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Supply the moral vision

by
08 November 2013

Forget the bogey of the command-economy: the 'free market' urgently needs ideas of the common good, argues Peter Selby

"THERE were some really good ideas. They didn't work, of course, but they were really good ideas." I was in conversation with the Bishop of the Evangelical Church in Saxony, a part of Germany that had been ruled by a Communist government before the lifting of the Iron Curtain. I had asked him whether there were things that he missed from those days, now that he was part of a united Germany.

He was not romantic about life under the Communist regime; he was clear about the things that were hard; and he was a person of integrity, who had, for instance, refused to take advantages of some of the perks he might have got in virtue of his position - such as an ability to travel to the West. But that did not make him starry-eyed about how things were under the new dispensation.

What did he miss? Well, the jokes were one thing: the black humour that enables people to preserve their inner freedom when some external freedoms are taken away. But, more seriously, he missed some good ideas - even if he was clear that they did not work.

I remember one example in particular: there was a policy - a good idea - that food prices should be set (such was the nature of the command economy) sufficiently low so that buying food was not a problem. But there was another policy, another good idea, which was that people should be encouraged to grow their own vegetables.

So the price you got for your vegetables, if you took them to the greengrocer, was set, so that it was financially to your advantage to grow more food than you needed. But there was the problem, the reason why these good ideas did not work: if you made it financially advantageous to people to grow their own produce, and set food prices deliberately low, you created a situation where what people could do - and did - was to grow the produce they needed for themselves, and then sell it to the greengrocer - only to go back later and buy it back more cheaply; clearly an unintended consequence.

 

THIS is what we have all been conditioned to think; and stories like this only confirm our prejudices about command-economies, where thousands of civil servants sit at desks fixing the price of everything from tomatoes to televisions. But my East German friend was not speaking of these "good ideas that didn't work" to mock them; nor was he asking to return to such a system.

What he was noticing - and we would do well to notice - is that the society he had been part of had, for all its shortcomings, some "good ideas", that is, ideas that expressed some kind of moral vision. That they had not worked was a problem, but that did not make them without value.

 

WE ARE used to hearing that our system works. Nevertheless, I doubt whether we shall look back on a period when elderly people - holding on to cups of tea to keep warm, for fear of the increasing energy bills - were told by ministers to wear another jumper as a time when there were "good ideas" that just happened not to work.

We have created for ourselves - conveniently, for those who profit from the fiction - a bipolar world, in which there is either the command-economy of totalitarian states, or the "free market", in which efficiency and liberty walk confidently hand in hand.

In that world, Ed Miliband's proposed energy price-freeze is easily mocked as a nostalgic return to "socialist statism", while the only system that works is accepted as one in which the price of energy is fixed by the "free" operation of the market.

On that basis, we know that the "fair" price of anything is - well, just what the price happens to be. As the East German bishop was increasingly feeling, the choice seemed to be one between "good ideas", which (he observed more in sorrow than in anger) did not work, and ideas that are declared to work, even when they do not, and that, in any case, are devoid of moral vision.

 

WE ALL know that the only sensible response to the question whether, compared with a command-economy, you prefer a "free market" would be the one Gandhi gave when he was asked what he thought of British civilisation: "It would be a good idea."

What we are observing at the moment in the case of energy prices - although it applies much more widely - is anything but the operation of a free market: prices are fixed by small groups that are responsible to the owners of their companies, or else, in the case of nuclear power, by secret negotiation between ministers and companies who are engaged in a thinly disguised game of chicken.

Those price-fixings and secret negotiations are not only not free, in any recognisable sense of the word: they are conducted completely without moral vision, because there is nobody in the discussions charged with expressing such a vision with authority.

What makes the increasing interest of the Churches in a moral economics so important is that our future (not to exaggerate) lies in finding a way to bring some notion of fairness into the market process, and into the consciences of those with power in it.

To do this requires that we stop frightening ourselves with the totalitarian experience of the past century, and instead challenge ourselves with the increasing experience of poverty and inequality which blight our very well resourced society.

The shortcomings of the markets within which we live are not only things for good people to think about: they require resistance in the name of the common good, for the sake of our fellow citizens and future generations.

It is clear that we do not have unlimited time. If those with power in the market persist in exercising their "freedom" to pursue their own gain, and in resisting the claims of the common good, 2008 will not be the last or worst disaster to hit us.

Dr Peter Selby is a former Bishop of Worcester and an interim co-director of St Paul's Institute (www.stpaulsinstitute.org.uk).

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