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Morality and Money

By Shaun Baker

The purpose of this article is to stimulate discussion about the issue of morality and economic theory. I believe that economic theory without any moral content can, and does, create much misery in the world. It is similar to such theories as nuclear fusion and genetic manipulation being used in a sinister form. These theories left in the hands of high society and power elites, largely unregulated by social protest, would permanently damage the world. Economic theory is now left in the hands of economists and it is wreaking havoc through outcomes such as unequal distribution of life-supporting resources, unsustainable environmental practices and soon to be, if not already, irreversible physiological damage for the human brain. Economic theory addresses only those human interactions that involve an exchange of money or commodities; as such, it ignores the larger part of human existence.  Economics does not address love, family, culture, health, spirituality, the environment, or many other things that make life rich and meaningful.

Let’s suppose for a second that there is a universal moral grammar that shapes our intuitions about certain moral cases that all people intuitively judge – for example, that harms resulting from action are worse than harms resulting from omission.  Certainly this intuition doesn’t hold up in the case that someone deliberately walks past a small child drowning in a pool who could be saved with no effort and no risk to themselves; in that case it seems that refraining from saving the child is no better than causing the death. You can easy relate that hypothetical to individuals and corporations in rich societies unwilling to use their disposable income to aid the sick and starving in poor societies. What follows is the suggestion that there is little moral difference between allowing sick and starving strangers to perish in lower income areas when they could be aided at no great cost to oneself.  Hence, the wealthy western world is morally and ethically responsible for causing the deaths themselves.

Call me a romantic at heart, but I firmly believe that all humans have a desire to help their fellow humans, even considering how fleeting this urge may be these days, and it’s hard to imagine how humans would have beaten the odds in an evolutionary sense without this basic instinct embedded in our nature. In the past two generations we have had to face a reality which makes us choose how we want to perceive injustices in the world through mediums such as TV, internet, radio and newspaper. This manufactured reality we have been made witness to from childhood has made the first world create a need to disconnect with upsetting realities such as third world poverty, war being waged in other parts of the world, and destruction of the environment.  An appropriate term for this situation would be “ignorance is bliss”. Before the above mediums were introduced, no disconnect was required; reality had no medium – it was created from another person standing in front of you, your first-hand physical interactions with the environment and word of mouth from one person to another.  The mediums which we naively rely on for unbiased, up to date news reports become sources of information that we find ourselves having to sift through for hints of invested perception management editing, editing brought to us by governments and corporate ambitions such as economic dominance. The first world has had to perceive the rest of the world in a morally disconnected fashion; we have had to adopt attitudes like, “people die in war, that’s just the way it is” or, “global warming is a natural phenomenon, don’t be a hippy” and, “who is to say a billionaire doesn’t deserve the extra income he has worked for, he deserves it just as much as the 3 billion people on the planet may who work just as long and hard to receive their two dollars a day”.

If we are to trace fundamental flaws which originate in the human condition we must consider the value of the family unit.  Economic principles with no moral component, established by governmental authorities or corporate agendas, may interfere with family cohesion or stability.  Many mothers and fathers are made to work full time to create a decent life for their children. Working time takes away from family time and is detrimental to society to the extent that family ties are weakened. In many cases even if parents are lucky enough to find the time to be physically present, they may be too exhausted to be emotionally present for the sound upbringing of a child.

It is easier for the rich to be moral than it is for the poor in most aspects of life, from raising a family to paying debts and even being more environmentally conscious if they so desire.  Wealth protects the wealthy, but encourages the poor to take action.  A rich man, for example, would never think of stealing bread. Only someone who is hungry but has no money steals bread. When the rich man is hungry, he has more than enough bread and everything else besides to quell his hunger.  Likewise, a rich man with a car will never travel without a ticket on the train or bus.  It is absurd for the rich to complain that certain rules apply to the poor that are not at all necessary for the rich.

“Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.”

