Ethics angle missing in financial crisis debate

PARIS Thu Mar 4, 2010 9:10am EST

David Randall from Bournemouth sits outside the Financial Services Authority offices in London's Canary Wharf financial district September 15, 2009. Randall, who lost 25,000 pounds ($41,224) in the collapse of Lehman Brothers, was protesting about being sold high risk financial products. REUTERS/Kevin Coombs

David Randall from Bournemouth sits outside the Financial Services Authority offices in London's Canary Wharf financial district September 15, 2009. Randall, who lost 25,000 pounds ($41,224) in the collapse of Lehman Brothers, was protesting about being sold high risk financial products.

Credit: Reuters/Kevin Coombs

PARIS (Reuters) - The debate about fixing the financial crisis seems to be missing a key factor -- a broad ethical discussion of what is the right and wrong thing to do in a modern economy.

This omission stands out at a time when a survey by the World Economic Forum, host of the glittering annual Davos summits of the rich and powerful, says two-thirds of those queried think the crunch is also a crisis of ethics and values.

Voters in western countries may have a gut feeling that huge bonuses and bank bailouts are somehow unfair, but politicians seem unable to come up with a solid response that reflects it, according to a group trying to kickstart an ethics debate.

"People have strong emotions about right and wrong - that sense of justice is hard-wired into the way we view the world," Madeleine Bunting, one of three founders of the Citizen Ethics Network launched in London last week, told Reuters.

"Our politics have lost the capacity to connect with that kind of emotion," said Bunting, associate editor of Britain's Guardian newspaper.

"Politics has become very technocratic and managerial, all about who's going to deliver more economic growth."

The backlash against bank bail-outs has forced several chief executives of major banks to lose their bonuses this year. Despite this, the Royal Bank of Scotland (RBS.L), 84 percent publicly owned, announced bonuses of 1 million pounds each to over 100 bankers last week.

U.S. President Barack Obama has proposed tighter regulations on banks but also said he didn't begrudge the $17 million bonus awarded to JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon or the $9 million for Goldman Sachs Group Inc (GS.N) CEO Lloyd Blankfein because "they are very savvy businessmen" and some athletes earned more.

ENDURING VIRTUES

Perhaps not surprisingly in Britain's pre-election period, the Network -- organized by Bunting, Adam Lent of the Trades Union Congress (TUC) and writer Mark Vernon -- had no problem getting top British politicians to contribute to the debate.

Prime Minister Gordon Brown said people wanted a return to the "enduring virtues" of accountability, responsibility and fairness. "These values must infuse our response," he wrote in the Network's pages on the Guardian website.

"Politicians have shied away from these questions, for fear of seeming judgmental," wrote Conservative opposition leader David Cameron. "It's vital we find a way of talking about these issues without people feeling preached at."

Although the Citizens Ethics Network started in Britain, where the financial crisis and an expense account scandal in parliament has fanned popular discontent, the mood it reflects seems to be much more widely spread.

The World Economic Forum survey showing widespread concern about ethics in business and politics polled 130,000 people in France, Germany, India, Indonesia, Israel, Mexico, Saudi Arabia, South Africa, Turkey and the United States.

There have been countless calls for more ethical standards in business and politics, many from religious leaders, but the fact they don't gain traction in the political debate is what spurred the Network's founders to take their initiative.

Contributors to a pamphlet outlining the Network's arguments saw the decline of religion leaving a moral vacuum in many western societies. "A terror of old-fashioned moralize has driven all talk of morality out of the public sphere," philosopher Alan de Botton wrote.

ARISTOTLE WOULD SEE IT

The market-driven consumer society, with its focus on satisfying and even creating individual desires, has also broken down the community ties and trust that helped people in the past to also consider the common good, others wrote.

Trade unions and politics used to provide secular frameworks for values such as solidarity and sacrifice, wrote Adam Lent of Britain's Trade Union Congress, but these were swept away by the rapid transition from a manufacturing economy to one dominated by services.

Archbishop of Canterbury Rowan Williams and Muslim intellectual Tariq Ramadan both contributed to the Network pamphlet, but the organizers stress they neither want to bring back religion nor return to any supposed earlier "golden age."

"The problem is that nothing new has replaced them," Lent said. "The time is ripe to start developing new perspectives."

Bunting said the best way to do that is to "go back to the really fundamental questions of political and moral philosophy and start the argument again.

"That argument is not solved by the market, nor is it solved by socialism. This is about getting back to some arguments that have been central to most human societies," she said.

"Aristotle would have recognized all these problems."

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