The (im)morality of markets

How "Hedge Fund Hugh" manages to defend the indefensible.

Hugh Hendry, an engagingly straightforward hedge-fund manager, made another appearance on Newsnight last night -- he's been on before, holding his own rather well against Joseph Stiglitz (or "Joe" Stiglitz, as I noted Ken Clarke called him during the recent Any Questions he appeared on with Mehdi).

Hendry was being attacked by Poul Rasmussen, president of the Party of European Socialists and the driving force behind proposals to limit the activities of hedge funds. Rasmussen said that the way Hendry and his ilk had affected the price of government debts -- Greece's in particular -- was not "democratically acceptable", that they were hurting innocent people by their actions and making structural problems worse.

One's natural sympathy was on the side of Rasmussen. It is very hard to see any merit in the kind of international speculation that made George Soros, for instance, so rich -- which is why I have always been bemused that a man whose wealth and prominence derives from the misfortune of others should be treated with such respect.

But Hendry did a very good job of making himself out as the one who was behaving morally. "If Greece reforms its behaviour, then speculation against it will be profitless," he said, quite truthfully. "I'm trying to save us putting more money into this black hole which is Greece's economy."

Newsnight's reporter Justin Rowlatt had asked him earlier in the programme, with some incredulity: "So are you saying you're providing us with a social service?"

Hendry could see this one coming, but replied: "Maybe I'm naive, maybe I'm foolish, but I believe that I'm the guard dog of the capitalist system." Greece had been caught "cheating", he said -- a statement with which I don't think anyone can disagree -- and was now paying the price.

My point is this: to me Hendry, was the far more convincing guest, because his argument was totally consistent. The "morality" he believes to be contained within the market is the one which is now doling out punishment to Greece, and deservedly so, he would say.

I suspect that Rasmussen does not believe that markets are in any way "moral" at all. Indeed, if he thinks that they are by their very nature cruel and immoral, I would agree with him. He probably regards market economies as necessary, but not virtuous.

Why then, however, would he expect people who really do believe in the market to abide by his moral values? If you sup with the devil . . .

You can find the whole report and the exchange that followed on BBC iPlayer, about 20 minutes in. It's well worth a look. Even if you don't agree with him, I think you'd have to admit that the aforementioned devil has a remarkably good advocate in Hendry.

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Sholto Byrnes is a Contributing Editor to the New Statesman
Photo: Getty Images/Christopher Furlong
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A dozen defeated parliamentary candidates back Caroline Flint for deputy

Supporters of all the leadership candidates have rallied around Caroline Flint's bid to be deputy leader.

Twelve former parliamentary candidates have backed Caroline Flint's bid to become deputy leader in an open letter to the New Statesman. Dubbing the Don Valley MP a "fantastic campaigner", they explain that why despite backing different candidates for the leadership, they "are united in supporting Caroline Flint to be Labour's next deputy leader", who they describe as a "brilliant communicator and creative policy maker". 

Flint welcomed the endorsement, saying: "our candidates know better than most what it takes to win the sort of seats Labour must gain in order to win a general election, so I'm delighted to have their support.". She urged Labour to rebuild "not by lookin to the past, but by learning from the past", saying that "we must rediscover Labour's voice, especially in communities wher we do not have a Labour MP:".

The Flint campaign will hope that the endorsement provides a boost as the campaign enters its final days.

The full letter is below:

There is no route to Downing Street that does not run through the seats we fought for Labour at the General Election.

"We need a new leadership team that can win back Labour's lost voters.

Although we are backing different candidates to be Leader, we are united in supporting Caroline Flint to be Labour's next deputy leader.

Not only is Caroline a fantastic campaigner, who toured the country supporting Labour's candidates, she's also a brilliant communicator and creative policy maker, which is exactly what we need in our next deputy leader.

If Labour is to win the next election, it is vital that we pick a leadership team that doesn't just appeal to Labour Party members, but is capable of winning the General Election. Caroline Flint is our best hope of beating the Tories.

We urge Labour Party members and supporters to unite behind Caroline Flint and begin the process of rebuilding to win in 2020.

Jessica Asato (Norwich North), Will Straw (Rossendale and Darween), Nick Bent (Warrington South), Mike Le Surf (South Basildon and East Thurrock), Tris Osborne (Chatham and Aylesford), Victoria Groulef (Reading West), Jamie Hanley (Pudsey), Kevin McKeever (Northampton South), Joy Squires (Worcester), Paul Clark (Gillingham and Rainham), Patrick Hall (Bedford) and Mary Wimbury (Aberconwy)

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.