business. What are the implications for privacy and, indeed, personal freedom and how should we respond to these? What kind of protections for “workers” are practicable and appropriate in a digital world? Where do the responsibilities of the platform companies to employees, customers, suppliers and others begin and end and how can they best discharge them? What kinds of regulatory regimes (if any) are needed for this kind of company and how can they be imposed in a digital, cross-border world? Generally, what does responsible digital business look like?

Srnicek fails to offer any insights into these matters. None-the-less, his analysis of the platform companies is important because it should help others to do so. It should also help all of us to note the way in which the business world is moving and avoid suggesting outdated solutions to modern business problems.


“Platform Capitalism” was first published in 2017 by Polity Press (ISBN 1509504869, 9781509504862), 120pp.

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: “Good News for the Poor” by Theodore W. Jennings


John Wesley’s influence in the history of Christianity is indisputable. His movement for ‘scriptural holiness,’ his foundation of Methodism as both movement and denomination, his organisational prowess, his spiritual passion for the established church, all form part of his legacy. His Journals, letters and sermons are a goldmine of information and insight. Naturally this wealth of primary resources has also generated a history of interpretation. The fire in his parents’ Rectory at Epworth (‘a brand plucked from the flames’) came to form part of the providential history of Methodism, as indeed did his ‘conversion’ experience at a meeting of the Moravians in Aldersgate Street in London in May 1738. Wesley also was a political conservative, a supporter of the monarch, willing to pray against the French and resistant to the rebellion of the north American colonies.

So, a quest for Wesley’s economic and social ethic is an attractive possibility. Surely if there is an ‘evangelical economics,’ we will find Wesley an able exponent? The enormous strength of this book is that it gathers into one place Wesley’s writings and teachings on economic and social matters. The weakness lies in the interpretation in which we learn more about the author than we do the subject.

Professor Theodore Jennings is currently an affiliated Faculty member of Chicago Theological Seminary as Professor of Biblical and Constructive Theology. He has been a local pastor and also taught at the Methodist Seminary in Mexico City. He clearly stated aim is to re-interpret Wesley through the lens of liberation theology. So his starting point is a ‘demystification of wealth and power’ and a ‘preferential option for the poor’ (pp24-25). By ‘evangelical economics’ the author means ‘the criticism of wealth, the forms of solidarity with the poor, the notion of stewardship, and the vision of an economic practice based on the example of the Pentecostal community’ (p24). Intriguing though these themes are, they hardly form an adequate definition for ‘evangelical economics.’

The book is constructed around these key themes together with chapters on ‘The Theological Basis of Wesley’s Ethic,’ ‘Why did Wesley Fail?’ and ‘The Relevance of Wesley,’ together with an appendix on ‘Wesley on Politics.’ These chapters, forming the second half of the book, are essential to Jennings interpretative exercise – because he has, by his own admission, to deal with Wesley’s well-known conservatism, his swift abandonment of the Pentecostal ideal, Wesley’s own contra-writings to the liberation theology theme and the unwillingness of Methodism to embrace the apparent ideals of their founder.

Jennings powerfully brings out Wesley’s critique of wealth and excess. Wealth was a temptation and increasing riches increase the temptation and conformity to the world. Luxury leads to laziness and contempt for the poor. Jennings here draws upon Wesley’s Journal and his sermons, On Riches, The Danger of Riches, On the Danger of Increasing Riches. Wesley expounds the theme that all our riches and wealth are held on stewardship from God and with a purpose:

Do you not know that God entrusted you with that money (all above what buys necessaries for your families) to feed the hungry, to clothe the naked, to help the stranger, the widow, the fatherless; and, indeed, as far as it will go, to relieve the wants of all mankind (p102, quoting the sermon on ‘The Danger of Increasing Riches’).

Wesley’s most famous treatise on the matter was his well-known sermon on ‘The Use of Money,’ and the famous three-fold injunctions of ‘Earn all you can, save all you can, give all you can.’ Jennings does recognise the complexity of this sermon but we see also his own forced interpretation here by his description of this sermon as ‘the source of most of Wesley’s problems with the Methodists’ (p167). This is wholly inadequate by way of interpretation. Wesley refers to money as ‘an excellent gift of God’ and being of ‘unspeakable service to all civilised nations,’ whilst also arguing for ‘honest industry’ and for the avoidance of sinful trade or the undercutting of competitors. In reality there is little economics (evangelical or otherwise); the feel is very much that of a preacher.

There is also the vexed question of Wesley’s advocacy of the ‘community of goods,’ upon which Jennings places great store but about which two things are clear. First, that Wesley experimented intellectually (and hoped to do so practically) with the idea in the 1740s and, secondly, that he subsequently abandoned it either because he considered it to be unrealistic or because his thought had moved on, perhaps as he preached his sermon on “The Use of Money” (which he delivered on 23 occasions according to the sermon register, starting in 1744, and which was printed in 1760).

Despite his occasional radical thoughts Wesley stood in the mainstream tradition; he accepts the basic role of the market, offers strictures against excess and looks to the voluntary principle as a response to social need. However, for all that, we should not underestimate the power of his critique of wealth and money.

Ultimately, Jennings forces the material to his theme. He makes far too many pejorative interjections in his interpretation for the contemporary age.  That is not to say that there is nothing powerful about gathering together from their disparate sources Wesley’s economic and social thought. However, he does so partially. By separating those writings of Wesley which operate in the opposite direction we are left with two halves of a theological tradition without the necessary interpretation of the complexity. Wesley was not an economist and his writings on economics – claimed indeed by both ‘free-marketers’ and ‘socialists’ (which merely illustrates the complexity) –  simply cannot be garnered into some overarching economic strategy. As a preacher he certainly knew the challenges wealth brought; about business and market itself (the use of the word capitalism would be an anachronism) he was unquestionably equivocal.


“Good News to the Poor: John Wesley’s Evangelical Economics” was first published in 1990 by Abingdon Press (ISBN-10: 0687155282)

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: “Capital and the Kingdom – Theological Ethics and Economic Order” by Tim Gorringe

I first read this book shortly after it was published in 1994, at a time when I was starting to explore the interface between Christian ethics and economics. Re-reading it some twenty years later has been instructive, now that this field has been developed rather more and is taken seriously again by at least some of those involved in politics and public life.

The book is set out in four parts, preceded by a helpful introduction in which Tim Gorringe sets out his stall by explaining how he uses Karl Marx as a dialogue partner throughout. This gives a hint as to his own political leanings. Indeed, in his introduction he even locates Marx as standing within the tradition of prophecy (p. xi). This means that Gorringe works essentially with a structured view of society and of economics that draws on Marxist theories of power and domination, rather than something more dynamic or entrepreneurial, and this is the undergirding theme of Part One. However, the theme of ‘narrative’ and economic history is certainly also present here, as part of his general critique of a version of economics that is ‘at the mercy of abstract laws which only experts can fathom’ (p. 22).

Within Part One I enjoyed finding at least two sharp criticisms of Brian Griffiths, Chairman of CEME, and having heard Lord Griffiths’ more recent reflections my sense is that he might now yield a little ground to Gorringe when it comes to the place for Christianity within public policy (see p. 13), while holding fast against the Marxist view on equality and liberty (p. 54). In certain respects, the world that Gorringe describes has changed. I particularly noticed this in his discussion of a living wage, which has now been embraced across the political spectrum in the UK.

Part Two of the book has four chapters that address more focused subjects. The first of these, ‘Work, Leisure, and Human Fulfillment’, sets out a valuable survey of Christian thinking through history on this theme, with the conclusion that ‘true leisure is not utilitarian’ (p. 77), and that both work and leisure are about human realisation. As a stand-alone section this would make good reading for anyone wanting a critique of a self-contained neo-classical economic world-view. However, the other three chapters in Part Two resonate more strongly with Gorringe’s Marxist theme, as they tackle the subjects of alienation, solidarity, resistance, and social justice. Gorringe looks for a ‘rejection of the individualism which divides people and sets them against each other, affirmation that humanity consists in working together’ (p. 102). While this is indeed a hopeful broad vision to set forth, as I read these words I found myself wondering whether it takes seriously enough the way in which entrepreneurial energies operate within the economy.

Part Three is given the over-arching heading ‘The Common Treasury’, in which Gorringe explores the subjects of personal property, inequality, planning and ecology. His general approach is one that advocates a socialist ‘control’ of the economy, and at one point he states that ‘some kind of global planning is needed’ (p. 140). Part Four then consists of a single final chapter, entitled ‘Two Ways’, in which Gorringe mounts a strong attack on global capitalism. It was here that I was surprised but pleased to stumble across a reference to the economist Joseph Schumpeter. His work had been used as ammunition within a 1980s debate between the Roman Catholic bishops of the USA and some prominent Catholic lay people. Reading this section carefully, my impression was that Gorringe brackets Schumpeter with a more general neo-classical take on economic theory, and then summarily lambasts them both. However, I would argue that he has missed something here, and that a more careful look at the contrast between Schumpeterian economics and the neo-classical approach would have been fruitful. In fact, Schumpeter has been taken in a Marxist direction, notably by Paul Sweezy, and I wondered if Gorringe might have changed his line if he had been aware of this.

On almost the last page of the book I then found this sentence: ‘There is nothing intrinsically wrong with enterprise, initiative and ownership. What is wrong is when these are harnessed to profit, power, self-aggrandisement, and inequality.’ (p. 166) As a programmatic statement this felt promising to me, but I struggled to see how large parts of the book itself could be taken to support or develop it. Rather, for Gorringe any sense of enterprise or initiative seems essentially to be subsumed within a Marxist superstructure, and the need for human cooperation to be played out in a society marked by planning and control. In the end, therefore, I found this book to be a helpful foil against which I wanted to put forward different ideas connected to human enterprise. However, as a major contribution in the field of theological ethics and economic theory its importance cannot be doubted.


“Capital and the Kingdom: Theological Ethics and Economic Order” was published in 1994 by SPCK/Orbis Books (ISBN 10: 0-281-04773-1)

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.

Andrei Rogobete: “The Shareholder Value Myth” by Lynn Stout


They often say ‘never to judge a book by its cover’, that initial external appearances can distort or even deceive the audience from the content that lies within. Well, the principle doesn’t apply here. Lynn Stout’s The Shareholder Value Myth attempts to achieve exactly what the title entails: a pure and straight forward critique of the belief that the ultimate purpose of business is to maximise shareholder value, which often dominates the field of business management.

Author Lynn Stout is Professor of Corporate & Business Law at the Cornell Law School where her main areas of research include corporate law, securities and derivatives regulation, economics, and organisational behaviour.  Stout argues that the Shareholder Value ideology is ultimately just an ideology, not a legal requirement or a ‘practical necessity of modern-day business life’ (p3). In this sense, Shareholder Value thinking is a mistake for most companies because it indirectly forces corporate managers and executives to ‘myopically’ focus on short-term earnings at the expense of long-term stability and performance. It also ‘discourages investment and innovation, harms employees, customers, and communities; and causes companies to indulge in reckless, sociopathic, and socially irresponsible behaviours’ (p10).

The book is written clearly and concisely, predominantly using direct rhetoric and short sentences. In terms of structure, the book is broadly divided in two comprising parts: Part 1 is a direct attempt in ‘Debunking the Shareholder Value Myth’ while Part 2 is mostly an investigative endeavour into who the ‘shareholders’ are and what they actually value. Each part is made up of five shorter Chapters so let’s take a closer look into some of the main points and arguments made throughout the book.

The first half can be seen as a systematic critique of the means and (even disastrous) consequences of ‘shareholder value thinking’. Corporate scandals such as the 2010 BP Oil Spill and cases of serious fraud in large companies such as Enron, HealthSouth and Worldcom throughout the 2000s are all cited as consequences of shareholder value thinking. Professor Stout makes a compelling case that the ‘narrow’ focus on share price alone can result in ruthless management behaviour. The drive for extreme cost-cutting in the hope of increasing short term profit doesn’t just hurt the employees and the company, but the shareholders themselves.

The book provides a brief historical account of how shareholder value thinking came to dominate teaching in business schools as well as becoming the norm within the private sector itself. If in the 1800s most privately held companies were of single ownership (or a tight shared ownership), by the 1990s publicly held companies have tens of thousands of shareholders. Stout rightly argues that this replacement of the ‘single’ ownership model with an executive Board to represent the vast number of shareholders causes the Board (as well as the senior management) to assume that all the shareholders want is ‘to make as much money as possible, as quickly as possible’. It rather quickly trickles down to the lowest common moral denominator, ignoring the fact that shareholders are real human beings with different investment timeframes, different priorities and different attitudes toward the well-being of others. In this sense Lynn Stout rightly argues that ‘recognising these differences reveals that the idea of a single objectively measurable “shareholder value” [i.e. solely based of share price] is not only quixotic, but intellectually incoherent’ (p60).

The second half of the book turns its attention toward the shareholders themselves: who are they? And what do they want to get out of their investment? These questions in turn give rise to a clear dichotomy within a company’s pool of shareholders: ‘short-term speculators versus long-term investors’. Again, Lynn Stout rightly points out that ‘long-term shareholders fear corporate myopia. Short-term investors embrace it – and many powerful shareholders today are short-term’ (p65). The conflict of interest generated by short vs. long-term investors indirectly forces a company’s management to take the default position and assume that every shareholder is a ‘platonic investor’ – i.e. an investor that only owns shares in company ‘X’ and the share price increase is all that they are interested in. Lynn Stout argues that in reality however, this ‘platonic investor’ does not exist. The overwhelming majority of investors today own more than just shares in company ‘X’, they are invested in the marketplace as a whole and want to protect the value of their other investments also. In this sense, the short-term focus generated by shareholder value thinking can actually work against the interests of the shareholders themselves.

The book as a whole presents a compelling critique of shareholder value thinking. Yet it’s strength is also its greatest weakness: it is just that, a critique –nothing more and nothing less. What are the solutions? The final pages of the book only tentatively touch on a possible way forward in arguing that what is needed is a more ‘complex and subtle understanding of what shareholders really want from corporations’ (p115). This all sounds great and very necessary but how do companies get there? Even if executives come to acknowledge the variations in their shareholder’s desires – is this a guarantee that the company’s approach to corporate governance will change?

I have written on this topic in the past  where I highlighted the importance of first establishing a concrete set of internal ethical values and practices. Only then does it become possible to accommodate the desires of a larger pool of shareholders and indeed, stakeholders.

A great deal remains to be written on this topic and The Shareholder Value Myth by Lynn Stout is an excellent addition to the growing body of literature that forces us to re-think the role and purpose of business in society.

A recommended read.


“The Shareholder Value Myth” was published in 2012 by Berrett-Koehler Publishers (ISBN 10: 1605098132). 134pp.

Andrei Rogobete

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






Richard Godden: “Business for the Common Good” by Scott Rae and Kenman Wong


The concept of “the common good” dates back at least to Aristotle and has been used by political theorists, moral philosophers and economists down the ages, including people as diverse as Thomas Aquinas, John Locke and Adam Smith. It is a basic concept in Catholic social teaching and is easily understandable by all. However, it is not familiar today in discourse about the purpose and role of business.

Wong and Rae want to change this. They suggest that, “it is an important time to reconsider what business, and our current or future participation in it, is all about” (page 28) and they undertake this reconsideration by first considering the purpose of those engaged in business. They suggest that, “The idea that business can be a calling is becoming more widely appreciated and accepted” but that “what exactly business is a calling to needs much more exploration” (page 33; the emphasis is theirs). They then launch into the required exploration. The first part of this leads to the conclusion that business is a calling “to transformational service for the common good” (page 76) and the implications of this are then worked through.

