Quakernomics
G Gordon Steel recommends a book that he feels all Friends should read
Economics is a ‘closed book’ to me and, at first, I feared that the same might be true of Mike King’s book Quakernomics: An ethical capitalism. But I obtained a copy, enjoyed it, and Sutton Friends later spent a profitable evening studying it. Quakernomics is a catchy and intriguing title – but what does it mean? The author defines it as ‘the economic activity of the Quakers’.
It is, in fact, a book about Quakers and capitalism. For many people capitalism has an ugly and unacceptable face – surely not where we would expect Quakers to be? Among possible definitions, Mike King begins with a very general one: ‘Capitalism is the investment of a surplus for a return.’ In the preindustrial age motivated individuals began to set up businesses that often made a profit. They accrued capital: nothing wrong with that provided it is honestly earned. But serious ethical issues came in when decisions were made about the use of the capital. It was often reinvested in the business. Should the founder keep it? Do his employees deserve a share and does he have a duty of care towards them? Is philanthropy a further duty? What is remarkable about this excellent book is the evidence that Mike King accumulates to demonstrate the enormous influence that Quakers had in the development of the industrial revolution. In this well-researched and comprehensive treatise he has opened my eyes to the scale and diversity of their activities. He reviews their involvement in iron and steelmaking, textiles, science, pharmaceuticals, foodstuffs and banking, among other activities. His treatment of each area is full of fascinating detail. Coalbrookdale, for example, became the largest iron foundry in the world. Robert Ransomes’ company was the largest producer of agricultural equipment in Britain. Joseph Pease, Bradshaw and others shaped the emerging rail industry. Quakers produced a fifth of all soap in the country. Some 4,000 Quaker families ran nearly 300 confectionery businesses. There were seventy-four Quaker banks and Overend & Gurney became the largest bill-broking firm in the world and, as a bank, was second only to the Bank of England (before it crashed). Mike King writes: ‘How did they do it? How could one per cent of the population create businesses that generated up to sixty per cent of productivity in their various enterprises?’
As we well know, the first answer is honesty, an honesty born of religious belief and a history of persecution. Quakers said: ‘Trade and other occupations show forth truth to the world.’ What I found new in Mike King’s treatment is how the cohesiveness of the whole Quaker body was a significant factor in its commercial success. ‘Friends financed their own and other industrial and commercial ventures by lending at below the market rate, confident that their investments were safeguarded by the ethical standards and rigorous scrutiny of the local Quaker community.’ So, that is how it was done?
Quaker firms developed a high reputation for the care of their employees. This is all very complimentary to our Society, but Mike King does also give details of some serious ‘Quaker lapses’.
What caused the historic Quakernomics to fade away? The author identifies the emergence of limited companies, the involvement of the state, and the rise of the unions. A new generation of Quaker youth saw their future in university education and attractive non-Quaker areas of business.
The latter half of this fine book is devoted to wider areas of economics and to leading figures in economic theory from Adam Smith to Karl Marx, John Maynard Keynes, Milton Friedman and many others, some of whom can be regarded as ethical capitalists, though most certainly cannot. Mike King concludes that: ‘Quakernomics stands in economic thinking as a rebuke to extremists of both left and right and as an encouragement to moderates everywhere.’
Quakernomics: An ethical capitalism by Mike King is published by Anthem Press at £13.99.
ISBN: 9780857281128.
