Tuesday 20 August 2019

Free market and free love have landed us in a mess

The stormy conditions in the world's economies have been blamed on the greed of the free markets
The stormy conditions in the world's economies have been blamed on the greed of the free markets

David Quinn

The other day two padres used the religious ceremonies marking the start of the new law term to launch attacks on the 'greed' that has helped spark the current financial turmoil. They were Bishop Seamus Freeman and Fr Godfrey O'Donnell, the head of the Romanian Orthodox Church in Ireland.

Bishop Freeman denounced greed as a form of 'self-indulgence', while Fr O'Donnell looked forward to the end of "raw capitalism... with its appalling greed, recklessness, lack of accountability and complete disregard for any ethical behaviour."

Is greed part and parcel of capitalism? As Sarah Palin might say, 'you betcha'. But let's not delude ourselves into thinking that greed is a feature only of capitalism and that if we got rid of capitalism we'd get rid of greed as well.

What has also helped to land us in our current dire predicament is greed on the part of the State and the Government. Right through the Celtic Tiger years the Government pushed public spending to unprecedented and undreamed of levels. It did this in no small part to win votes.

It committed us to levels of public spending that could only be maintained if the tax revenues of the boom years could also be maintained and that was never going to happen. Next week's Budget will see us paying the price of State excess.

So yes, greed was and is a problem but greed can affect any economic system, including socialism.

What this means is that we're faced not so much with an ideological problem as a moral one. To put it in an even more unfashionable way, what we're faced with is a question of character. Bad character can destroy even a good system.

This topic was raised in the left-of-centre 'Prospect' magazine recently. The person raising it was Richard Reeves of the left-of-centre think-tank, Demos. He thinks the left have neglected the question of character because it sounds judgmental and patronising, but Reeves says leftists like himself are beginning to cotton on to the fact "that inequality of character may now be as important as inequality of economic resources".

Reeves says there are three key ingredients of a good character, namely: "a sense of personal agency or self-direction; an acceptance of personal responsibility; and effective regulation of one's own emotions, in particular the ability to resist temptation or at least to defer gratification".

Were senior bankers able to resist maximising their bonuses through irresponsible lending practices?

No. Were shareholders able to resist maximising their dividends by maxing out this year's profits at the expenses of next year's? No.

Was the State able to resist pushing up public spending past the point of sustainability? No.

Across the board people were unwilling and unable to defer gratification and too many people in positions of great responsibility behaved, literally, irresponsibly.

There is now a lot of perfectly understandable talk about regulating the markets and especially the banks. If people won't regulate themselves because they lack the character to do it, then others will have to do it for them.

In a way, the Irish experience of the last 10, 20 and 30 years has been an experiment in free markets of every kind. This has been true at both the economic level and the social level. The right has urged deregulation of the markets while the left has successfully pushed for the deregulation of personal behaviour, especially sexual behaviour.

The right has pushed the State out of the marketplace while the left has pushed the State out of people's 'private' lives. More tellingly, it has wiped out traditional sexual morality which was always more effective than the State at regulating people's sex lives.

The problem is actually more serious at the personal level because hardly anyone, in practice, believes in an unfettered market economy -- the only dispute is over exactly how unfettered they should be -- but lots of people believe that no restraints, either through law or convention, should be placed on our sexual behaviour.

This is despite the overwhelming evidence that this particular free market has been a disaster leading to thousands of abortions each year, to thousands of children being born without a father each year, to a huge rise in the number of STDs, to a huge increase in marriage breakdown.

The free market in sexual behaviour has had a particularly disastrous effect on the family which Reeves calls 'a character factory'.

He says that the family has fared very badly against what he describes as the liberal assumption "that the individual is entitled to lead his or her life only by reference to their own desires".

Essentially, no free market can work properly unless people are capable of regulating themselves properly. That requires character.

In the absence of good character we have to resort to lots and lots of externally imposed regulation instead, and that applies as much to our personal lives as it does to our economic lives. If we hadn't so stupidly dismissed character as patronising and judgmental our current mess wouldn't be as bad as it is. Will we learn the lesson?


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