Business for the Common Good forms part of the InterVarsity Press “Christian Worldview Integration Series” and is, thus, written primarily for Christians. However, Prabhu Guptara observes in his endorsement that “Nothing in this book prevents it enriching the lives of Hindus such as myself – or, as far as I can see, those of Buddhists, Muslims, agnostics or atheists!” He is right.  The book’s conclusions do not depend upon any theological propositions other than a general view of God and the World that will be shared, at least in its more important features, by millions of people of various faiths and, at least in relation to its view of the World, by many of no faith. Furthermore, although the Series Preface suggests that college students may be a primary target audience, the book is likely to assist a far wider audience, including those who have been in business for many years. Some readers will find its lack of interaction with other literature a downside but others will welcome the fact that it does not assume any prior reading and deals with issues from first principles.

After an over long Series Preface and their (shorter) Introduction, Wong and Rae helpfully examine the purpose of work, addressing the question whether work has merely an instrumental purpose or whether it also has an intrinsic purpose. Put simply, do we work merely to live or do we live to work? Many, perhaps most, people today would say that they work to live and for the poor this may seem obviously true but Wong and Rae seek to re-establish the idea that, as Martin Luther said, “The entire World is full of service to God, not only in the Churches but also the home, the kitchen, the cellar, the workshop and the field of the townsfolk and farmers” (page 60). As Wong and Rae put it, “Our work can serve as an altar” (i.e. an act of worship; page 46).

On this basis, they ask whose interests business should serve. It is their analysis of this that leads to what they describe as their “Christian vision for business” (page 76) and hence to their basic proposition that the calling to business is a calling to transformational service for the common good.

Having laid these foundations, they then turn to a series of specific issues: how involvement in business can result in negative effects on our character but how it can also transform us for good (which they rightly describe as a “rarely examined question”; page 37); what our attitude towards wealth, success and ambition should be; how we should respond to globalisation; ethics in the work place; business leadership and management; marketing; and stewardship and sustainability. Finally, they turn to what they describe as “several exciting (and very inspiring) ways that emerging practices and organisations are moving business towards becoming proactive and intentional partners in solving social problems” (page 38).

This is a huge amount to cover in a relatively short book and some parts of the book may leave the reader feeling a little short changed. However, this is not a superficial book or one that deals in generalities. It is closely argued and it is careful to explain both its starting points and its logic. It is also good to see issues such as the ethics of marketing addressed head on rather than in passing and, more generally, to have work place ethics placed in the broader context of the purpose of business rather than considered in isolation.

More seriously, many may question whether it is realistic to expect society as a whole to adopt Wong and Rae’s view of the purpose of business and whether it is even worth attempting to persuade society to do so. Wong and Rae are ethicists not business people and on occasions this is revealed in a lack of sophistication in the examples of business situations that they give. Furthermore, their view of the world leans towards the optimistic end of the theological spectrum (being in Niebuhr’s “Christ the Transformer of Culture” category and, in some respects, leaning towards his “Christ of Culture” category) and many will wish to question this optimism.

Wong and Rae recognise these issues and seek to address them. Not all of what they say is wholly convincing and they leave many unexamined issues (e.g. with regard to the role of competition). However, the points that they make should at least cause those who are more pessimistic, whether from experience or theological conviction, to analyse their views and perhaps conclude that, even if they are right to be pessimistic, Wong and Rae’s basic suggestions are worth pursuing.

Business for the Common Good provides an overview of its subject matter and, if it leaves readers with many questions requiring further exploration, that is for the good. Wong and Rae state that their intention is “to plant seeds, deepen conversations and enable changed outlooks, purposes, values and practices” (page 285). Their book should achieve this goal.


“Business for the Common Good” was published in 2011 by InterVarsity Press (ISBN 10: 0830828168). 288pp.

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.

Andrei Rogobete: Ethics in Global Business

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of Ethics in Global Business: Building Moral Capitalism by Andrei Rogobete.

The publication can be downloaded here. Alternatively, hardcopies can be ordered by contacting CEME’s offices via email at:





God and Enterprise: Towards a Theology of the Entrepreneur – November, 2016


CCLA Investment Management and the Centre for Enterprise, Markets and Ethics held a book launch, lecture, panel discussion and reception.  Author Revd Canon Edward Carter spoke about his new book, published by The Centre for Enterprise, Markets and Ethics as part of its series on Enterprise and Faith.

A distinguished panel included Joanna Moriarty, Lord Glasman, Lord Griffiths and the Bishop of Dover, the Rt Revd Trevor Willmott.


Martin Schlag: Business in Catholic Social Thought

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of Business in Catholic Social Thought by Martin Schlag.

The publication can be downloaded here. Alternatively, paperback copies can be ordered by contacting CEME’s offices via email at: or by telephone at, (+44) 0186 5513 453.




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.

Richard Turnbull: The Moral Case for Asset Management

This was a speech given at a reception for the New City Initiative hosted by the Lord Mayor of London, the Rt Honourable Lord Mountevans – July 7th 2016, Mansion House. To request a full copy of the Report please contact

May I, first of all, add my own thanks to the Lord Mayor, to Jamie Carter and to the NCI?

There may be, in the minds of many of our fellow citizens, something rather incongruous about asset managers even beginning to think about morality. That in itself illustrates that the importance of returning to our basic purposes, role, intent and vision, could not be greater.

Why is it that efficiency of asset allocation, pooling risk, providing liquidity and so on can be seen as contributing to moral purpose? It is because at the heart of the asset management task lies the collective management of wealth and economic growth that not only provides for individual well-being, but is also an essential component for the provision of public services in any free society. Unless we have the former, we cannot have the latter. So that is our first and most basic moral purpose, the creation of wealth, individual and corporate, and we should articulate it rather more than we do.

Second, the very nature of the firms gathered here gives us some clues about moral purpose at the micro level. Intelligent people, thinking about investment, markets and companies; the alignment of interests through co-investment; a culture that focuses on the offering to the client; an alternative to the index-driven retail industry; stewards of value – all of these are moral benefits of NCI member firms.

Are there challenges? Of course. We need to be transparent on fees and the relationship of remuneration and performance; fee structures have sometimes rewarded mediocrity. We should recognise that many of our clients will have non-financial objectives as well as financial. We should encourage a culture that places long-term thinking at the heart of the investment objective.

Finally, regulation and reputation. Regulation is necessary, but government and regulators alike are mistaken if they think that regulation enforces moral behaviour. NCI members are uniquely placed to shape the culture, the structure and indeed the long-term growth that alone can deliver performance and restore reputation. We should indeed articulate it more than we do, at both micro and macro levels.

Well, I encourage you to read the booklet, and if I can be of assistance to you, your partners or clients, to help you achieve these goals, then please do not hesitate to contact me.

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

The Challenge of Social Welfare: Seeking a New Consensus

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of The Challenge of Social Welfare: Seeking a New Consensus by Brian Griffiths, Richard Turnbull, James Perry and Maurice Glasman.

The publication can be downloaded here. Alternatively, a hardcopy can be ordered by contacting CEME’s offices via email at: or by telephone at, (+44) 0186 5513 453.




Edward Carter: God and Enterprise

The Centre for Enterprise, Markets and Ethics (CEME) is pleased to announce the publication of God and Enterprise: Towards a Theology of the Entrepreneur by Edward Carter.

The publication can be downloaded here. Alternatively, hardcopies can be ordered by contacting CEME’s offices via email at: or by telephone at, (+44) 0186 5513 453.




Richard Godden: “The Tides of Life” by Bill Pollard


The Tides of Life is impossible to categorise: it is not an autobiography, although the majority of it comprises autobiographical material; it is not a business leadership and management manual, although it contains a lot about leadership and management; and it is not a systematic work about Christian living, although it is full of guidance about just that.

