The Centre for Enterprise, Markets and Ethics (CEME) is delighted to announce the publication of Making Capitalism Work for Everyone – Vol. 1 & 2, edited by Richard Turnbull and Tim Weinhold.
Volume 1 can be downloaded here and Volume 2 here. Alternatively, you can order paperback copies via contacting CEME’s offices at: office@theceme.org
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.
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.
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 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.
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.
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.
Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.
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.
Andy Darrell – Investor Confidence
Michael Liebreich – Green Markets, Sustainable Business
Kingsmill Bond – The New Energy Revolution – From Morality to Market
Cameron Hepburn – Carbon Trading: Unethical, Unjust and Ineffective?
Erin Priddle – Environmental Defense Fund – EDF Oceans
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.
“Managing as if Faith Mattered” is the first volume in the Catholic Social Tradition Series, published by the University of Notre Dame Press in response to Pope John Paul II questioning how many Christians really know and put into practice the principles of the Catholic Church’s social doctrine. Its target audience is thus, first and foremost, Catholics in business, although the authors say that they are directing their book towards Christians as a whole and that its content will be worth considering by all people (page xvii).
At the time the book was published, in 2001, Helen Alford was Dean of the Faculty of Social Sciences at the Pontifical University of St Thomas Aquinas in Rome and Michael Naughton was Director of the John A. Ryan Institute for Catholic Social Thought at the University of St Thomas, St Paul, Minnesota. Unsurprisingly, they adopt a precise analytical approach to their subject and, as the 73 pages of end notes illustrate, seek academic rigour. None-the-less, the two questions that they pose in order to frame their discussion are profoundly practical: “What kind of person should I as a manager or employee strive to become?” and “What kind of organisational community should I as a manager or employee strive to build and maintain?” (page 8).
They suggest that two unhelpful paradigms foster a divided life in present day Western culture: first, the paradigm of the “secularisers” (typified by Tom Peters, co-author of “In Search of Excellence”), who suggest that religion and spirituality have nothing to say to business since religion is by its nature a private affair; secondly, the paradigm of the “spiritualisers” (typified by Andrew Carnegie), who may have strong personal faith and seek to live out this faith in personal virtue but who “avoid judging business policies in light of their faith” and who “fail to be true to a faith that does justice” (page 15). Alford and Naughton, asserting the relevance of faith to business, take issue with both paradigms, before analysing three models of linking faith and work: what they call the “natural law approach” (which seeks to find common ground in order to mould secular organisations); the faith-based approach (which is manifested by organisations founded explicitly on faith inspired values); and the prophetic model (which seeks to challenge organisations). They recognise weaknesses in all of these models but urge that they all be kept in mind.
Alford and Naughton then address the purpose of business. They severely criticise the suggestion that this is merely to make money or, indeed, merely to enhance shareholder value; they draw attention to the limitations of a stakeholder model of organisational purpose; and they conclude that the purpose of business is “working together for the common good” (the title of Chapter 2), defining “the common good” as “the promotion of all the goods necessary for integral human development in the organisation, in a way that respects the proper ordering of those goods” (page 70). This definition then leads naturally into the consideration of the concept of human development in a corporate community and, at the core of this, is a discussion of “virtue” and, in particular, the four Catholic Cardinal Virtues.
The book then moves from the theoretical to the practical in four chapters that are collectively entitled “Making the Engagement”. These consider, in turn, job design, just wages, ownership and marketing and, whilst continuing to analyse and develop theoretical concepts, seek to consider practical solutions to business problems. Thus, for example, the discussion of pay suggests that three basic tests need to be applied: whether something is a living wage; whether it is an equitable wage; and whether it is a sustainable wage (page 130). This theory is then applied to remuneration concepts such as ESOPs (Employee Share Option Plans).
Finally, the book turns to spirituality at work, considering the use of prayer, scripture, daily reflection and, perhaps more surprisingly, liturgy.
