Oliver Griffiths

Our new website

As the most tech-savvy political operation most of us have seen takes up the reins of government in Washington, there is rightly a lot of interest in how the Obama Administration will use the internet. FDR was the first American President to use the radio effectively. JFK was the first to appreciate the power of TV. Will BHO be the first to really harness the internet as a tool of government? The potential is enormous, of course. And it goes well beyond sending emails and posting clips on YouTube. The internet is a two-way, indeed multi-way, technology, which could theoretically take us back towards a more direct form of democracy by allowing debate and conversations across any size of political unit. Will we witness a re-birth of democracy in a virtual Athens? What chance wiki-style policy making? But first will be the collision with government IT systems and security requirements - for example, see the claims that President Obama's blackberry could be hacked. And I say this from the perspective of someone who uses Windows 98 at work.

Anyway, we can be sure that there will be some excellent websites, judging from the revamped White House site. We wanted to do our bit as well, so we have launched a section on trade and globalisation on the ukinusa website. It is still early days, but our ambition is to create something that will be more than just a portal for dull government documents. We'd like it to be a useful resource and an interesting, thought-provoking read. An Aide for Trade if you will. So please have a look around and let me know what you think.

Posted at 13:04 17 February 2009 by Oliver Griffiths  |  Comments[0]

Moral markets

It is a fairly reliable rule of thumb that a financial crisis will be blamed on greed. But the enormity of the current challenges has led some people to signpost this as the high-water mark of this particular tide of globalization (see Irwin Stelzer's argument) that the era of free trade has ended) and question the future of capitalism itself.

President Sarkozy's recent speech on the financial crisis has received a fair amount of interest. It did not feel to me like the broadside against capitalism that some have portrayed it, although there was some therapeutic knocking down of straw-men: 'the idea of the all-powerful market which wasn't to be impeded by any rules or political intervention was a mad one'. It would indeed be a mad idea, which is why we have lots of rules (including a legal code) and regulations (even if they didn't work very well in some cases) to channel markets. The part that has received most attention was President Sarkozy's assertion that 'if we want to rebuild a viable financial system, raising the moral standards of financial capitalism is a priority'.

The idea of moralising the market is an idea as old as the hills, of course. During a crisis it is a natural step on from talking about regulation (which, let's face it, is pretty dull). Regulation changes the duties and incentives faced by a company. At its purist, moralisation aims to change the motivations of the people working in the company. But it hasn't been very successful.

Defenders of free markets argue that moralisation isn't necessary and could do harm. Adam Smith famously said that 'it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard for their own interest'. But Smith was by no means the first in the game. Perhaps the most notorious rebuke of moralizers was written by Bernard Mandeville, a Dutchman living in London during the birth of modern finance. His Fable of the Bees, written to rile the self-explanatory Society for the Reformation of Manners, argued that it was private vice itself that led to public economic benefits. A libertine kept an array of tailors and innkeepers in business in a way that a church-going spinster did not. You can draw a straight line from Mandeville to Gordon Gekko. Greed is good.

The interesting middle ground is moralizing the mission of the company. Free marketers argue that profits are a company's good works for society and companies trying to deliver public interests will be distracted from their core business. But there is mounting evidence that consumer dollars are interested in the social responsibility footprint of individual companies. So far this - to borrow shamelessly from Google's logo - seems primarily to be on the basis that a company should do no evil. So multinationals have queued up to manufacture in Cambodia because of the ILO's excellent Better Factory Cambodia initiative. If it says 'Made in Cambodia' on the label, you can be fairly certain as a consumer there was no child labour involved. The Kimberley Process, established in 2003 and covering 99% of rough diamond trade, is another good example: you don't want a conflict diamond to be forever. The next step up the ethics chain is to buy from a company because it does good. Consumers may start to reward more systematically companies that get out ahead on addressing climate change, for example.

Going back to Sarkozy's aim of raising moral standards in financial capitalism, I wonder whether corporate social responsibility has had less bottom-line traction among financial services companies than in other sectors of the economy. There have been a few virtue funds launched (though also some counter-veiling vice funds). Some entities run ethical investment policies.  But they feel like a vanishingly small minority. In policy terms, the proxy we seem to have hit on for raising moral standards in banks is to oversee executive remuneration.

Posted at 09:40 20 October 2008 by Oliver Griffiths  |  Comments[0]