Nobody seems to have gotten an ethical fix on the current financial crisis. People are upset, outraged, even, and there is a lot of blame flying around in the media. But the moral upshot? Nothing even remotely insightful seems to have been said for public consumption.
This is disappointing. But, it doesn't surprise me. Some years back, I did some research on hostile takeovers, and a number of worrying things emerged that at least partly explain the present absence of fruitful ethical thinking and reflection.
First, many business people, politicians, and economists seem to think that ethics has a very limited jurisdiction. In all but the weakest sense, it has no authority over what happens behind the closed doors of financial institutions. Finance is a technical, and hence ethically neutral, concern. As such, it is best left to those who understand both markets and the relevant equations.
Second, economists, especially those who specialise in finance theory, seem to have lost their capacity to criticise the behaviour of financiers and business people when they are following market trends. Take any evidence that on the face of it looks fishy - a decrease in R& D expenditure, huge remuneration unrelated to performance, and so on - and you will find an economic theorist using market data to show that, despite appearances, this is all for the best.
Third, the rewards in finance-related occupations are potentially so high that employees are subjected to unique temptations and the decisions of management are subjected to a sort of anti-ethical gravitational force. With economists and finance theorists on hand to rationalise ethically questionable decisions, it is difficult for those involved to retain a conventional ethical perspective.
I don't want this blog to be too long, so I will wait until next time to explain how such factors are relevant to the current financial situation.