October 12, 2008

Moral Factors in the Free Market

There is a very interesting review in Time magazine of an article, from a forthcoming Oxford University Press book, titled "The Recession of 2008: The Moral Factor — A Jewish Law Analysis.", by Aaron Levine, who is both a rabbi and an economics professor.

The article comes up with a pro-regulatory stance that has its basis on the ancient principles of Judeo-Christian ethics, including not putting a stumbling-block before the blind (economically so in this case), disclosure (of hidden flaws) and over-charging.

That economics professors start to discuss ethics is a much needed step towards creating a principled compromise between freedom and moral restrictions in the prevailing "free market" ideology.

The old adage of "no freedom without responsibility" has been greatly manifested by the current financial crisis. The free agents in a marketplace are suddenly not so free after all, when confronted with margin calls. If one does not act in a responsible way, one's freedom will we taken away, one way or another.

In our usual feelings of self-importance and entitlement, we could take a word from Abraham Lincoln: "I like to see a man proud of the place in which he lives. I like to see a man live so his place will be proud of him."

No comments: