Value(s)
Carney, M. (2021). Value(s): building a better world for all. London: William Collins.
If you’re looking for a book that jumps between disciplines more than the Turkish lira jumps in value and proposes a new kind of economics, you found what you seek!
Mark Carney was the Governor of the Bank of England (2013-2020), bank of Canada (2098-2013) with a lifetime of experience in the private banking sector and academia. Unfortunately, the book creates a complex narrative that goes from social contract theory to central banking and investment regulations with short stops for psychological analysis of the historical phenomenon. In other words, liberal arts degrees might be useful after all…
The book is long but the lesson is simple: markets are no longer value-oriented which causes social issues. The issue of “value” from belief to currency of exchange is deeply discussed while touching on many contemporary hot potatoes such as ownership (stakeholder supremacy discussion), source of credit (credit derivatives and reputation as credit), role of banks (central bank digital currencies), and the most global, climate change financing (Environmental Sustainable Governance). The author argues that we are on the brink of the fourth industrial revolution and we should invest in value (ESG) instead of focusing on expanding the pie. Yet, since ESG evaluations are highly contested because of their subjective nature, they should be explained to investors and the public to establish and maintain trust between value and markets.
Indeed, the background of the author makes him an authoritative figure on the topic of financial misconduct. He claims that the three lies of finance led us to believe that this time is different, markets always clear (equilibrium), and markets are moral… However, facing climate change requires a “climate stress test” for banks and investors. He argues that there’s o such thing as green and brown, but claims that “we need fifty shades of green to catalyse and support all companies towards net zero, and to enable us to asses our alignments with Paris.” I wonder what he thinks about the EU green taxonomy…
Favourite quote: “let them eat cake became let them eat credit” & “machines have always substituted for human hands, not heads.”