‘The City and the Common Good: What kind of City do we want?’ - ‘Good People’

I recently went to an event at St. Paul’s Cathedral, which was the first of a series with the overall title, ‘The City and the Common Good: What kind of City do we want?’  This first event was about ‘Good People’; the others will be on ‘Good Money’ and ‘Good Banks’.  The Keynote speaker last week was Vincent Nichols, Archbishop of Westminster and formerly of Birmingham.  Also speaking were Peter Selby, Helena Kennedy and Tracey McDermott (Director of Enforcement and Financial Crime at the new Financial Conduct Authority).

Vincent Nichols quoted TS Eliot: "What life have you if you have not life together?  There is no life that is not in community..." but went on to say that you need to cultivate community and, reflecting Catholic Social Teaching, that in the recognition of both community and the holding of personal property the well-being of each is dependent on the other.  The danger with the City (of London) is that that a disconnection has grown up both of people in the City with each other and with those outside.

But, he argued, good people yearn for love, relationships, friendship and to make a difference.  This lies deep within us in sharing a common humanity and life of relationships, and to learn to live well is to learn the virtues – we act well because it has become habit for us.  Becoming people of virtue starts within the family but should also be inherent in our schools and universities (and in this case business schools); the institutions of commerce should nurture this with a clear sense of purpose focused on the wider common good.

Profit should be made by delivering a purpose that leads to human well-being (not as an end in itself), for unless you know the purpose you will never get the ethics right.  Business should be able to demonstrate how it is making the world a better place; so whilst employees need technical skills they must also be schooled in character and virtue.

His view that there are limits to law and regulation – they are a lazy proxy for morality – drew comment from the representative of the FCA who, whilst arguing they were necessary but not sufficient, said they needed to reflect underlying norms, though sadly in financial services this connection was not always made, so it is important to make society’s morals clear.  Vincent Nichols was, however, arguing for a fundamental transformation of purpose so that the banks and big business were at the service of society and he felt that (as the economist John Kay has said) it will take another financial crisis before the City wakes up to the scale of reform that is really needed.

He concluded by saying all this depends on the quality of leadership to draw out the good in people by their own actions: do they appeal to fear or greed, or to selflessness and a desire to serve the wider good?

Helena Kennedy in responding referred to Adam Smith’s ‘Theory of Moral Sentiments’ saying that markets are only good if there is good law and high ethical standards and that this has been squeezed out in many parts of our society because we have made money a measure of value and how we measure people.  She feared that there was still a sense in the City of waiting to get back to business as usual.  Peter Selby said that exhortation is not enough; there are issues of power here and an imbalance of effect.  And whilst schools of virtue are important we also need schools of resistance, to say ‘enough is enough’.

In response, Vincent Nichols referred to the virtues of courage and judgement and spoke again about the power of leadership for service, and in the discussion about the purpose of business, said that corporate social responsibility is about more than ‘reputational laundering’.  It should lie at the core of the business that should be about the quality of relationships with employees and their families, growth of employment, the quality of goods and services, the tax that is paid, as well as shareholder return.  In short, there needs to be a broader view of success.  But for this to be so, markets need a more personal connection to work properly, because business doesn’t operate in a vacuum, it depends on its context and on its connection with the society within which it operates.  Wealth creation is, however, good if it is for the right purpose.

Unsurprisingly, many in the audience were sympathetic to the tenor of the speakers' contributions but there seemed to be few practical suggestions about how they should be achieved, apart from the long-term of education from the Archbishop and Peter Selby's call for resistance.  A couple of questions made the point of the significant contribution of financial services to the economy and to tax paid, asking if we could afford to see this diminish.

Implied in Vincent Nichols views is that financial services should serve the needs of business and the economy rather than making money from money (so-called casino banking), which is a significant part of the City and which contributes to its disproportionate size relative to the economy as a whole.  Businesses run well along the lines suggested by the archbishop should make good profits in a longer-term and more sustainable way.  One has to ask if the over concentration of  resources in the London and the South East is not damaging to the rest of the country and its economic and social well-being.  Stephanie Flanders (the BBC's Economics Editor), who chaired the discussion, wrote a piece recently asking 'Should Britain let go of London?' showing how the gap is widening between London and the rest of the country and how economic and other policies are skewed by London-centrism.

In this week of Baroness Thatcher's funeral (which takes place in the same space as this debate that I am reporting upon) it has been pointed out by a number of commentators that the north-south divide which was already happening before she came to power has become more acute as a result of government policies (of all parties) over the past 30 years.  Mrs Thatcher's government was responsible for the 'Big Bang' de-regulating much of the City from its previously restrictive ways and contributing to its exponential growth.  But no one has been able to halt, let alone reverse the decline of manufacturing or find an effective policy to truly revive affected regional economies, and the present governments' attempts at rebalancing the economy towards manufacturing and exports have been ineffective.

To truly succeed may mean grasping some very difficult nettles including the deeply entrenched economic and political power of the City.  To get some idea of this see: 'Who Runs Britain?' by Robert Peston (2008), London, Hodder & Stoughton, which I have mentioned previously on a number of occasions.