Over the last decade, and culminating in the 2008 global financial meltdown, there has been an erosion of trust and a concomitant rise of distrust in domestic companies, multinational enterprises, and political economies.In response to this attrition, this article presents three arguments. First, we suggest that trust is the “glue” of any viable political economy, and we propose that the stakes of violating public trust are particularly high in light of the asymmetry between trust and distrust. Second, we (...) identify a constellation of key barriers to overcoming distrust that companies face in the current environment: (1) corporate mind-sets that promote a preoccupation with quantification, hierarchical leadership models, and “blind trust” in authority; (2) the anonymity of core stakeholders; (3) the agency of the media as a driver of the political economy; and (4) firm-centric models of stakeholder relationships.Third, we argue that, notwithstanding these challenges, these phenomena are not fatal and can be addressed through a holistic transformation in corporate culture. Such a transformation might include a shift to collaborative leadership models and replacing authority models with responsibility, a “names and faces” approach to stakeholders through cases and stories, more egalitarian communication exchanges with external stakeholders, and a reprioritization of the firm as a vital element among others within a system rather than the central core of a network.We conclude that the value of trust at the individual, institutional, national, and global levels cannot be overstated. Without a reinvigoration of trust in our political economies, at all levels, the future of an economically vibrant planet is indeed bleak. (shrink)

This article delves into a potential mindset that may be responsible for the recent financial meltdown. Research relating to this mindset from different perspectives is reviewed. The findings from this literature review are used to create a conceptual framework for the empirical, ethical, and corporate social responsibility study of financial professionals. Data were collected from a survey of the professional membership of a large national association of financial professionals. This article reports the results of the analysis (...) of data relative to the relationships among the four constructs—financial professionals' perceived organizational value clusters, ethics, corporate social responsibility, and corporate performance. The findings indicate that organizational core values significantly affect corporate ethics, social responsibility, and financial performance. We propose that organizations in the financial industry can move toward being more ethical and socially responsible by adopting organic core values (e.g., democratic, open, trusting, enterprising, creative, stimulating) and moving away from mechanistic values (e.g., structured, regulated, procedural, authoritarian, closed, callous). We also found the adaptation of organic core values does not require the organization to suffer a loss in financial performance. (shrink)

In The Global Financial Crisis, contributors argue that the complexity of the Global Financial Crisis challenges researchers to offer more comprehensive explanations by extending the scope and range of their traditional investigations.

ABSTRACT Capital regulations stemming from the Basel accords created incentives for banks to securitize mortgages, even risky ones; hold them at a correspondingly low Basel risk weight; or shift them off of banks' balance sheets to obtain even greater leverage. Securitization was praised by economists and regulators for dispersing risks to investors across the world, providing greater resilience to the financial system. However, since in reality banks tended to hold onto securitized assets—either on their balance sheets or off of (...) them, in off‐balance‐sheet entities—the accumulated credit risk remained with the banks, especially in the “shadow banking sector.” This explains the heightened vulnerability of the financial system to a sudden collapse. (shrink)

Capital regulations stemming from the Basel accords created incentives for banks to securitize mortgages, even risky ones; hold them at a correspondingly low Basel risk weight; or shift them off of banks' balance sheets to obtain even greater leverage. Securitization was praised by economists and regulators for dispersing risks to investors across the world, providing greater resilience to the financial system. However, since in reality banks tended to hold onto securitized assets—either on their balance sheets or off of them, (...) in off‐balance‐sheet entities—the accumulated credit risk remained with the banks, especially in the “shadow banking sector.” This explains the heightened vulnerability of the financial system to a sudden collapse. (shrink)

The subprime mortgage crisis which was caused to a large degree by questionable mortgage lending and securitization practices that were furthered by deregulatory policies devastated the economy, led to large scale unemployment, and caused the foreclosure of millions of homes. There is evidence that numerous mortgage companies, financial firms, rating agencies, and high-level professionals were involved in unethical and often fraudulent business practices leading to the most severe economic meltdown since the Great Depression. In spite of the great (...) economic and social harm, there was a lack of criminal sanctions against those companies and individuals, who were involved in creating the crisis that reached even global dimensions. This article analyses the reasons for and the possible social impacts of the lack of criminal sanctions against those who crossed the line between unethical and criminal business practices. (shrink)

ABSTRACT The underlying cause of the financial meltdown was much more mundane than a “crisis of capitalism”: The real origins lay in mostly obscure housing, tax, and regulatory policies of the U.S. government. The Community Reinvestment Act, the affordable‐housing “mission” of Fannie Mae and Freddie Mac, penalty‐free refinancing of home loans, penalty‐free defaults on home loans, tax preferences for home‐equity borrowing, and reduced capital requirements for banks that held mortgages and mortgage‐backed securities combined with each other to create (...) the incentives for both subprime lending and the housing bubble that eventually led to the financial collapse. (shrink)

