Monthly Archives: June 2009

Can mere law-makers lead?

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I find myself wondering: in what sense does the government (of the U.K.) govern? I have never studied politics, so the better read may be able to educate me.

One of my themes in this blog has been that it is necessary to do right on a foundation of not doing wrong. For example Florence Nightingale’s rules about hospital design (do no harm), or Christopher Jamison on Finding Happiness by demolishing harmful thoughts.

In the field of mechanical engineering (where I claim more knowledge than in politics) a governor is a device that restrains an engine from rotating too rapidly. (It is a pair of balls attached to a shaft. As the shaft speeds up the balls are forced to rotate further from the shaft and this action then slows the shaft.) So maybe government wisely focuses on preventing things from changing too quickly: preventing excess. I think for example of the need to curb some excesses of the “free market” to protect those who will not benefit from it naturally.

Maybe this is what government should do, but there are a couple of problems. Firstly the government has its own excesses that it has not restrained – I think of the recent scandal about MP’s expenses. Secondly, it does not seem to think its role is just to restrict, but also to direct and to instigate change. According to the Daily Telegraph, since Labour came to power in 1997, 3,600 new offences have been created by Parliament. Even more astonishing is the fact that of these, no fewer than 1,036 can result in the imposition of a prison sentence.

Herein lies another problem. What we call the government is a legislature. It sees itself in a leadership role, however it’s main power is to make law so it seeks to lead in this way – and in a way that becomes increasingly constrictive. It can also lead by choosing how to raise taxes and where to spend those taxes. In our constitution the role of the executive is held by the Queen, but following constitutional reform she is not supposed to do anything on her own initiative but only in response to parliament’s acts.

So where does leadership lie in our nation? The prime minister seeks to act in an executive role, and to parallel the president of the USA, but does it work? I really do not see that legislation (on its own) is an effective way to lead. Furthermore it seems to me that our membership of the EU compounds this error.

Morally leadership does need to be about exercising appropriate honest restraint in a community in order to ensure that benefit is shared (which is like being a mechanical governor, and will include legislation). However leadership also needs the holding out of a vision for the future and the encouragement and support of people as they travel together towards that. My belief is that this is not about control: it is about leading an honest, altruistic, lifestyle and about “setting direction.”

So leadership is bigger than legislation, and in modern society we like to think that leadership comes through democracy. In other words it is not just some wealthy or educated elite who know how to lead, everyone can lead. This statement works best if we see leadership as being about setting an example and being responsible – not just giving directions.

There is much basis for this in Christian theology. The development of our parliamentary democracy has taken place in a society that has sought to be Christian, and travelled through that period of time (up to the 17th century) when Christian leadership in Britain was believed to be exercised by monarchs with “divine right.” Since then “the people” have sought to lead through parliament. I am a believer that God can and does speak through all people, and the promise after Pentecost of the presence of His Spirit in all people is a powerful indication that leadership can be through all: through a democracy and not just “top down.”

In this way the leadership of Britain is, historically and theologically, “topped and tailed” by God: a monarch who is required to be Christian (Protestant, in fact), and people who are also seeking to be agents of God’s leadership.

So Britain’s leadership is both powerfully implicit and vulnerable. In my previous article about Adam Smith I queried the moral assumptions underlying his economic theory. What were the assumptions underlying our parliamentary democracy? It seems to me that our unwritten constitution rests on the assumption that all will as Christians be seeking to follow God’s lead. If that is not so then indeed there will be a vacuum, and then who indeed will lead Britain?

What would Adam Smith think of our handling of his economics?

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People seem to like to claim that important historical figures are on their side. One example is the way people will argue about whether Charles Darwin believed in God. The example I want to explore here is the “father of modern economics” Adam Smith.

I believe in business, in the sense that I see that trading is a way of creating wealth. This is one of Scotsman Adam Smith’s precepts. In his famous 1776 treatise, The Wealth of Nations, he wrote of his faith in self-interest. In using that language today, some of us may feel that self-interest is wise or inevitable: others may feel that the word is immoral. Adam Smith meant that he believed that, if a number of people were acting out of self-interest in developing their businesses, then society as a whole would become more wealthy and all would benefit. This is his concept of the invisible hand: he did not advocate self-interest, but he observed that it was commonplace and that more benefit seemed to come to society as a whole when people traded out of self-interest than when they sought instead to be philanthropic (there's a challenging thought). (By pursuing his own self interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good – WoN, 456).

It has been stated that the proof that wealth came through labour, through trade and not through hoarding gold, was seen in the growing wealth of countries such as the UK and America because at that time they saw growth through trade, whereas countries such as Spain which saw wealth as being about holding onto gold bullion languished.

I have been fascinated by the life of John Forbes Nash, Jr, Nobel laureate, whose work is depicted in the 2001 film A Beautiful Mind. In a captivating moment in the film, he watches some of his friends eyeing up women in a bar and suddenly declares, “Adam Smith is wrong!” His theory – the Nash Equilibrium – says that if people just work out of self-interest based on what other individual “players” are doing they will not produce nearly as good an outcome as if they collaborate with one another. In other words, trade may be good, but acting just as an individual player will not produce the best results.

Modern advocates of free trade derive their doctrine from Adam Smith. But will everyone benefit in a society that is just driven by free trade, by “the market,” whether they are totally self-interested or collaborate? There seems to be much disbelief today that free trade on its own is sufficient; there is a belief that certain groups of people need special care or protection.

So I was interested to read a speech given by Traidcraft founder Richard Adams to Durham University students. As an alumnus I read it in the Spring edition of the magazine Durham First that I was sent. Here is some of what he said.

The market is quite good at a number of things, as Adam Smith pointed out. It creates efficiency, it's good at encouraging profit-seeking behaviour, it delivers goods and services effectively to those who can afford to pay, and it created jobs for many, and wealth for some, in the process. But as we are finding out with a vengeance, it's not so good at recognising external costs like environmental damage and the exploitation of people and, given it's head, it will pursue profit to the wilder shores of greed and criminality. Smith recognised this and, being an Enlightenment professor of moral philosophy, assumed his market economics would be set within a moral framework.

So, 233 years on, how do we change the market? We make it grow up, give it values, a sense of responsibility, a conscience, a theology, a heart. This is what fair trade, sustainable development, ethical business is about.

This leads me back to my starting point, the significance of the context in which people set their theories, and the competing claims of modern commentators. Did Smith see market economics as set in a moral framework? And, whether he did or not, should we and how should we?