“Administration of a drug to an addict will cause reestablishment of chemical dependence upon the addictive substance.”
According to some sites this is the first law of addiction and whether or not it is universally true it is certainly something which resonates. The temptation to just have one cigarette, drink, whatever, is a siren call which can so easily lead back into dependence; and the pathway second time around is so much easier because it is familiar.
But addiction is not solely confined to substance abuse. Anything which rewards, which gives us a high, which sets the adrenaline going, can be addictive. Power is addictive, money is addictive, as is cornering the marketplace or creating a winning deal; and the greater the reward the more tempting it is to just stretch ethical behaviour one more time. So it was hardly surprising that in a recent speech Mark Carney warned that “with time, the Three Lies of Finance will come to enjoy widespread credulity again” and called on policymakers and market participants to bind themselves to the mast and resist their siren call.
What are the Three Lies of Finance? Quite simply:
- This time is different
- Markets always clear
- Markets are moral
In his speech Mark Carney acknowledged that over the past seven years great strides have been made but said that more needs to be done by individuals, firms and regulators. This will require individuals to be held accountable for their actions, firms to take responsibility for the system and for establishing acceptable trading practices and regulators to take a tough stance on market abuse.
But taking immediate action is one thing, creating a lasting change is another. As long as the temptation is there, the chance of further abuse of customer and market trust remains a very real danger. The only way to increase the chance of lasting success is to ensure that the culture of organisations changes to such an extent that there is no chance of temptation. This requires structures and rewards to be positioned in such a way that they promote ethical behaviour rather than ‘me first’ greed. It requires a new vision which looks towards long-term growth rather than short-term gain. And it requires the promotion of a set of beliefs and behaviours which engage employees in the idea of acting in the interests of the customer rather than the interests of a quick bonus.
As anyone who has observed repeated cycles of addiction or abuse will testify, ‘this time it’s different’ is a self-delusion which can in fact lead to a quicker reversion into addiction than otherwise might be the case. Words are cheap but it is only when actions are taken to firstly acknowledge the depth of the problem and secondly to radically alter the underlying culture and behaviour pattern that a glimmer of hope can be seen. As Mark Carney says, if we are to consign the age of irresponsibility to history, to reverse the tide of ethical drift then regulators and market participants have to work together in a continuing drive to develop global standards. And it’s not just one off exercise; it requires continuing engagement and vigilance if the siren call is to be resisted