New dancing rules

Posted on September 28, 2011


Ed Miliband, the British Labour leader has set out in a speech to the Labour Party Conference, a ‘new bargain’ in society.  Miliband has said that if elected his Government would end the ‘fast buck economy’, perpetuated by predators, asset strippers and the closed circles of British society.  Miliband has been immediately criticised for being on the one hand, anti-business, and on the other, not sufficiently focused on the practical measures that would deliver these lofty ideals. Criticism has begun circling around Miliband’s labelling of un-named business people and banks as ‘predators’, and he is being asked to identify individual predatory businesses, people or banks.  In response, Miliband has said that short-term gains put before long-term growth and broader social benefit is predatory behaviour.

The reaction to Miliband is fascinating.  If he is right – and I think he is right – we will all need to understand the difference between entrepreneurial behaviour that works for social outcomes, and that which only benefits the individuals who own or profit from these businesses.  The trouble is, how do we make this call?  Companies seeking to embrace an ethical way of doing business all around the globe are trying to define this very same boundary.  Do they do business with multi-nationals that own arms companies, or tobacco companies, or mining companies?  The structure of global companies sometimes makes these decisions very difficult.  Yet at some point these choices are more stark.  At a community level, the impact of action can be traced.  At an individual level (on employees and customers) it can be traced.  Environmental impacts too can be traced.

We don’t yet know whether Ed Miliband will be shouted down as a naive socialist, or whether this proposal be taken seriously. Coming at the question from a different angle, we might wonder why we don’t know much about many corporations  – even those that are publicly listed.  After all why shouldnt we be asking more questions about how money gets made and who benefits (and who pays)?  It is amazing that so much of what goes on in the corporate world is under such a veil of secrecy and yet we demand so much from employers who are in the public sphere (governments and services funded by government).  I have heard the term ‘tax-payers’ money’ so many times in the last month that I think I will need a bucket the next time somone pompously pronounces on government ‘waste’.  Are we not all ‘paying’ not just for what governments provide, but for the permission we give the corporate sector to do the thing they do best – sell stuff?

And are these boundaries between public and private sector now a fig leaf?  We have seen how governments have been unduly influenced by media barons and bankers alike.  Why shouldn’t we seek similar influence or even retribution from those exerting influence? This raises challenging questions about the separation of the state from the private sector and the important protections that this separation provides  – the most obvious of these is of course the need to combat political corruption.

So, I think, in this strange future, we do have to rethink how we all do business (private sector and governments alike).  The old rules aren’t working anymore – most seem to agree with this.  So let’s roll the sleeves up and work out what this new relationship, these new rules are.    Ed Miliband may be a lot of things, not all of them positive, but I for one, hope this new policy platform survives the scourges of party conference season.