As the energy companies raise prices just as the temperature is falling, is it time to ensure fairness is at the heart of business if we want to avoid another financial crisis?
It is unclear whether Ed Milibands proposal to cap energy prices will work or whether this is just a political move to attract voters (see FullFact for the stats) . However, the response from the energy providers comes across as bullying (the energy companies have threatened to raise prices ahead of Ed Milibands proposed price freeze).
Maybe it is time for government to promote a different ethos in industry, one characterised by fairness.
The Nobel prize winner for economics, Jospeh E.Stiglitz, suggests the current neo-liberal approach favoured by government is undermining a fundamental value many support, a sense of fair play. Stiglitz argues if financiers that lay at the heart of the current financial crisis felt such a basic value their actions should have led to feelings of guilt as they engaged in predatory actions that damaged individuals lives. He suggests few felt any sense of shame or guilt and that where making money is concerned there is ‘moral deprivation’, meaning something is wrong with the moral compass of so many working in the financial sector, and that this has changed the norms of society, allowing what might once have been deemed as unacceptable as acceptable when justified by financial gain. It appears moral deprivation is clearly not confined to the financial sector if the energy companies and governments response is anything to go by.
However, faith in under regulated free markets is unshakeable across government, and is seen by many as the only way forward. However, the re-branding of a basic need for life, such as warmth, as nothing more than a commodity to be bought and sold ignores some simple ‘free market’ truths, pointed out by the economist Adam Smith several hundred years ago; the purpose of the free market is to generate wealth for those who own the means of production, or the ‘masters of mankind’ as Smith christened them, it is not a charitable endeavour but a single-minded system driven by cash not compassion, who Smith suggested had a ‘vile maxim‘ of “all for ourselves”. The ‘masters of mankind’ in Smiths time were the merchants and manufacturers who supported policy that enabled them to make more profit, they were not concerned with how such policy and their actions might impact on others.
Today the needs of the ‘masters of mankind’, such as the energy providers, appear to be the governments primary concern, not the ordinary citizen on the street who works hard yet is struggling to afford even the most basic need in life. The rebranding of ‘energy’, and almost every basic resource required to sustain life in the UK, as a commodity, has reduced business to a series of faceless transactions. The truth is as winter approaches many in Britain are already wondering how they will afford to keep warm this winter, where their ‘choice’ will between eating and heating.
Have we learnt nothing from the financial crisis? Moral deprivation in business harms us all, the very fabric of society, as business and government continue to focus on ever-increasing profits year on year.
How much more could have been gained for us all had the response been more positive, kinder and willing to at least try to engage in a different way of being.