Reject the binary

In the month of Ramadan, what better than to read a book by the controversial academic Tariq Ramadan?

I have just finished reading his latest work: the Quest for Meaning. Professor of Islamic studies at Oxford, Tariq attracts, some might say courts, controversy, presumably because of his willingness to challenge existing orthodoxies. From start to finish, I found The Quest for Meaning exhilarating; refreshing in the clarity of its language in dealing with complex issues, in particular the ways in which different societies interact in the globalised world.

I was therefore very surprised to find several highly critical reviews of the book – one in particular describing it as “philosophy as candyfloss” and comparing it unfavourably to Alain de Botton’s work, among others. I can only assume that the New Statesman reviewer believes that complex ideas and concepts require traditionally impenetrable academic discourse. He ignores the fact that many great philosophers have expressed their arguments and propositions using simple and accessible language. Furthermore, the reference to Alain de Botton betrays an unpleasant form of academic snobbery, most likely driven by envy of Botton’s success in appealing to a popular market.

Tariq’s book opens with an unusual dedication, to the semi-colon, “which in a world of simplified communication and binary judgements reconciles us with the plurality of propositions and with the welcome nuances…. of complex realities”. And this dedication sets the tone for the book, especially in relation to Tariq’s appeal to his readers to respect diversity and accept that there are different histories, different cultures and different truths. He argues that we now live in an age of the instant, where groupthink on a continental, even global, scale governs our attitudes; where people are no longer interested in ideas, beliefs, principles and ethics, but bow to their fears and anxieties, seeking comfort in the search for safety and security. He asserts that governments everywhere understand this, and politicians exploit these fears, to the extent that ignoring human rights in the name of security has become acceptable, even desirable, in the minds of their electorate. To counter these unfortunate trends, Tariq encourages us to accept uncertainty, the grey areas of possibility, and to try to understand and respect the diverse worlds where truths and value systems intersect. Sadly, however, he notes that we are no longer interested. Rather, our attitude seems to be (my words) “Let someone else do the thinking – I’m too busy updating my facebook profile.”

This lamentable tendency towards binary judgements extends to my own efforts to raise capital from investors to invest in the East African agriculture sector. The AAC investment proposition is to identify good quality agriculture-related businesses and provide them with affordably-priced and patient capital for expansion and growth. We define our success according to two measures: in financial terms, from the amount of capital we will ultimately return to investors; and in social and developmental terms, through the achievements of our investees as they grow and increase the supply of goods, services and employment in their markets. This is a fairly simple proposition, yet it causes surprising confusion among potential investors. I regularly encounter comments such as "ah, so you're sub-commercial" or “what is impact investing, anyway. Just another word for cheap money? You guys are distorting the market.” or “No, we don’t understand that sort of thing. Maximising financial returns is what matters. The social returns will follow”. Regrettably, the concept of responsible long term investment for economic growth no longer seems to matter in the eyes of most owners of capital.

Antony Bugg-Levine, of the Rockefeller Foundation and one of the founders of the Global Impact Investing Network, urges investors to “reject the binary”, the either/or simplistic judgement that underpins the arguments against the double bottom-line investment approach. It is probably true that in a well-functioning efficient capital market the concept of providing affordable and patient capital would be irrelevant, but events of the past few years have served as reminders that even in the most developed of economies, capital markets require a strong regulatory environment alongside the forces of industry competition.

And what happens when capital markets aren’t working efficiently? Well, in East Africa, the supply of capital is short. Mealy-mouthed bankers argue that the cost of credit is not the issue, but the availability of and access to credit. They use this argument to justify massive spreads between deposit and lending interest rates. Under these circumstances, is short term oligopolistic pricing the best proxy for defining long term commercially sustainable rates of return? Where there is market failure, the market alone is not enough. In the world of finance, of commercial lending, of private equity and venture capital, of differing investor and investee needs, surely there is room for the acceptance of a plurality of approaches.