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Northern Rock plus 10 – Why the ‘why’ matters more than ever

31 Aug 2017

Professor Chris Baker writes on neo-liberalism, spiritual capital and finance, ten years after the global financial crisis began

Next month sees a series of important public events – lectures, panels, seminars – curated at the Royal Society of the Arts entitled 10 Years After the Crash. This series will take stock of what we have learned about the economy, finance, globalisation and social inequality ten years after the run on Northern Rock Bank (formerly a mutual building society). This run heralded the disastrous global banking and financial crash which fully exploded the following year. Contributors to the RSA event include those who lived through the traumatic occurrences themselves; Alistair Darling, Ed Balls along with noted economists and commentators such as Ann Pettifor, Steve Keen, Martin Wolf and Robert Peston.

The event has been devised by a not-for-profit company called Promoting Economic Pluralism. As their name suggests, they are interested in developing a whole of range of perspectives and solutions on how we can prevent such global events happening again rather than relying on a ‘one-trick pony’ approach. Historically, this has been a de-regulated approach to economic activity that stresses personal freedom and autonomy as essential consumerist rights at the expense of state, and therefore public, control. This neo-liberal approach has been blamed by many for the series of increasingly numerous, disjointed and unaccountable forms of lending and debt management that led directly to the run on Northern Rock. This run exposed the trillions of dollars of bad or unsecured debt upon which most mainstream banks had based their liquidity and security.

Part of the economic pluralism being promoted by the conference is a seminar entitled Beliefs, Values, and Worldviews at Work, which is named after an innovative interdisciplinary research project devised by Dr Maria Power (Liverpool University and Good Works), Professor Peter Stokes (De Montfort University, Leicester) and myself (Goldsmiths, University of London and William Temple Foundation).

The project explores how different people, across both religious and ‘no-religion’ backgrounds, translate and negotiate their beliefs, values and worldviews in the work-based and business environment.  It analyses the impacts this has on visible dimensions of the workplace such as structures, systems and working environments, as well as invisible ones such as company ethos and ‘feel’. A core concept at the heart of this enquiry is that of spiritual capital – namely the motivating energy that we derive from our faith and/or beliefs and worldviews and which influences or public actions. We sense that the time is right to explore the potential added value of this form of capital in the workplace, because spiritual capital is not only related to issues of identity and authenticity, but is also the basis of other forms of capital – social, human and economic.

Our seminar will share early findings on how beliefs, values and worldviews impact on the business and work environment based on some pilot research conducted with English Roman Catholics in an innovative retreat setting.

Our thesis, already supported by other research, is that the more we can bring our authentic selves into the work place, including our identities and our deepest beliefs and values, the more contented, resilient, loyal and productive we will be. Frankly, this idea is not rocket science. We know how alienated and demotivated people become when they face prejudice or bullying, or simply have their creativity and individuality squeezed out by autocratic or absent leadership. Or when production processes simply stress the bottom line without accounting for the processes by which we as humans want to personally invest in what we are creating.

And yet, part of the reason for the Crash was because we forgot this simple principle. We allowed the practices of business and finance to become separated from deeper sources of ethics and values that stress the importance of trust, self-sacrifice, being connected to a wider whole, tolerance and respect. The ‘why’ question always needs to be asked. Why are we doing what we are doing? Is it creating a good environment for all? Is there a deeper purpose to what we are doing and what is it? We all need to remind ourselves of these questions, otherwise our moral compasses get disorientated, both as individuals and institutions.

Under neo-liberalism, one feels a pressure not to raise the deeper ‘why’ questions because any moral ambiguity, or stepping back to reflect, was seen as an impediment to the free and efficient flow of goods and services. It was assumed that the raising of deep or awkward questions would get in the way of increased efficiency and innovation.

10 years after the Crash there is a growing awareness that the opposite is the case. Sustainable and resilient innovation and efficiency is only possible precisely because you ask the deeper questions and do not suppress them – precisely because you look for deeper meanings that lie behind material surfaces, and do not treat the material surfaces as the only level of value.

We hope that this growing realisation, and the new leadership practices it is creating, will be a deep and global legacy arising from the aftermath of the events of 10 years ago. We can no longer create economies and financial systems that can’t be bothered, disciplined, or which indeed try to actively suppress the ‘why’ question. To do that is to create the conditions for another perfect storm of instability, conflict and a lack of hope. We need to fashion a new model of capitalism and investment that reconnects the ‘why’ to the ‘what’ – the means back towards the end.

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