… to paraphrase Churchill, capitalism is the worst system, except for everything else that has been tried.

Gillian Tett – whose official title (“markets and finance commentator and assistant editor” of the Financial Times)  seems designed so that its holder can write about whatever she likes,  whenever she likes – is responding to my question about whether  capitalist enterprises can ever escape an inbuilt moral blindness. She  has agreed that “profit-seeking enterprises tend to create employees who  are focused on profits and subject to tunnel vision”, but that

The best way to counter the flaws of capitalism is to do  everything you can to promote a more humane version that keeps some  element of the profit motive there, to encourage competition and  dynamism, but keeps it in check with oversight.

The question that forms and nags at the back of my mind at this point  is how far you would have to dilute the profit motive before you’d end  up with an acceptable form of capitalism. And whether at the end of this  diluting process it would really still be capitalism at all. But we’ll  get to that. Tett continues:

Forcing companies to pay properly for externalities is  key. So is creating a level playing field, with real transparency and  competition and access to the markets and market prices for a wide array  of players. And encouraging companies to take a longer term view, and  investors to measure results with a longer-term vision too, is  important. For what it’s worth, I am a huge fan of Adam Smith’s version  of capitalism, but that vision had four elements that are often missing  today (particularly in Wall Street): companies where the owners  exercised real control and oversight (because they were family owned  enterprises); markets with fairly open access; market prices that were  visible; and a wider sense of ethics and moral sentiment.

That phrase “often missing today” interests me. It could be  interpreted as suggesting that there was a time when things were better  (though I don’t think Tett necessarily means it that way)…

Unwilling to go back and read Smith’s more-than-Piketty-length The Wealth of Nations, I turn to the Baedeker of economists, Robert Heilbroner’s The Worldy Philosophers.  Heilbroner is a fan of Adam Smith too. And he seems to think that in  Smith’s time the economy really did function as he supposed it would: as  a “self-regulating system for society’s orderly provisioning”. “Does  the world really work this way?”, Heilbroner asks; “To a very real  degree it did in the days of Adam Smith”.

Now what is this “to a very real degree”? Heilbroner’s claim comes  after several pages in which he has described some of the working  conditions that prevailed in Smith’s day:

… had [Smith] traveled up north and nerved himself  against a descent into the pits of Durham or Northumberland, he would  have seen … men and women [working] together, stripped to the waist, and  sometimes reduced from pure fatigue to a whimpering half-human state.  The wildest and most brutish customs were practiced; sexual appetites  aroused at a glance were gratified down some deserted shaftway; children  of seven or ten who never saw daylight during the winter months were  used and abused and paid a pittance by the miners to help drag away  their tubs of coal; pregnant women drew coal cars like horses and even  gave birth in the dark black caverns. But it was not just in the mines  that life appeared colorful, traditional, or ferocious …

To a “very real degree” such conditions resulted from “some element of the profit motive”.

Anyway, back to Tett. A “more humane” version of capitalism that  matches Smith’s ideal is possible, in Tett’s view, but this depends on  the possibility of moral vision:

I think the issue is tunnel vision – which basically  makes people exclude things that they don’t like – and if they live in a  social silo they never meet anyone who is going to challenge them. Or,  to put it another way, Bourdieu used to talk about doxa – the field of  accepted debate. Inside the doxa you can get varieties of opinion, but  what really matters is what lies outside the doxa, in the sense of what  is never discussed. The social silences, as it were. In the case of  banking, the presence of social silences has been critical for the moral  blindness that developed.

And the academic scribbler, the great silencer at the centre of Wall  Street’s doxa? Dr. Smith again. “Even though Wall Street wraps itself in  the flag of Adam Smith (which, in a sense, is like trying to export  democracy at the point of a gun)”, Tett tells me, High Frequency Trading  and much Wall Street practice “flies in the face” of Smith’s  commandments. But Tett’s general point is not that traders need to read  their Smith more carefully; it’s that living in a “social silo” prevents  confrontation with ideas and problems that might challenge your  preconceptions, and which might force you out of a moral blindness you  hadn’t even recognised. Dr. Smith may be as much part of the problem as  part of the solution, especially if he becomes too cosy a conversation  partner and prevents you from going out and talking to other people.

*

I had begun our exchange, back in January, with a few questions about  inequality. My first (pre-Piketty) question asked whether it was time  to move inequality back to the centre of political debate. Tett replied  that

Inequality is moving back to the centre of the agenda  whether politicians want it or not. In Davos this year the CEOs and  other elites named inequality as the biggest risk to the global economy  over the next year, which is utterly amazing given that it’s never  featured in the Global Risks report that the WEF [World Economic Forum]  do each year. What people are increasingly realising is that this is  heavily linked to the question of technological change, not just  developing country supply shocks or even any particular policy espoused  by the parties in power.

I ask Tett to go into a little more detail about how technological  change relates to inequality and how – if CEOs are indeed starting to  recognise that inequality threatens economic stability – they are  proposing to address the technology-inequality connection. In short  order she sends me a link to an FT article she has just published. Luckily I haven’t yet maxed out my free monthly eight-article allowance on the FT  site, so I’m able to view the piece without being paywalled. (As the  automatically-generated text in Tett’s email explains, “High quality  global journalism requires investment. Please share this article with  others using the link below, do not cut & paste the article.”)