In this Article I argue that the global credit crunch of 2007-2009 is the result of the multifaceted phenomenon of liquidity illusion. Fundamentally, the problem of liquidity illusion derives from the hollow conceptualization of "liquidity" in mainstream financial theory and practice. Represented most recently by the market completion theory, this paradigm has led to a widespread misunderstanding of the dynamics of the relationship between the process of financial innovation and the liquidity of the financial system. In order (...) to unpack the political economy of liquidity illusion from other factors in the leadup to the global credit crunch, this Article builds upon Hyman Minsky’s vision of financial innovation and crisis. Challenging mainstream views of the liquidity-enhancing process of financial innovation, I identify the three pillars of liquidity illusion in the recent 2002-2007 bout of securitization: a) the paradigm of self-regulating finance; b) the role of Ponzi finance; and c) the function of private authority, namely credit rating agencies. (shrink)

A global survey of Business Ethics as a field of teaching and research was launched in the second half of 2008. The launch of this survey coincided with the global financial meltdown that was triggered by the subprime crisis in the USA. As part of the global survey of Business Ethics, respondents from nine world regions were requested to provide information on the current focus of research in the field of Business Ethics in their respective countries. They were (...) also asked about the new challenges that they foresee arising over the next 5 years. The timing of the survey makes it possible to determine what the focus of research in the field of Business Ethics was before the start of the global economic crisis, whilst the responses that were given to the survey in response to the question about new challenges in the field of Business Ethics over the next 5 years give an indication of what the new focus areas in Business Ethics research might be after the onset of the global economic crisis. By critically comparing the focus areas of research in Business Ethics prior to the economic crisis to the new areas of research that are foreseen after the onset of the global economic crisis, some insights might be gained on how the global economic crisis is likely to affect the study of capitalism, finance and corporate responsibility in the field of Business Ethics. (shrink)

This review essay of Economics Rules situates Dani Rodrik’s contribution with respect to the 2007–2008 global economic crisis. This financial meltdown, which the eurozone did not fully recover from before the Covid-19 pandemic, led to soul- searching among economists as well as a call for heterodox economic approaches. Yet, over the past decade, instead the economics profession has maintained its orthodoxy. Rodrik’s Economics Rules offers a critique of the economics profession that is castigating but mild. It calls for (...) economists to use more and diverse models without becoming wedded to any single model or an overarching vision. Yet Rodrik ratifies many of the benchmark models standard to orthodox economics and provides little ground for a fundamental rethinking of the discipline. This essay analyses the conservatism underlying Rodrik’s approach, which upholds general equilibrium theory and rational expectations underlying the efficient market hypothesis. It argues that the economics discipline’s scope-creep to maintain its applicability to all human decision-making, and its acceptance of all-inclusive utility functions, crowds out moral sentiments and civic virtue. Thus. it argues that rather than urging economists simply to be more cautious in their application of models to address particular social concerns, instead economists must recognise their discipline’s inherent limitations. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Reviewed by:Looking Beyond Neoliberalism: French and Fran-cophone Belgian Cinema and the Crisis by Martin O’ShaughnessyJoseph MaiO’Shaughnessy, Martin. Looking Beyond Neoliberalism: French and Fran-cophone Belgian Cinema and the Crisis. Edinburgh University Press, 2022. 224pp.Martin O’Shaughnessy has devoted a career to scouring the intersections of politics, identity, and contemporary French cinema, perhaps most notably in his 2007 book, The New Face of Political Filmmaking. In a review in Cineaste, Jonathan Buchsbaum (...) called that book “theoretically sophisticated” and a “powerful and eloquent polemic for retaining a class analysis of film” (90). According to Buchsbaum, The New Face asked “the central question of how films can formulate political critiques after the collapse of the grand leftist narrative(s) of the twentieth century” (89). O’Shaughnessy’s new book, Looking Beyond Neoliberalism: French and Francophone Belgian Cinema and the Crisis, is a major publication with similar qualities of theoretical breadth, and is also once again inspired by cinematic attempts to envision different political futures.Things have not gotten better since 2007. The “crisis” of O’Shaughnessy’s title does not refer narrowly to the financial meltdown of 2007–2008 and subsequent government-funded bailouts. Crisis is not an event requiring austerity (disguised as “courageous decision-making”), but in many senses the essence of global neoliberalism, or as the frequently cited Maurizio Lazzarato puts it: “the form of government of contemporary capitalism” (qtd. in O’Shaughnessy 5). The 2008 crisis has, if anything, made this form of government ever more visible, and ever more punitive and essential to Western industrial societies. With a mastery of the philosophical critique of neoliberalism, O’Shaughnessy unpacks how the logic of crisis habituates the subject to self-entrepreneurship, debt, social and political isolation, conformism, precarity, social violence, and nihilism.The book looks at these issues through cinematic works by French and Belgian Francophone filmmakers, ranging from popular auteurs like Jacques Audiard and Luc Besson to more critically political filmmakers like the Dardenne brothers or Laurent Cantet. O’Shaughnessy is not looking only for thematic representations; he also seeks new answers in films that respond to, flee, or resist neoliberalism. Like the Occupy or Nuit Debout movements, much of this cinema seeks to reformulate identifications and cultivate political resistance, though O’Shaughnessy warns us early on [End Page 117] that we are not in a place “where there is a cohesive political cinema” (9). There is, therefore, a refreshingly normative concern throughout the book: the most valuable films seek paths toward social encounter, re-assemblage of identity categories, lives that are not defined through debt, and a future in which crisis and precarity do not structure action.The first three chapters focus on the “crisis of the neoliberal subject” (6). Chapter 1 approaches the work of Jacques Audiard, who has at times been read as reinforcing regressive gender roles and at other times embracing a rather more disruptive masculinity. Bringing the lens of the neoliberal subject to bear on films like Un prophète (2009) or Un héros très discret (1996), O’Shaughnessy emphasizes Audiard’s use of crime-genre filmmaking as a parallel to capitalism, and the genre hero as a corollary to the bourgeois entrepreneurial male subjectivity it fosters and puts into crisis. Desperately, Audiard’s masculine subjects rehearse, recreate, and “perfect” themselves, initiate profitable collaboration, self-define through flexibility, improvisation, and competence, in ways that are hallmarks of, but do not surpass, an internalized neoliberal subjectivity.Chapter 2 examines how the mechanisms of debt influence characters’ beliefs and actions. What does it mean, in works by the Dardenne brothers, Laurent Cantet, and Mia Hansen-Løve, to be “man in debt” (54)? O’Shaughnessy explores debt’s temporality as it limits the possibilities of the future by tying actions to the obligations of repayment. In Le silence de Lorna (2010), Lorna is enrolled in a logic of indebtedness in exchange for papers to cross borders, at the expense of another human, Claudy. Caught in an “overarching tension between systemic violence and an ethical commitment to the Other” (45), she seeks a way out in increasingly irrational attempts to escape. Vincent, the protagonist of L’emploi du temps... (shrink)

