Copyright 1999 The Daily Telegraph (London)
"Acid Test: Never forget the moral of Danegeld"
February 8, 1998
By Matt Ridley

WHEN King Alfred the Great first paid Danegeld to appease a Viking army, that army "with a treachery to which all adjectives are unequal" (Churchill's words) immediately broke its promise of peace. He thereby learnt a lesson that we all subsequently absorbed at school: never pay off a blackmailer; he'll only come back for more.

Yet do we learn this lesson? It strikes me that on the large scale and the small, we continue to pay ransoms with little heed to the consequences. Even after seeing what happened when we gave the Sudetenland to Hitler, I still give chocolate biscuits to my children much too readily when they whine for them. My local newspaper recently reported a case of a man who had paid nearly half a million pounds to a blackmailer from whom he had bought a pornographic video, rather than have it come out. We discount the future steeply.

Indeed, we have begun to make a virtue of paying Danegeld.

We call it "corporate responsibility" when a company accedes to the demands of a pressure group that has been besieging it and "pays" the pressure group off by changing its policy. It is little wonder that pressure groups have noticed this trend and are "blackmailing" multinational companies with the threat of bad publicity.

Just as marauders arriving back in Danelaw unscathed and rich must have set others thinking, so the success of the Environmental Defence Fund and Greenpeace in extracting verbal concessions and financial commitments to the environment from companies has encouraged others to seek badges of corporate responsibility from their victims. Ethically minded multinationals now fall over themselves to display their commitment to disability, social conditions, affirmative action and sustainability as well as environmental issues.

The head of BP, perhaps terrified by what happened to Shell over Brent Spar, has rushed to endorse global warming alarmism and renewable energy. Iceland stores, perhaps alarmed by environmental campaigns against chlorine used in refrigeration, has refused to stock genetically engineered food.

Pressure groups have only to threaten a campaign against a company and they will be well supplied with ideological Danegeld. Many prominent environmentalists now shuttle between lucrative consultancies, like itinerant Danes, helpfully suggesting to Saxon villages how to avoid being the next victims.

I do not mean to be cynical. In practice, the effect of having to avoid being publicly humiliated by a powerful pressure group probably does encourage good corporate practice in a way that no amount of government regulation could achieve.

BUT the moral of the original Danegeld tale should not be forgotten. Danegeld did not buy peace; it led to more war.

Brent Spar is only one example of where rent-seeking activities of pressure groups led to a good outcome for them (publicity) but possibly a poor one for the environment.

There is also the more general argument, which the American think-tanker Fred Smith has made in the Wall Street Journal, that "if executives really believe they harm the poor, they should quit their jobs immediately". BP's directors must realise that pumping gas as cheaply as possible out of the ground relieves the pressure to burn more carbon-rich fuels such as wood and coal, and does so far more effectively than any renewable technology. Monsanto's directors must genuinely believe genetically engineered crops are good for the environment by more narrowly targeting pesticides; yet they paid Danegeld by providing access from their own web site to that of Greenpeace which thinks the opposite.

As Robert Halfon argued in a pamphlet for the Social Affairs Unit last year, corporate responsibility should include standing up for the belief that the pursuit of profit and market share can in many cases be good for both people and planet. As blackmail by pressure group becomes more lucrative, so it is more and more frequently going to be counterproductive.