- John Maynard Keynes

The current operating system of the world relies on strict classism, which is essential for power elites and big business to stay wealthy and in control. The recent credit crisis and the subsequent economic recession were the direct consequence of serious moral and ethical failures; some may even say they could have been purposeful.  Banks lent money that they didn’t have to borrowers who wanted goods and services they couldn’t afford or didn’t actually need. Human greed and fear were the fundamental drivers of the crisis. Unfortunately, however, the crisis is certain to be repeated unless human beings learn to exercise greater restraint, morals, and humanity. The ethical failure that lay behind the crisis is a result of the modern economic theory. If we want economic growth, we must also accept economic decline. We inhabit a closed planetary ecosystem with finite resources. While solar radiation, wind energy, and gravity offer virtually unlimited energy resources, fossil fuels, fresh water, fertile soil, a benign climate, and biodiversity are either limited or fragile.  But if we accept that our planet has a limited and fragile ecosystem, how can it support this constant and infinite economic growth?  I know it is not a particularly popular view, but perhaps the philosophy of perpetual economic growth has more in common with the cancer cell — a terminal disease — than it does with sustainable organisms. Only a minority of economists, such as Herman Daly, Juan Martinez-Alier, and Robert Constanza, acknowledge that the economics of infinite growth is essentially suicidal. Among politicians, only the Green movement accepts the alternative that Daly describes as “steady state” economics.

“Money, not morality, is the principal commerce of civilized nations.”

- Thomas Jefferson

In 2008, Roger Steare Consulting constructed and published the ethicability Moral DNA Test to understand how people prefer to make moral decisions. Between July and August 2008 over 20,000 people from 162 countries completed the test, which was supported by Cass Business School, PricewaterhouseCoopers, and The Times in London. Those who work in financial services scored lower than average, indicating greed, fear, or moral immaturity. But the test measures not just our overall ethics score compared with others, it also describes how we make moral choices based on three moral dimensions: rule compliance, social conscience, and principled conscience. Rule compliance means obedience, and is the first conscience we develop as young children. Don’t think — just do as you’re told — or else. Social conscience means altruism and is based on the idea that doing the right thing is doing what’s best for others. This part of our conscience appears to be almost fully developed by the time we are in our teens. Finally, principled conscience means character or virtue. Doing the right thing is about making decisions based on how we apply principles such as courage, fairness, and honesty to the choices we make.  This appears not to develop fully until we are in our late 50s.

When things go wrong, the response of governments and regulators is to treat us like children and try to change behaviours by devising even more rules and regulations.  But the test results clearly demonstrate that this only serves to increase the risk of more wrong-doing, as it means people take less personal responsibility for their actions.  Instead of bothering with this, they will simply check if it’s okay with compliance or HR. Then, if things do go wrong, they don’t blame themselves, but blame the system or the market.

It is my experience that in order to do the right thing in any organization, people have to have the following

  • a clear and moral purpose
  • a clear set of moral values that guide behaviour
  • leaders who set a personal example consistent with these values
  • a living community of employees, customers, suppliers, shareholders, and others, in which people will able to resolve together the inevitable challenges and conflicts which are faced in every endeavour

The challenges that we face today in business are not economic, social, or political — they are ethical challenges that demand a more mature response. Moral grown-ups in business don’t need others to tell them what’s right; they ought to be trusted to discuss it and work it out for themselves. A great customer proposition is not delivered in the form of complex rules and procedures; it is delivered by mature adults who really do care about other people and the quality of goods and services they buy.

But the greatest challenge of all will be to confront the brutal truth that our current assumptions about economics are fundamentally flawed.  This planet that we all share is a closed ecosystem with finite resources. Yet the other assumptions we make are that human beings have unlimited wants; that growth is good; that we can all strive for what we want rather than what we need. This economic philosophy of growth for its own sake is as bankrupt as the philosophy of the cancer cell. We need to rediscover the philosophy of “homo sapiens.” We need to find the wisdom to confront this awful truth, and then deploy our intelligence to find a new and sustainable model of moral capitalism – if not a completely new sustainable manufacturing and distribution system.

As long as a man blindly disregards the moral values of other persons, as long as he does not distinguish the positive value which inheres in truth, and the negative value which is proper to error, as long as he does not understand the value which inheres in the life of man, and the negative value attached to an injustice, he will be incapable of moral goodness.


The Morals of Money—How to Build a Sustainable Economy and Financial Sector,  by Roger Steare