Ethics angle missing in financial crisis debate

March 4, 2010

Worried Wall Street traders watch stocks fall on September 29, 2008/Brendan McDermid

In the ongoing financial crisis debate, many people think that unrestricted subprime loans, credit default swaps, astronomical bonuses, huge bank bailouts and other aspects of today’s economy are somehow unfair or wrong. This issue is not only economic or political, it’s also about ethics and morality, these people think. But that view doesn’t get traction in our political discourse. Asking the big question about what is right/fair or wrong/unfair is not really debated. Sure, there are contrary views on this and any debate would be long and lively. But it doesn’t really happen.

Some moral issues do get traction in politics. Look at abortion or same-sex marriage. The forces on both sides of this argument have considerable clout (at varying levels, depending on the country). They hold heated debates over ethical¬† principles such as the sanctity of human life, the freedom of individual choice or the principle of equality. But those are questions that are not primarily about the economy. When money gets thrown into the equation, there is much more of a tendency to let the market decide. What’s not illegal can’t be unethical, this view seems to argue.

So it was refreshing to find the Citizens Ethics Network in London standing up and asking why we’re not asking these questions. I’ve just run an article on this which starts as follows:

The debate about fixing the financial crisis seems to be missing a key factor — a broad ethical discussion of what is the right and wrong thing to do in a modern economy.

This omission stands out at a time when a survey by the World Economic Forum, host of the glittering annual Davos summits of the rich and powerful, says two-thirds of those queried think the crunch is also a crisis of ethics and values.

Voters in western countries may have a gut feeling that huge bonuses and bank bailouts are somehow unfair, but politicians seem unable to come up with a solid response that reflects it, according to a group trying to kickstart an ethics debate.

“People have strong emotions about right and wrong – that sense of justice is hard-wired into the way we view the world,” Madeleine Bunting, one of three founders of the Citizen Ethics Network launched in London last week, told Reuters.

“Our politics have lost the capacity to connect with that kind of emotion,” said Bunting, associate editor of Britain’s Guardian newspaper. “Politics has become very technocratic and managerial, all about who’s going to deliver more economic growth.”

citizen ethics pamphletIn our phone conversation, Bunting said some would surely take this initiative as a disguised bid to bring religion back into a highly secularised society. It was not, she said, but morality and churches have been linked for so long that many immediately thought of religion when they heard the words morality or ethics. And they promptly think they’re being preached at, and turn off the message. But avoiding these issues is what got us into the muddle we now have, Bunting argued. “You can’t dodge these questions,” she said.

“For 20 years or so, the language of market efficiency was supposed to resolve everything. That was the only question that was asked,” she said. When asked about the fairness of certain economic policies, those defending them dismiss the question as “emotionalism” or “the politics of envy.” This leads to what Bunting calls “an abdication of debate” about ethical issues in the economic policy sphere.

This Network doesn’t want to promote specific policies as much as get a serious debate going. “The only way we can work out what the muddle is that we’ve got ourselves into over the last 25-30 years is to go back to the really fundamental questions of political and moral philosophy and start the argument again,” Bunting said.¬† “That argument is not solved by the market, nor is it solved by socialism. This is about getting back to some arguments that have been central to most human societies. Aristotle would have recognized all these problems.”



This interested me because I recently wrote up that World Economic Forum report mentioned above that said two-thirds of the people polled thought the financial crisis was also a crisis of ethics and values. It also said that 54% of the respondents believed that universal values exist, a view which could be a basis for taking a more ethical approach to business economic policy. I didn’t know then, and the Citizens Ethics Network doesn’t claim to know now, exactly which policies should be proposed to do that. But the Network wants to kickstart the debate and see where it leads.

Here’s the link to the 60-page pamphlet the Network published as a basis for discussion. The group has its own section on the Guardian newspaper’s Comment is Free website. That includes contributions by various¬† philosophers, politicians, economists, theologians and writers supporting the project. It also has an audio of its launch at the British Museum on February 26 with a debate with Archbishop of Canterbury Rowan Williams, Harvard philosopher Michal Sandel and economist Diane Coyle.

What do you think about this? Do we need to go back and ask the tough basic questions? Or should we echo Margaret Thatcher’s motto “You can’t buck the market”?

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