Apologies for losing momentum in this blog, but I have been unable to get onto the Net for a few days. This was probably a good thing because during that time I had a rethink about my previous pledges to 'sharpen up' the demarcation problem (i.e. the problem of drawing a useful line between ethical and non-ethical concerns) and then consider solutions. The rethink was largely prompted by the things I read.
These fell into two groups. First, I continued plowing through stuff that has been written recently - I was mainly looking for thoughts interesting enough to match the momentous nature of the current financial crisis. Nobody seemed up to the job. I read Michael Lewis' collection entitled 'Panic', along with Greenspan's memoir and Robert Reich's 'Supercapitalism'. The Lewis articles do not cut deep, but they contain a lot of anecdotal evidence to reinforce my view that there's a big mess out there and that finance theorists, unwittingly or otherwise, have contributed a large amount of it. Greenspan had somehow slipped under my radar - for some reason, I never took him seriously. Now, I don't feel too guilty about this. His take on the 'crisis' is so underwhelming, I can only think that he has such an overinflated view of his own importance that he is unwilling to say anything significant in case it gets misconstrued and upsets the markets (as if they could be more upset). If you want to have an unpleasant experience of how a person of supposedly world-historical expertise can suffer disconnection from the real world, check out Greenspan's banal comments on the collapse of Enron. Then read up on this evil empire. Reich's book has some good things in it about the relationship between commerce and democracy. But, he underplays the finance card.
In my second category of reading, I returned to some of the literature on previous financial debacles. Here, it is clear that members of the finance industry and politicians are unwilling, or simply don't know how, to extract any lessons from the laboratory of history's relentless experimentation. I also re-examined some of the primary texts of the finance theorists who, as I have indicated before, help rationalise reckless and unethical financial behaviour. Right now, I am reading Merton H.Miller on 'derivatives'. Miller suffered from the same theoretical hallucinations as other prominent finance theorists - a condition I recognise because it is rampant amongst philosophers - and he was prone to creative accounting on the ethical balance sheet (e.g. shifting ethical harm over to the personal responsibility column and then claiming that no social harm has been done) but I kind of like him. He was smart, direct, and knew how to think clearly. However, I leave you with a quotation from him that speaks volumes given that one crucial aspect of the current crisis is the way in which it has shifted burdens of high risk onto people who are ill-equipped, both in terms of knowledge and wealth, to deal with them: "Free market economists have a simple standard for judging whether a new product has increased social welfare: are people willing to pay their hard earned cash for it?"
The upshot of my rethink? Technology willing, I will tell you next time out.