Friday, March 19, 2010

A Trade, but for What?

The following is a guest post from Daniel Vera, PhD. Dr. Vera holds the PhD in mathematics from MIT and is a senior analyst at a private investment firm in Newport Beach. He moonlights as a CS Lewis scholar, and has focused extensively on the topic of ethics in finance in his private research. We are grateful to have him at the Existential Cosmopolite.

     As I was nearing the end of a laborious and tedious Friday, filled with the usual drudgery associated with any office job, I came across a curious article on Reuters.  My interests became piqued as I found, instead of the usual dry financial pieces I read for work, this article was attempting something more than an interpretation or forecast of current economic events.  

The article, auspiciously titled “Ethics angle missing in financial crisis debate”  (article may be read here: seemed to be aiming at something slightly philosophical, yet leaning away from purely academic and asking a fair pragmatic question.  What is “right and wrong” in the modern economy? The article appeared to
accept the universal aphorism that right and wrong does exist and that people want to be treated a certain way and would be in the right if they extended that to others in attitudes and actions. Simple enough.

Additionally, it should be no stretch to acknowledge a certain uniformity and common acceptance of what right and wrong constitute. Morality is objective.  The interested modern reader who may take issue with this is invited to explore the appendix of C.S. Lewis’ “The
Abolition of Man” where Mr. Lewis summarizes the “different” moral codes of various cultures of antiquity.  It is quite striking how similar, in fact nearly identical, these moral codes are. Indeed, as Mr. Lewis and others have pointed out, it would be quite hard to find a culture where thieves, cowards, and murderers were celebrated, and honest, brave, and compassionate individuals were condemned.

     The complexity, if there is any complexity, seems to arise when we try to apply the Natural Law to the edifice of the world economy. Somehow, people sense that in recent years, somewhere in the entire process of efficiently allocating resources and capital, some have
cheated, and thus, the rest of us have somehow been cheated. Whether or not this is the case and why the situation is as it is escapes a concise summary.  What does immediately raise questions is the last half of the article.  A Citizen’s Ethics Network has been launched in London to raise awareness of the need for clear ethics in finance and addressing the wide concerns that morality and ethics have largely been diluted (or outright ignored) in modern finance.

      “Contributors to a pamphlet outlining the Network's arguments saw the decline of religion leaving a moral vacuum in many western societies. ‘A terror of old-fashioned moralize [sic] has driven all talk of morality out of the public sphere,’ philosopher Alan de Botton wrote.  The
market-driven consumer society, with its focus on satisfying and even creating individual desires, has also broken down the community ties and trust that helped people in the past to also consider the common good, others wrote.”

      The organizers of the Network had various religious leaders contribute to the discourse but wished to emphasize that they did not “want to bring back religion nor return to any supposed other ‘golden age’. One of the founders, Adam Lent went further, stating that "The problem
is that nothing new has replaced them [religion or other “outdated" secular protocols used to provide a moral compass, such as trade unions and politics].” Lent said. "The time is ripe to start developing new perspectives."  Herein lies the beginning of several questions.

      Mr. Lent and company have insightfully identified the “decline in religion” as a contributor to a decline in morality and ethics in finance.  Since religion has so often been the most powerful voice about morality, a decline in religion would presumably see a concurrent decline in morality.  Political organizations, such as trade unions, are as temporal as politics itself, but the underlying
foundation of morality remains throughout various systematic changes in history. Thus it seems we have religious thought providing a basis of morality and the decline in religion causing a decline in morality. Mr. Lent has identified the problem. I am confused by the next step he takes as he goes on to say “the problem is nothing new has replaced them [religion or politics based on a moral foundation from religion]” and we should “develop new perspectives.” How can we use a system and identify the problem as being a lack of something that system provides
only to request that we scrap that system and come up with something new?  How would the new system provide what the old one did?  If I concede that a new system can be developed that serves as a conduit for the Natural Law, how can I distinguish that system from religion, or a politic based on some vague impotent form of religion?  Have I not somehow wandered away from the core issue?  Regardless of one’s spiritual beliefs, there is a sense that something is not fair with our current economic set up.  

The problem is not solved by another set up; socialism (or any other economic structure) cannot “solve” moral problems in capitalism anymore than it can solve moral problems in socialism. The problem has been identified. In industrialized countries, we have been clever enough to allocate capital so efficiently, that we are now little gods, able to summon nearly anything to satiate nearly any appetite and slake nearly any thirst. As our own gods, we no longer need the gods (or God) of our fathers, and yet, it seems we still attempt to use the morality preached by their messengers to identify a problem with what we have created. How then can we reconcile these two things?  How do we impose the Natural Law on another, or agree to live in fairness, if we have replaced what brought us the Natural Law in the first place with Starbucks, Amazon, and Apple, and collateralized debt obligations?

1 comment:

  1. I love the point you made here regarding political-economic systems, and their incapacity to impart morality to the individuals functioning within those systems. I also wonder how an ethics without any broader religious understanding doesn't simply degenerate into a Nietzschian power struggle between master and slave morality. It seems to me that "power" replaces "love" when we start making stuff up and telling others to abide by it. Great thoughts.