Values and the economy

It is always gratifying when one reads a comment by someone with whom one fully agrees. It is even more gratifying when that comment is made by someone like Mark Carney, former Governor of the Bank of England (2013-2020) and the Canadian Central Bank and now Prime Minister of Canada itself.

The comment is contained in the March 20, 2021, edition of the Economist magazine and the article is entitled Why two former Central Bankers are talking about Trust.

The idea is contained in Carney’s own book entitled Values, in which according to an Economist correspondent, Carney contends that “within profit-obsessed market economies, self-interest crowds out other motivations, making the world a more selfish place and a less resilient and prosperous one too.”

The same ethical perspective is echoed in another text by Minouche Shafik entitled, What We Owe Each Other. Interestingly, Shafik was director of the London School of Economics and one of Carney’s deputies at the Bank of England.

In her text, Shafik contends that changes in the global economy have undermined the role of the social contract and the function of the institutions societies rely on to keep the world a reasonably just place. She concluded that we could be witnessing “a destructive fracturing of the mutual trust on which citizenship and society is based.”

Where one would disagree with Shafik is that this “destructive fracturing” is primarily a characteristic of the contemporary global economy. Readers of history will know that historical capitalism, which has always contained an element of greed, has invariably tended to be destructive of social and ethical trust.

This would be true whether we are talking about child labour during the First Industrial Revolution, those ‘dark Satanic mills’ or the American robber barons of the late nineteenth and early twentieth centuries.

The capitalist marketplace does not perform at a socially optimal level without certain interventionist factors that seek to modify and mollify capital’s inherently exploitative character.

These countervailing interventions involve a liberal-democratic state that favours some measure of income redistribution and a viable trade union movement that defends marginalised labour. But the key factor that can mollify the ravages of capitalism is a moral consensual culture that appeals to “the better angels of our nature”.

In his work The Theory of Moral Sentiments, Adam Smith wrote of the “invisible hand”. Smith’s “invisible hand” was in a sense what he saw as the hand of God working in the economic sphere. Smith was an economist but he was at heart a moralist.

In an age of crass materialism, one is not sure how the “invisible hand” operates today. The Economist magazine writer notes: “People have become too disinterested in their obligations to other people and to society as a whole.”

Barbadians across the length and breadth of this small island are showing neither the requisite levels of empathy nor common civility. In spite of the persistent political chatter about resilience and sustainability, social trust is waning, hence the crime and violence, scamming, praedial larceny, child abuse, neglect and other pathologies.

In an age when ‘orthodox economics’ seems to give less and less thought to ethical concerns, morality might appear a laughable consideration, a bit Pollyannish. I don’t think that moral courage exists today to the extent that it would need to exist to fashion anything resembling a just economic order.

Power, both political and economic, tends to perpetuate itself. Mark Carney has suggested that monetary incentives can crowd out prosocial motivations in ways that can prove socially and economically counterproductive.

However, religious values generally and Christian values, in particular, are still a force for good in the modern world. The Bill and Melinda Gates Foundation has agreed to give away some US$200 billion to the world’s poor over the next 20 years.

Speaking on Fareed Zakaria’s Global Public Square show on Sunday, May 11, 2025, Gates stated, “I am concerned with lifting up those in greatest need.”

In conclusion the Economist writer makes the curious observation that Central Bankers “can be a dispassionate and humourless bunch,” because they are charged with the onerous task of “fending off runs on the financial system.”

Wonder what Messrs Worrell, Williams, Haynes and Greenidge would have to say about that, being dispassionate and humourless that is. The writer is realistic in suggesting that it will be difficult to make capitalism more inclusive and shore up existing social safety nets.

He concludes: “The analytical tools relied upon by top economic policymakers do not include mechanisms for quantifying the importance of social norms or cultivating ethical behaviour across the population.”

One might conclude economists and Central Bankers are inclined to render to Caesar the things that are Caesar’s and to God the things that are God’s.