Why absolute certainty is impossible in science In today's unpredictable and chaotic world, we look to science to provide certainty and answers—and often blame it when things go wrong. The Blind Spot reveals why our faith in scientific certainty is a dangerous illusion, and how only by embracing science's inherent ambiguities and paradoxes can we truly appreciate its beauty and harness its potential. Crackling with insights into our most perplexing contemporary dilemmas, from climate change to the global financial (...) class='Hi'>meltdown, this book challenges our most sacredly held beliefs about science, technology, and progress. At the same time, it shows how the secret to better science can be found where we least expect it—in the uncertain, the ambiguous, and the inevitably unpredictable. William Byers explains why the subjective element in scientific inquiry is in fact what makes it so dynamic, and deftly balances the need for certainty and rigor in science with the equally important need for creativity, freedom, and downright wonder. Drawing on an array of fascinating examples—from Wall Street's overreliance on algorithms to provide certainty in uncertain markets, to undecidable problems in mathematics and computer science, to Georg Cantor's paradoxical but true assertion about infinity—Byers demonstrates how we can and must learn from the existence of blind spots in our scientific and mathematical understanding. The Blind Spot offers an entirely new way of thinking about science, one that highlights its strengths and limitations, its unrealized promise, and, above all, its unavoidable ambiguity. It also points to a more sophisticated approach to the most intractable problems of our time. (shrink)

The recent financial meltdown in the US mortgage markets and the ongoing budgetary crises in Europe suggest that we are at an economic and ethical crossroads. What has caused the problems? Do we need to rethink in some fundamental way our ethical notions and some of our practices? These questions clearly are not separable, for, as I shall argue, some of our ideas about corporate responsibilities, technological innovations, and nation states’ ability to regulate corporations have been a cause (...) of the recent problems. Key ethical notions need to be rethought. (shrink)

The only truly surprising thing about the 2008 financial meltdown is how easily the idea was accepted that its happening was unpredictable. Recall the demonstrations that throughout the last decade regularly accompanied meetings of the International Monetary Fund and the World Bank: the protesters’ complaints encompassed not only the usual antiglobalization motifs but also how the banks were creating the illusion of growth by playing with fictional money and how this would all have to end in a crash. (...) It was not only economists such as Paul Krugman and Joseph Stiglitz who warned of the dangers ahead and made it clear that those who promised continuous growth did not really understand what was going on under their noses. In Washington in 2000, so many people demonstrated about the danger of a financial collapse that the city had to mobilize 3,500 local policemen. What ensued was tear–gassing, clubbing, and mass arrests. The police were used to stifle the truth. (shrink)

Max Anderson and Peter Escher’s The MBA Oath addresses the need for a set of ethical standards to provide guidance to MBA graduates as they go about their everyday professional business. Their oath is relevant to the concerns of others in business but clearly was inspired by the special problems they encountered in the classroom as members of the Harvard MBA class of 2009. The oath and the book itself evolved from the financial meltdown of 2008 for which (...) MBAs often felt that they were being held accountable. Our review begins with the oath itself. Then we turn to the rest of the book in which we have organized our comments around its strengths and weaknesses. (shrink)

The period of very high foreclosure rates sets the 2007–8 financial meltdown apart from similar banking crises fueled by asset price booms. Why did the 2007–8 meltdown lead to a prolonged foreclosure crisis? Through a theoretical perspective built on Minsky’s financial instability hypothesis, Polanyi’s ideas about adverse consequences of commodity fiction, financialization of homes, and institutional coupling, I argue that commodifying houses as financial assets exposed mortgage loan holders to price fluctuations originating in capital markets (...) and elevated their risk of default. I show how increased exposure to price fluctuations followed from the tight coupling between U.S. housing and capital markets, a coupling that resulted directly from the rising preponderance of securitization in U.S. housing finance. I provide further evidence from countries where housing finance was tightly coupled with capital markets to countries where housing finance did not rely dominantly on capital markets. (shrink)

Vital to libraries, teachers, and undergraduate students and their writings, this anthology offers contemporary analysis of American culture in new essays written exclusively for this book by leading anthropologists. The new essays are set against the perspective of several renowned anthropologists (Malinowski, Eric Wolf, Marvin Harris, Marshall Sahlins, etc.) to offer a uniquely anthropological perspective on the most challenging issues of our time, from immigration to job exportation to the recent financial meltdown.

Wall Street and Main Street have become opposing icons in narratives of boom and bust that endeavor to account for the financial meltdown in fall 2008 and the Great Recession that followed. In many such narratives, Wall Street denizens are said to have brought on the economic collapse in which ordinary Main Streeters became collateral damage. Economic analysis and political advocacy are carried on in a metaphorics which implicates the fate of Main Street in the rituals of Wall (...) Street. Metaphors can enlighten and mislead, and likely these do both. The present effort aims to go behind the metaphors in order to understand the worlds of Wall Street and Main Street mobilizing the conceptual resources of Schutzian phenomenology. (shrink)

The advent of the ‘mega’ or world city seems inseparable from the ambivalent and transient experience of modernity – the ideals of liberty, individuality, property, accelerating progress, and, for many, the realities of immobility, anonymity, poverty, and arresting regression. When more than half of the global population pursues an existence within an urban frame, the densities and boundaries of urban spaces swell to fantastical proportions. With the vast increase in size, so the experiences and expectations of the city become more (...) pronounced and profound. This introduction to this special issue of Thesis Eleven, ‘Big City Blues’, discusses the themes and stories of the articles below, which present different aspects of life in the metropolis. The over-stimulation of the desensitized urbanite, the wandering flâneur who fortifies him/her self against fragmenting pressures, the explosion of everyday peace into riots, the battles for political and social recognition of identity and property rights, and the financial meltdown of an entire municipal institution, are just some of the things that take place in the modern city, and are explored here. (shrink)

In the spring of 2010, major newspapers in the U.S. announced arrival of a “recovery” from the economic recession precipitated by the 2008 financial crisis. This essay examines the biopolitics of recovery in the wake of the disaster capitalism of the financial meltdown, arguing that twentieth-century social welfare biopolitics that derived wealth from the populace have been replaced by new forms of financial power whose global circulations and convergences exploit wealth informatically and transactionally, rather than biopolitically, (...) through devices such as derivatives and technologies such a high-frequency trading. Carbon derivatives trading is used to illustrate how wealth can be generated informatically from a thanatopolitics of destruction. (shrink)

Wall Street and Main Street have become opposing icons in narratives of boom and bust that endeavor to account for the financial meltdown in fall 2008 and the Great Recession that followed. In many such narratives, Wall Street denizens are said to have brought on the economic collapse in which ordinary Main Streeters became collateral damage. Economic analysis and political advocacy are carried on in a metaphorics which implicates the fate of Main Street in the rituals of Wall (...) Street. Metaphors can enlighten and mislead, and likely these do both. The present effort aims to go behind the metaphors in order to understand the worlds of Wall Street and Main Street mobilizing the conceptual resources of Schutzian phenomenology. (shrink)

Max Anderson and Peter Escher's The MBA Oath addresses the need for a set of ethical standards to provide guidance to MBA graduates as they go about their everyday professional business. Their oath is relevant to the concerns of others in business but clearly was inspired by the special problems they encountered in the classroom as members of the Harvard MBA class of 2009. The oath and the book itself evolved from the financial meltdown of 2008 for which (...) MBAs often felt that they were being held accountable. Our review begins with the oath itself. Then we turn to the rest of the book in which we have organized our comments around its strengths and weaknesses. (shrink)

What has ethics got to do with my job? How can I take on ethical responsibility and help to make my company more successful at the same time? Although 'ethical responsibility' has become something of a catchphrase these days, most people only have a vague idea what it means and how it can be demonstrated in actual practice.Disasters like the Volkswagen's emission scandal, the oil spill in the Gulf of Mexico, the nuclear meltdown of Fukushima, the global financial (...) crisis, and countless lesser-known cases of damage to human beings and the environment are the result of unethically irresponsible business practices. Efforts to maximize profits frequently lead to reckless behavior, as those in charge focus on short-term benefits and ignore social and environmental risks. Their actions have negative consequences, not only for the victims but, in many cases, for the perpetrators themselves too. Aggrieved interest groups or disadvantaged stakeholders may react with strikes, public protests, or boycotts, jeopardizing their reputation and profitability.This textbook, Applied Business Ethics, is the result of many years of research work and lecturing, and is an attempt to present the most important principles and the latest approaches in business ethics to students, teachers, and business practitioners alike, and help them to make business decisions that everyone concerned will benefit from, rather than just a few fortunate stakeholders.The author illustrates his theoretical subject matter with practical examples of real-life situations and provides numerous exercises to help the reader grasp complex issues, moral dilemmas, and business risks better. In clear, accessible, and easily understandable terms, he demonstrates how ways of finding satisfactory solutions can be found in a systematic way thanks to interdisciplinary research and philosophical reflection. (shrink)

