Arguments are flying to and fro between the experts, as the fallout continues from capitalism’s biggest crisis in living memory. The greatest issue preoccupying them is this: is it possible to tame or control today’s global economy and its financial markets by forms of legal regulation?
Most critics and politicians from establishment figures such as Bank of England governor Mervyn King to Financial Services Authority Lord Adair Turner on the one side, to left-wing critics like Graham Turner and Prem Sika on the other – are united by the notion that further crises can only be avoided if “excesses” of one kind or another are curbed.
But it is not only the economists and politicians who have ventured into the fray. Enter the keepers of business morals. People like Church of England priest George Pitcher of St Bride’s church in the City of London (also of the Daily Telegraph) and Roger Steare, Corporate Philosopher in Residence at the Cass Business School in East London. He also works as a consultant for the accountancy and financial services giant PricewaterhouseCoopers.
Professor Steare occupies a special role in that “he manages to combine the hard world of commercialism with business ethics”, as a fellow consultant notes on Steare’s personal website by way of an endorsement. As the inventor and author of “ethicability®: How to decide what’s right and find the courage to do it” (note the registered trademark) he is well qualified for this position. Not only does he teach at the Cass Business School but he also helped prepare recommendations on rights and humanity for last April’s G20 summit in London.
Steare has added his pennyworth in a letter to the Financial Times. His research has shown, he says, that many people make moral decisions using a variety of philosophical and moral perspectives. He believes that “we have seen these moral philosophies working well for thousands of years”.
This rather serene view of human history (which conveniently ignores countless wars, colonialism etc) is then suddenly interrupted by “Frankenstein’s monster” – the corporation. He denounces the corporation as a “dysfunctional social construct invented during the Industrial Revolution by lawyers and politicians to further economic growth”.
Steare concludes that: “We must therefore dismantle the legal protections of corporations and reinstate full legal and financial liability for company directors and shareholders.” But is that a viable proposition? And is that really the problem? I think not.
In reality, corporations (or chartered companies) arose in 17th century Netherlands and England not as bizarre social aberrations, but as societies of merchants inseparable from the growth of capitalism as a national and international system, which both countries pioneered. As such, the corporation acquired a special status in law.
It is nonetheless true, as Steare says, that “like Frankenstein’s monster, the corporation and the artificial marketplaces created by lawyers and politicians have no persona, no soul and no conscience”. But is that not true of the capitalist system as a whole? Since when has capital had a conscience?
What society is oppressed by is not the brutal logic of the power of the corporation per se, but of corporations as the dominant part of a profit-driven capitalist system that is brought together by a state that reflects the predominant interests of the ruling classes.
The undiluted powers of the corporation therefore mirror existing class relations in society and cannot be changed or challenged in any significant way without overturning these. Paradoxically, Steare’s justified horror of the lawless nature of capitalism and its corporations – and his plaintive call for liability – is a powerful argument for putting an end to the system as a whole.
Secretary, A World to Win