Bill Pollard was for many years the CEO of ServiceMaster, the much studied and admired former Fortune 500 Company. Prior to that, he was, for a time, a practising lawyer in private practice and, for a brief period, an academic. Throughout his life he has been involved in educational projects and charities. He has seen much success, including the extraordinary growth of his company, but has also experienced the varying “tides of life”, including the early death of his father and, recently, the death of an evidently much loved grandson (who appears on the cover of this book). Now, in the evening of his life, he has written a book about what he calls the “lessons and choices in life”. Essentially, it is an overview of what he has learned through his many and varied experiences.

The result is a structured miscellany: there are reflections on what “our humanity is all about” and on God’s ordering of the world; thoughts about responsibility and stewardship; discussions of the nature of work of and purpose of business, the role of leaders and managers and how God may be served by those in business; and, last but not least, reflections on the importance and nurturing of relationships. In all cases, Bill Pollard teaches by means of stories from his own life, which are placed within the framework of a biblical world view.

Happily, in recent years there has been a considerable upsurge of interest in the calling of Christians to serve God throughout their everyday lives rather than through some detached “Christian service” element of them. Bill Pollard believes passionately in this calling and wishes to pass on what he has learned about how to put the theory into practice. He is clearly a man who has never stopped learning and, judging by the number of times he quotes what others have said to him over the years, a man who never forgets advice that he has been given. Above all, he is a man who believes in providence and who lives his life in the light of Proverbs 19:21 (“Many are the plans in a man’s heart but it is the Lord’s purpose that prevails”), which is quoted at the head of one of the chapters of his book.

Arguably, he tries to cram too much into the space available. For example, the seventeen pages devoted to good corporate governance include matters as diverse as the ideal size for a corporate board and comments regarding what went wrong in the banks in the run up to the global financial crisis. Some business people will find this section of the book superficial. However, this is a quibble rather than a serious criticism.

More significantly, even having read Bill Pollard’s fierce criticism of the results of the absence of morality in the market place, some Christians may question the merits of the market economy to which he is committed and may be disappointed that he largely asserts these benefits rather than arguing for them in an academic manner. He similarly asserts his Christian world view rather than seeking to defend it. This, however, merely reflects the nature of the book: it does not purport to be a work of free market or Christian apologetics. It is thus unlikely to persuade a reader to accept its basic premises. However, it demonstrates how these premises may be lived out in practice and may cause sceptics to ask themselves whether this might indeed be the way that we should live our lives. Furthermore, if like me you agree with the premises, you will find here a mine of practical Christian teaching and advice.

This is not a book to read quickly. It is worth reading in short sections over a prolonged period of time, reflecting on each part of it before moving on to the next part. It may be impossible to categorise but it is none the worse for that.


“The Tides of Life” by Bill Pollard was first published in 2014 by Crossway Publishing (ISBN 1433541742, 9781433541742).

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.

Philip Booth: Morality, taxation and coercion

It is often argued that taxation to promote the position of the poor is somehow a moral act on behalf of those that are better off and paying taxes to finance the transfers to those who are worse off. It is not.

It is not an intrinsically moral act for the same reason that, if I go out this evening with the intention of beating up my brother and I am stopped from doing so because he is with two muscly friends, I have not committed an act of moral restraint. If I am put in prison for not paying taxes, I have not committed a moral act as a result of paying those taxes. There is no moral equivalence between paying taxes because you have to and the self-sacrifice that comes with philanthropy. Indeed, taxation can exhaust our ability to make moral choices to help our families, our neighbours and society more widely.

The moral problems that people often feel exist with a free and prosperous economy such as selfishness and an individualistic mindset are no less inherently present in an economy with high taxes. Self-interest can be every bit as present in the political system as it is amongst individuals. The idea that we have two natures – a selfish one in the private sphere but a better, more refined, less self-interested nature that is present in the public sphere has no justification in moral philosophy or empirical evidence. After all, when did you ever see a demonstration in a town calling for the local hospital to be closed down so that the neighbouring town could have more resources? Indeed, the zero-sum-game nature of public sector activity promotes selfishness and conflict – witness the lengths people go to in order to obtain places in good state schools, including fraud. In the private sphere, co-operation and providing something of value to customers tend to be rewarded.


The moral limits of taxation

So, there is no credible moral case for a high tax economy. But we can go further. Ultimately, taxation is an issue of how we view property rights. As Pope Leo XIII noted, property (the money that we have) is just wages in another form. To take another person’s property through taxation is to deprive a person of his justly earned wages.

Of course, the state does need resources and it is legitimate to tax people’s earnings in relation to their ability to pay in order to provide those things that are needed for the protection of society as a whole (defence, police etc.). It is also legitimate to tax people to ensure that all in society can have the resources to live in dignity if they are not provided by charity (through the provision of housing, food, healthcare etc.) – though these things do not need to be provided directly by the state.

This might justify taxation of between 5 and 20 per cent of national income – nothing like the 46 per cent of national income that the state spends in the UK today.


Practical aspects

In many practical ways, our tax system is morally problematic. It discriminates against family formation – with results that we see very clearly and, of course, it discourages work. A tax system that undermines family and work cannot be thought of as moral.

And, of course, when the state is spending nearly half of national income, there can be no general agreement about the morality of the things on which it spends money. In spending over 46 per cent of national income, the state finances all sorts of other things with my money that I think are morally wrong – and probably different things that you think are morally wrong.

A tax system in a nation of 65 million people, mediated by a huge bureaucracy controlled by a government called to account in elections every five years, cannot possibly replicate the true personal human compassion and philanthropy that is necessary if we are to provide the poor with genuine help. The individual, in this context, becomes a small cog in a giant wheel whose right of initiative has, in large part, been taken away and who has been encouraged to delegate his genuine societal responsibilities to those in need to the state. As Pope Benedict has said: solidarity is the responsibility of everyone to everyone and it cannot be delegated to the state.

This does not mean that the state should not provide for the poor. However, a low tax economy is conducive to social co-operation, individual initiative, the flourishing of families and high levels of employment. Furthermore, it is also conducive to the genuine voluntary assistance that the better off must give to those who need it. Society is not more moral when we discharge our responsibilities to those in need by voting for a party that will form a government that will manage a bureaucracy that takes money from one group of people to give to another group of people with neither group ever meeting each other.


Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. He is also an Associate Fellow with the Centre for Enterprise, Markets and Ethics (CEME).





Andrei Rogobete: Sports Direct gives business a bad name


Sports Direct’s founder and Chief Executive, Mike Ashley has admitted to paying staff below the minimum wage. The consultancy firm Mckinsey & Co. has been found to have a ‘secretive’ £5bn proprietary investment fund for its partners and BHS, the high street retailer has filed for bankruptcy in a downward spiral of events that would put most soap operas to shame.

What a week it has been!

It sure does feel like the year’s business stories have all been compressed in the space of one week.

Here are some thoughts:


     1. There will always be a few bad apples

In the ‘free’ marketplace there will always be those that play so close to the legal line that they sometimes trip themselves over. Such was the case with Mike Ashley’s Sports Direct where staff were required to go through excessive security checks during which time they were not paid. In the parliamentary enquiry, Mike Ashley admitted that staff were paid below the minimum wage and also that the company “outgrown his ability to manage it”.

I remain rather sceptical.

Within a free market economy there will always be some (especially at the low-cost end of the spectrum of any given industry) that are so ruthless in minimizing costs that they sometimes, intentionally or unintentionally, dip into illegal territory.

Alongside Primark, Sports Direct is effectively the Ryanair of the sports retail industry. And like Ryanair, Sports Direct operates with an iron fist on efficiency.

But financial efficiency should not come at the cost of employee fairness and the well-being of staff. Indeed, the two are prerequisites for the long term stability of a company (see also point 3 below).

Perhaps of even greater moral concern is the widespread use of zero-hours contracts by Sports Direct as the normal means of employment.

There is a case against the minimum wage and there is a case in favour of zero-hours contracts. However, for wages to be so low as to breach (even on a technicality) the law and for zero-hours contracts to be the norm rather than the exception does not give confidence that the directors and senior executives of a business are aligning the interests of all rather than just some of their stakeholders.

