27 September 2009

Closing the gap

A week ago I blogged about the widening gap between voters and the people who are supposed to represent us. 'We might well be reaching a tipping-point when we all feel it's our right - or duty - to game the system for the benefit of ourselves and our families.' For a similar view, beginning with examples from sport, read the article by Will Hutton in today's Observer:
What is dangerous is that when cheating reaches a certain mass, it becomes impossible to contain. Rules become there to be broken. Those who dive on the football field will hardly think an annulled suspension for a couple of matches for Arsenal's Eduardo sufficient deterrent not to try it themselves – and the football authorities have to be careful in their sanctions, because diving is so rife. Equally, governments find it hard to challenge the accounting industry, along with much of the financial services' so-called structured (cheating) investment operations, built around advising the rich how to avoid (and even evade) tax. Too many people have been allowed for too long to build a career on advising others how to cheat. ....

There is a change in society that has driven the growth of cheating – from sportsmanship to business ethics – over the last generation. It is not that there was some cheat-free golden age. Back in the 1960s and '70s there were sports cheats and some businesses bent the rules. However, most CEOs of public companies were like Courtaulds' Sir Arthur Knight, punctiliously filing every penny of his income and refusing "tax efficiency" schemes on principle as dodges to help the rich avoid their civic responsibilities. He strongly believed he was a privileged member of a community whose rules he wanted to respect. I know a few CEOs like him now, but it is a culture that is fast disappearing.

The problem is that the social sanctions against cheating are becoming ever harder to operate as communities disintegrate. ....

The outstripping of the top 0.1% from the rest – in sport and business alike – has undermined the core belief in reciprocity on which association and rule-keeping depends. If the top does not need the approval of others – because the distance between us in income, wealth and status has grown so vast – then we cannot make them feel the harm that they do. They do not feel the consequences of not paying tax, rigging markets or bending the rules. They can behave unfairly without consequence. The leaders set the tone; the rest follow and so cheating becomes the norm. We now live in a society so cynical that cheating has become the norm, 'The Observer', 27 September
As I said in my post, the end-point of widespread cheating is not a pretty sight, but we are moving toward it so long as the ends of politicians are different from the ends of ordinary people. And unfortunately, they seem to be both wide and diverging.

Social Policy Bonds cannot, themselves, rebuild communities - not immediately anyway. But they could be a way of bridging the gap between politicians and public. By focusing political debate on outcomes, rather than process, spending or activity, they could boost public participation in the policymaking process. Under a bond regime it would be more difficult for large corporations or government agencies to influence or dictate the direction of policy. The distinction between leaders and the rest of us would diminish.

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