Related News
Home » Opinion » Foreign Views
Ethics isn't icing on the cake - it's basic to new financial order
By Hans Kung |
March 2, 2009, Monday
|
Print Edition
Print Edition
MANY say that the world financial crisis could not have been foreseen.
Perhaps not by financiers and economists, but others who were watching how markets were developing - often with dismay - were more than worried.
As early as 1997, I warned about a repeat of the collapsed economic order of 1929-33 in my book "A Global Ethic for Global Politics and Global Economics."
"The slightest remark, for example by the president of the American Federal Bank, Alan Greenspan, at the beginning of December 1996, that an 'irrational exuberance' had led to an overvaluation of the financial markets was enough to drive the nervous investors on the high-flying stock markets of Asia, Europe and America into a spin, and panic selling. This also shows that crises in globalization do not a priori balance out, but perhaps get progressively worse."
Back then, I was already venturing what is, for economists, a heretical presumption: that chaos theory should be applied to the economy; that devastating effects can follow from the smallest causes.
So I was not at all surprised by the speed and dimension of events in recent months. Indeed, only a few economists - such as the 2001 Nobel economics laureate Joseph Stiglitz and the 2008 laureate Paul Krugman - warned against fatal developments that were mounting in the now globalized economy.
In contrast to 1929, credits are not now being throttled; on the contrary, public money is being pumped into banks and the economy.
But these measures will be successful only if they are not taken in an isolated and populist way. Instead, they need to be part of a convincing overall plan that combines responsible state intervention with relief of the financial burdens of individual citizens, as well as savings in public budgets.
Unforeseeable state debt - at the cost of coming generations - is neither a viable nor an ethical solution. Fortunately, there are signs that the general state of mind that helped spawn the crisis is changing.
In the rich industrialized countries, after an era of cynical and short-sighted profit-maximizing behavior, we may be at the dawn of a new age of modesty and sustainability.
Companies are facing growing pressure to behave ethically, and unethical business behavior is at last being punished.
On a lecture tour in the United States in November 2008, I could see that many people are now complaining about the overwhelming desire for profit in business and megalomania in politics.
As markets failed, calls for ethical regulation of the quest for profit have become justified not only in principle, but also in fact. But ethics is not the icing on the cake; it is not merely an incidental addition to the global market economy.
(The author is president of the Foundation for a Global Ethic - Stiftung Weltethos. The views are his own. Shanghai Daily condensed his article. Copyright: Project Syndicate/Institute for Human Sciences, 2009. www.project-syndicate.org.)
Perhaps not by financiers and economists, but others who were watching how markets were developing - often with dismay - were more than worried.
As early as 1997, I warned about a repeat of the collapsed economic order of 1929-33 in my book "A Global Ethic for Global Politics and Global Economics."
"The slightest remark, for example by the president of the American Federal Bank, Alan Greenspan, at the beginning of December 1996, that an 'irrational exuberance' had led to an overvaluation of the financial markets was enough to drive the nervous investors on the high-flying stock markets of Asia, Europe and America into a spin, and panic selling. This also shows that crises in globalization do not a priori balance out, but perhaps get progressively worse."
Back then, I was already venturing what is, for economists, a heretical presumption: that chaos theory should be applied to the economy; that devastating effects can follow from the smallest causes.
So I was not at all surprised by the speed and dimension of events in recent months. Indeed, only a few economists - such as the 2001 Nobel economics laureate Joseph Stiglitz and the 2008 laureate Paul Krugman - warned against fatal developments that were mounting in the now globalized economy.
In contrast to 1929, credits are not now being throttled; on the contrary, public money is being pumped into banks and the economy.
But these measures will be successful only if they are not taken in an isolated and populist way. Instead, they need to be part of a convincing overall plan that combines responsible state intervention with relief of the financial burdens of individual citizens, as well as savings in public budgets.
Unforeseeable state debt - at the cost of coming generations - is neither a viable nor an ethical solution. Fortunately, there are signs that the general state of mind that helped spawn the crisis is changing.
In the rich industrialized countries, after an era of cynical and short-sighted profit-maximizing behavior, we may be at the dawn of a new age of modesty and sustainability.
Companies are facing growing pressure to behave ethically, and unethical business behavior is at last being punished.
On a lecture tour in the United States in November 2008, I could see that many people are now complaining about the overwhelming desire for profit in business and megalomania in politics.
As markets failed, calls for ethical regulation of the quest for profit have become justified not only in principle, but also in fact. But ethics is not the icing on the cake; it is not merely an incidental addition to the global market economy.
(The author is president of the Foundation for a Global Ethic - Stiftung Weltethos. The views are his own. Shanghai Daily condensed his article. Copyright: Project Syndicate/Institute for Human Sciences, 2009. www.project-syndicate.org.)
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
