Quick, bring back nanny – the market’s failed

How should government and business interact when something big needs to change?

When too much crappy food is making people fat? When the financial system gets undermined by too many cosy relationships and blind eyes? When energy companies are demanding eye watering rises in bills?

I’ve found myself thinking about this more in the last few weeks whilst we’ve been brushing up against some big issues – such as the future of food and the future of transport – all of which seem to demand a new form of collaboration between business and governments. But what’s becoming obvious is that nobody yet knows exactly how this new relationship should work. Should it be a straightforward “we’re all in this together” style collaboration or should the politicos be a kind of governess character that raps business over the knuckles and tells us all how to behave? Or maybe there’s another way?

Eating ourselves to death

The issues around food are mind bending – it’s essential for life but it’s getting much more expensive everywhere (or less cheap maybe) so feeding ourselves is harder; food banks are everywhere (Bath – nobody’s idea of poverty central – has two); climate change and geo-politics mean that droughts in Africa can drive up grain prices globally with enormous consequences; some countries are hoarding; we’ve probably reached the limits of agricultural efficiency etc. etc. etc. Big stuff needs to change on both the demand and the supply side if we’re going to solve this – our attitudes to food (and food technology) as much as how we produce and retail food.

All of this requires food businesses and policymakers to get on the same page. Now. And thankfully many of them are.

But also urgent is the crisis around obesity. We’re eating more, getting fatter, and we don’t seem to be learning. It won’t be too long before 40% of the adult population are classed as obese (it’s 32% now). Unless something changes a generation will see many of their children pre-decease them. They will have eaten themselves to death.

what happens when markets are left alone?
what happens when markets are left alone?

Existing market dynamics don’t solve the big issues

Obesity is a frontier issue for Government intervention. Leaving it to the market clearly doesn’t work – we’re still getting fatter. Telling people what to eat isn’t popular (look at how people react to St Jamie doing it). But here are two approaches emerging that are well worth keeping an eye on:

Mexico has just introduced a fat tax – which if it works will be copied by pretty much everyone else (catnip for politicians – raises money and cures a social ill)

The Scottish are seriously considering putting cheese and sausages on the top shelf like pornography. Can you imagine? Razzle and cheese strings occupying the same corner of your local top-up shop? Stigmatising food might just work in the same way it seems to have worked for fags.

I kind of like this. Since the crisis Governments have lost the ability to influence what goes on through money and incentives (they don’t have any money) – and (surely) they must have twigged that “nudging” doesn’t really work when we’re dealing with fundamental issues.

So what’s left? They can either collaborate with business (e.g. with the Green Deal – still haven’t got that right) or they can come off the fence and be much more nanny like when people or businesses are doing stuff that’s not good.

This – somewhat old school – approach seems to be gathering a bit of momentum. Taxing fat and alcohol; stigmatising cheese and sausages; introducing mandatory switching of audit provider to guard against Enron/Lehman style oversight errors; berating energy companies for their pricing policy; or even telling customers to switch energy companies to get better deals.

(Topic for another day – how did the energy brands manage to make themselves such pariahs? They now find themselves on the wrong side of every single argument – anyone involved in brand strategy for major energy company should be asking themselves some very tough questions right now. This is a proper fail.)

So I reckon we should get ready for a bit more nanny style intervention. Governments with no money have little option but to legislate.

Out of the ashes – the Co-op may have stumbled across another way

But wait – not so fast. Today comes news of a remarkable attempt by Co-op bank to insulate its business ethos from the hedge funds that now own 70% of the business. They are enshrining into their articles of association the ethical approach that is the foundation of the Co-op brand. 

co-op by name, co-op by nature - but not a co-operative
co-op by name, co-op by nature – but not a co-operative

It might not work – the mess that the Co-op bank has got itself into is astonishing – but the idea is brilliant. Why doesn’t every business that is serious about the impact it has on the world enshrine that into its constitution? And maybe a better question – why doesn’t the Government insist that any business that has some kind of systemic or infrastructural impact has such a clause at its heart?

It’s just an idea – a bit unformed I’ll admit – but here maybe lie the seeds of a much smarter relationship between government and business – built not around nannying (though that has its place) but around a clear and open definition of what that business is in the world to do.

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2 thoughts on “Quick, bring back nanny – the market’s failed

  1. Great blog, Nick…powerful idea around the ‘influencing’ capability of government. It suggests however a recognition that government shares communications channels with all the other interests out there…not sure whether that is recognised widely yet

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