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Moral sentiment and faith in capitalism

Updated Thursday, 23rd February 2012

Gavin Oldham, chief executive of retail stockbroker The Share Centre, explains why he does not see capitalism as the money-making 'casino' of popular imagination.

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Leslie Budd:
Gavin, it’s been suggested that we’ve moved from shareholder capitalism to casino capitalism. I wonder what your view is on this apparent shift in public perception.

Gavin Oldham:
Yeah I think that I can understand why people would see that. I have to say I don’t see capitalism as being this sort of huge amount of institutional power and wheeler dealers within investment banks or anything like that. For me capitalism is about people in the country, on the ground owning a stake in the businesses in which they work and that they use as customers day by day, and so there’s a genuine drawing together of being employee, consumer and being shareholder. And that is a genuine proper capitalist environment. You know, when you have everything controlled by institutions, it’s only a step away from having everything controlled by the state.

So actually I think we need to rethink our definitions of capitalism in this country and get away from this idea that capitalism is about casinos and really the huge sort of money machines of the City, which really are just parasitic intermediation. You know, they just sit in between people, getting in the way, drawing too much money out of it and really not contributing enough into the process. Those who actually are the professionals, who actually work in the financial service industry, ought to be as lean, as efficient as they can in order to actually help people to be directly in contact with the whole process of wealth generation in this country.

Leslie Budd:
Adam Smith wrote that without moral sentiment, just prices in markets won’t occur. Do you think business and moral sentiment can still coexist?

Gavin Oldham:
Well there’s no doubt about sentiment controlling markets, because a lot of people think that prices are really formed by peoples buying and selling at the time, but actually they’re formed by anticipation, and anticipation is all about sentiment. It’s not something thoroughly logical or rational which you can predict; it’s something which is quite irrational sometimes, and that’s why you get these very big swings in markets. And I think they are a balance of all the various anticipations, the hopes and the fears, you know, that people have for the future, which actually forms a price around where a particular asset or particular market is. And I think really that there’s bound to be some degree of, well you call it morality but, because morality does get all tied up with hopes and fears, and it’s that driving the anticipation which actually does settle down in equilibrium and find the level at which you have willing buyers and willing sellers. So I think I have to agree with Adam Smith, yes, I think it’s right.

Leslie Budd:
Well it’s one part of Adam Smith that’s often overlooked that you can’t have self-interest without taking into account of other people’s self-interest.

Gavin Oldham:
I think it’s very interesting, you know, the motives that people have for getting involved in charity, because in many, many cases one feels a sensation of doing things for other people, but actually there’s a sense of a really considerable achievement in doing that for oneself. Where do you actually draw the line between the self-interest there and the selflessness, because actually it’s that feeling of satisfaction which gives us a sense of worth ourselves, and so actually there is a convergence there coming together. And I think actually that the human species has a very, very special ability to actually carry that unconditional love, which we can actually build into selflessness, in a way which really is quite unusual in the rest of nature. And if we see that working effectively we can see really creating strong communities and strong societies and really care for others, and that actually should drive a lot of what we do, both in the way we live day by day and also the way we work in business.

Leslie Budd:
And finally, can faith organisations and similar bodies still play a crucial role in bridging business and society?

Gavin Oldham:
Well I think they can, but I don’t think that they need to wear their religion too heavily on their sleeve. The really, in my view, the main purpose of the institutional form of church is actually a vehicle which has carried the faith down from generation to generation, and in the Christian church’s sense it’s done that for 2,000 years. Now sometimes it’s been good and sometimes it’s been not so good, and, but, you know, there’s been at the same time an extraordinary succession of really sparkling characters who’ve actually come up and brought it back to the true faith as it’s gone through, people like Saint Francis of Assisi or John Wesley, you know, on the way through. But I think that is the role of a sort of formality of religion as it were to actually provide that vehicle which carries it through from generation to generation.

At the individual, personal level, it’s about how we behave with one another, and the core value from which streams everything, at least for me as a Christian, is to love your neighbour as yourself, because actually if we do that effectively, we are actually also, you know, we learn in the Christian gospel to identify other people as actually God being within them as well, and so if we love other people and if we care for them then we are also loving God, which is the other core value. And that to me eclipses all the other stuff about religion and faith, all the debates we have which find their way onto the newspapers, all pale into insignificance compared with that, and it’s part of actually taking that unconditional love which is God and letting it flow through us into everybody that we meet day by day. If we do that effectively, we don’t have to talk about formal faith or formal religions, it’s just a matter of caring for other people, respecting others and actually trying to be on their side, and that’s the way I think that the best of people would want to behave anyway.

Leslie Budd:
And just on that, do you think though sometimes faith organisations and similar organisations have to step into the policy realm to act as a kind of critical friend for governments if they think they are perhaps following a difficult path for society?

Gavin Oldham:
Well it’s a complex relationship from that point of view, and undoubtedly, you know, I’ve spoken about the long term nature of faith and the way that it does carry down from generation to generation, and sometimes what we see as maybe being very important to our current generation may in the longer stretch of time be something which may not be for the best interest. And so I think one of the abilities that the faith organisations have is to look at the long term and, you know, to say to government look, you know, we understand you’ve got to make decisions for the short term, but actually there is a long term perspective, and that’s important to look at. I mean you think about the environment for example which is an issue that really concerns a lot of us both inside faith and outside faith - that is really a long term issue because it’s going to affect our children and our grandchildren, the way the world is in the future, and so I think that's a typical example of where a good dialogue can take place.

Personally, you know, I would like to see a situation where the reform, the current reform of the House of Lords, which is going on at the moment, could actually look very seriously at this long term perspective. You know, it’s almost certainly going to be the case that the majority of members of the House of Lords in future or the second chamber will be elected, and I think that if you said to the electorate vote for how you would like the country to be in 50 years’ time, then actually I think people are very capable of sitting back and saying how do I want this country to look like in 50 years’ time. You know, how do I want its economy to look like, do we still want to be saddled with these enormous debts, how do I want the environment to look like, do I really want a situation where we’ve got climate change going on and, you know, all the worries that brings about for economies and so on, do I really want the situation where families are so broken as they are today and, you know. And so it seems to me to be an opportunity to actually get a longer term perspective.

And I think when we go to change in our government system, which is being looked at in the reform of the House of Lords at the moment, it’s an opportunity to assess that afresh, and I would really, really like the select committee which is actually looking into the House of Lords reform at the moment to try and get this long-term perspective into an electoral system. Because then we could have a proper checks and balances against the House of Commons which will always be based on short term realities, because they’ve got to care about whether the books are going to balance next year and whether people are going to vote for them in two or three years’ time. If we had let’s say ten year election timeframes for the House of Lords, then people would have a longer perspective anyway, but when they actually stood for election they’d have to fill their manifestos with stories of stability and hope for the future, because everybody would be voting on how they want the country to look like in 50 years’ time.

Leslie Budd:
Gavin Oldham, thank you very much.

Gavin Oldham:
Thank you.

Gavin Oldham was talking about capitalism, moral sentiment and the role of faith in business after a recording of The Bottom Line.

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