Bankers have now joined politicians (post the MPs expenses scandal) and journalists (after phone tapping) as targets for public anger. As the UK’s financial problems show no signs of abating, with falling incomes and families having to go without, it is understandable that the electorate (and as a consequence politicians) are looking for somebody to blame.
The initial reaction to the Libor scandal has been to ‘bash the bankers’. Such a reaction may have therapeutic benefits, but could make a bad situation worse. Vilifying an entire profession is neither fair (there are many honest, hard working and productive bankers) or ultimately good for the British economy and its tax payers. Like it or not, the City is central to the success of the UK economy and tax payers are the largest shareholders in two of its major institutions (Lloyds and RBS). Bashing bankers may push business away from London to rival financial centres, whilst demonising the banking profession will scare talented staff away just when they are needed most. We tax payers need a thriving banking sector to generate profits which can be taxed to finance education, healthcare and social security. We also need RBS and Lloyds to succeed to get our bail out money back.
Once the immediate anger surrounding the Libor scandal dies down, the next understandable demand will be for increased regulation of the banking industry. Regulation certainly has a role to play in banking reform, but it is not on its own the universal panacea. The history of regulation is one of regulators struggling to keep up with dynamic commercial environments; of good regulatory staff being ‘poached’ to work for the business they once regulated, and of regulatory straight jackets reducing the competitiveness of British companies. We have tried state regulation before (banks are currently regulated by the Financial Services Authority) and it has been found wanting.
Government ‘watchdogs’ are one form of regulation. There is another. Some of the most successful capitalists of the nineteenth century, the Quakers, were regulated by their faith. They founded and ran very successful businesses including Cadbury’s, Lever Brothers, Rowntrees, Huntly-Palmer and Barclays Bank. Quakers were tough business people, but their faith regulated their actions and required them to behave with honesty and integrity working for the good of the company, their employees and the local community. Quaker capitalists invested in houses and schools for their workers, built libraries and doctors surgeries for local communities, and ensured employees had (for the time) generous salaries and holiday provision. Quaker companies benefitted from committed and loyal employees, and although they spent more on social costs than rival businesses Quaker companies generally outperformed and outlasted their competitors.
A twenty first century renaissance of Quaker capitalism is unlikely. But we can learn from it. We need higher standards in public and commercial life. External watchdogs and state regulators can be of some assistance, but the ultimate regulators are the conscience and faith of individuals. In the modern world not everyone has faith, but we all have a conscience. If schools can do more to develop positive consciences in their pupils, then the next generation should be better able to regulate itself.
Unfortunately conscience development is not top of many educational agendas. Schools provide Personal, Social, Health and Economic (PSHE) education lessons but these tend to be practical in nature, focusing on life skills such as producing CVs and operating bank accounts, or health concerns such as sex education and drug and alcohol abuse.
In many schools conscience development has no place in the formal curriculum, and instead is squeezed into occasional assemblies, pastoral meetings and Religious Education discussions. The development of positive pupil consciences needs a higher profile in education. Some educators shy away from conscience issues because of concerns about different faith perspectives, but whilst interfaith differences exist, it is possible to identify some universal features of a positive conscience including: integrity, honesty and a concern for others.
Schools are required to have spiritual, moral, social and cultural development policies which help pupils understand the differences between right and wrong. Such policies can be long on abstract ideas and short on practical detail. They also have a tendency to gather dust as school leaders focus on outputs that can be measured such as public exam results.
In worrying about the number of GCSE grades A*-C, or the UK’s relative position in the PISA league tables of educational attainment, we must not forget that schools have a duty to provide students with decent moral compasses fit for adult life.