Grenfell: what we should do after mourning

After Grenfell, red-tape cutting has been blamed for facilitating risky practices in house-building. Granted: more regulation is needed, and companies must be forced to make more efforts in guaranteeing safety for tenants.

If we want to prevent enraging, avoidable tragedies like Grenfell, though, laws are not enough. Ethical behaviour needs to be fostered within companies, encouraging managers to ask themselves moral questions when they choose suppliers, or decide how to allocate the money at their disposal. It’s not going to be easy, but it is necessary. Here’s why.

Let’s get one thing out of the way. Laws are made by fallible human beings. They can be unethical, and one could make a case for civil disobedience in some cases, but that’s a conversation for another day. In what follows, let’s assume the best regulation we can come up with – which, in my opinion, would still not be enough.

Laws don’t – can’t – regulate everything. If every nitty-gritty detail of everyday business were to be regulated, they would be infinitely long, and cumbersome to use. Everything would halt. Regulations state principles and make some practices mandatory, or forbidden, allowing leeway for interpretation which is necessary in order to have laws that are general enough to be applied to everyone. But there will always be instances of decision-making that simply do not fall under the competence of the law, or imply choices on how to apply it. Plus, new technologies or social changes may quickly make laws obsolete; creating new regulation takes time. We need to be able to trust companies’ judgment in absence of a law.

Abiding by the law is a choice. Of course, breaking the law entails a sanction of some sort. However, corporate lawyers are excellent at finding loopholes, or procedural tricks in order to save their clients’ money. It’s not their fault: in a fair system, everyone deserves to be defended. Otherwise it would be the Middle Ages, and I am really not looking forward to whatever imaginative way to arbitrarily kill each other we’d come up with. So, laws, short of being broken, can be circumvented. Deeply held ethical beliefs can’t.

Or, a company can decide that the trade-off is worth it. In a logic of profit without any room for moral blame, compensation can easily be turned into a fee: it’s a calculated risk for the company, who invest in future profits. The sanction is low compared to the revenue made by breaking that law. The risk is worth it, in monetary terms. The sanction becomes a fee: companies buy their right to break the law. The difference is not merely semantic: if there is no social sanction attached to giving money to compensate for their actions, people tend to behave more recklessly, because they have effectively bought the permission to misbehave. They tend to use every last bit of advantage that they’re buying with it. A simple example to illustrate the phenomenon (lifted from Micheal Sandel’s What money can’t buy, which is an excellent, entertaining and enlightening book, that should be mandatory for anyone living in a capitalist society): an Israeli daycare centre had a problem with parents coming late to pick up their children. This meant staff had to do unnecessary overtime, and management were looking for a way to incentivise parents to come pick up their children on time. Their solution was in the form of a fine: whenever a parent went in late, they had to pay a sum of money. Result: the late pickups increased, because parents felt they were buying extra babysitting, not being punished for an undesirable behaviour. The fine had become a fee.

When you fine people with enough resources to turn the fine into a fee, reckless behaviour is encouraged. A famous example: Madonna used to regularly pay exorbitant parking fines in London, because she wanted her chauffeur to park right in front of her gym, where parking is prohibited. This habit cost her thousands of pounds, which to a woman with hundreds of millions in the bank, was simply a luxury parking fee. Similar cases can be made for environmental fines, and investment banks.

Regulation is needed urgently. But we should also give ourselves some credit and play a longer game, by trying to find ways to foster ethical behaviour within businesses.