The article is about the displacement of “flesh-and-blood workers” by  digital machines – “computer business systems” that push employees out  of decent jobs and either “out of work or into thankless, monotonous  drudgery, even as a tiny elite of skilled managers (or business owners)  gets wealthier”. Tett’s reflections have been prompted by a recent book  by Simon Head, fellow of Oxford’s Rothermere American Institute. Head  points to companies such as Amazon, whose working conditions are the  stuff of hellish nightmares – to a very real degree.  In the early days, Amazon had private ambulances parked outside their  warehouses; this was cheaper than installing the air conditioning  systems that would have prevented employees collapsing in the heat,  which they inevitably did. In an article for Mother Jones,  journalist Mac McClelland described her time working in a distribution  centre for “Amalgamated Product Giant Shipping Worldwide Inc.”:

The place is immense. Cold, cavernous. Silent, despite  thousands of people quietly doing their picking, or standing along the  conveyors quietly packing or box-taping, nothing noisy but the  occasional whir of a passing forklift… People lose fingers. Or parts of  fingers. And about once a year, they tell us, someone in an Amalgamated  warehouse gets caught by the hair, and when a conveyor belt catches you  by the hair, it doesn’t just take your hair with it. It rips out a piece  of scalp as well.

After her third day in the job, McClelland is reduced from fatigue to a whimpering state:

I’ll admit that I did start crying a little. Not at work,  thankfully, since that’s evidently frowned upon, but later, when I  explained to someone over Skype that it hurts, oh, how my body hurts  after failing to make my goals despite speed-walking or flat-out jogging  and pausing every 20 or 30 seconds to reach on my tiptoes or bend or  drop to the floor for 10.5 hours.

“[W]hat is perhaps most interesting of all about Head’s view”, Tett  remarks in the article, “is that while he writes from an indignant,  leftwing perspective, even he cannot find any answers”. Head points to  “Germany’s culture of co-determination and labour-management  partnership”; “the John Lewis Partnership in the United Kingdom,  employee owned and the best high-quality retail chain in the country”;  and “exceptional [US companies] like Lincoln Electric”. But as Tett  notes, he also believes “it would be delusional to think that, in the  United States, the domain of these alternative work cultures will expand  spontaneously”. As I read Tett’s article, I wonder what an answer would  look like if it didn’t look like this.

Tett suggests that the most worrying thing about this technological  displacement, and the inequalities that follow, is its invisibility: the  impression she gives is of a blind and inexorable march into dystopia.  It is “a point we all need to ponder more deeply”. I write back that I  think there’s a danger of slipping into a form of technological  determinism here – of assuming the existence of an invisible hand and  ignoring the existence of a hand that exists “to a very real [and  visible] degree”: the hand of managers and business owners. Surely it’s  because managers and business owners are primarily concerned with profit  and not the wellbeing of their workers that they embrace these  technologies. In which case maybe we need to look again at the very  structure of capitalist enterprises, as Head – with his nod to John  Lewis and Germany’s partnership culture – seems to do.

But apparently I’ve missed the point: “the real issue about  technology”, Tett responds, “is not what it does to companies on the  micro level but that it raises questions about displaced workers on a  macro level. If [Brian] Arthur [ – a professor at the Palo Alto Research  Center who Tett mentions in her article –] is right, then the issue  facing economies today is not how they can become more productive, but  how they distribute the fruits of their productivity. This is absolutely  key. Economies can grow but only a tiny proportion of people benefit.  Yet economists, politicians and journalists tend to be obsessed with the  raw GDP growth rate”.

I wonder again whether the micro and macro aren’t more intimately  connected than Tett implies, and whether companies set up to prioritise  profit above all else won’t inevitably result in the trend towards the  concentration of wealth that Thomas Piketty describes in his new book, Capital in the Twenty-First Century,  which Tett refers to. At this point Tett brings Smith and the moral  blindness problem back into the conversation. But now the focus is on  “silo busters”:

Companies get too focussed on narrow goals sometimes and  lack people who can force them to take the wider vision. You cannot  expect everyone in a company to take a wider vision. But you do need a  few ‘silo busters’ – people who can step back and see the bigger  structure and see how the bits join up together, and act as cultural  translators between the different parts of the company and the company  and the outside world. Being an anthropologist by training, I would  argue that every company and institution needs an anthropologist to look  at the big picture, see how the dots join up, and see what nobody is  talking about – because those social silences often matter very deeply.  The problem, though, is that when companies and institutions are under  pressure to cut resources, it is those cultural translators and silo  busters they often cut first. Streamlined organisations that are  narrowly focused on single goals tend to look ‘efficient’ when times are  good; but they often cut all the slack out with such ruthless focus  that they end up being beset by tunnel vision too.

