Fareed Zakaria: What are Capitalism’s Morals?
June 23, 2009
“We will never know when the next bubble will form, what the next innovations will look like and where excesses will build up. But we can ask that the people steer themselves and their institutions with a greater reliance on a moral compass.” Fareed Zakaria, A Capitalist Manifesto, Newsweek, June 22 2009 (p 44 print edition)
Like adding the social back into the economic, adding the moral dimension to financial action will be a big argument to contend with in debates about how to reform the financial system. The position Zakaria takes in his manifesto is at odds with studies of financial markets in two key respects: Firstly, it presumes that financial activity can take place in the absence of any kind of morality; secondly, it presumes that the location of morality is innate to people and institutions, who can be asked to use it – like digging an old bowling ball out of the closet – it in the future.
It seems to me that a key task of studies of finance is to show how moralities are inherent in all financial systems; financial action has a moral component, if by moral we mean it appeals to some kind of justification or good that is claimed to be transcendent. Secondly, moral compasses do not exist in the singular and are not natural components of agents but are conferred on them through infrastructures and systems; if people and institutions act according to a particular morality it is because they have been equipped to do so.
The implication is that instead of politely invoking ‘the’ moral compass, the real question of reform involves building technical devices: What morality has the financial system had, and where has this morality been hardwired so that multiple agents found it suitable to act in a similar manner? What moralitites might be preferable, and what are the nature of the tools that will provide this necessary moral transformation? The keystone article discussing how objects participate in creating common moral expression is Latour’s delightful article, Where are the Missing Masses?
Post script: This article from the FT reports on oath taking by Harvard MBAs. Given the rising divorce rate, however, it seems to me that the oath is somewhat ‘out’ as a mechanism of long term commitment.