I feel deeply honored and privileged to have the opportunity of giving the first Baffi Lecture at the Bank of Italy. Paolo Baffi was not only a distinguished banker and financial expert, he was also a remarkable economist and a visionary social thinker. He had outstanding technical expertise in many different fields, but combined his intellectual eminence with a profound sense of values. As Governor Ciampi put it at the general meeting of the Bank of Italy last May, Paolo Baffi (...) represented “an extraordinary combination of penetrating logic, erudition and moral strength … [he was] not only a gifted student of economics, he had a deep-seated commitment to act for the common good.”1 In remembering Baffi today, we must keep in mind both his intellectual contributions and his general evaluative concerns. (shrink)

To live in human community is, in part, to owe debts to others and to be owed in return. How should we evaluate, normatively, the varied forms, practices, institutions, and relationships of debt? Which should be constrained and which accepted or encouraged? These questions have far-reaching implications given the pervasiveness of debt within human experience. This paper brings the resources of the capabilities approach developed by Amartya Sen and Martha Nussbaum to bear on normative assessments of debt. Our thesis is (...) that the theoretical resources provided by this approach can help philosophers to examine the wide range of costs and benefits afforded by actual debts. We examine six contemporary examples of debt, arguing that the capabilities approach offers a nuanced and holistic framework for evaluating each. The framework is nuanced in that it provides resources for conducting fine-grained analyses of different cases and related policy proposals. It is holistic in that it takes into account more than a narrow range of either positive or negative considerations, instead encompassing the wide array of debt’s bodily, cognitive, and social impacts upon individuals. (shrink)

The principle of limited liability is one of the defining characteristics of modern corporate capitalism. It is also, we argue in this article, a powerful structural source of moral hazard. Engaging in a double conceptual genealogy, we investigate how the concepts of moral hazard and limited liability have evolved and diffused over time. We highlight two parallel but unconnected paths of construction, diffusion, moral contestation, and eventual institutionalization. We bring to the fore clear elective affinities between both concepts and their (...) respective evolution. Going one step further, we suggest that both concepts have come to be connected through time. In the context of contemporary capitalism, limited liability has to be understood, we argue, as a powerful structural source of moral hazard. In conclusion, we propose that this structural link between limited liability and moral hazard is an important explanatory factor of the systemic instability of contemporary capitalism and, as a consequence, of a pattern of recurrent crises that are regularly disrupting our economies and societies. (shrink)

Teleological thinking about money reasons from what money is for to both how it ought to be used and what forms it should take. One type, found in Aristotle’s argument against usury, takes teleological considerations alone to decisively settle normative questions. Another type, found in Locke’s argument about monetary durability, takes teleological considerations to contribute to the settling of normative questions, but sees them as one consideration among many. This paper endorses the type made by Locke while rejecting the type (...) made by Aristotle, and identifies further teleological tendencies in the work of Adam Smith and other philosophers. (shrink)

This article revisits a set of classic political, theological and economic scenes in the (early) modern debate on usury from Luther to Bentham. To summarize, I argue that this theory of usury – which polemically mobilizes counter-Aristotelian tropes of the breeding, reproduction and husbandry of money – might also be read as a theory of what Foucault famously calls pastoral power. If this debate nominally concerns the ‘repeal’ of the ancient prohibition against money-lending at interest, I argue that what is (...) really at stake here is the pastoral production of a new theory of the subject as ‘human interest’: a self whose allegedly intrinsic self-interest expresses itself paradigmatically through financial interest. In conclusion, I situate this genealogy of human interest within the larger history of the self-interested, capitalist and indebted subject from Hirschman, through Foucault, to Lazzarato. (shrink)