Well, folks, we can all relax: according to the US Federal Reserve not long ago, the world economy is ‘leveling out’. Break out the bubbly, take out that second mortgage, and shift the kids back from Garden Variety High to Golden Grammar School – the markets are happy again.
Never mind that many government and private forecasters were blind to the ‘global meltdown’ in the first place. Never mind that some of them contributed to it, either through feverish addiction to economic ideology, or plain old-fashioned greed. All’s well again, and the emperor’s new clothes are dry cleaned.
Even if they’re right, it misses the point. What’s missing from the equations of many governments and corporations isn’t financial nous – it’s what we might call economic largesse. It’s a willingness to sacrifice private profit for public good; to invest in human flourishing, rather than investing in investment.
This, of course, isn’t a new doctrine. But it can be a radical one, in times when politicians, business leaders and ordinary citizens are all wearing banknotes for blinkers.
A good example of this moral capitalism comes from John Ruskin, who was born 190 years ago in England. The son of a well-off merchant, Ruskin was for a time the most beloved, respected public intellectual of Victorian Britain. He wrote on art, aesthetics, geology, botany, household management and education. He inspired guilds, schools, and the striking works of William Morris, and the Arts and Crafts movement.
But his most controversial works were his economics lectures. His father thought he’d be ridiculed for poking his nose into men’s business, instead of the more ‘feminine’ subjects of art and nature.
And his father was right. He was mocked by many commentators as ignorant, wooly-minded and unrealistic.
On top of this, he had conservative, repugnant ideas on democracy, suffrage and feminism. He was no radical. And, to our eyes, his famous Victorian prose seems meandering and vague.
But despite their flowery, sometimes-muddled expression, some of Ruskin’s ideas were prescient then, and relevant now.
In his book Unto This Last, the conservative redefined wealth: ‘there is no wealth but life,’ he famously wrote. For Ruskin, the Victorian obsession with profit wasn’t generating wealth – not health, happiness, beauty. Instead, it was creating sickness, anxiety, ugliness – what Ruskin called ‘illth’.
His point was a good one: the laissez-faire fixation with private gain was destructive. In their chase for profits, many industrialists and small-businessmen were crushing their workers, producing defective goods, and spoiling the countryside.
It’s not hard to see the parallels with today. The environmental crisis is partly the product of systematic, selfish marketeering, which seeks infinite growth in a world of finite, fragile resources.
The appalling conditions of third-world workers mimic the squalor and misery of Victorian factory-employees and miners – eking out a living, while others benefit from their subsistence life, and expect them to be grateful.
And, in the short term, the global economic implosion is obviously the result of blind, self-interested, unregulated profit-seeking.
As for defective goods – ever tried buying a durable DVD player recently? Our ever-growing landfill is heaped-high with obsolete, broken, inexpensive, often-toxic imports.
This is all Ruskin’s ‘illth’. And it makes a mockery of wealth: billions of dollars concentrated in a few wallets, while ordinary workers and the environment suffer. The same forces that produce beautiful cars, bags, clothes, also lead to industrial ugliness on a planetary scale.
So what to do?
Ruskin had many unworkable suggestions. He recommended, for example, that workers should be paid less, but with more predictable, ongoing hours. And he occasionally argued against leisure time, in case it was filled with idleness and trivia. I can’t imagine too many unions accepting these – and rightly so.
A more striking idea was that of duty and sacrifice. And it concerned, not workers, but bosses: managers, owners, CEOs.
His idea was simple. Many of our most esteemed professions involve sacrifice. We expect doctors to do grueling shifts in pursuit of health. We expect priests and ministers to miss out on family life or riches in the service of God and community. And from soldiers, we ask the ultimate sacrifice: their lives.
Yet from our businessmen and merchants, we expect selfishness. We believe, as did the Victorian free-traders, that ‘greed is good’ for our industrialists and high-flyers, and for the country. And we use the same logic for shareholders.
Or at least, some of us used to believe this. As the global meltdown suggests, selfish individualism can be horridly destructive. It can blind us to the consequences of our trade, and cause untold, cascading damage.
This was why Ruskin sought to raise the ambitions of traders. For them, the time had come to discard all they’d been taught; to lay aside their greed and selfishness, and adopt a mindset of honour, duty and sacrifice. ‘In true commerce, as in true preaching, or true fighting,’ he wrote, ‘it is necessary to admit the idea of occasional voluntary loss.’
Note he says ‘voluntary’, not accidental or forced. He means simply this: sometimes, in the interests of workers, the environment, or the country at large, our wealthiest should deliberately, thoughtfully lose money. ‘The market may have its martyrdoms as well as the Pulpit,’ he continued, ‘and trade its heroisms as well as war.’
In essence, Ruskin wasn’t offering a ‘roadmap’ for financial solvency. He was trying to humanise the market. He was asking economic leaders to raise their moral aspirations, and accept less, so that the broader community might have cleaner air, better goods, or higher wages.
With his cap on executive salaries involved in the bailout, US President Barack Obama recognises this: it’s fiendish for executives claiming hand-outs to profit while ordinary people suffer. They should sacrifice their private gain for public profit. Wayne Swan's discussion of caps in Australia have the same import.
What’s disappointing is that this surrender must be enforced, rather than freely given.
Perhaps a new generation, accustomed to global recession, might learn the value of sacrifice over selfishness. They might learn to live with less, while their industries green the countryside, or feed the families of the poorest here and abroad.
In Ruskin, we see an unlikely global financial advisor: an heir to a fortune, who lost it in philanthropic schemes, instructing today’s Forbes 500 in money-management. And, admittedly, notions of duty and honour are no ‘magic bullet’ for systematic economic crises.
But Ruskin’s point, almost two centuries since his birth, remains a vital reminder: that a healthy economy is for promoting wealth, not just making money.
I was wrestling with Nikos, and he tripped me over. 
