Sir Evelyn de Rothschild discusses actions to achieve Inclusive Capitalism

Sir Evelyn de Rothschild discusses actions to achieve Inclusive Capitalism
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

Sir Evelyn de Rothschild
Chairman, E.L. Rothschild LLC

Since the financial crash, much ink has been expended in the debate over the future of capitalism - and rightly so. But the political and journalistic clamour will never be able to inspire the change that is required unless our next steps are underpinned by a firm grasp of the over-arching ethical problem.

At root, the crisis of the past 20 years reflects an ethical pathology, a failure to constrain appetite with moral consideration. The system is absolutely not beyond repair. But we must be much more deliberate and urgent in our action if we are to achieve meaningful change.

It is not enough, for instance, to train young recruits in the correct spirit; the much harder task is to persuade the current leaders of banks and other financial institutions to behave differently. Old dogs must unlearn their tricks.

It goes without saying (or should do) that the banks must act in accord with the law laid down by the government. But they should also heed the wise warning of the Bank of England Governor, Mark Carney, who has identified an "ethical drift" in the past, in which "personal accountability was lacking" and "a culture of impunity" engulfed the financial sector.

The Governor chose his words with care. Better regulation is part of the solution, but it will only lead to transformative change if it is enacted within the right culture. This means educating teenagers about the broader nature of global finance and the social context in which markets succeed or fail. In today's schools, such issues are often taught in the most cursory fashion. But they surely deserve as much classroom time as the political system and the environment.

Every child should have a grounding in the ethical content of financial risk, profit and loss as well as the potentially colossal moral consequences of decisions taken by men and women on one side of the world upon those on the other side. This is part of rounded citizenship in 2015.

It is also essential that those who join the financial sector not be driven exclusively by the desire to get rich quick. What has been conspicuously lacking in the financial world is a concern for the long term. The sense of collective pride in a company's strategic performance has been supplanted by an entirely tactical hunger for a slice of annual profit share.

Action that promotes a sense of participation and collective endeavour is critical. That said, it is no good yearning for the restoration of a half-imagined golden age. The technological revolution, the tide of globalisation and the massive expansion of worldwide opportunities for investment have spawned a totally new landscape.

What this new landscape lacks is an ethical framework that is fit for purpose in the 21st century. The shaping of this inclusive capitalism has only just begun.

Popular in the Community

Close

What's Hot