In this article, we argue that scientists and technologists associated with the nuclear industry are building support for small modular reactors by advancing five rhetorical visions imbued with elements of fantasy that cater to various social expectations. The five visions are as follows: a vision of risk-free energy would eliminate catastrophic accidents and meltdowns. A vision of indigenous self-energization would see SMRs empowering remote communities and developing economies. A vision of water security would see SMR-powered desalination plants satisfying the world’s (...) water needs. A vision of environmental nirvana would see SMRs providing waste-free and carbon-free electricity to preserve the earth’s biosphere. A vision of space exploration would see SMRs assisting in the colonization of the moon, Mars, and possibly other worlds. These visions help create a symbolic convergence among promoters, serving to attract political and financial support, and erasing previous nuclear failures from public discourse. Moreover, underlying these visions is a technological utopian ideal world where SMRs would generate plentiful energy of multiple kinds, offering the necessary means for a life of comfort for all people by meeting various needs and without any environmental externalities or cause for concern about accidents. (shrink)

Nineteen eighty-seven was a year of financial paradox. During the 1980s there was the strong perception that the Americans, the Europeans, and the Japanese were living well, contrasting with the accounting data that suggested the house of cards was about to fall. Three factors dominated the financial economy of 1987: the 25-percent drop in equity prices in mid-October, the apparent collapse of the U.S. dollar in the foreign exchange market, and the formal recognition by the major international banks (...) that their losses on developing country loans would amount to at least $250 billion. The key question at the end of that year was whether the world economy was moving into a period of inflation or deflation. This essay identifies three possible scenarios. First, the decline in the foreign-exchange value of the U.S. dollar would lead to a rapid increase in U.S. net exports, an excessively large increase in demand for U.S. goods, and a run on the U.S. dollar, which would prompt more contractive monetary policies from the Federal Reserve and an increase in interest rates on U.S. dollars. Second, an increase in U.S. net exports would offset the decline in domestic spending from the smaller fiscal deficit and the less rapid growth of consumer spending. Interest rates on U.S. dollar assets would fall, which in turn would facilitate the expansion of income, and the U.S. fiscal deficit would automatically decline. Or, third, a second stock market meltdown might cause consumer and investment spending to decline more than the increase in net exports, resulting in a recession and a decline in the inflation rate and interest rates. (shrink)

Since the mid‐1990s we have witnessed the rise of numerous constructive and positive activities aimed at developing or enhancing corporate responsibility and corporate citizenship as well as anti‐globalization and anticorporate activism. And, of course, in 2008, we witnessed the meltdown of financial markets and numerous financial institutions as well as some major companies teetering on the brink of collapse. What is actually needed to create the world that many people want to live in may in fact be (...) a new relationship between business and society, that is, new ways of looking at the corporation and its role in society, both in practice and in management education? We will argue that some initiatives, such as Corporation 2020, have already begun to explore these issues by taking a more holistic perspective on different purposes and roles of the corporation in the future. Management education, which has been severely criticized in the aftermath of the economic crisis, has an important role to play, but in a changed form. Implications for leadership and management education include the need to shift cognitive, moral, and emotional levels of development, renewed emphasis on balance both individually and socially, a less is more sensibility, a holistic systems perspective, and shifting the purpose of the firm to encompass not just shareholder needs, but also societal, stakeholder, and ecological needs and interests. In this article we explore some of the ways in which these attributes might be engendered in future leaders, at least in those management development and education programs interested in fostering a new wave of progressive leadership in management for the future. (shrink)

As the aftershocks of the latest economic meltdown reverberate throughout the world, and people organize to physically occupy the major financial centers of the West, few experts and even fewer governments have dared to consider a world without the powerful markets that brought on the crash. Yet, as François Morin explains in A World Without Wall Street?, this is the very step that needs to be taken as quickly as possible to avoid a perpetual future of dehumanizing working (...) conditions, devastated ecosystems, and the submission of public policies to private interests. In this insightful and radical take on global finance, Morin recommends nothing less than a revolutionary reconstruction of the international monetary system. More, he recommends that the laws of societies be reformed so that the power of management may be shared among all of the actors involved in production, not concentrated in the hands of the few. This shift, argues Morin, will transform the monetary system into a common good for all of humanity, rich or poor. With Wall Street at the center of the very power structure that needs to be dismantled, Morin takes broad aim at the purely speculative financial games and arcane instruments by which the global economy and its citizens are held captive. In this very timely and provocative book, Morin bravely offers a way forward—instead of simply triaging a hemorrhaging system, he persuasively asks us to consider a subversive reinvention. (shrink)

