Interesting

Posted by Tim Harford

https://timharford.com/2025/07/why-is-modern-commerce-corrosive/

https://timharford.com/?p=9339

You’re not imagining it. There is something shallow about modern life — a sense that traditional virtues, from craftsmanship to professionalism to loyalty, have somehow been hollowed out. Don’t get me wrong: I love living in the 21st century and believe that the world is a far better place in 2025 than it was in, say, 1975.

Still, there is something amiss. You can see it in long-term trends such as the demise of communities built around fishing, mining or manufacture, and in more recent calamities such as the internet’s descent into a hellscape of fraud, manufactured anxiety and AI slop. You can see it in serious matters such as the sewage flowing into the Thames, the decay of high streets or the precarity of many modern jobs. You can see it in more trivial worries such as the way each new casual dining concept so quickly goes downhill. You can see it in the fact that every single one of these social ills is intimately connected to commerce.

There is no shortage of books to consult on the matter. This hollowing out has been explored in works as varied as Sherry Turkle’s Alone Together, Barbara Ehrenreich’s Nickel and Dimed, JD Vance’s Hillbilly Elegy, Robert Putnam’s Bowling Alone and Cory Doctorow’s forthcoming Enshittification.

But for the deep analysis, turn to the philosopher Alasdair MacIntyre’s After Virtue, published in 1981. MacIntyre articulated an utter disenchantment with three centuries of moral philosophy all the way back to the Enlightenment, and argued that it was hardly a surprise that modern society itself lost its way. He argued that clear thinking and virtuous action couldn’t be unmoored from a social context — it had to be embedded in a community with shared values, goals and practices. His fellow philosophers found the book impossible to ignore.

MacIntyre died in May at the age of 96, which prompted me to turn back to a piece of his writing (in the 1994 essay “A Partial Response To My Critics”) that has stuck with me for decades: the tale of two fishing crews.

One crew is “organised and understood as a purely technical and economic means to a productive end, whose aim is only or overridingly to satisfy as profitably as possible some market’s demand for fish”. The crew members are motivated to work hard, innovate and hone their skills, because that way lies profit. The other crew has developed “an understanding of and devotion to excellence in fishing and to excellence in playing one’s part as a member of such a crew”. This excellence is about skill, to be sure — but also about character, social bonds and courage. These fishermen are risking their lives and are dependent on each other. And, adds MacIntyre, “when someone dies at sea, fellow crew members, their families and the rest of the fishing community will share a common affliction and common responsibilities”.

The values of this second crew are what we seem to be losing when a private equity group “rolls up” hundreds of small independent vets; or when an old-fashioned private partnership such as Lehman Brothers becomes a publicly traded company; or when a business embraces a mission statement that could equally describe the aim of any other business.

Try this: “Our objective is to maximise value for our shareholders by focusing on businesses where we have market leadership, a technological edge and a world competitive cost base”. Any guess as to the industry? It could be anything, so it means nothing.

I was introduced to MacIntyre’s ideas not by my philosophy tutors, but by the economist John Kay. In The Truth About Markets (2003), Kay quotes MacIntyre’s description of the fishing crews, and then asks a question: which crew would make more money?

MacIntyre assumed the answer was depressingly self-evident: the profit-maximising crew will be an unstoppable force, which is why modern commerce is so corrosive. Organisations that offer the riches of friendship, community, loyalty, craft and professionalism are sure to be driven out of business by the relentless economic logic of the profit-maximiser. They make money, and destroy what really matters.

But do they really make money? Kay argues that narrow profit-maximising is often a failure, even by its own denuded standards.

A 1972 Harvard Business School case study examines a real-world example of MacIntyre’s profit-maximising fishing crew. The Prelude Corporation, the largest lobster producer in North America, aimed to become the General Motors of the fishing industry. It went bankrupt shortly after the case study was written.

Lehman Brothers is another example — was it really more successful after jettisoning the traditional structure in which the capital at risk was provided by partners who best understood the business?

A third example is the chemical giant ICI, which in 1994 published that vacuous mission statement about “market leadership”. A titan of 20th-century British manufacturing, it faded and, in 2008, was absorbed and broken up by a Dutch paint company. Perhaps ICI would have done better had they paid less attention to making money, and more attention to making chemicals.

This should not really surprise us, as Kay explains in The Corporation in the 21st Century (2024). To be solidly profitable, companies need some kind of competitive advantage. That might rest on network effects, intellectual property or even political connections. But it might equally rest on a trusted brand and well-worn habits of making the right kind of decision, quickly. In other words, profitability can rest on shared values, goals and practices too. An organisation that MacIntyre himself might admire, one that has developed the right kind of culture, may well be more attractive to customers, more appealing to potential employees and simply more effective at doing all the things a particular business in a particular industry must do.

Consider the Financial Times itself. I dare say everyone involved in the business prefers to be paid, and the FT aims to be profitable. Yet we didn’t come here with the hope of printing money; we came with the aim of printing newspapers. If the FT’s entire operation, day to day and top to bottom, was predicated on maximising profit, this would be a different newspaper. It is not obvious that it would be a more profitable one.

Written for and first published in the Financial Times on 6 June 2025.

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https://timharford.com/2025/07/why-is-modern-commerce-corrosive/

https://timharford.com/?p=9339