On Saturday 26 April, I was invited to present to the Philosophers’ Cafe on Mark Carney’s 2021 book Value(s). It was a pleasure to present this to an exceptional group of engaged, mostly seniors. This invitation from Professor Emeritus Martin Tweedle was prompted by a book review I can written in May 2021 on Carney’s “Magnum Opus.”
You can access my dressed up speaking notes in the PDF file below.
Mark Carney- Value(s)finalThe discussion was spirited at times with many questions coming back to who is this man? Can he be trusted given his corporate connections?
Unlike the book review, my presentation made some additional points about the book. First, Carney left the Bank of England (BoE) at the end of February 2020 and yet he had the final 600 -page manuscript to the publisher by the end of the year This alacrity was accomplished with help from the organizations he lead and their superlative research organizations. A large portion of the Governor’s work is public facing, usually business luncheons populated mainly by financiers and media, where he would “communicate to markets” the central bank’s view on the economy and financial system. Speeches were very substantive and worked on by deputy governors, the communications and the research departments of the banks. Carney’s book relies heavily on various speeches he gave as a G7 central banker.
Second, during his tenure at the Bank of England his remit included regulation and supervision of the large London insurance markets including the Lloyd’s of London. This meant Carney needed to understand the growing climate crisis and this led him into understanding climate change and evolving his thinking on the role international finance must play in reaching financial solutions for the climate emergency. This lead to the appointment by Carney as Chair of the Financial Stability Board of Michael Bloomberg, the founder of the Bloomberg financial intelligence and media company to provide guidance around disclosure of actionable measures of how corporations were dealing with climate change. The thinking was that if financial markets obtained comparable measures of what corporations had a climate plan and how were companies managing this risk, then pricing in financial markets would fully reflect embedded risks and no unanticipated climate risks were lurking.
Digression
This has not happened for several reasons. First, the world’s major fossil fuel producers are a powerful group (not just Exxon Mobil, but also the governments of Saudi Arabia, Iran, Venezuela. Russia, Norway, Alaska, and Alberta). Fiscally dependent governments control regulatory regimes which generally have no interest in regulating environmental risks. And there are very powerful consumers of the product, notably as one attendee said- the U.S. military is the largest consumer of petroleum in the world.
Recently with Trump’s “drill baby drill” policies, a regrettable regressive step, financial institutions are abandoning their membership on various international banking and investment environmental fora such as the Net-Zero Banking Alliance (NZBA). Just this past week, the Canadian Securities Administrators, a collective of provincial and territorial securities regulators, said they would be shelving plans to set disclosure standards for environmental and DEI.practices.
Third, Carney is both a follower and and leader; he has been an effective leader and with the either patronage or sheer abilities, Carney has grown in his roles and moved from one trusted role to another as U.N. Special Envoy -Climate Action and Finance to Brookfield Vice Chair and then Prime Minister of Canada. There are certainly many who are willing to place their confidence in him. If he is successful as his central bank period- no financial crises!- he may be just the remedy that Canada needs.
Intellectually, I think he is a follower. Although he demonstrates his economic chops without resorting to calculus he is captive to the ideas of the times – neo-liberalism – not not one mention of the word. He has embraced the urgency of action on climate change but the world is much changed since the writing of the book (2020-21). Trumpism has lead to financial conglomerates like banks bending to the need and practically fleeing Mark Carney NZBA. Although he is a thoughtful reader of past Nobel Economics lectures and well understands the theories, he has yet to indicate he brings a new synthesis, new ideas.
Discussion
We also discussed the character or trustworthiness of Carney as a newly minted politician. Carney joined Brookfield Asset Management as an adviser of Environmental, Social Governance (ESG) investing and transitional finance. This fit nicely with his intermediary role as a finance capitalist and environmental entrepreneur. This may be too harsh a judgment but his shift back into public service with enormous decision-making scope tells me he wants to make a positive difference. Is Carney who worked for a company which utilizing tax minimization strategies someone who is interested in building a better world for all?
I brought up the question of financial disclosure before voting day. I am of the view that while I think Carney is a man of integrity and is not in public service to enrich himself, but the public should not the quantum of his assets (real estate, financial) and the details of his specific investments.
The presentation enumerated the 7 core values that Carney says should factor in a value-based decision-making process corporately and I am assuming in government organizations. These values are -dynamism, resilience, sustainability, fairness, responsibility, solidarity, and humility. We discussed how would the incorporation of values work where values can clash- humility vs. dynamism, for example.
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