As the aftershocks of the latest economic meltdown reverberate throughout the world, and people organize to physically occupy the major financial centers of the West, few experts and even fewer governments have dared to consider a world without the powerful markets that brought on the crash. Yet, as François Morin explains in _A World Without Wall Street?_, this is the very step that needs to be taken as quickly as possible to avoid a perpetual future of dehumanizing working (...) conditions, devastated ecosystems, and the submission of public policies to private interests. In this insightful and radical take on global finance, Morin recommends nothing less than a revolutionary reconstruction of the international monetary system. More, he recommends that the laws of societies be reformed so that the power of management may be shared among all of the actors involved in production, not concentrated in the hands of the few. This shift, argues Morin, will transform the monetary system into a common good for all of humanity, rich or poor. With Wall Street at the center of the very power structure that needs to be dismantled, Morin takes broad aim at the purely speculative financial games and arcane instruments by which the global economy and its citizens are held captive. In this very timely and provocative book, Morin bravely offers a way forward—instead of simply triaging a hemorrhaging system, he persuasively asks us to consider a subversive reinvention. (shrink)

Recent corporate legal and ethical meltdowns suggest that avoiding such harms to companies and to society requires a significant culture change within the organization. This paper addresses the issue of what it takes to change a corporate culture. While conventional wisdom may suggest that a change requires only the institution of an ethics office with proper reporting paths and an ethics code, such an approach is only a beginning. Many large corporations, especially those in danger of legal and ethical catastrophes, (...) need to undertake multiple initiatives to generate a new culture that manifests new values and new vocabularies. A cultural change accomplished by changing large numbers of personnel is expensive in financial and human terms. One component of a less costly approach is to tell new and different stories within the corporation because stories establish the cultural DNA that gives organizations, families, and individuals their identities. Such changes in individual firms, however, are influenced by the ideological assumptions within which and under which the industry and the society operates. (shrink)

The widespread and elaborate use of new financial instruments among corporate entities and financial institutions requires justification. It faces the charge of increasing both the level and complexity of risk in the financial system under the pretext of reducing it. It is a prodigious user of management resources and IT. It obscures the integrity of the nature of the non-financial user.It is not mere academic argument to question the ethics of certain instruments. Both in the US (...) and the UK certain forms of financial instrument are deemed too risky to be used by all and sundry. Other forms of instrument may be banned outright, even though many financial professionals will be perfectly capable of measuring the risk involved. The force of this attack is recognized in the financial industry. One defence frequently put forward is similar to that of the National Rifle Association in the US about guns. It is the users, not the product, that are the problem. “One misconception is that derivatives are risky instruments that are used for speculation. It is more accurate to say that derivatives are instruments that can be used to alter risk profiles”. The mere fact of an instrument existing is no reason to use it. The biggest advocates of exotic options are bankers. Practising Treasurers spend much time seeking to distinguish between the fascinating idea which the bank’s rocket scientist wants to try, and the derivative that will genuinely benefit the company. The fact that many of these instruments are harmful or spurious does not mean they should be banned, but neither does the absence of a ban make them ethical.The ethical question to ask for the non-financial corporation has to do with the proper balance of courage and prudence. Will this instrument enable the company to carry out its proper task with more focus and self-awareness, or is it an attempt to neutralize the proper risks that we are paid to take? For financial corporations the inevitable presence of derivatives poses two issues. First, are they intrinsically valuable or simply so complicated that no client could use them and monitor the new exposures involved? Secondly, will the active management of our positions created by this activity result in a change in the nature of our business, and if so, has this been clearly communicated to the world around?On reading this again I am once more struck by a remark made to me by a clergyman long before I was ordained. “What is an ethical Treasurer?” One of the major challenges in the field of financial ethics is the development of an adequate, and clearly communicated, measure of the intrinsic ethics of finance.This paper is not arguing that derivatives are wrong, but that they are powerful, and power needs monitoring and controlling. The events of October 1987 are often referred to as the meltdown of the markets. My clear memory is of the whole executive board of directors standing in my office gazing in awe at a Topic Screen as waves of red chased across the screen. The use of nuclear metaphors was apt. A system that seemed safe had assumed a life of its own. There is little doubt that derivatives fuelled the reaction. (shrink)

Recent corporate legal and ethical meltdowns suggest that avoiding such harms to companies and to society requires a significant culture change within the organization. This paper addresses the issue of what it takes to change a corporate culture. While conventional wisdom may suggest that a change requires only the institution of an ethics office with proper reporting paths and an ethics code, such an approach is only a beginning. Many large corporations, especially those in danger of legal and ethical catastrophes, (...) need to undertake multiple initiatives to generate a new culture that manifests new values and new vocabularies. A cultural change accomplished by changing large numbers of personnel is expensive in financial and human terms. One component of a less costly approach is to tell new and different stories within the corporation because stories establish the cultural DNA that gives organizations, families, and individuals their identities. Such changes in individual firms, however, are influenced by the ideological assumptions within which and under which the industry and the society operates. (shrink)

In this chapter, my main aim is to explore some of the central moral critiques of international financial institutions as well as proposals to overcome the moral problems that they face.

