Peter Jackson column

Mar 3 2005 By Peter Jackson, The Journal

It may be hard to imagine at the moment, but spring and summer are on their way, seasons of sun, flowers - and economic summits.

Yes, as the weather improves, the world's leaders will take themselves off to swanky resorts and plot our future. It will be interesting to see whether this year meetings of the world's finance ministers will bring the same huge protests we have seen over recent years.

Even if they don't, we know the death of socialism has not meant the end of anti-capitalism or anti-business. These are still in rude health, even if they now go under the cloak of anti-globalisation or environmentalism.

Since Adam Smith, capitalism has made no bones about its appeal to self-interest, or the fact that self-interest is essentially what makes it work, and it does not take too great a leap of reasoning to argue that self-interest is only another name for selfishness. From this assumption, it is easy to go on to claim that such a system is bound to benefit the few and that it is necessarily harmful to the interests of a fair and just society. In fact, few entrepreneurs are motivated by greed. Usually they crave independence, excitement or just to see their big idea put into practice.

And, more importantly, it is becoming apparent that investors and consumers are not motivated purely by self-interest either.

Last year research revealed that some £4bn is now held in so-called ethical investment funds and that there are nearly half a million ethical investors in the UK. Also, a survey showed that two thirds of investors are interested in making ethical investments.

Furthermore, there is no evidence to suggest that ethical investment funds perform any worse than others. It may even be the case that in future they will perform better, if consumers favour companies which behave ethically, and there is no reason, particularly in the wake of the public's response to the tsunami disaster, to believe this will not be the case.

Indeed, it may already be happening. This week the Fairtrade organisation reported that sales of goods bearing the label guaranteeing a better price for farmers in developing countries jumped by 51pc to £140m last year.

Major retailers expanded their Fairtrade ranges to meet consumer demand, with sales of coffee, chocolate and bananas all showing huge increases. The fact is that capitalism is all about answering demand - it's up to us to demand it is a force for good rather than ill.