Economic overreach

We live in a world where (talking trends rather than specifics) the geographic span of economic connections has expanded extremely rapidly so that they have come to stretch beyond the reach of community capable of effectively moderating/ controlling them.

We refer to this phenomenon as economic overreach.

For example, it may not be possible to know whether a moile phone manufactured overseas with components and materials coming from many sources meets environmental and labour standards. This may be due to distance, cultural, governance or other factors. In such circumstances it is possible for economic actors to perpetrate injustice without censure from community mechanisms.

Examples of such community mechanisms range from local chatter/ gossip to media to state regulation or international treaty obligations.

The question of economic overreach has grown up is very interesting to us but not of direct relevance here. Writers on the subject include Rosenstock-Huessy (especially in his work Out of Revolution e.g. p.496 (Wipf and Stock, 2013)), Polanyi and Berman.

The result has been alienation: we have become distant from the decisions and ethics inherent in the goods and services all around us – it has progressively become more and more difficult for us to know about the impact upon the world of the things we buy.

‘Before’ economic overreach

By contrast (and again talking in generalisations) economic interactions in, say, earlier times may be characterised as having goods and services circulating much more within a local setting, often mainly face-to-face within villages, say.

In such settings we suggest that individuals were much less likely to separate their moral being from their marketplace activities. This is because any unethical behaviour would occur in a community setting and therefore be known about (though personal values would still play a role).

As economic overreach has grown up

We believe that out of these two aspects it is the community element that has altered most, rather than personal values.

The span of economic connections has increased, without the creation of community structures and tools capable of supervising them. New mechanisms are needed to invigorate and support community.

A spectrum for economic activity

Activity in the economy will lie on a spectrum:

• at one end there is economic activity that is subject to fully adequate community controls. There may be community controls exercised by actors external to the transaction (e.g. regulation). There may be community controls exercised by actors taking part in the transaction (e.g. Fairtrade).

• at the other there is economic activity that is not subject to any meaningful community controls. An example might be metals traded on exchanges without any (meaningful) information about source such as conditions for miners, relationships to local conflicts etc.

Simplifying to these two extremes, we can now start to build up a more detailed picture of the types of ethical mechanisms that operate in the economy.

Mechanisms for providing ethical controls in the market

A number of mechanisms currently provide community ethical controls:

• the influence of the nation-state is wielded through law and regulation. This is a powerful tool, yet see big society and our solution for a discussion of its limitations along with suggestions of how to move beyond the power of the nation-state to more effective but similar mechanisms;

• individual actors may exert ethical influence within the economy through behavioural mechanisms such as ethical consumerism, ethical business practices and ethical investment. These are important mechanisms but their limitations are discussed in behaviour vs structure. Note that a mechanism such as Fairtrade is capable of controlling part of a market but will leave the rest ‘unethical’ (except for the unlikely event that all consumers are ethical). New structural mechanisms are needed (which provide new frameworks which must be ‘filled out’ with ethical behaviour). We unravel these new solutions through the pages on cooperatition and big society; and/ or

• civil society (see behaviour vs structure), which augments and shapes the behavioural mechanisms.

What happens outside the ethically controlled areas of the economy?

The task of interest to us, therefore, is to think about how we may introduce ethics into those areas where there are currently inadequate control mechanisms.

Where to now?

In order to do that we first consider whether we should investigate these unethical areas with a behavioural or structural approach.

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