ABSTRACTThis work explores financial edgework by professional speculative traders as an explanation for the persistence of rogue trading in financial markets. The article joins in the scholarly application of “edgework,” the social psychological study of voluntary risk, to speculative trading. The discussion focuses on the origins and persistence of that subset of behavior wherein the trader knowingly creates the condition in which he or she endangers the brokerage house that employs them and even, at times, threatens the public's (...) perception of the integrity of the securities industry. Going over the edge between risk taking and unauthorized rogue trading is explained by looking at five inducements to escalate risk taking provided in the securities industry. This examination of financial edgework demonstrates how and, to a lesser degree, why rogue trading is a result of the security industry's pursuit of and desire to capitalize upon yet not publicize an occupational culture stressing a “risk‐and‐win” ethos. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Epistemic Leaks and Epistemic Meltdowns: A Response to William Morris on Scepticism with Regard to Reason Mikael M. Karlsson I. In an excellent paper which appeared in the April, 1989 issue of this journal,2 William Morris attemptsto demonstrate thatthe arguments which make up Hume's notorious chapter, "Of scepticism with regard to reason, are, in the first place, coherent—both internally and with the overall strategy of the Treatise—and, in the (...) second place, successful. Morris' paper is an exercise in the noble art of what I style constructive exegesis, an enterprise to which many readers of Hume Studies, and myself as much as any, are committed. It is a guiding principle ofthis art that we donotunderstandaphilosophical textuntil we can interpret it in such a way as to render it both coherent and correct. From this point ofview, coherence and correctness are not as independent of one another as they may seem to be to others who are differently committed. Some texts, such as Hume's chapter, "Ofscepticism with regard to reason," are notoriously resistant to constructive exegesis, despite the formidable bag of tricks which scholars and interpreters have developed; so resistant, that in gloomier moments we may be brought to wonder about our interpretative enterprise itself. Constructive exegesis is indeed a strange, and peculiarly optimistic, enterprise. Someday, I imagine, in a leisurely moment, I will think more reflectively about the principles ofour art. But not now.6 As a fellow practitioner of constructive exegesis, I am in full sympathy with what Morris tries to do in his paper; and I think that he does contribute substantially to our understanding of what Hume is up to in the chapter, "Ofscepticism with regard to reason." The third section of Morris' paper is, in my judgement, particularly successful in showing how Hume's chapter fits into the larger framework of the Treatise: Hume is, we see, attacking both what Morris labels "intellectualist rationalism" and its counterpart, which we may call 'unmitigated scepticism', although the chapter's two main arguments go primarily to the former. I also think that Morris gives very helpful, Volume XVI Number 2 121 MIKAEL M. KARLSSON and to my mind accurate, accounts of these two arguments, which I dub, respectively, the epistemic leak argument, and the epistemic meltdown argument. However, I have personally never found either of these arguments remotely convincing; and I still do not, despite Morris' clarification and defense. In what follows, I shall indicate some ofthe reasons for my dissatisfaction.?. Theepistemicleakargumentpurportsto"prove"(in Hume's sense)that reason or demonstration cannot support knowledge. Morris rightlyreminds us that whatHume meansby knowledge is perfect assurance or conviction: Knowledge is, in short, subjective certainty. This has caused confusion, for this is not what we usually mean nowadays by knowledge; nor was it what people, philosophers included, generally meant prior to Descartes. In Hume itis the product ofthe attempttoresolve all epistemic statesintomental eventsorwhat he calls "perceptions." In any case, we must—as Morris rightly explains—be clear that the epistemic leak argument is aimed at showing that demonstration cannot supportperfect conviction. Inoutline, the argumentissimple: Itworks, asMorrismakes clear, by shifting attention away from the subject-matter or "objects" of demonstration, that is, relations of ideas, to the exercise of demonstrative reason by human agents. The necessity of relations of ideas may suggest to us that we can be certain about them. Against this, one may point out that people do err in the conclusions arrived at by demonstration; this presumably shows that our (rational) understandingis fallible. And once we recognize this, our confidence in any conclusion produced by exercising this facultyislessened—thus do we move from knowledge, or subjective certainty, toprobability: belief, or imperfect conviction. Arguments ofthis general type (we can call them, using Descartes' famous figure, Totten-apple arguments ) were around long before Hume, although they were more commonly directed against the senses than against reason. We find them in antiquity—in Plato and Sextus Empiricus, for instance —and in Descartes, in parallel passages in the Discourse on Method, the First Meditation and the Principles of Philosophy, wherein one can discern a version directed precisely against reason and demonstration.12 To find out what, if anything, Hume has... (shrink)