Mike Ashley’s admission that the company has got too big for him to run raises very deep questions about governance.


     2. Not all businesses are evil

We must not assume that all businesses are run in this way. The majority of businesses, and therefore people, involved in the private sector are upright and strive to do well in the workplace as well as their private lives.

It’s difficult to believe this when you hear stories like BHS owner Dominic Chappell giving death threats to Darren Topp, then CEO of BHS. When Darren questioned him about an unannounced £1.5 million withdrawal from the company’s accounts, Mr Chappell reacted by saying that “If you kick off about it I’m going to come down there and kill you.”

As atrocious as these events may sound, we must not lose hope in the good that business can bring.

Yes, the collapse of BHS was ugly beyond imagination and yes, the 11,000 people that are now unemployed is a tough pill to swallow – but despite all this we must not paint the entire private sector with the same colour.

Simon Walker from the Institute of Directors recently said in an interview that “… [the BHS case is] completely inexcusable and outrageous, and what worries me is that it makes people think that’s what British business is like and it’s not. British business is about hard working people who have often mortgaged their houses to get businesses going, this is as far from the world of normal businesses in this country as anything can be” (BBC Newsnight).

We need to hear some good stories.


     3. It all comes down to Ethics

I have said it before and I will say it again: A company’s genuine commitment to a set of core moral values is crucially important to its long-term financial and reputational stability.

A strong commitment to a set of moral values will impact the entire business. From staff pay and working hours to the firm’s products and services, the senior management should strive to ensure that their decisions and actions are aligned with the firm’s core values.

Businesses that fail to instil a sense of morality and wider responsibility will sooner or later, have to pay the consequences of their actions.

It’s people’s livelihoods on the line so the stakes couldn’t be any higher. Let’s hope businesses are listening.


Business needs to argue its case.

Andrei Rogobete

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

Richard Turnbull: Moral and economic issues in the EU Referendum

This is a transcript of a speech given as part of a debate on the EU Referendum. The event was organised by James Cowper Kreston and held at the Oxford Union.


The EU Referendum – some moral and economic perspectives

Thank you for the invitation to speak this evening, and thank you also for putting on this event.

How, then, will we decide between the competing visions for Europe, for the future of the United Kingdom and our relationship, not only with Europe, but with the world? Will we decide on the arguments about economics, borders or sovereignty? Will we make our decision on the basis of statistics? And if so, which particular statistics will we rely upon? Or maybe we will decide on the basis of propaganda – but who’s propaganda would we trust; the government’s, the Brexit campaign or some other vested interest?

My initial observation is that larger businesses, especially those with a significant export market to Europe, tend to be more swayed by the economic arguments for remaining (that is, primarily the argument of access to markets) than smaller businesses that tend to be more exercised by the impact of regulation (that is, the control of markets)

So, this evening, I want to open up a different kind of question, to try and bring a moral economic perspective into the debate, or perhaps two questions, one about the nature of markets, access to markets, trade and employment and another about regulation, control, business development, entrepreneurship, innovation and creativity.

The most depressing argument in this debate is….the EU costs us £55m per day (gross amount, no account of rebate or EU payments to the UK) or £35m a day (net of the rebate and closer to the amount actually paid over) or £23m a day (net of EU payments for farming and poorer areas support – but not counting the payments to universities for research). Cash and economic costs and benefits are not the same thing. We must go deeper in our analysis. And we should ask questions about purpose, the long-term economic costs and benefits, not just cash payments.

The most significant economic argument is concerned with access to markets. The reason it is the most important question is that economic growth is a necessary condition for individual, family, community and national welfare. This is a moral question. Without economic growth we damage employment prospects, reduce the tax base and stifle innovation. Economic growth is not a zero-sum game and is also a prerequisite for the political debates around wealth and income creation and distribution. In other words, unless we bake the cake in the first place, we cannot debate how the cake should be divided.

So, we should ask how best, then, to bake the cake. Access to markets means trade and exchange, import and export, competition and so on. The freedom to trade has shaped and transformed the world we live in. So, we know the EU represents the largest single market in the world (with the US being second). The UK is the largest market for exports from the EU (though only at around 16% of total EU exports), but for the UK around 44% of our total exports go to the single European market, though that percentage has been falling.

Does this mean that the UK couldn’t negotiate its own free-trade agreements with other countries, or that either new or even traditional markets could not be opened up or expanded? No, it does not mean that, but it does mean that we need to take very seriously indeed, the opportunity for access to the world’s largest single market and surrender that only after very careful thought. To lose that access is not irreplaceable, but would certainly damage short and medium term growth prospects, and there would be a cost to the negotiation of multiple trade agreements which may, or, more likely, may not, obtain equally favourable trade terms.

And we certainly need to be wary of naivety; the oft-quoted Norway model is illusory; Norway pays 90% of the UK per capita payments, they have to observe the single market regulations, and, indeed, it is worth quoting The Economist reporting a Norwegian minister as follows, ‘if you want to run Europe, you must be in Europe. If you want to be run by Europe, feel free to join Norway’ (Economist, 4th March, 2016, p20).

So, let me turn to the second question, that of regulation. The impact of the EU on the regulation of the market is undeniable. Part of the problem stems from the fact that what we read about in the newspapers is the silly stuff – the size of a vegetable, bendiness of bananas and cucumbers, regulations on washing-up gloves and so on. In reality the regulative impact of the EU extends far and wide into employment, market regulation, discrimination, health and safety, and into industry sectors from investment management to transport and shipping.

How are we to assess the nature and impact of this regulatory regime? Let’s start with the negative impact. There is little doubt that there is a ‘regulatory bureaucracy’ about the EU which rather reinforces the observation of Andrew Bailey, formerly the deputy-governor of the Bank of England, that ‘the main consequence of an increase in regulation is an increase in the number of regulators.’ Similarly, I think there is a cogent argument that EU regulation is an easier burden to bear for larger firms than smaller and medium-sized enterprises; and, in my view, it is SMEs who are the powerhouses of innovation, entrepreneurship and growth, indeed, collectively also of employment. Perhaps the Working Time Directive is an example of that. The directive, with the laudable aim of protection, is, however, an example of the different cultural mind-set between the UK and a Europe that sees the control of working hours as a governmental responsibility. You can see how, with a regulation like the Working Time Directive, a larger organisation with the resources of an HR department, would find those rules easier to manage and implement than an SME. Some of the industry-specific regulation is of a similar outlook – so, a significant number of effective, focussed, co-owned and co-invested small investment management firms find the burden of the regulatory regime focussed and geared towards the larger investment management firms, with their resources and capacity – all investment management firms with funds under management of more than £100m are treated the same, subject to the same requirements, reporting and regulations. So, I am persuaded that there is a negative impact of EU regulation.

However, there is a ‘but.’ First, I believe, morally, that the freest access possible to markets should be encouraged, but as we know, the free market is never quite as free as we think or might like. So, the single market itself is surrounded by a tariff wall; free Europe or fortress Europe? And in addition to tariff walls around the single market, because a free market is never entirely free, and indeed is populated by participants and players who do not possess perfect information, and, I might add, are not perfect and flawless characters, a degree of regulation is necessary. Second, therefore, the idea that leaving the EU means we can simply sweep away all of this regulatory regime is neither right nor appropriate. Even if we left the EU, and abandoned the more bizarre or restrictive regulations, the reality is that any independent UK government is going to impose the overwhelming majority of the current regulatory regime. So, although, I too would like changes, I too find the bureaucracy and extent of EU regulation irksome, it is naïve in the extreme, to think that leaving the EU would enable all of this regulation to be simply abandoned.

So, where have we got to? We have, I think, established the importance for economic well-being of the single market; with the challenge that we might lose other opportunities, but with much uncertainty. We have also argued that there is a negative impact of a regulatory regime bearing heavily on SMEs; yet with the reality that it would not all be swept away by leaving.

