Businesses seek profit and sportsmen chase victory, but there’s still hope for morality

Ed Smith's "Left Field" column.

There are times when a columnist, conditioned to take a firm line, feels pressure to pronounce about a controversy – but what if he knows that logic and evidence can be marshalled to make an equally strong case for both standpoints, even though they are perfectly opposed? The temptation is to pick a side and be done with it. Yet if two opposing views support such convincing defences, the hinge of the argument must be in the wrong place. Instead of summoning rhetorical conviction, perhaps we should try to redraw the debate along more helpful dividing lines.

That is how I’ve felt watching the rows about fair play that have flared up throughout the Ashes. The most controversial was Stuart Broad’s decision not to “walk” when he edged the ball to first slip during the thrilling first Test match at Trent Bridge.

Two clear-cut columns write themselves all too easily. First, the disgusted moral one: “Sometimes a batsman is unsure if he hit the ball and may rightfully stand his ground. This was not one of those moments. Cheating is a strong word but when a batsman is 100 per cent sure that he hit the ball and still doesn’t walk, it is hard to pretend that ‘gamesmanship’ is the accurate term.” So thunder the moralists.

It is just as easy to defend Broad by arguing that he did what everyone does, only better: “Modern batsmen do not walk. They let the umpire decide. So a batsman who doesn’t walk for a thick edge is no more ‘in the wrong’ than a batsman who doesn’t walk for a slight deflection. Broad should be congratulated for his professionalism and his poker face.”

The problem is that neither column captures my conflicting emotions. As a batsman who did not always “walk”, I sympathise with Broad. I also know that watching him get away with such an obvious edge felt wrong. It looked silly and demeaned the day.

How did we get into this mess? Ironically, it was once assumed that professionalism would eventually negate the need for moral judgements. Accepting the umpire’s decision would replace the moral imperative of doing the right thing. The advent of new technologies, too, encouraged the delusion that players would never have to think morally in the heat of battle.

However, umpires make mistakes and technology has proved inadequate and unpredictable. We have moved from one grey area, based on a player’s word, to an increasingly precisely calibrated grey area, determined by a Byzantine system of technical apparatus designed to clarify the matter but serving only to confuse it.

If we substitute the words “umpiring” and “technology” with the word “law”, we see how the everyday professional working world has encountered similar problems. Narrowly “legal” behaviour is often shown to be morally wrong. Jimmy Carr’s tax avoidance was entirely legal but rightly caused public indignation. The letter of the law be damned – a rich man should pay a decent amount of tax, even if none of us knows exactly what proportion that should be. The same point applies even more strongly to the tax-avoidance strategies of Starbucks.

We can never reach such an evolved stage of technological or legal precision that the question “Does this feel right?” stops being central to a professional code. Matthew Parris has argued that the pages of small print tacked on to employment contracts paradoxically only encourage dubious behaviour. A long list of prohibited actions merely suggests a further list of (presumably) unprohibited ones. In contrast, the assumption that they shouldn’t “do anything that feels wrong” encourages employees to think for themselves.

When businesses seek profit and professional sportsmen chase competitive advantage, what hope is there for morality? The answer is more likely to reside in culture and conventions than in law and technology.

In her 1994 paper “Bourgeois Virtue”, the American economist Deirdre McCloskey argued that modern society was stuck with outdated conventions. We fall back on old ideals – the honourable aristocrat, the plucky worker – but we lack ethical models for professional or bourgeois virtues.

The history of modern sport fits McCloskey’s model. At first, sport was obsessed with the honourable gentleman who was above the fray. The Corinthians football team declined to score from penalties on the grounds that the opposition’s foul must have been accidental. The second phase of modern sport, the early years of professionalism, emphasised hard work and industry – the plucky worker who kept his head down and stuck to the task. Not for him moral grandstanding and “walking” when he edged it; he had to put food on the table.

Sport is now – uncertainly but distinctly – entering a third phase. It may prove a happy surprise. The relentless determination to win, founded on scientific training and ruthless planning, does not inevitably lead to moral collapse. Today’s snooker players own up when they faintly touch the cue ball, even though it is entirely against their self-interest and rarely visible to the referee. Rugby players in a scrum, driven backwards on to their try line, could halt the disaster by pretending that one of the players was suffering a neck injury. It never happens – faking serious spinal injuries is not part of professional rugby culture. Tennis players are more respectful and courteous than they were 20 years ago.

Cultures are always in flux. An extreme example of questionable behaviour, one that pushes an accepted convention beyond common sense, can tip the culture in a positive direction. Broad’s successful stand may encourage more batsmen to walk.

Professional sportsmen are groping towards McCloskey’s “bourgeois virtues”. But as the third phase crawls forward, spare a thought for the players. If you are confused in the comfort of your armchair, imagine how they feel in the white heat of competitiveness, with the roar of 30,000 people in their ears.

Get more sports news and views over at Fast News Release.

Stuart Broad, whose controversial decision not to "walk" when he edged the ball to first slip has been a point of controversy. Photograph: Getty Images.

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 12 August 2013 issue of the New Statesman, What if JFK had lived?

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation