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Timely series of reflections on the financial sector's obligations,
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This review is from: Crisis and Recovery: Ethics, Economics and Justice (Hardcover)
Amidst the welter of books describing the purely financial causes and consequences of the current global economic crisis, there's not been a great deal of reflection about the interaction of issues of ethics, justice and the purpose of economics. Until now. In a very timely book, which came out of a colloquium at Lambeth Palace organised by the Archbishop of Canterbury Rowan Williams, a range of distinguished commentators give their varied perspectives on what needs to happen now. You can get an idea where the debate is going from the Roosevelt New Deal quote with which the Guardian newspaper's economics editor Larry Elliott (in a superb account of the causes and unfolding timetable of the crisis itself) ends his introduction:
`The fundamental trouble with this whole stock market crowd is their lack of elementary education. I do not mean a lack of college diplomas, and so on, but just inability to understand the country or public, or their obligations to their fellow man'.
With one notable exception, subsequent contributors proceed to examine what those obligations might be. For the Archbishop, economics, profit and loss can never satisfactorily be the be all and end all of what it means to live well, or virtuously. And in a masterful account of John Maynard Keynes' thought, Robert Skidelsky similarly makes the case for Keynes as interested in virtue. His economic thought (fresh adherence to which, as an antidote to current economic models, Skidelsky emphatically recommends) was pursued, in the author's view, only as a tool intended to help society escape as quickly as possible from `the tunnel of economic necessity' to the sunlit uplands of the good life (51). Jon Cruddas' and Jonathan Rutherford's piece has more the tone of a manifesto for ethical socialism, and was correspondingly short on reflective detail, but Philip Blond then returns to the theme with a call for economics to be subordinate to a virtue-based society that operates and regulates a `moral' market via a `civil economy' of widely-dispersed (including cooperative) ownership, rather than leaving it to the `free' market or a bureaucratic state. Further contributions on the knowledge economy and the environment make very similar cases, although there's a healthy measure of divergence in the approaches offered.
The one contribution that appears to me much weaker is John Reynolds' chapter on ethics and investment banking. As Chair of the Church of England's Ethical Investment Advisory Group, he knows the world of investment banking intimately. And although, in fairness, he does conclude that the investment banking community needs more effective regulation and transparency, and `better ethics' rather than the mechanical, `tick-box' compliance culture it has now, his analysis has no reference point outside the industry. At times, it comes across as an apology for the indefensible. He appears to find short-selling morally neutral, a startling enough conclusion; but the superficiality of his view that failure of major banks was not `in any sense the result of deliberate acts by their management' (145) beggars belief. And he can be callous too: describing the risks run by top bankers (a point which he clearly expects should elicit some sympathy for those involved), he notes, for example, that James Cayne, CEO of Bear Stearns at the time of its emergency sale to JP Morgan, made `only' $61 million on his share options instead of the $1 billion he could have made when the shares were at their peak. Such a remark - involving a sum it would take someone on the UK average wage 1600 years to earn - could only have been made by someone who, like Roosevelt's stock market crowd, is losing sight of his obligations to the rest of us. No reference to wider outrage about bankers' pay or bonuses, as though this was something the closed world of the banks need not trouble itself about; no challenge function, holding greed up to the cold light of day to see how it really looks. It's left to the commentators whose pieces follow his to unpick Reynolds' worryingly weak analysis, which - mercifully - they do to great effect. I'll leave the last word to Will Hutton, whose excoriating description of bankers as economics-fixated and still stuck, morally, in the hunter-gatherer age is worth the price of the book on its own: `Bankers and their apologists understood none of this then, and little of it now. They have a tin ear to fairness.' (189).