How to decide? I remain sceptical of the campaigns and the propaganda from both directions! Rather, ask this question, what will best enable the maximum flourishing of the economy which in turn will enable the flourishing of individuals, families, communities and the nation? Is access to the single market and its benefits too significant to surrender? Is the regulatory regime of the EU sufficiently oppressive and burdensome that it prevents SMEs from flourishing? Of course, there are other considerations, non-economic arguments about borders and sovereignty, but as business people, we need to assess fairly the moral imperative of ensuring a successful business environment for the country. The answer to that question might vary from person to person, but let us at least ask the right questions.

Photo Gallery:

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

Google should not be demonised

Poor old Google. Well, not so poor actually. According to their SEC 10-K filing group profits amounted, in 2014, to $17.26bn. Google’s UK sales (mainly internet advertising), based upon the billing address of customers, were around $6.5bn in 2014. Lots of sales, but, apparently no profits. Google themselves told the Public Accounts Committee in 2012 that they don’t actually make UK sales. Of course, that is true. To suggest otherwise, might imply a permanent residence for tax purposes and trigger all sorts of consequences – such as paying more Corporation Tax. There are, though, sales from a Dublin registered company to people in the UK. The basic corporate tax rate in Ireland is 12.5%, in the UK 20% and in the US, 35%! So, Ireland get the business. If I buy a product from an American company or an Irish company then the sales and profits are generally accounted for in the country of origin. A British company selling in the US would account for and pay tax on the transaction in the UK. Well, that’s the easy bit. It gets much more complicated when subsidiaries are involved and there are transactions between them…as we will see.

So, what’s the problem?

Mind you, for a Professor of Accounting, Prem Sikka, seems rather naïve. He estimated that rather than the £130m settlement Google reached with HMRC the figure should have been nearer £1.8bn. I have no idea if he has the right figure. And neither does he. HMRC said that they collect the full amount of tax due on profits and no less.

Why the discrepancy?

Before, rushing to judgement (John McDonnell described the payments as ‘derisory’), let’s try and be objective.


  • Google pays a lot of tax.

Most of its corporate taxes are paid in the US (approximately $2.5bn in 2014). The company also pays corporate tax – at a lower level ($0.8bn) – in Ireland. Google also pays a lot of tax in the UK and collects even more on behalf of the government. Google has around 2,400 employees in the UK (though I cannot confirm the exact figure). Let’s assume that the average salary approximates to that of the Top 100 companies in the UK, namely, £31,929. So that is an annual tax bill of, say, £7.9m per annum in National Insurance Contributions (NIC for employers is 13.8% for all remuneration above £8,160). Not to mention business rates and all the taxes on consumption and irrecoverable VAT the company incurred. It might be that the tax burden on Google and other companies should be higher. Or not. But we must remember the total tax bill that companies face, not just Corporation Tax.


  • An awful lot of other people seem to think they know what Google should pay

It’s odd how tax campaigners always seem to know how much tax companies should pay. It is a very strange morality. Google can be forgiven for, perhaps wrongly believing that the taxes they are due to pay should be determined by the rule of law, the tax provisions set in Parliament. We do not know what Google’s UK profits are, should be, or should not be, unless there are some rules to determine the calculations.


  • The rules are complex and not always clear

George Osbourne introduced the Diverted Profits Tax in order to deal with large multi-nationals potentially diverting profits. Google, we are told, would not have been caught. I read the Diverted Profits Tax legislation. Like the rest of the tax code it is not straightforward, complex and requires interpretation to determine whether a company is caught by its provisions or not. This was a simple reminder of the complexity of the tax code, a point quite simply overlooked by many campaigners. Elections, claims and, indeed, judgements are invariably required.


  • Legislators legislate

Parliament has the ultimate responsibility to legislate. There are ways in which the tax provisions could be simplified. However, we are naïve in the extreme if we think it is straightforward to enact a national tax regime for multi-national companies. Even multi-nationals need to be protected from double taxation (the same income taxed twice in different places) and there are many provisions to prevent cost and value shifting. Indeed, there are moral issues about depriving Ireland (say) of its tax revenue from Google, when they have been attracted there by a transparent and public lower rate of tax. If a UK subsidiary pays a US parent (or a Bermudan subsidiary) for the use of the brand, what is a fair price?


  • HMRC investigated for six years

We do not know the actual, precise amount of tax liability, if any, in dispute between Google and HMRC. It is possible that Google and their advisors believe this to be Y and HMRC believe it to be 4Y. So, HMRC could seek to impose 4Y. And Google could stand firm on the grounds that their interpretation of the law produces Y. HMRC could go to court. They might win. They might lose. It will cost millions of pounds in direct costs and even more in opportunity cost. So, a deal is done at 2Y. Except it is not a deal, but an agreement that 2Y is the amount of tax that is due.

So, we should not join with the so-called tax justice campaigners who display a false morality about tax. The campaigners seem to think that they should be the arbiters of Google’s and other companies tax liabilities. I prefer the law to determine the liability.

And yet, my sympathy for Google is limited.

First, let’s spell out the roots of the accounting problem.

The core of the issue lies in what sales and what costs should be booked in the UK. Only then can the level of profits be determined and appropriately taxed.

If I buy a product from the US, the income and costs will be recorded by that company in the US. If that US company sells so much in the UK that they set up a subsidiary to sell those products here then the sales and costs will be accounted for and taxed in the UK (with relief given in the US for double taxation).


Problem 1. Google (and others similarly) do not officially ‘reside’ in the UK, but Dublin, or Bermuda, the Netherlands or Switzerland, where depending on the precise corporate structure corporate tax rates are lower.


Problem 2. Google sell internet advertising, but almost certainly there will be payments between subsidiaries which have the effect of transferring costs and revenues. So for example, London may charge Dublin for, say, ‘sales and marketing services’ so that the income in Google UK more closely matches it costs (employees, rent etc), and hence reducing the profits in Dublin which are then subjected to the (lower) rate of corporate tax. It also seems likely that a subsidiary in Bermuda (even lower tax) makes charges to Ireland for the use of intellectual property. There are existing rules about ‘transfer pricing’ (effectively it must be an ‘arms-length’ transaction) but what precisely would be a fair or reasonable price?.


Other issues might involve inter-company loans, charges for use of the brand and (probably not in Google’s case) payment for raw materials. The pricing of these transactions is complex and can generate very different outcomes.

In essence a low corporate tax regime should encourage investment, employment and transparency. Google should not be targeted or demonised for meeting its obligations, nor HMRC for agreeing past and (more importantly) future arrangements.

Yet, at the same time, Google is being disingenuous. There is, without doubt, substantial economic activity in the UK by Google and it is not unreasonable for a corporate tax liability to arise. The OECD is encouraging national governments to change the tax arrangements of multi-nationals so as to reflect this economic activity. In reality this cannot be achieved by individual nations.

So, the deal with HMRC is central. Confidentiality in taxpayer affairs quite reasonably prevents disclosure of the arrangements for the past. However, assuming HMRC will seek to apply consistent principles to others for the future payment of tax, it is not unreasonable to disclose those principles. It is not good enough for Google to say they will book more sales to the UK (perhaps more costs too, so there will still be no profits) nor for HMRC to hide behind confidentiality when what is needed is not details about an individual company, but details of the principles which will be adopted going forward.

Google should not be demonised. They pay a lot of tax and arrange their affairs accordingly and legally. However, it is reasonable for there to be a tax regime which does bear some relationship to economic activity. What that regime is to be, we should be told.

And, maybe, just maybe, what is at fault is the whole approach to corporate taxation. To introduce a new tax allowance or restriction is easier than to remove one – long-term consequence, less certainty and more complexity in the tax code. If a company employs more people due to it competitive advantage there are tax gains for government, economic growth, more employment and so on. Maybe we should abolish Corporation Tax and all its associated reliefs and allowances. Make the profits, invest the profits, remove the profits (duly taxed as income in the hands of the recipient), improve employment, pay and so on. Just a thought.

