Malcolm Brown, the Director of Mission and Public Affairs for the Church of England, has written an interesting article about morality and the market in the economy.
He describes his experience in inner-city Southampton where
I watched “market forces” creating retail apartheid – one high street for wealthy shoppers and an alternative back street for those with little. People internalised the market mantra so that it became a fact of life rather than a set of disputed policies… money and commerce became the analogies through which all our human experiences were mediated.
He makes an important point: that the way the market works needs to be constrained by moral consensus.
Markets serve human needs properly only if markets operate in a moral context. The loss of that wider moral tradition has allowed the financial sector to forget what a good marketplace looks like, to abandon competition for cartels, to acquiesce in the disenfranchisement of the poor and to lead us all to the precipice.
The way I would put it is that over the last few decades the way the relationship between morality and the market has been turned upside down. The way the market works has become itself a model for how morality should work. Since the crash, however, there is growing realisation that this will not do. Brown writes:
It’s not about morality versus markets – it’s the recognition that the market is a brilliant distributional mechanism with great power to adapt and self-correct, provided there is enough moral awareness among the players to prevent the accumulation of overweening monopoly power. For the first time in a century, the Church of England is speaking about the morality of the marketplace and is not being told that “theology has nothing to say to economics, so shut up”.
I would not have put it like this, but the main point is that ‘the market’ needs to be constrained by a wider moral consensus. I would add that this wider moral consensus must not be simply another way of saying we need to do what ‘the market’ does. Life is more than economics. Every healthy society needs a moral consensus capable of reflecting intelligently on all aspects of its life, including its economic aspects. Such a moral consensus enables economic activity to serve society, rather than the other way round.
Here lies the problem. In effect, the moral consensus of our society – or at least, of our ruling classes – is derived from market economics, and has therefore ceased to function as an authority over it. It is easy enough to see why. As long as Christianity provided society with a set of beliefs about what life is for, it was possible to derive moral norms from it. Obviously different versions of Christianity generated different moral norms, but it was possible to argue that specific moral norms were the true norms of Christianity, and therefore of a Christian society. Now what happens when we reject Christianity’s normative role? Do we replace it with anything else? In effect, to a large extent we have replaced it with the ideology of the market. So market economics becomes our morality. Economics explains the meaning of life. This is why we have so willingly accepted government by people whose top priority is to maximise the size of the economy. Thus secular capitalism has replaced Christianity with a new, and much more oppressive, religion.
Where I disagree with Malcolm is in his statement – a standard economist’s statement – that ‘the market is a brilliant distributional mechanism’. It is not a mechanism at all. It is a description of the effects of what people do. To treat it as a mechanism is to attribute power to it.