All of this provides much food for thought. The critique of modern professional education for its failure to address the “ends of business” (page 16) and its recommendation by default of a “privatised professional ethic” (page 18) is particularly telling and its fresh look at the objectives of job design and remuneration is challenging. Unfortunately, however, the book is heavy going in places and some of it could have been more simply expressed. For example, the book would have been more accessible to its lay readers had the authors expressed more pithily their points relating to the distinctions between “foundational goods” and “excellent goods” (page 42) and between “common goods” and “particular goods” (page 49). Similarly, the discussion of virtue would have been more accessible to modern businessmen had the authors not felt it necessary to tie it back to Aquinas’s teaching. More generally, there is a grave danger that the key points made by the authors become lost in a sea of detailed analysis.
It is also disappointing that, for all the care in the analysis, unsupported contentious statements from time to time leap off the page. For example, the quotation (with apparent approval) of Peter Maurin’s statement that “when everyone tries to become better off, nobody is better off” (page 92) suggests a naïve “zero sum gain” view of global economics and the quotation (again with apparent approval) of the assertion that “a manager’s first obligation is maintaining the company as a going concern for the benefit of the stakeholders” (page 149) seems contrary even to the purpose of business as contemplated by the authors. Furthermore, many Christians will raise eyebrows at various theological statements such as the statements that we are meant “through virtuous living to attain the possession of God” (page 64) and the quotation of Pierre Teilhard de Chardin’s statement that “God is inexhaustibly attainable in the totality of our action” (page 207).
Those who are not used to Catholic academic analysis may also find the frequent quotation of Thomas Aquinas, Pope John Paul II and other Catholic authorities a distraction rather than a help and the authors’ use of the terms “Christian Social Tradition” and “Christian Social Teaching” to refer to what is specifically Catholic teaching is irritating even though, as the authors point out, in recent years there has been some ecumenical convergence in relation to social teaching (page 247).
This book is worth reading but it requires time, determination and a degree of patience.
“Managing as if Faith Mattered” was first published in 2001 by University of Notre Dame Press (ISBN 0268034613, 9780268034610)
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.
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.
“Why Business Matters to God” is addressed to Christians. Jeff Van Duzer, now Provost of Seattle Pacific University and formerly Dean of its School of Business and Economics, suggests that Christians in business “have often been made to feel like second-class citizens in God’s kingdom” (page 9). His aim is to counter the attitudes that underlie this by affirming the intrinsic value of business work “as work full of meaning and importance to God”, whilst at the same time challenging what he describes as the “dominant business paradigm of the day” (page 9). The result is an excellent, well-argued and thought provoking book that should be read by all Christians engaged in business.
Van Duzer undertakes his task by using a theological framework, considering in successive chapters the implications for business of the biblical accounts of creation, fall, redemption and consummation.
From the creation story, he concludes that the material world matters to God, that human beings are called to steward God’s creation and that we are made to work (i.e. that work is not a punishment or a necessary evil). He notes that society has many institutions (e.g. families, churches and governmental bodies) and asks “which aspects of the creation mandate are best suited for business to handle?” (page 41). He points to the role of business in the creation of wealth and concludes that the intrinsic purposes of business are “to provide the community with goods and services that will enable it to flourish, and … to provide opportunities for meaningful work that will allow employees to express their God-given creativity” (page 42).
At this point, the reader may feel that the account of business is too rosy but this issue is squarely addressed in the next chapter, which considers the implications of the fall. Here Van Duzer parts company with the more extreme free market enthusiasts (both Christian and non-Christian) by stressing that “the market will not usher in the kingdom of God” (page 75) and suggesting that the market mechanism is an aspect of common grace that mitigates some of the consequences of the fall. He stresses that we cannot “equate market forces with God’s perfect will” (page 79).
