The moral and ethical responsibilities of capitalism and business
Reinventing capitalism will be a work in progress for years or even decades, but the great transition has begun.
- A Kaletsky, Capitalism 4.0
A debate
about the moral limits of markets would enable us to decide, as a society,
where markets serve the public good and where they don’t belong.
- M
Sandel, What Money Can’t Buy, The Moral Limits Of MarketsA house of cards
The collapse of African Bank should not surprise
anyone. What is surprising and ethically debatable is the number of asset
management companies, investors and even banks who bought shares in this
company. Of course they got a good return as did the handful of senior managers
at the bank who each reportedly earned about R40 million a year. The banks
former chief risk officer made more than R50 million in share options and are
R35 million in salary and bonuses according to the Sunday Times. If we ever needed more evidence of rampant capitalism and the need for a new model, we
have it with ABIL.
I can recall doing a training session at African Bank about 20 years ago when during the tea break some of the delegates brought staff members to show me their payslips. The slips displayed their
net salary within brackets. In other words, they were rolling with so many
loans that their monthly salary was negative. I learnt then, and I know this
process has since changed, that ABIL had an arrangement with the government
salary system whereby repayment on loans would be automatically deducted from
government and parastatal employee salaries. One can imagine the selling that
went on - like dogs in a butcher shop.
The other obvious indicator of collapse, aside from
the rolling loan phenomenon, was the exorbitant, actually obscene, interest
rates being charged. So we all made a lot of money at the expense of the poorly
educated poor. Now we are surprised that the wheels fell off.
Of course this further disempowering of the poor
has taken place for decades in the furniture retail industry. That ABIL then
bought Ellerines probably sped up the collapse
of the house of cards.
Time for reflection
What do we learn from this sad story? For certain
every brand and its company should spend a day reflecting on its purpose and
whether it and its products and services are actually creating and adding genuine
and sustainable value.
Perhaps the following questions could assist during
this proposed time for reflection:
- Are our products and services healthy?
- To what extent is there a disconnect between the advertised promise
and actual delivery?
- Do we subconsciously
perpetuate a social class mind-set within our organisation structures?
- Are our own people developing significantly on an annual basis?
- Are they happy?
- Are our customer’s truly satisfied?
- Are social and environmental concerns implicit within our brand
offering and behaviour?
- Do we represent and celebrate cultural diversity?
Professor of
Government at Harvard University, Michael Sandel has stressed recently that
market reasoning empties public life of moral argument. He warns us that our
reluctance to engage in moral and spiritual argument, together with our
embrace of markets, has exacted a heavy price: it has drained public discourse
of moral and civic energy, and contributed to the technocratic, managerial
politics afflict many societies today.
Let's make something positive come from the African Bank collapse.
Let's not just point a finger but remember, as my mother often told me, that there are three fingers pointing back at you
Sandel urges us to rethink the role and reach of
markets in social practices, human relationships and everyday lives.
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