The behavior of the energy companies is currently in the news leading to an excess of posturing from politicians and commentators who know (not ought to know) better.
One line of argument, spread by the so-called ‘left’ goes like this:
‘They are at it again. Those greedy companies all they are interested in is serving the needs of those nasty, self-centered, institutional shareholders. Let’s change the system, through regulation, or price controls and all will be well,’ (all will be well means election success will be ours!).
The counter argument, that of the ‘right’ takes the opposite line: ‘Look it is the shareholders who finance the company, they delegate day-to-day management decisions to the executive team, whose legal and moral duty it is to maximize returns for shareholders. Consumers can, if they don’t like the way they are being treated switch allegiance, after all nobody should be coerced into remaining with any one supplier for this would be to limit democratic freedoms.’
These are both essentially political arguments (masquerading as ethical arguments), hence the phrase political-economy. Now I need to be honest, I have more sympathy with the second view. I don’t like state intervention and, I don’t think politicians have the expertise to run companies, participate in markets etc with any degree of success. My opinions derive from my perceptions of scope and competence and, not from an ideological predisposition to any one politico-economic system.
I also agree with the sentiment that ‘capitalism may not be perfect, the trouble is nobody has ever thought of a better system.’ (I have talked with people who have lived under autocratic regimes. Believe me it is not pretty). Again my support is not based on ideology but on historical analysis.
BUT we are not interested in politico-economic solutions because their rationale is to win elections. I suspect that successful electioneering, as it relates to economics, involves the employment of four ‘cardinal sins,’ the first of which is propagated by both the left and the right, the second by the left. The third sin, again owned by both the left and the right, is concerned with the direction of our worship (idolatry). The forth ‘sin’ reveals a lack of basic understanding.
- Pretending that all manner of ills can be sorted out through the legislative and the economic system. This is nonsensical. If this were true there would be no fraudsters (corporate or individual), no cheating and no lying. Systems and laws do not instill virtue – this is the domain of theology and philosophy (actually I would argue theology enacted through faith). You can change the system all you want but if you leave the same rusty old tubs floating in it you will get the same results (C.S. Lewis).
- Pretending that customers and shareholders are two separate groups. This is a spectacular deception and one bought hook line and sinker by many pundits. Let me explain: I am both a shareholder and customer (in all probability so are you). I am a member of three pensions funds (a Legal and General tracker fund, the Universities Superannuation Fund and the Clergy Pension Fund) all of which ‘invest’ in the energy companies. Now as a shareholder, who as a clergyman, is paid a modest stipend (salary) I want the energy companies to produce attractive returns, after all my future income is dependent on it. But, as a customer I want lower charges in order to increase / sustain my standard of living. I therefore have two competing goals. The political class know that the majority of shareholders are ordinary folk and not the rich and famous, yet they pretend otherwise. This shows a lack of grace (i.e. it is a disgrace). The politicians, under this scenario, deliberately promote conflict and disunity rendering any truly imaginative, creative and holistic policy responses and impossibility.
- An allegiance to a belief system that suggests that all manner of ills can be sorted out through ownership; such a belief encourages the love and service of money / financial returns above all else. Sort out the flow of money, and you sort out society is the hollow cry of the political classes.
- Investment managers are deeply interested in the companies they invest in. They are not; they are interested in the share price. The share price and the company itself are not one in the same. A share is regarded by many investment managers as a second hand trade-able good, to be bought or sold at any time according to whether the investment manager believes the share to be over or undervalued relative to comparative shares. An investment manager whose job (and bonus) is determined by his / her annual performance relative to their peer group will not waste too much time attempting to improve the underlying performance of a given company. instead he / she will simply trade in the shares. I used to be a director of an investment management business, trust me, at least on this one.
Instead we are interested in a theological or theonomic response. In our forthcoming book ‘Theonomics,’ we offer six principles as a guide for economic decision making:
- Gift (the idea that all of life is a gift)
- Community (not commune)
- Solidarity (we are all in it together – your good is my good)
- Justice (restorative and distributive)
- Subsidiarity (the idea that decisions should be taken at the ‘local’ level), and,
- Service (after all the Son of Man came to serve not to be served)
I also think that balance and prudence should play a big role in theonomic thinking.
I don’t necessarily have a solution to the ‘energy crisis,’ this is not even my aim, but I do hope that Christians and other people of faith will start to think in new and creative ways. This will involve challenging the politicians on many levels but most of all through the fertile fallacies they continue to cultivate. Politicians and economists tend to offer sticking plaster solutions where radical surgery is required. In a sense they are compelled to do so because their ambition extends only as far as the next election. Christians, by contrast, are presumably motivated by nothing less that the breaking in of the ‘kingdom on earth as in heaven,’ and herein lies all the difference in the world!