Thank you. I appreciate the solidarity shown by colleagues.
I am now sending the link to [email protected]. I hope I spelled that correctly.
I'm not sure if I'll read the entire thing, but I will at least reference it, as a kind of preface, and then I want to present some of my counter-arguments.
The Guardian says:
If 25 years ago anyone had suggested that one of the world's most prominent ex-central bankers would launch an intellectual broadside at free market fundamentalism for shredding the values on which good societies and functioning markets are based, I would have been amazed. If, in addition, it was suggested [that] he would go on to argue that stakeholder capitalism, socially motivated investing and business putting purpose before profits were the best ways to put matters right, I would have considered it a fairy story. Although writing in this vein in the mid-1990s made my book, The State We're In,—
It's sort of fawning over self as well, which is typical of certain writing. Anyway:
—one of the past century’s political bestsellers, the newly elected Labour government was terrified of going near most of it for fear of being cast as anti-business and interventionist. Now Mark Carney, governor of the Bank of England until this time last year, has turned his hand to driving ideas once considered eccentric into the mainstream.
This continues, sadly:
In a mix of rich analysis mixed with pages that read like a dry Bank of England minute—
It's not too fawning at that point. Anyway:
—he blames the three great crises of our times—the financial crash, the pandemic and the climate emergency (he is the UN's special envoy on climate action and finance)—on twisted economics, an accompanying amoral culture, and degraded institutions whose lack of accountability and integrity accelerate the system's disfunction. Thus banks lost control of reality in a fantasy world in which balance sheets could grow exponentially without risk—another market would handle that—indulged by governments and regulators who believed that markets were always right.
Then came the Covid pandemic, for which western governments were singularly unready, relying on dubious cost-benefit analysis rather than valuing what we as humans tend to—our lives and looking out for one another. The same mistake is being made with climate change.
Maybe I'll pause there, because I can only take so much of this at once.
To make one sort of general observation about this kind of critique of markets, I always find it curious when people critique markets or say that markets have failed because they don't do the things that they were actually never intended to do.
The private market has a specific purpose. It's designed to allow free people to acquire goods in exchange for other goods, for things they own. It is designed to facilitate the creation of wealth. The market has certain defined objectives. Markets are not and should not be thought of as the source of ultimate meaning and purpose, as the furnisher of all material and non-material goods for human beings. That's not the purpose of markets. Nobody thinks that's what markets do or should do.
When you have some of these arguments that present themselves as critiques of the market system because the market doesn't furnish us with perfect happiness, that's like saying I hired an economist to paint my fence and he didn't do a very good job. That doesn't mean he's a bad economist. It just means that you're trying to apply one skill set to an activity that is unrelated to that skill set.
Of course markets don't guarantee social cohesion or happiness or perfect harmony: There are other activities and institutions that have as their objective the realization of those ends. It is curious to hold markets accountable for failing to do the thing that they were never supposed to do.
This is part of Mark Carney's critique in his book. He says isn't it terrible that a market-oriented capitalist system hasn't done all of the things that it was actually never supposed to do. What free markets have done is that they have lifted people out of poverty. They've furnished societies that have used them with significantly more prosperity and flowing from that prosperity choice than would have been possible without the use of the tools associated with a free market. Well-functioning market systems lend themselves to innovation, to the development of new technology, to flexibility, to a more empowered citizenry, to a situation in which opportunity is more accessible to more people, where social relations aren't calcified based on the class people are born into, or at least not to the same extent, and a less well-off person can come up with ideas that allow them to advance their material condition.
These are all good things and are reasons why conservatives are generally supportive of market systems. The conservative tradition, though, has always emphasized the primacy of non-material values. It recognizes non-material values like a recognition of the role and importance of faith, of family and freedom, of subsidiarity and solidarity. There's a recognition of universal human dignity, responsibility and creativity, and that these non-material values are the foundation of a good society. A society that only focuses on the material and not on the realization and advancement of non-material values is not going to succeed.
It has been certain forms of left-wing thinking that actually have tended towards the extremes of materialism, and that has generally not been characteristic of the conservative tradition. In fact, if we go back several hundred years, there were times when what was called conservatism did not include the same sort of positive orientation towards the free market that we associate with conservatism today. Yet, this sense of the primacy of certain kinds of non-material values has always characterized the conservative tradition through, I would say, the entirety of its existence.
As for the critique that at first blush is advanced by this book, that markets don't solve every problem, of course they don't. That's on one level trivially obvious, but the trajectory of his sort of developing argument goes in a dangerous direction.