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Of oligarchs and ethics

In the American comedy series Curb Your Enthusiasm, Larry David greets pieces of obvious information that reflect badly on him by throwing up his arms and crying: “Who knew?” In truth Larry David always did know, of course.

In the American comedy series Curb Your Enthusiasm, Larry David greets pieces of obvious information that reflect badly on him by throwing up his arms and crying: “Who knew?” In truth Larry David always did know, of course. It’s funny because he’s a grown man who just can’t ever accept that he’s ever done anything wrong. He’s a big kid who wants to avoid responsibility. His need to remain a child is, a psychiatrist might say, a way of refusing to be a moral agent.

I was struck with a series of “who knew?” moments when reading about the end of the carnivalesque trial involving Roman Abramovich and Boris Berezovsky that recently ended in London. (Why was this gaudy circus held in London? I don’t know, but it has raised some chuckles in a cold winter.)

Berezovsky’s QC described Abramovich as “thoroughly dishonest and cynical”, and a story about Berezovsky attending a meeting in a dressing-gown as “concocted”, designed to make him out to be a godfather figure.

Abramovich’s lawyer responded by calling Berezovsky “dishonest”, and afflicted with “vanity and self-obsession”.

Well, who knew? It’s easy to shrug and laugh. They’re a bunch of cartoonish rogues, even if none of them ever broke any laws. But there’s a more serious side to all of this. Saying “who knew?” is to say that, if you create the sort of bear-pit capitalism as was created in Russia in the 1990s, what do you expect? In the Wild West, these are the sorts of people who rise to the top.

If you have capitalism, you get oligarchs, or something like them. If you deregulate you end up with fraud, cheating and greedy people enriching themselves at the expense of the rest of us? Who knew! Accept it, say the enemies of red tape and regulation, they’re the price you pay for encouraging “wealth-creators”.

Well, ask the Russians if they want to accept this. The head of a major business school in the country recently admitted that he let in students who were from organised crime families. Even in Russia that has caused some soul-searching.

At the same time the well-fed QCs were summing up in court, Nick Clegg was giving his speech championing a “John Lewis economy”. Clegg looks like the sort of bloke who spends a good amount of his weekends in John Lewis, but his love affair goes beyond the quality of the store’s soft furnishings. He was talking about the fact that it is an employee-owned firm.

Clegg wants a more moral economy, and what he means by that is one where the powerful don’t enrich themselves with bonuses and outrageous pay-deals and employees get more of the profits they helped create. The usual gang of critics have lined up to say that this is wishy-washy, naïve, cloud cuckoo land stuff. But they’re the Larry Davids of economics, who pretend to believe that markets are amoral. They’re ethical morons who duck responsibility and shrug.

And not only that. Employer-owned firms might be cuddly, but according to the UK Employee Ownership Index published by law firm Field Fisher Waterhouse, they have also outperformed the FTSE All-Share by an average of 11% a year for the past 18 years. Their opponents are not just motivated by a childish politics bereft of morals, but they also prefer ideological purity to profit.

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