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

Stakeholder relationships matter

First coined in 1984 by R. Edward Freeman in his book, Strategic Management: A Stakeholder Approach, Stakeholder Theory brought a new and somewhat radical approach to the study of organizational management and business ethics. Radical in the sense that it became the first theoretical framework to secure a prominent position for the interplay of values, responsibilities, and ethical decision-making in managing a business.

In contrast to the traditional shareholder view, stakeholder theory promotes a way of business conduct that takes into account all the parties that come into contact with a company’s ecosystem . From shareholders and employees, to customers, suppliers and the local community. A ‘stakeholder’ is a person or group that can affect or be affected by the business in question.

Here are three key lessons that we can learn from Freeman’s Stakeholder Theory:

  • – Businesses that effectively manage all stakeholder relationships are more likely to succeed in the long-run.
  • – Stakeholders must be considered together and not in isolation, working together in the same direction.
  • – In the long-run, all stakeholders are equally important for the future of a business.

At the end of the day, both internal stakeholders (such as employees, management, shareholders) as well as external stakeholders (customers, the local community and even governmental or non-governmental organizations) – all have the power to significantly damage, and in extreme cases, bring down a business that mistreats them.

Wise companies must recognize the value in a stakeholder-driven management approach.

Andrei Rogobete

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

We need to talk about work

CEME will be publishing a ‘theology of work’ in late 2015 so it was particularly helpful to listen to Yves de Talhouet, senior Vice-President of Hewlett-Packard on the subject.

Work is essential to human flourishing. All sorts of implications flow from that including for government welfare policies. However, work is not necessarily in the state it should be in. Gallup have shown that 16% of workers are actively disengaged from their work which has enormous cost in terms of productivity, community and the collective intelligence within a workplace.

Yves described work as under attack from two sources, both of which need to be resisted. The first is the classic ‘work is a necessary evil,’ or simply viewed as a prison to escape from. Actually work delivers well-being, defeats poverty and dependence and so needs to be encouraged. More interesting was Yves second point about work being under attack. In this case work was under attack from management systems driven only by numbers, productivity, targets etc, key performance indicators – all of which had the effect of disguising real work.

Work has three aspects:

  • The subjective – work is intricately related to human being
  • The objective – the measured output
  • The collective – human relationships

A proper understanding of work involves all three of these aspects to be properly recognised. The problem is that the objective side (measurement, targets) has grown to the extent that nothing else seems to matter. Work is reduced to process and the consequence is disengagement. More value needs to be put into the subjective side (recognition, encouraging self-esteem) and the collective (team work, solidarity, community).

It seems to be me that we either over-emphasise the objective as Yves suggests so that we become obsessed by outputs and targets, or  we ignore that productive side altogether in pursuit of some vague collective ideal. Work both dignifies humanity and is essential for producing goods and services. Work enables us to flourish and provide for our families. Work, for the Christian, reflects God’s purpose for us. Work is important.

If work is conveys both dignity and economic productivity then its lack destroys both. So unemployment is not a good thing and we should encourage policies which encourage enterprise, growth and hence employment. At least part of the purpose of a firm is to provide employment in the process of producing economic surplus.  However, discouraging work also damages human dignity and purpose. CEME is strictly independent and works with people across the political spectrum. Nevertheless, if minimum wages are imposed at too high a level for all jobs, or welfare benefits set at too high a level, the consequence could be to discourage work. Equally, in order to encourage work there is surely a case for a degree of wage subsidy at the lowest points of the wage scale to encourage people into work. However, if tax credits potentially subsidise the proper wages employers should be paying then there is an even stronger case for a lower introductory rate of income tax which would encourage work, avoid subsidies and indeed the impact on take-home pay as income rises.

Whatever the policy prescriptions work not only must pay, but work must also be valued and invested with true worth, value and dignity in all its fullness.

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

Profit and sustainability are compatible

The inspiring session of the day came from Daniel Servitje, Chairman and CEO of the Bimbo Group, Mexico.

Bimbo is one of the world’s largest baking goods industry firms with a capitalisation of US$12bn and around 129,000 employees.

The company was described as ‘rooted in long-standing values,’ shaped by strong corporate governance and a determination that businesses and society must work together for human dignity and the common good. The company, he said, was both highly productive and deeply humane.

The aims of the company where shaped by a matrix:


Economic Social
  External             Providing valuable goods and services to society Contributing to the development of society in a sustainable way
Internal Compensating employees, members, investors Contributing to personal and professional development of employees


This was a powerful reminder that profitability and sustainability are not incompatible. However, it is entirely reasonable for a company to have aims and objectives that are not simply defined by shareholder value maximisation. Of course, a successful and sustainable company may well do just that.

Daniel pointed out that his company was involved in sectors of the economy which attracted criticism – baked goods and health. The companies social responsibility platform was built on four areas:

  • Well-being: promoting physical activity, research into nutritional improvement
  • The planet: using renewable energy, developing electric delivery vehicles, waste management , degradable packaging
  • Community: promoting volunteering, supply chain transparency, community development
  • Associates: talent, health, training and development of employees

All employees were encouraged to take part in the 3-day company sponsored off-site development event, covering  person, family, work, society, culture and spirituality.

The fascinating thing about the presentation was the holistic and integrated nature of the approach to sustainability. Social responsibility was not an add-on, but fully part of the company and its objectives – and not as an alternative to profitability. At the heart of the company’s purpose was providing goods and services at profit. Alongside that came creating jobs, investment, promoting a formal economy (in a country, Mexico, where much of the economy is ‘informal’ which denies extensive tax revenue to the government), developing and sharing knowledge and skills. The outcome was better people, companies and countries.

It would be great if more companies, large and small, thought about their aims and objectives, the role of profit and sustainability, with the same degree of intent.

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

Capitalism must take poverty seriously

I am passing through Rio de Janeiro en route to Belo Horizonte to attend the XXV World Congress of UNIAPAC (The International Christian Union of Business Executives) on the theme of “Business, Government and civil society working together for the common good.”

This is my first visit to South America and Rio has presented me with a capitalist conundrum.

What a great city. The beach at Copacabana is wonderful (well, it looks marvellous, I have not yet had opportunity to explore!). The setting, the mountains, the water, the statue of Christ the Redeemer are exceeded only by the friendliness of the people.

I know well that many cities and metro areas like Rio throughout the Americas and Africa present contrasts and poverty and wealth mingle together. My driver took me past large swathes of ‘shanty town’ like housing. It was not that I have never seen anything like it before (I have visited Cape Town in the past), but the capitalist conundrum struck me again.

The quality of the housing was shambolic. Half-built buildings, many exposed to the elements, seemingly built one on top of the other stretching back from the highway into the hilly areas behind. The conundrum is this. Almost all had satellite dishes and air-conditioning units. So on the one hand there seems to be poverty (at least as represented by poor housing) and on the other the poor exercising consumer choices in a capitalist economy that would reflect many more affluent  priorities.

Are these apparently irreconcilable priorities reconcilable? Can capitalism provide a solution to the poverty of housing and indeed poverty more generally as well as providing such consumer choice?

Here are a few thoughts:

  • – Housing is a fundamental human need and improvement in the quality of housing makes a real difference to the quality of people’s lives
  • – Human individuals will make consumer choices within the capitalist system and have the freedom to do so (the satellite dish in the shanty-town)
  • – Enterprise, work and wages are the essential pre-requisite to lifting the populace out of poverty

The problems which I think arise are when wages are so low they are unable to sustain the basic infrastructure (housing) yet provide some opportunity for consumer choice. I cannot believe how cheap the taxi fares are.

According to the Economist Brazil is in a hole and still digging. One of the largest economies in the world has seen GDP contract, deficits grow and government corruption is rife. A country the size of Brazil, of course, and in its regional setting, faces many difficulties of environmental issues, inclusion and so on. The 2016 Olympics is seeing significant infrastructure investment, though, once again, government corruption damages the inclusivity of the growth which is generated. All of these things are likely to enhance the capitalist conundrum rather than solve it.

