Is there any Ethics in Economics Anymore?

Ethics in Economics
Ethics in Economics

Tough times call for new, creative solutions. It calls for fresh faces and fresh ideas. Obama was elected president behind his rally cry of change. He has appointed many policy leaders for all facets of our nation. From Health to Technology, the best and the brightest are brought on to bring our nation out of our poor economic state.

Great. Now what?

How about appointing an Ethics Czar? We hear all the time in the media that things need to change. We hear about excessive pensions and bonuses while thousands are laid off, and we get angry. We hear all about how some executive cheated on this, some accountant played with the numbers like that, and something in us burns. Yet would we have been any different if we lived in the world they did? If we were given the opportunities they had? We live in a me-first culture and accumulating wealth, living the “American Dream”, whatever that is, has become such a great focus in all that we do. Media praises success and we all grow up with that inward desire to make it big.

Below is a great little article about Ethics in Economics. Some excerpts:

Code of Ethics in Business has Changed

…I recall another conversation with a successful investment banker. He told me that the first thing he had to establish was his character, his reputation for trustworthiness and honesty. Without that, he would have been unable to trade. Nowadays, he said, deals no longer depend on character but on lawyers.

Common to these stories is the gradual disappearance of the cluster of principles that went by the name of morality. Whatever its source – religion, conscience, custom or code – it meant that there are certain things you don’t do because they are not done. You don’t reward yourself when customers, clients or shareholders or employees are suffering losses. You don’t pay yourself out of all proportion to what you pay others. You don’t take advantage of your position just because you can. You are guided, even if no one is watching, by a sense of what is responsible and right. Without that internalised code of honour and trust, no institution can be sustained in the long run.

This article starts off by talking about how things used to be. Ethics played a large part of how we did business. There was a time the top lawyers would refuse to take on hostile takeover cases because they deemed it simply wrong. You can throw all the money you want, I will not do it. The point is not whether hostile takeovers are moral or not, but the point is that there was a sense of principle, a sense of morality that kept our greediness and ambitions at bay. There are things we just do not do, because our code of morality and honor wherever we get it from, dictates it to be so. But times have changed. But who is to blame? The culture? Who creates culture? We do.

Morality has become Relative, The Market follows Suit.

Markets don’t guarantee equity, responsibility or integrity. They can maximise short-term gain at the cost of long-term sustainability. They don’t distribute rewards fairly. They don’t guarantee honesty. When it comes to flagrant self-interest, they combine the maximum temptation with the maximum opportunity. Markets need morals, and morals are not made by markets.

They are made by schools, the media, custom, tradition, religious leaders, moral role models and the influence of people. But when religion loses its voice and the media worship success, when right and wrong become relativised and morality is condemned as “judgmental”, when people lose all sense of honour and shame and there is nothing they won’t do if they can get away with it, no regulation will save us.

One trend in our culture is that it has become completely relativistic. What is right for me is right for me, what is right for you is right for you. Tolerance used to mean to be respectful all PEOPLE, despite perhaps their completely wrong ideals or ideas. Tolerance is now culturally defined to be respectful of all IDEAS. As it says above, what is right and wrong has become relative and any strong challenge or perhaps condemnation is considered “judgemental” or “intolerant”. This is called moral relativism and it’s changing the fabric of our society from one of truth and morals to a culture of “niceness” and subjective truth, where the whole point is doing what feels right for oneself.

It is no wonder the latest USA Today Gallop Poll says that less than 25% of Americans give a high rating for ethical standards for the members of Congress, business executives, stockbrokers, attorneys, bankers, you name it.

With a relativistic mindset living a morally relativistic culture, is it really that surprising to find executives doing the things they do? Athletes getting caught using the things they use? Politicians getting jailed for the things they commit?

We need to find a way to return to the understanding that there is an objective truth that we must live by. That there is a right and a wrong, and we must not be afraid to condemn that which is wrong and quick to admit when we ourselves have done wrong. Shouldn’t that be the basis of all business, let alone a civilized moral society?

Full Article

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