The sense that stewards of capital can support positive enhancements to life – human or otherwise – rather than simply seeking financial profit has gained significant traction. Increasingly, governments are regulating to encourage and support such shifts. This is happening not only domestically but also internationally. Young people protest that not enough action is being taken, and their grandparents agree. The media, epitomised by Sir David Attenborough, informs both mind and emotion.
These trends provide some context for the 2020 BBC Reith Lectures. The lectures add an intellectual voice to the widespread calls for change; the voice of a policy-making insider to public expressions of dissatisfaction.
Dr Mark Carney, having been until recently the Governor of the Bank of England, is well placed to understand the nexus of regulation and capital. In these lectures, he described how important this nexus is in influencing social norms and in driving behaviour, and how the development of knowledge and understanding can affect our priorities.
I believe these four lectures provide a clear and well-reasoned exposition of the context for changes in financial regulation and investment opportunities. They provide a context for appraising the Great Financial Crisis, the pandemic and fears about the environment.
In the lectures Dr Carney guided us through a historical and philosophical journey to the predicaments with which we have been confronted during the last decade.
He explained how Adam Smith’s “moral sentiments” turned into “market sentiments”, how from the time of Reagan and Thatcher societies’ values became equated with financial value, and how this contributed to this century’s crises of credit, Covid and climate, and how we can turn this around.
These issues are critical to our understanding of some of the changes which surround us. There are many others too which are driven by human ingenuity in data and gene sciences.
They are critical to understanding our investment choices.
The lectures contain a great deal of detail and many references to great thinkers of the past. I have edited them substantially with the aim of making the points more succinctly while trying to avoid losing his social and philosophical grounding.
At the risk of having omitted too many references, I refer readers to the BBC where both recordings and transcripts can be found.