Watching a dramatic musical television episode reminded me of my own meltdown and reconstruction during the collection of my dissertation research. This stir of memory led me to write down my story. Seeking meaning in the experience of the studio teacher in an early childhood school, I co-participated in events that led me through a dramatic and transformative experience that deepened my awareness and understanding of what it means to teach and learn in the wondrous space of the atelier, (...) otherwise called the early childhood studio. We engaged in the meaning making process of our studio endeavours through keeping field notes and a journal, informally interviewing and engaging in collaboration sessions with the studio teachers, and reviewing the dissertation manuscript for authenticity. Through active listening and engagement, I collided with predicament. I learnt that the only way to move through the crisis-point is to ‘keep on living’. In the end, I came to a new sense of how to live and work in an early childhood studio and I also came to understand that life eats entropy. My experience in the studio became about the beauty of courage, time, and deep listening, as examined through the experiences of fear of the new and of my reconstruction into something more. Indo-Pacific Journal of Phenomenology , Volume 12, Special Edition May 2012. (shrink)

The aim of this book is to deepen our understanding of financial crimes as phenomena. It uses concepts of existential philosophies that are relevant to dissecting the phenomenon of financial crimes. With the help of these concepts, the book makes clear what the impact of financial crimes is on the way a human being defines himself or the way he focuses on a given notion of humankind. The book unveils how the growth of financial crimes has (...) contributed to the increase of the anthropological gap, and how the phenomenon of financial crimes now distorts the way we understand humankind. Using the existential philosophies of Kierkegaard, Nietzsche, Jaspers, Buber, Heidegger, Marcel, Tillich, and Sartre, the book sheds light on how these philosophies can help to better perceive and describe financial crimes. The book provides readers with existential principles that will help them be more efficient when they have to design and implement prevention strategies against corporate crime. (shrink)

Women are commonly stereotyped as more risk averse than men in financial decision making. In this paper we examine whether this stereotype reflects gender differences in actual risk-taking behavior by means of a laboratory experiment with monetary incentives. Gender differences in risk taking may be due to differences in valuations of outcomes or in probability weights. The results of our experiment indicate that value functions do not differ significantly between men and women. Men and women differ in their probability (...) weighting schemes, however. In general, women tend to be less sensitive to probability changes. They also tend to underestimate large probabilities of gains more strongly than do men. This effect is particularly pronounced when the decisions are framed in investment terms. As a result, women appear to be more risk averse than men in specific circumstances. (shrink)

Although Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks and (...) although some scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis. (shrink)

The Global Financial Crisis is acknowledged to be the most severe economic downturn since the 1930s, and one that is unique in its underlying causes, its scope, and its wider social, political and economic implications. This volume explores some of the ethical issues that it has raised.

Using a diverse set of research sources, this article critically examines the trajectory of singer Britney Spears over four decades, from her first steps towards fame to the unfolding of the #FreeB...

Cover story: WORLD ASKED FOUR leaders of the Intelligent Design Movement to have some fun: Imagine writing in 2025, on the 100th anniversary of the famous Scopes "monkey" trial, and explain how Darwinism has bit the dust, unable to rebut the evidence that what we see around us could not have arisen merely by time plus chance.

This paper assesses the current world economic crisis in terms of crucial transformations in global capitalism throughout the neoliberal period. It argues that intense social and spatial restructuring after the crises of 1973–82 produced a new wave of capitalist expansion that began to exhaust itself in the late-1990s. Since that time, new problems of overaccumulation and declining profitability have plagued global capitalism. Interconnected with these problems are contradictions related to a mutation in the form of world-money, as a result of (...) its complete de-linking from gold after 1971, which stimulated a fantastic growth in financial instruments and transactions, and generated a proliferation of esoteric 'fictitious capitals' whose collapse is wreaking havoc across world financial markets. The intersection between general conditions of overaccumulation and a crisis in financial structures specific to neoliberalism has now produced a deep world-slump. Inherent in this crisis is a breakdown in forms of value-measurement that is throwing up intense struggles between the capitalist value-form and popular life-values, the latter of which comprise the grounds for any real renewal of the socialist Left. (shrink)

Disclosure of financial interests in scientific research is the centerpiece of the new conflict of interest regulations issued by the U.S. Public Health Service and the National Science Foundation that became effective October 1, 1995. Several scientific journals have also established financial disclosure requirements for contributors. This paper measures the frequency of selected financial interests held among authors of certain types of scientific publications and assesses disclosure practices of authors. We examined 1105 university authors (first and last (...) cited) from Massachusetts institutions whose 789 articles, published in 1992, appeared in 14 scientific and medical journals. (shrink)

To what extent are questions of sovereign debt a matter for political rather than scientific or moral adjudication? We answer that question by defending three claims. We argue that (i) moral and technocratic takes on sovereign debt tend to be ideological in a pejorative sense of the term, and that therefore (ii) sovereign debt should be politicised all the way down. We then show that this sort of politicisation need not boil down to the crude Realpolitik of debtor-creditor power relations—a (...) conclusion that would leave no room for normative theory, among other problems. Rather, we argue that (iii) in a democratic context, a realist approach to politics centred on what Bernard Williams calls ‘The Basic Legitimation Demand’ affords a deliberative approach to the normative evaluation of public debt policy options. (shrink)