I enjoyed Andrew’s post below, though I’d dispute the assertion that Adam Smith and the other ‘great theorists’ of capitalism thought it was amoral.
That’s not true, they thought capitalism in general made us more moral, more civilised, though they also saw this wasn’t always infallibly the case. But if you read Smith, Hume, Shaftesbury and the other great theorists, you’ll see they tried to make a moral case for capitalism and commerce.
In terms of the ethical implications of the crisis, the basic ethical point, which others have discussed but which is still unaddressed by governments, is this: our present economic system is palpably unfair, in that the financial services sector is allowed to live by different rules to the rest of the economy.
The financial sector has, for the last 30 years, subjected the rest of the economy to its pitiless attention, privatizing it, stripping off assets, selling off assets, and imposing ‘market efficiency’ (ie job cuts), with an evangelical zeal.
If a company was failing, we were told, it should be carved up, sold off, or allowed to fail. This was the efficient way.
Now, banks right across the world are failing. But we are told they are too big to fail, they are of ‘systemic importance’, and so they are propped up with our money, and allowed to continue their reckless activities until the next bail out, in a few years time.
The financial sector created a whole new moral lexicon – ‘shareholder value’, ‘rationalisation’, ‘market efficiency’, ‘transparency’ – which we absorbed to an extent we perhaps haven’t realised. Now, this rhetoric has been exposed as self-interested, and hypocritical.
Our societies reward bankers for gambling, often gambling badly, with the highest salaries in the economy, with the possible exception of a handful of equally juvenile Premiership footballers. Meanwhile, teachers, nurses, social workers – people who are genuinely contributing to the public good – are paid a fraction of that.
Our present economic system rewards gambling and greed, and punishes altruism and self-sacrifice.
And we let bankers get away with it – as soon as they go bust, we bail them out, get them back to the poker table, and applaud them for their pluck and acumen when the stock markets go up.
It is, as others have pointed out, a captured system, rigged to serve the interests of those in the financial sector.
A genuinely ethical economic system would value teachers, nurses and social workers as among the most important figures in a society, and they would be paid accordingly, or at the very least better than the pittance they earn today.
Thatcherism has left us a system where we hold the financial services sector up as a paradigm of excellence, a beacon leading the rest of us to prosperity. It is not. It makes us both spiritually and literally poorer, and if we have to subsidize it because it’s of ‘systemic importance’, that means our system as it presently exists is broken.
