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.

7 Responses to “Fareed Zakaria: What are Capitalism’s Morals?”


  1. […] “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 Go here to see the original: Fareed Zakaria: What are Capitalism’s Morals? […]

  2. typewritten Says:

    We’ve seen an oath something in an episode of The Sopranos too. Very effective.

  3. danielbeunza Says:

    Typewritten — I disagree with your the spirit of your comment, if not the letter. The fact that an oath is effective for mafiosi is actually a proof that it might work for MBAs. Rituals of passage into a profession are a key moment to focus on symbols and values. For instance, my colleague David Stark recently attended the graduation of her daughter. Being professor at the same university, he was bound to be unsurprised by the ritual. However, he came very impressed by the hippocratic oath… “it’s been around for two thousand years,” he commented.

    So here’s my thinking. If the question here is how to introduce stricter moral principles in the behavior of bankers –and I’m still wondering if it is– the oath seems a possible good answer. What would be required, along Martha’s comment, is ways to make it material and durable. Could nice “MBA Oath” frame, as people use to frame their wedding photographs, be the solution to capitalism?

  4. marthapoon Says:

    Good question! What’s material and durable about the Hippocratic oath? It seems to me what keeps physicians in order in the US is an elaborate apparatus of tort law! Ugh.

  5. danielbeunza Says:

    Martha — that view would be in line with an agency theory perspective. Beyond that, what I observe in you… and especially in Typewritten, is a remarkable position. Typewritten takes a cynical view of the existing efforts (new, creative) to infuse new values in capitalism. I would like to probe you on that. Is it that actor-network theory denies the existence of “values” as too “sociological” or is it that you guys fatalistically believe that capitalism cannot be improved, period?

  6. Dada Says:

    In a funny way, you are all right… at least in my view.
    Cf Daniel (and I agree with his view): Rituals of passage into a profession are a key moment to focus on symbols and values.
    But it often happens that, while the rite of passage looks unchanged, its meaning has changed. It is not the oath that you take (or the walk you take to hand in your thesis if you graduate from Oxford or any other type of ceremonial act) that tells you what to do from there on, but the system in which you fall/ become part of/ after the ceremony is over. And here I agree with Martha – if you know that lawyers will be after you in US, your display a certain behavior. Same if you take the Mafioso oath.

  7. marthapoon Says:

    A very nice way of tying it all together Dada! Thank you! This sounds like an excellent description of performativity. In a nutshell: it’s not just the enunciation of the statement but the way in which the material world is set up to enact that statement forward in an ongoing and sustained way.


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