Is it ironic to start a personal finance blog as the US tips into recession?
An appropriate time to think about our finances and financial ethics is now, as one or both may face serious tests in the near future. As we muse on the subject, it’s always helpful to keep context in mind. For those who want to know a little more about the broad US financial predicament and its causes, PBS has come through:
This is the PBS page with the Bill Moyers special on the mortgage meltdown. Author William Greider is featured; the video of his part of the segment is here. Also here is a link to a TERRIFIC Economist article on Fannie and Freddie (actually quoted in the Bill Moyers piece) for people who want to know more about the mechanics of the situation.
That the intricacies of the credit crisis are enough to cross any layperson’s eyes may be the most important lesson this recession has to offer. It is the very complexity of the financial industry and its instruments that caused the crisis, and the cozy relationship between Washington and Wall Street paved the way. What better time to examine Ethics and Finance?
3 Comments
July 29, 2008 at 3:52 pm
So, why is it important to link “ethics” with “finance?” Pardon the dumb question, but why are they necessarily related?
If I spend my money on gum, how does that make me a bad (or good) person?
July 29, 2008 at 4:26 pm
Spending money on gum doesn’t makes you a bad or good person. Spending money on gum might be a bad or good act, or it might be a morally neutral act.
For instance, if you bought the gum from a kid who was raising money for his ball team, it might be a good act. Whether it is or not depends on your standards for “good” (see Ethics 101).
If you bought the gum for yourself or someone else to enjoy, that might be a good act, if you are a utilitarian, because it contributes to happiness.
If you bought the gum intending to chew it, and it had sugar, and you were a diabetic, it might be ethically questionable (again, depending on your standards.)
Or, let’s say you bought the gum in order to use it to hide an explosive in a very innocent-looking package, then that’s ethically very questionable. (We’ll go with understatement here.)
Or, if you knew that the gum of that brand was packaged by little children chained to tables in a sweatshop, and you knowingly rewarded the people who profit from slavery by buying the gum, that is an ethically questionable act.
Money puts us in relationship with many different people and situations, and we may want to think through the ethical implications of those relationships.
That’s why I link ethics and finance. Anyone else have a thought about this?
July 29, 2008 at 4:59 pm
It is very important to link ethics and finance; when one ignores the ethical implications of financial practices (personal and institutional) tragedies such as the one in Darfur can result. No doubt this is an extreme and garish example. Such disturbing subtopics as genocide and the economic nature of its roots too often scare people away from the subject of ethics and finance altogether. What healthy discussion of ethics and finance aims to do is find a middle ground between quaking in terror at the possible implications of buying a stick of gum (no really, some people actually do) and ignoring the subject altogether!