Having done this, Van Duzer reverses the logical theological order and leaps on to consider what the biblical account of ultimate salvation (“consummation”) can teach us that is of relevance to business. In doing so, he heads into stormy theological waters as he assesses the relative merits of adoptionism and annihilationism as an explanation of how God’s new heaven and new earth will be inaugurated. He sides with the “cautious adopters” (page 94) but those who don’t take this view will be pleased to hear that it is not central to his argument and he acknowledges that “any conclusions we may reach must be held lightly” (page 83). This result is that this part of his analysis is less fruitful than other parts of it.
He next considers redemption and suggests that business must “concern itself with redemptive as well as creative work” (page 114), whilst accepting that it is operating within the “messy middle” (page 118). In this context, he rejects both the cynicism of those who suggest that “Business ethics is an oxymoron” and the optimism of those who argue that “Good ethics is good business” in the sense that there will always be a bottom line benefit for those practicing good ethics.
Van Duzer recognises that our attitude to business will turn to a considerable extent on our view of how Christians should engage with the world (what he calls our “posture of engagement”) and also upon our attitude to institutions of all kinds in the modern world. He devotes an “excursus” to each of these issues, of which the first is particularly helpful. It adopts Niebuhr’s typology (“Christ against culture”, “Christ of culture”, “Christ above culture”, “Christ and culture in paradox” and “Christ the transformer of culture”) and demonstrates how our answers to several key theological questions are likely to determine which type of cultural engagement we adopt and, specifically, our view of the role of business.
The final quarter of the book is less well structured than it might have been and parts of it would have better merged with the earlier chapters. None-the-less, it contains some worthwhile discussions of important issues such as business sustainability (in the broad sense) and, most importantly, the role of profit and enhancing shareholder value. Van Druzer recognises the essential instrumental role of profit but denies it any greater significance, specifically rejects the notion that the maximisation of profit or shareholder value is a primary goal of a business.
Although published under the IVP Academic banner, this is not an academic work. It does not interact extensively with other literature and it has no bibliography, although it makes good use of footnotes that may suggest further reading.
It is a short book and could not possible consider all of the angles on its subject. None-the-less, it would have been helpful had Van Duzer considered questions that arise from his dethroning of profit and shareholder value: Might this result in a loss of focus on efficiency and thus reduce wealth creation? How can managers be rendered accountable for the delivery of goals that cannot be quantified or otherwise clearly measured? If shareholders in a public company appoint and remove them, will the directors not always focus on the maximisation of shareholder value? Who might enforce any broader directors’ duties? Van Duzer is a lawyer by background and his views on these issues would be interesting.
Despite the final chapter’s focus on “making it real”, many readers may be left wondering how it is possible to translate Van Duzer’s vision of business into practice in a secular Western business context. This is a significant issue. However, the purpose of this book is to provide a Christian conceptual framework for business not to analyse in detail its implications in relation to day to day management. Addressing these implications would require another book and perhaps the only significant criticism that can be levelled at Van Duzer is that he hasn’t yet written it!
“Why Business Matters to God” was published in 2010 by InterVarsity Press (ISBN 10: 0830838880). 201pp.
Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world.
Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.
The 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: office@theceme.org
With Liberty & Justice for Whom? is an analysis of the views of conservative Protestants about capitalism. It was written a quarter of a century ago and its focus is on U.S. writers. It is thus dated in parts and, in any event, many outside the U.S.A. will feel that Gay’s analysis is not wholly applicable to their context. Some will also find tiresome its almost obsessive quoting of other scholars, which betrays its origin as a doctoral dissertation. Nonetheless, the issues raised by it are of long-term general significance and, whilst Anglo-Saxon evangelicals are likely to benefit most from reading it, it could be read with profit by other Christians, those of other faiths and, indeed, anyone who wishes to consider the reasons why people who apparently share a common religious or philosophical starting point disagree so vehemently about economic and societal issues.
