Occupy St Paul’s in London in October 2011, before the protests gathered momentum

— The Chancellor of Lincoln Cathedral, the Reverend Canon Dr Mark Hocknull, will be discussing some of the moral issues raised by the market economy at a free talk in the Cathedral Chapter House on Friday, February 3, from 2pm to 4m, along with professor David Head, Dean of the Business faculty in the University of Lincoln and Karl McCartney, MP for Lincoln. The following column has been republished with permission from the Lincoln Cathedral blog, where it appeared originally.

Deregulation of the financial institutions at the heart of the city was a cornerstone of Margaret Thatcher’s government. Determined to save ailing institutions, she introduced sweeping change and deregulation in October 1986.

Overnight new trading practices and new technologies were introduced. Business that was once conducted face to face by people who knew each other henceforth was to be transacted electronically and anonymously. Perhaps an unintended consequence of this was an erosion of personal accountability and responsibility.

“My word is my bond” remains the motto of the Stock Exchange, but a recent survey found that 79% of city workers did not know this. The same report also notes that deregulation has had a significant effect on the ethical behaviour of those who work in the city. These two facts cannot be unrelated.

Morality is all about how we interact with and deal with one another. When trading was done face to face, it was very hard to pull a fast one on someone on a Friday afternoon that you were going to see again on Monday morning. For all its faults and failings, the old model had this, at least, in its favour.

In theory in a free market, there is no regulation except the laws of supply and demand. Goods exchange hands at a price determined by the two parties to the transaction and nothing else. Such a system requires a very delicate power balance if it is to avoid being exploitative of some.

The theory is that, though there will be some casualties along the way, eventually the system will settle to a stable equilibrium to everyone’s benefit. Subsequent governments since the 1980s have discovered that reality does not match the theory and have been forced to confront, pretty much unsuccessfully, the issue of financial regulation. No one has yet cracked the problem.

We all agree that we can’t go back to the old way. The world is a different place now. But neither can we stay where we are. So the question is can we find ways to hold the markets to account? The growing global protest movement, known as Occupy, which started in Wall Street but has spread around the world, is made up of people wanting to press this question.

It is an Occupy group that is camped on the steps of St Paul’s Cathedral in the heart of the City. I have no doubt whatsoever that the protestors are sincere in what they are doing, and protest is a vital plank of our democracy. Nevertheless we need to move beyond protest and get to the very heart of the issue if we are ever to find a way forward.

Photo: David Jones

Dr Mark Hocknull is the Chancellor of Lincoln Cathedral.