The ‘moral economy’, the market and politics

The notion of an ethical foreign policy developed by Robin Cook, something that came to an abrupt end with 9/11, and more particularly the impact of the financial crisis since 2008 and the scandal of MPs’ expenses raised important questions about the place of morality in politics and business.  It has become almost essential for politicians to ‘name and shame’ those who, even when they work within existing rules, have offended against the public’s sense of what is ‘right’.  This hair-shirt approach to politics has seen bankers, MPs, journalists, newspaper editors and proprietors and large corporations attacked, often by self-serving  and ‘holier than thou’ politicians for breaching the ‘contract’ between ‘the people’ and governing economic and political elites.  This revival of the notion of a ‘moral economy’ in which there are agreed, but generally ill-defined, standards against which people’s actions can be judged, has seen the idea of the free market come under sustained pressure to become more ethical in its operations.  One of the things that is evident from past experience is that when the moral economy and the free market come into conflict, it is the free market that emerges triumphant.

In part this is the result of the intense difficulty of making ethical judgements on which people actually agree.  Take the question of taxation.  Should people and business pay the taxes that the rules state that they should pay?  Most people would agree that they should.  However, when people are asked whether people should pay the taxes that are due from them following the ‘spirit’ of the rules as well the rules themselves, then the question become more problematic.  What do people understand by the ‘spirit’ of the rules and does it actually have any meaning at all?  If the rules allow people to avoid paying taxes, even aggressively avoid taxes, their actions are perfectly legal and calling upon the ‘spirit’ of the rules to get them to pay more taxes is morally repugnant.  If you think that people should be paying more tax and are using the rules to avoid paying more tax, then change to rules rather than using what can only be called moral blackmail to get them to divi up.  The rhetoric of morality is an excellent stratagem for rousing popular anger against those who offend public sensibilities and is often manufactured by politicians keen to show they are on the people’s side but rules always ultimately trump morality even if they have a moral grounding. 

Take the question of fracking and the so-called ‘dash for gas’. The most important role for the state is to provide security for its people and energy security is of particular importance as Britain is increasingly reliant on imported energy that could be turned off.  Here again there is a clash between the moral economy and the market.  Those opposed to fracking fall into different types.  There are those who are opposed to any fracking arguing that it will not resolve the problem of global warming—methane is released as part of the fracking process and is a powerful greenhouse gas—and that we should be looking at renewable energy to resolve the problem of energy security.  There are those who may or may not be opposed to fracking but don’t want it on their doorsteps.  There are those who are agnostic on the question but are concerned about the environmental effects of fracking and are not convinced that the regulations controlling exploration and extraction are sufficiently robust.  On the other side, there are those who argue that it will reduce energy bills, create jobs, contribute (along with nuclear and renewables) to energy security and will still allow Britain to reach its climate change targets.  Whatever the moral arguments for or against fracking, the critical issue for a state is fulfilling its imperative to provide people with security and that suggests a market solution—fracking may resolve a threat.  There may be moral issues about fracking that for some are absolute but the reality for most people is whether the lights and heating stay on or not. 

The problem for politicians, even if keen to use the rhetoric of morality, is that politics is the art of the possible not the art of moral absolutes.  Although there often is a convergence between what is possible or necessary and what is right in politics, if there is a choice between the two, what is right takes second place whether the decision made is ‘right’ or not.