Mark Carney, Values and a "Nicer" Capitalism

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 There is an ongoing debate about whether we can make capitalism “nicer'' or “gentler” in order to address the issues of economic inequality, climate change and other social ills.  For some the answer is a better capitalism and a better set of capitalists and for others it is the change in economic systems to socialism, mutualism or something else.


Recently, the Canadian Mark Carney, ex central bank governor of Canada and the UK,  has written a book called “Values: Building a Better World for All”.  In the book, he argues that we need to shift from market society to market economy.  The market must not dominate all of society and market decisions must reflect values other than mere financial profitability.


Laurence Miall writing in the Jacobian argued that this will not work (Miall, 2021).  Miall’s basic critique is that there is a lot of wishful thinking about capitalists getting better, greener, etc...but not much evidence to back it up other than a few anecdotes.  He is also skeptical, along with others, that telling capitalists to forget (or at least minimize) the shareholders and focus on a broader set of objectives is also doomed to fail. A particularly telling quote from Milall is , “Carney writes in a moral register, but capitalism is not swayed by moral arguments.” (Miall, 2021).


There are also critiques on the right.  Writing in the National Review, Phillip Cross argues that Carney’s book is just bad economic logic.  A long quote is worth referencing here, Cross writes, “it is revealing to compare the values Carney claims are necessary to repurpose our economic and financial systems with those that the Nobel prize–winning economist Edmund Phelps shows are key to innovation and economic growth. Carney lists fairness, solidarity, resilience, responsibility, sustainability, humility, and dynamism. Phelps emphasizes independence, initiative, achievement, and acceptance of competition. Carney’s values are arbitrary and politically motivated…” (Cross, 2021).  Cross believes that Carney simply wants more government intervention and is pushing the wrong set of values that have no empirical justification. It should also be noted that it is unclear if Cross believes that we are facing problems such as climate change or inequality as he does not address this point.  


 Both critics focus on the fact that Carney’s book is short on empirical evidence that his proposed solutions will work.  Both also believe that Carney has not offered any real solutions.  Not surprisingly, the critics widely diverge in their proposed solutions.


How would an ILE approach address this conundrum? I think we would start with examining the institutions, both formal and informal, that seem to lead us to the path of where we are and then explore how alternatives might work. Al Schmid did write and think about how we carry “institutions or norms” in our head and how that impacts the decisions we make.  In this sense, perhaps, capitalists can be made to change their minds about how they ultimately decide on how much to pay their workers, how to treat their supplies, what they buy and invest. Schmid would at the same time remind us that the institutional system determines who is a cost and who is buyer or seller and this leads one to think about putting a price on nature is important and can lead to major changes in how the current economic system evolves and even more practically what is an output and input. Schmid’s thinking does not preclude that a total rethinking of the economic system could also be in order to resolve the issues of addressing climate, economic inequality and other social ills.


Perhaps even more striking is whether we actually agree that these are problems that need to be addressed and resolved.  Institutional analysis will be difficult in any scenario if we don’t even agree on the basic situation or problems we are facing.  I would argue that this may be the most basic problem revealed by the critiques of Carney.  Some on the right may argue that capitalism is the key to solving these types of problems, but in fact we don’t have capitalism today and what we actually have is a form of crony capitalism that needs to be addressed with too much government intervention.  This is not the argument being put forward by Cross at least directly.  Those on the left are far more likely, especially now, to argue that capitalism is a flawed system and needs to be replaced by a different institutional system such as socialism or mutualism. Carney is some third way approach where capitalism remains, but in a significantly reformed manner.  This is one of the key institutional debates of the 21st century.



https://www.penguinrandomhouse.ca/books/669023/values-by-mark-carney/9780771051555


https://www.jacobinmag.com/2021/08/mark-carney-capitalism-neoliberalism-value-book-review


https://www.nationalreview.com/2021/04/book-review-values-mark-carney/

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