Thursday, September 23, 2010

So You Want To Be A Moral Billionaire?

Via Christopher Lind: The Moral Economy Column.
The students in the seminar knew there was a connection between the failure of our economic system and the failure of our morality but they kept wanting to interpret the problem as a failure of personal morality. If only we had had honest moral people in charge, instead of liars and thieves, (they seemed to be thinking) we wouldn’t have gotten into this mess. Well, actually, I don’t think that’s true.
There is a difference between personal morality and social ethics. Personal morality has to do with the decisions made by individuals and social ethics has to do with the cultures of organizations and the behaviour of corporate and social systems. Many of these thoughtful and upstanding students will be hired by Canada’s banks and they should have prosperous careers in front of them. However, if shareholders continue to judge bank performance only by the rise in share price each quarter, the CEO will be forced to ratchet up the pressure on each division to increase profit. Eventually that trickles down to the 30 year old loans officer who is pressured to shift a farmer into a variable rate loan or increase the interest rate on a line of credit to a small business owner. When increased profit is the only criteria by which we judge all of economic life, social ethics disappears and only personal morality remains.

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