Deeply Responsible Business: A Global History of Values-Driven Leadership by Geoffrey Jones, a professor of business history at Harvard Business School, is a sobering read. It does have many examples of what Colin Mayer might describe as purpose-driven companies, those whose commitment to socially beneficial and fair outcomes is baked through their activities. The case studies are mainly from the US, UK, India and Japan, and date back into the 19th century including some well-known Quaker-founded companies.
What’s sobering about it is how hard it has proven to be to sustain this ‘deep’ (beyond ESG compliance) responsibility. Very few of the examples could still be described in this way. Sometimes the irresistible tide of events has been to blame – the coming to power of the Nazis or other nationalistic imperatives such as war or independence movements. Sometimes the change has been driven by the arrival of professional managers in a family firm, and the imperative of profitability. Sometimes it has been slow business failure or acquisition by a more conventional business.
So I enjoyed reading this and was particularly interested to read about Japan – including the concept of gapponshugi, which refers to capital but can include the meaning of human and social capital, very interesting for those of us interested in the measurement and use of inclusive wealth. But in the end I had to conclude that highly motivated people and corporate actions by themselves are insufficient to bring about deep resonsibility. It confirmed my presupposition that a more responsible capitalism will require government action too.
I polished off in a couple of days Paul Johnson’s new book Follow the Money: How Much Does Britain Cost? The hugely-respected Director of the Institute for Fiscal Studies (who is a friend, to be transparent) has written a crystal-clear account of how the UK government raises revenues and how it spends them. Government expenditure is over £1 trillion, raising just over £900m in taxes, or four pounds in every ten earned. The big swallowers of money are health, social care and pensions. So this book (published later this month) is a huge service to citizens as we head towards the next general election within a couple of years.
Although a calm, even forensic, account of the unavoidable trade-offs and complexities in providing these facets of social insurance against the uncertainties of life, the book left me furious. It cites the wonderful The Blunders of Our Governments by Anthony King & Ivor Crewe, and could equally have cited the more recent Why Governments Get It Wrong by my colleague Dennis Grube. We know – don’t we – that governments do a lot of stupid things, badly. We’ve certainly had a run of these stupidities here in the UK: Brexit on the worst possible terms for internal party reasons, Liz Truss… Even so, to see collected in one place all the bad decisions concerning the fundamental well-being of citizens is angry-making. Any unavoidable choice that could be postponed has been, even at substantial long term cost. There have been obfuscations and lies. And it has been going on for years.
So here we are with an economy whose long term potential growth is heading down toward zero (1% a year for the next couple of years, the Bank of England reckons, down from 1.7% in 2010-1019). The extent of inequality is shocking. As Simon Tilford noted in a recent essay, most of the people taking decisions have no idea about the lives of those they exercise control over, about how badly off most of their compatriots are. The over-burdened welfare state is not quite coping with people suffering from what (I learned here) doctors describe as “Shit Life Syndrome” when they go to their GPs for help with depression or other mental ill-health conditions. And there will not be enough money to fix any of this unless growth picks up. But that would require a competent, effective government able to take clear decisions, build cross-party consensus, devolve money and powers, and stick with the plan without changing ministers and policies every 18 months.
Here’s hoping – but it’s been decades since we had that. And for another couple of years this corrupt, internally-riven, and ineffective government is likely to cling on. Meanwhile, read the book, which urges us not to despair, but ends: “We can, and must, do better.”
I spent a couple of days this week at a summit on values in business and the economy at the Blavatnik School of Government in Oxford. Organised by Colin Mayer, Dennis Snower and others, it ranged over questions such as the philosophical foundations of value as they relate to policy to measurement questions, participatory practices, evolutionary approaches to economic theory, and digital governance. It was the kind of many disciplines (philosophy, economics, biology, anthropology, computer science), many types of participant (academics, practitioners, businesspeople) conference where I always learn a lot. This naturally includes jotting down references to books and papers.