There are examples of companies who seem to be doing this right: Tett  mentions Paul Polman’s leadership at Unilever, where he has “tried very  hard to take a more holistic view of companies and put CSR [Corporate  Social Responsibility] into the centre of the company’s operation”. In  Smithian fashion, Tett believes that the best way to encourage companies  to look at the bigger, moral picture is for investors to reward moral  vision. The fact that “CSR pages are one of the fastest growing areas on  Bloomberg terminals these days” is cause for optimism; but, Tett  observes, “it’s still often more about window-dressing than a genuine  commitment to change”. Presumably, I think to myself, because their  genuine and overriding commitment is still to profit.

And this takes us back to the question of what “some element of the  profit motive” really means: how far must the profit motive be displaced  before we end up with a morally responsible form of capitalism? And to  what degree should this moral responsibility be “real” – rather than  just theoretical – before we stop looking beyond the status quo for ways  of displacing the profit motive even further?

*

One of the most important elements of the feminist movement, as Nancy Fraser wrote in the Guardian  not long ago, was that it looked beyond the status quo celebration of  profit-driven entrepreneurship, promoting care and interdependence and  valuing the ideals of participatory democracy and social solidarity.  Fraser suggested that the current celebration of female entrepreneurs  and the provision of microcredit to poor women in the global south  marked a worrying general movement away from these alternative values.  In a review of recent feminist books, Tett seemed to acknowledge some of  Fraser’s concerns: the most notable thing about these books, she  remarked, was that the books’ authors “look around at their colleagues,  and realise that something has not worked out as they supposed; they are  more alone than they expected”. She also seemed to agree with Debora  Spar, president of Barnard College in New York, who writes that “We  privatised feminism and focused only on our dreams and our own  inevitable frustrations”.

But when I asked Tett about her broadly favourable report  on Goldman Sachs’ new fund aimed at raising $600m in capital for  100,000 women entrepreneurs in developing countries – and about whether  she thought Fraser’s concerns were valid – this was her reply:

I don’t see these issues as mutually exclusive. Women who  are strong entrepreneurs and able to get a sense of confidence and  voice often end up being more active politically too. What on earth is  wrong with trying to encourage women to have more business experience  and opportunity?

Tett also gave a nuanced and more personal answer to the question of feminism’s trajectory:

As someone who has tried to do the juggle of being a  woman and journalist – and now a single mother – all at once, I feel  very wary of giving any advice or judgement on feminism. Women today  have amazing opportunities and I am intensely grateful for that. I grew  up with rock-bottom low ideas about what women could do and have been  stunned by what has been available to me. But women are not on a parity  with men in terms of career success, and that is as much to do with  perceptions inside their heads (which are often taught at school and  home) as external barriers. Both need to be addressed. But with a big  sense of humor. I do think my daughters are going to have it easier than  my generation because attitudes about gender roles are changing fast.  But, for my part, I also feel very strongly that we should never ever  forget in the West how utterly lucky women are to be able to earn their  own living, walk away from bad marriages, have children on their own  terms, move around, speak up – and forge the world on their terms. No,  it’s not perfect. In fact, its a long way from perfect. But having lived  with women in places such as Pakistan and Tajikistan, and seen first  hand the horrific traps that women can end up in there and the broken  lives of some of my female friends there. I feel intensely grateful for  what we do have and am determined to teach my daughters not just a sense  of ambition, but gratitude too.

Tett’s prose sparkles with that sense of  ambition, the possibility of entrepreneurship, the creativity of profit.  As she put it in one of her emails to me, “building companies or  working in the profit sector can be an utterly honorable thing” – and  it’s difficult to argue with that sentiment. But the full sentence read:  “Building companies or working in the profit sector can be an utterly  honorable thing, since growth tends to be driven by profit-seeking  enterprises”.

Here’s McClelland again, describing her first day at Amalgamated:

We are surrounded by signs that state our productivity  goals. Other signs proclaim that a good customer experience, to which  our goal-meeting is essential, is the key to growth, and growth is the  key to lower prices, which leads to a better customer experience. There  is no room for inefficiencies.

*

In a recent article on Italian politics, Perry Anderson joins together some of the dots – and some of the silences – of the FT’s  journalism. “For years”, Anderson writes, “[Turkish Prime Minister  Recep Tayyip] Erdoğan – a close friend of Berlusconi – has been the  recipient of fulsome interviews, profiles and reports in the Financial Times and elsewhere”. The opposite was true of Silvio Berlusconi, “thunderous denunciations” of whom were led by the FT along with The Economist.  And yet “unlike Berlusconi … whose rule was anodyne in matters of civil  liberties, Erdoğan was and is a menace to these”. When the extent of  the Erdoğan regime’s “jailing of journalists, killing of protesters, rigging of trials, brutal intimidation of opposition” became clear, the Frankfurter Allgemeine’s denunciation was nothing if not thunderous. “Not a comparable whisper in the FT”.  The reason for this discrepancy, in Anderson’s view, was the two  leaders’ competence in playing the executors of a neoliberal scheme  devised in Brussels, Berlin and Frankfurt: Berlusconi, hopelessly  incompetent; Erdoğan, by contrast, ruthlessly competent, leaving little  room for the inefficiencies, the slack, of human lıfe.