Gay divides evangelical intellectuals into three groups: the left (which, he suggests, essentially regards capitalism as oppression); the right (which, he suggests, has primarily engaged in the defence of capitalism against the critics of the left); and the centre (comprising those “whose appraisals of capitalism are neither wholly negative nor entirely positive” but who regard capitalism as a “cause for concern”; page 116). He examines the views of many people within each group, considering the essentials of their economic and political views as well as the way in which they use the Bible to support these views.
The first two-thirds of the book is largely descriptive, albeit interwoven with comment and evaluation. Gay then moves on to analysis. He believes that it is “clear that capitalism as such is not the only thing at issue in this debate but that the various evangelical factions are contending for entirely different socio-cultural visions of American society” (page 161). However, he points out that the difference between the competing views “is not a matter of competing moral and ethical paradigms but of disagreement on the question of whether capitalism promotes or prevents the realisation of the norms and values they hold in common” (page 166).
Gay attempts to use the “new class” theory of the Austrian born American sociologist Peter Berger in his analysis. He argues that those on the evangelical left are reflecting their membership of this new class (broadly those engaged in what he calls the “knowledge industry”) whilst those on the right reflect the attitudes and interests of the old middle class (occupied in the production and distribution of goods and services). He suggests that both evangelical groups have engaged in a process of “cognitive bargaining” with the secular world and, in particular, in their analyses, have compromised the more transcendent, or “other worldly”, elements of evangelical faith. He also asserts that “Both the evangelical left and right have succumbed to an ideological abuse of Scripture and a de facto (and occasionally explicit) confession of the ultimacy of economic life” (page 203).
Many of Gay’s assertions and suggestions are contentious. For example, he admits that his use of the new class theory is “provocative, to say the least” (page 203). Furthermore, one may question whether his categorisation of evangelical views (which he admits is arbitrary) is helpful. Is the analysis assisted by lumping Theonomists and Christian Reconstructionists together with Brian Griffiths and Peter Hill? Do those in what Gay terms the “evangelical mainstream” (whose views are moderately right of centre) really have much in common with the views of what he terms “progressive evangelicals” (whose views fit much more comfortably with the left wing analysis)? Gay observes that the “evangelical centre” has no economic programme, which suggests that it is not a real category worth examining. It might have been better had he examined the extreme right, the moderate right and the left (which Gay recognises is a more coherent group than the others).
Gay was doubtless conscious of the danger of being accused of criticising everyone else’s views without offering a view of his own but he wisely avoids entering into the detail of the economic and theological debate. Instead, he offers suggestions as to a way forward in the debate, which are set out in a 33 page “Epilogue”. Unfortunately, this part of the book is disappointing There is little to object to in what he says but the language used, particularly in the first part of the Epilogue, is less clear than might be desired and, overall, his suggestions do not add much to the debate. Furthermore, although he seeks to avoid taking sides, those on the evangelical left are likely to feel that he is in fact laying the foundations of an essentially right of centre viewpoint without fully justifying his position.
These are significant failings but they should not put anyone off reading this book. It provides a wealth of food for thought and challenges: Why is it that evangelical economic debate so closely mirrors the corresponding secular debate, albeit with the addition of Biblical analysis? How much of the evangelical contributions to economic debate derives from the Bible, how much from secular assumptions and how much the compromise with the groups in which the relevant authors move or a reaction against these groups? To what extent are arguments caused by a disagreement as to whether criticism of the existing economic order is to be based on a comparison with an ideal or a comparison with practically available alternatives? Should the debate focus on the detail of capitalist economics or will progress only be made if the underlying assumptions and issues relating to our concept of society are addressed? Specifically, are those debating capitalism and other economic models guilty of a failure to examine whether terms like “liberty” and “justice” are being used by everyone in the same sense?
These questions are well worth considering and, by raising them in the context of a detailed analysis of the spectrum of evangelical opinion, Gay provided and, 25 years on from his book’s original publication, continues to provide an excellent foundation for further thinking.
“With Liberty and Justice for Whom?” was reprinted in 2000 by Regent College Publishing (ISBN 10 1573831328).
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.