Capitalism does lead to some unintended consequences. I am not one who believes that equality per se is necessarily a desirable objective; but poverty (in absolute terms) surely cannot be acceptable to any decent human being? Yet, a market economy built upon ethical principles can be the solution to many of these problems.

  • – Capitalism must take poverty seriously
  • – Corrupt government and excessive regulation damage inclusive growth
  • – Economic freedom means freedom of choice (we should not criticise the choice of a satellite dish)
  • – The encouragement of enterprise, employment and wage growth are essential to dealing with the infrastructure and housing problems

Capitalism generates conundrums. Long live capitalism. Oh, but take poverty seriously and let’s use our business and economic opportunities to help.

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

VW makes the case for a moral capitalism

What a mess. Many of you won’t like my title – surely the catastrophic failures and deceits at VW make the case against rather than for capitalism? Not so and here is why.

At the root of the problem with VW is dishonesty. Now, of course, that dishonesty might have been driven by sales targets, or a brand identity to be the ‘greenest’ car manufacturer, but the essence of the problem is that somewhere in the mix VW and its management engaged in deception, a deception which is, of course, indefensible.

However, we do learn from this episode (which has yet to run its course) a few lessons which help make the case for a moral, entrepreneurial capitalism.

  • – Regulation failed

Surely not, I hear you say, it was the regulators who were deceived. Indeed they were, but they didn’t know about it. The discovery that VW was using underhand methods to pass emission testing was made by a not-for-profit, non-governmental organisation that put some vehicles to the test in order to gather evidence to persuade Europe to adopt the USA’s more stringent nitrous oxide limits. From this source the Environmental Protection Agency launched its own investigations.

I can see more regulators and more regulations emerging from this. But they didn’t work first time around – closing the stable door after the horse had bolted.

  • – The market will judge VW

Actually most people do want greener technology, not least in automobile engines. Indeed, a significant part of VW’s brand was that it was a market leader in the development of such technology. VW’s market share was driven by those that wanted both fuel efficiency and lower emissions. VW’s collapse of reputation will be severely damaging to its brand in the market place; and, indeed, as a publicly quoted company, to its share price (which has already wiped ‎€15 Bn off its market cap.). Not ultimately because of fines by regulators, but because its customers will lose confidence in the brand and especially in the green technology claims.

  • – Innovation in the car market will be encouraged

Manufacturers will need to develop ‘clean diesel’ technology, fuel efficient and greener engines, more investment in cheaper hybrids and electric vehicles. They will have to do so not because government says so, but because consumers want a better, greener, more environmentally responsible deal.

  • – The senior executive has been held publicly to account

Can you imagine if VW had been owned by the government? Ok, I know the state government of Lower Saxony has 20% of the voting rights, but if VW had been a state-owned, nationalised industry? Does anyone really imagine that the senior executive would be held to account? If the regulators are also the owners, then there is no incentive at all for transparency. Corporate structures are complex, as indeed is the situation when boards are not aware of what is being carried out in their name. However, the existence of a supervisory board, over and above the executive board, did at least provide a means for public contrition and the holding to account of the chief executive, but many not have known, but certainly carried the responsibility.

The problem is essentially a moral one; dishonesty.

Odd then really. A capitalist scandal makes the case for capitalism.

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

Newsletter – Summer 2014

A message from the Director,

Quaker Capitalism and virtuous companies

I am fRichard%20Turnbullweb#1# (2)ascinated that in the early years of the industrial revolution some of the great businesses were established by Quakers – not least the first iron foundry established by Abraham Darby.

There were many others, Cadbury, Rowntree, Clarks’ Shoes, Barclays and Lloyds. Why was this so? The answer lies in some combination of moral integrity, culture, networks and spiritual commitment or purpose. I am not suggesting we all become Quakers but rather that there are lessons, both commercial and moral, which we could usefully learn. Later this year we will hold a day conference on this subject, considering the lessons for today, including debate around trust and corporate structure – join the mailing list, contact the office or watch the website for details!

Too often in our debates about enterprise, ethics and society we use ‘binary’ terms. So, for example, ‘profit’ is set up against ‘people’ or ‘competition’ against ‘fairness.’ However, these dichotomies (capital versus labour is another one) are invariably simplistic. Profit may also enable people to flourish, through the provision of goods and services as well as employment. Competition may increase fairness by allocating resources for consumers at lower prices and ensuring efficient production. The impact of enterprise in an economy cannot not be reduced to an ‘either-or’ but affects many people and their livelihoods, from entrepreneurs to consumers. The encouragement of enterprise is essential especially through what is usually termed the ‘supply-side’ of the economy. This means a fair reward for the entrepreneurs who take risks, encouragements to invest and to employ and taxation regimes that incentivise.

From an ethical perspective however the responsibilities extend more widely. Companies, large and small, have a significant impact on wider society. Do virtuous companies exist or just virtuous individuals? A virtuous enterprise might be described as one which not only behaves well or acts properly but which acknowledges and acts upon its wider role in society, even challenging that society itself in the direction of virtue. Companies and individual business people can have an enormous impact upon their local communities for the good. They can indeed act morally commercially, but also, through their actions they can, in a free economy and a free society, shape virtue itself, through service, philanthropy and example. However, to do so, they must be fashioned and led by moral individuals. Values are at the heart of both virtuous enterprises and individuals; the restoration of commercial trust will have direct commercial benefit but will also benefit society itself.

Research, publications, events

We are committed to a research agenda to think deeply about business, ethics and responsibility. As well as other
events on this page the future focus includes:

– A CEME publication on Quakers in Business.

– Autumn events (and publications) in London on the Social Value of Capital Markets and The contribution of Catholic thinking on the market.

– A Conference in London on Quaker Capitalism: lessons for today.

– Plans for a conference in 2015 on ‘Capitalism in the 21st Century’.


Restoring Ethics to Banking

We were joined, in January, by civic guests including the Lord Lieutenant for Oxfordshire and the Thames Valley Police Commissioner, together with over a hundred civic, university and business guests at Harris Manchester College to hear the Chief Executive of Barclays, Antony Jenkins, outline his vision for the restoration of trust. Antony detailed the challenge faced by Barclays, the problems of transforming the culture in an authentic way in such a large institution as well as genuine issues the bank still faces. Antony noted the importance of being a steward of the original vision of the bank’s Quaker founders. There followed an extensive time for questions – many topics from remuneration to lending to small businesses were covered – then dinner and a short response and vote of thanks from the Bishop of Oxford.

To view our latest research please click here.


Enterprise not Aid?

How can private equity and social venture capital be effectively harnessed in economic development? Dr Kim Tan will explore whether this approach is more effective than inter-government aid. Professor Alex Nicholls of the Said Business School and Penny Fowler of Oxfam will respond.

25th June 2014, Said Business School Oxford from 6pm. Places limited. Email for invitation.

To view our latest Events and Picture Gallery click here.


The Ethics of Usury

A seminar in London heard the Revd Dr Ben Cooper reflect upon the teaching of the Old Testament on the charging of interest. He argued that in order to assist the poor it was not only permissible but essential to charge interest on loans particularly for investment rather than consumption. The availability of credit and wealth creation is essential to the relief of poverty.


Lord Shaftesbury: radical conservative? Lessons for social welfare today

A talk by the Director, sponsored by CCLA Investment Management Limited.

12th June 2014, 4.30pm – 7pm, London. Email for details.


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

US citizens can send donations, payable to CAF America, for the benefit of ‘The Centre for Enterprise, Markets and Ethics’ (‘the CEME Fund’) to CAFAmerica, 1800 Diagonal Road, Suite 150, Alexandria, VA 22314 with the donor advice available from or This is tax deductible.

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

To sign-up to our Newsletter please click here or to download a .pdf version click here.