The Fair Value Equation

Originally Published in Fair Value

Not Far From my London house is the Charles Dickens Museum, a three-story Georgian terrace where the author chronicled the life and poverty of Victorian England. From here, it’s a short walk to many of his novels’ famous settings: Smithfield Market, the Old Curiosity Shop, and the now-repurposed workhouses that were once a commonplace feature of the city. 

We have come a long way in improving the social conditions that inspired novels like Oliver Twist. Indeed, it’s said that were it ever possible to return to those times, a modern-day visitor would be traumatized not only by the sights but by what they would smell! The sanitary conditions of London were so poor that for several summers in the 1850s, it was described as the Great Stink

Imagine for a moment what that must have been like-not in Dickens’s comfortable home but in the filth and hopelessness of the slums which surrounded it. Imagine, too, the bass note of fear that accompanied a life without healthcare, decent education, or fair access to the law where the refuge of last resort was the workhouse, a fate so dreadful that only the desperate ever entered. 

It’s sobering to think that these conditions existed at a time of relative peace and prosperity in what was then the most powerful nation on earth. 

Fairness and Value

That they were tolerated was not so much for want of resources but as a lack of empathy with those who suffered the consequences. Questions of fairness and value were regarded as matters of charity or evangelism rather than deriving from our fundamental rights or the duties of a compassionate state. The dominant social ethic of the time was framed by the idea of the deserving and underserving poor, a belief (from those with power and privilege) that we flourish or fail through our efforts and industry alone. 

Such views are now rightly seen as naive, but we are far from abandoning them. Indeed, since the dismantling of the USSR and the reinvention of China, the Western capitalist model of meritocratic enterprise has relegated more egalitarian alternatives to the fringes. And in many ways, that’s a good thing, for it’s evidentially true that industry and incentive reap both individual and collective rewards. 

Starting Points Matter

The difference today is that we understand the race of opportunity is far from fair-that; while our endeavors make a difference, our starting point has a significant bearing on the progress we are likely to make. This is why we have free and universal education, why we outlaw discrimination, why children are protected from poverty. Modern-day meritocracy recognizes that in a world where rewards are unequally spread, the competition for them should be as equitable as possible—at least, that’s the theory! 

In practice, we all know that inequality, and the burdens that come with it, is still rife. We know, too, that while there is no merit in being born into money, wealth and success follow hand-in-hand, just as surely as social mobility is the devil’s only job for those without privilege. The pursuit of what the philosopher John Rawles called “true equality of opportunity” remains a work in progress, albeit most developed nations have a positive trajectory. 

In sharing these thoughts, I’m deeply conscious that I have fared especially well in the lottery of life’s chances. I like to think that ambition and ability have played their part, but it’s impossible to deny the blessings I’ve had. Psychologists tell us that a significant determiner of our prospects can be something as simple as being read bedtime stories as a child—I came from a house full of books and a family that encouraged me to study; that alone is priceless. I also benefited from an enlightened system of social welfare that provided me with education, health care, and, ultimately, a choice of roads to travel that are a world away from the dead-ends of nineteenth-century London.

Collective Values Matter 

Today, I spend much of my time commuting between the US and Europe. Both are wonderful societies in their way-and we should largely rejoice in what they’ve achieved. But if there’s a single difference between my experience of people’s lives in these two economic powerhouses, it’s the prevalence of residual anxiety that is rooted in inadequate social provision for large numbers in American communities. The most common question my European friends ask me—invariably with a sense of incredulity—is why the US, the richest and most powerful nation on earth, is so reluctant to provide universal, free-to-access healthcare. 

Levels of Compassion Matter

It’s not my purpose or my place to delve too deeply into politics. The reference to health care is more a reporting of the transatlantic attitudinal differences than any polemic on my part. Rather, I’m reflecting on how our collective values have impacts that go so much deeper than our fiscal systems and the scope of the services our governments provide. I call this the fair value equation, measuring the worth of our society in terms not only of what it produces but also of the compassion it shows and the well-being that results. 

The business has much to teach us here. The reflection above might imply there is a conflict between the two goals, but in practice, we know the best companies have the most progressive policies, treat their people with care, and show concern for the environment . . . It’s no coincidence that there are few organizations of this size that operate today without a clear statement of values. 

And furthermore, it’s no surprise that those organizations which found their policies on “true equality of opportunity” have the highest levels of engagement. This isn’t because they pay higher wages, for the relationship between remuneration and employee commitment is weak. True engagement and the discretionary effort which follows comes from a combination of involvement, progression, fair and equitable treatment, and, most importantly of all, a commonly held belief that everyone is a fully valued member of the organization, regardless of their seniority. 

Societies should support their Citizenry

Returning to our governments, if, as societies, we provide less than is necessary for citizens to feel they have a fair stake in their communities, then we should expect engagement of a different sort. History shows us that the biggest threats to our democracies and freedom have come from those who feel excluded-in the despair which follows, it’s all too easy to be persuaded by simplistic solutions that play to our survival instincts. The roots of fascism, nationalism, and what today we call populism lie not in a rational assessment of our best interests but in the sense of hopelessness and the fear which comes with it. 

In Northern and Western Europe, the socio-political model is based (significantly more so than the US) on the provision of universal public services, underpinned by a wide-reaching safety net that, if not exactly eliminating, at least dulls that bass note of anxiety I spoke of earlier. Counter to nineteenth-century thinking; the result is not a loss of incentive or productivity from those at the bottom of the social ladder. Indeed, the countries with the most comprehensive welfare systems have the highest levels of intergenerational social mobility.

We’re in it Together

Meanwhile, the US, far from being the land of opportunity, has one of the poorest records in this regard any enlightened leadership doesn’t mean there are no hierarchies or that remuneration and reward should be equally spread. But it does mean we must recognize the pursuit of success is a joint endeavor and that we flourish most when we nurture the prospects of all. If-on the contrary-we, exclude sections of our workforce, deny them fair, or provide only insecure contracts-then we lose out opportunities on their full potential. In practice, then, the two sides of the fair value equation operate not in conflict but in concert. If our care lacks depth, then commitment will be shallow-but so too the opposite and therein lies our opportunity. 

Pursuing this alternative course can require a leap of faith—not least because there will always be some who seek to game the system. But I’d argue this is a small price to pay, for the alternative is not so much a race to the bottom as a burden that weighs us down as individuals and societies.

To lighten the load, we need surely to share it not as a penance but in the knowledge that unless we do so, gravity will win, and all of us are diminished as a consequence. 

We might be mindful too of the fates of Mr. and Mrs. Bumble, the workhouse-keepers in Oliver Twist. Their hearts were said to be impervious to tears; ‘waterproof’ is how Dickens’ described them. But as the story, and their pursuit of self-interest, unfolds, they “were gradually reduced to great indigence and misery, and finally became paupers in that very same workhouse in which they had once lorded it over others.” 

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