Business and Society

Lord Parekh Excerpts

Wednesday 12th June 2013 Lords Chamber

[Lord Parekh]

My Lords, it is a pleasure to be participating in a debate initiated so eloquently by the noble Lord, Lord Sacks, and in which my good friend the noble Baroness, Lady Bottomley, spoke so wisely. I want to concentrate in the next two minutes that I have on the paradoxical relationship between business and society. Business simply cannot survive without three conditions. One is an educated workforce and skilled personnel, which society provides. Another is a well regulated market with a civic morality, which only society can cultivate and nurture through its institutions. It also requires a well regulated state, which only a good society can sustain.

Those three conditions constitute the invisible capital that business requires in order to survive. Business depends not just on the financial capital that businessmen produce, but on the moral, cultural and political capital that society at large provides. Business, therefore, is vitally dependent on society, and yet it has the constant tendency to undermine all those three conditions on which it depends for its survival. It is used to counting the money and therefore does not see the value of the invisible capital that society’s moral and political institutions provide. It takes a short-term view of things, and institutions, moral institutions in particular, are built over generations. It also takes an instrumental approach to life and turns almost everything into business so that in a society such as ours, medicine, law and even the priesthood might become a business.

Given business’s hegemonic and expansionist tendency to turn everything into its own mirror image, it inevitably undermines the capital on which it depends. Therefore, it desperately requires a regulatory framework, which is provided by the state. The state therefore is not the enemy of business let alone of the market: the state provides the sole preconditions that business requires in order to flourish. That was the big mistake made by Mrs Thatcher and the neoliberals. They thought that they could deregulate the economy and remove the state. In the process, they released forces that caused the havoc that we are still experiencing. Unless we properly grasp the relationship between business and society and the way in which business depends vitally on the moral capital that society provides, we are in grave danger of repeating the mistakes that were made only a few years ago.