So among other things I’ll be looking up the work of Ruth Chang and Teppo Felin, both amazing scholars I hadn’t come across before. Among the books that featured, my friend Celia Heyes gave a brilliant overview of the work she covers in her book Cognitive Gadgets: The Cultural Evolution of Thinking, about collective intelligence being what’s distinctive about humans, and its role in thinking about thinking: societies can build this metacognition – and also lose it. (It won’t necessarily make you optimistic.) Hilary Cottam presented her recent work, which is captured in her wonderful book Radical Help. Dennis Noble previewed his book with his brother, out this summer, Understanding Living Systems. Also on my to-read list will be David Sloan Wilson’s This View of Life and possibly a 1917/1925 title, Wolfgang Kohler’s The Mentality of Apes. Also recommended was The Philosophical Foundations of Neurscience by Bennett and Hacker – clearly important but possibly one for those with more of a foundation than I do in either philosophy or neuroscience!
As I wrote about a bit in The Soulful Science, there’s a long history of inter-play between economics and evolutionary biology, and interestingly the impression I got from the presentations was that the latter is as ripe for renewal as is economics (my claim in Cogs and Monsters), and in not dissimilar ways. To be pursued.
For relaxation this week, I read two novels featuring economics. One was Don Delillo’s (2003) Cosmopolis, which I spotted in the (new?) fiction section of the Marshall Library here in Cambridge. The capsule description that comes to mind is J.G. Ballard for the era of FinTech squillionaires – vastly excessive wealth, cars and gadgets, sex and violence. An enjoyable romp with an uncomfortable edge of plausibility.
The other is the new installment of E.J.Barnes’ fictionalised life of Keynes, Mr Keynes’ Dance (a follow up to Mr Keynes’ Revolution). These are excellent novels, bringing to life the personalities (Lydia Lopokova is central in this one, alongside various members of the Bloomsbury Group), and also the feel of the times and the intellectual debates in economics. This is surely the only work of fiction featuring Richard Kahn’s development of the concept of the multiplier. They would be very good enrichment reading for students who will get too little history of thought in their formal courses, illuminating the way ideas in economics are shaped by events rather than universal truths. And also a terrific read for anybody else: Mr Keynes’ Dance stands up firmly in its own right as a novel.
I really enjoyed reading Metaphysical Animals: How Four Women Brought Philosophy Back to Life by Clare Mac Cumhaill and Rachel Wiseman. It’s one of two recent books about the quartet Elizabeth Anscombe, Philippa Foot, Mary Midgley and Iris Murdoch, all philosophy students at Oxford just before and during World War Two, and remaining close in the postwar years as they began their scholarly and writing careers. (The other is The Women Are Up To Something by Benjamin Lipscomb, which I haven’t read yet.)
Unsurprisingly, the book is about philosophy rather than economics. I did PPE at Oxford and felt pretty hopeless at the philosophy despite doing ok in exams. We were taught the British tradition – Locke and Hume – and modern linguistic and analytic philosophy – Ayer and Hare. The four women didn’t feature; I’d heard of Irisl Murdoch only, and only for her novels. So I think this implies that the subtitle is perhaps wrong: at least from my perspective, the four might have halted the onward march of reductive positivism in philosophy, but they lost the war.
I was particularly struck by the description of how the shockingly male and misogynist Oxford philosophy establishment reclaimed territory when the men returned from war. “If undergraduate classes before the war had been full of ‘clever young men who liked winning arguments,’ … graduate classes were now led by such men and full of others who were being specifically trained in modern methods and hothoused for a profession that would reward cleverness, quickness and agression.”
Well, hello. Isn’t this the story of economics too? Both disciplines have painfully low proportions of women (and others from backgrounds where people are not automatically taught the confidence needed to put on a show of clever, quick and aggressive). Both are still like this. The culture and make-up are mutually reinforcing. There won’t be a quick solution if any, but the struggle of these four philosophers is inspiring. As is that of all the women of their era who fought to be able to wear trousers if they felt like it, and above all get the same education and scholarly opportunities as the men.