Global Financial Crisis: The Ethical Issues

Global Financial Crisis: The Ethical Issues

This page intentionally left blank

Global Financial Crisis: The Ethical Issues Edited by Ned Dobos Charles Sturt University and the University of Melbourne, Australia Christian Barry Australian National University Thomas Pogge Australian National University and Yale University, USA

Editorial matter and selection Ned Dobos, Christian Barry, Thomas Pogge 2011 Chapters their individual authors 2011 Softcover reprint of the hardcover 1st edition 2011 978-0-230-27663-5 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2011 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-0-230-29351-9 ISBN 978-0-230-30695-0 (ebook) DO I 10.1057/9780230306950 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Global financial crisis : the ethical issues / edited by Ned Dobos, Christian Barry, Thomas Pogge. p. cm. Includes index. 1. Global Financial Crisis, 2008 2009. 2. Financial crises. I. Dobos, Ned. II. Barry, Christian. III. Pogge, Thomas Winfried Menko. IV. Title. HB3722.G596 2011 174 dc22 2011001476 10 9 8 7 6 5 4 3 2 1 20 19 18 17 16 15 14 13 12 11

Contents Acknowledgments List of Contributors vi vii 1 Introduction 1 Ned Dobos 2 Global Financial Institutions, Ethics and Market Fundamentalism 24 Seumas Miller 3 The Legitimacy of the Financial System and State Capitalism 52 Noam Chomsky 4 Neoliberalism Is This the End? 63 Ned Dobos 5 Ethical Investing in an Age of Excessive Materialistic Self-Interest 82 John C. Harrington 6 The Achilles Heel of Competitive/Adversarial Systems 120 Thomas Pogge 7 Financial Services Providers: Integrity Systems, Reputation and the Triangle of Virtue 132 Seumas Miller 8 Who Must Pay for the Damage of the Global Financial Crisis? 158 Matt Peterson and Christian Barry Index 185 v

Acknowledgments The editors wish to acknowledge the support of an Australian Research Council Linkage grant on Corporate Governance, Regulation and Accountability (industry partner Tiri). vi

List of Contributors Christian Barry is Deputy Director of the Centre for Applied Philosophy and Public Ethics (an Australian Research Council Special Research Centre) and Senior Lecturer in Philosophy at the Australian National University. He has served as a consultant and contributing author to three of the UN Development Programme s Human Development Reports, was editor of Ethics & International Affairs and directed the Carnegie Council s Justice and the World Economy programme. His research focuses on closing the gap between theory and practice in international justice. Noam Chomsky is Institute Professor of Linguistics at the Massachusetts Institute of Technology and is a world-renowned political theorist and activist. A vocal critic of US foreign policy and the mainstream media, his best-known works include Profit Over People: Neoliberalism & Global Order (1998); Hegemony or Survival: America s Quest for Global Dominance (2004); Manufacturing Consent (2006); Deterring Democracy (2006); and Failed States: The Abuse of Power and the Assault on Democracy (2007). Ned Dobos is Research Fellow at the Centre for Applied Philosophy and Public Ethics (an Australian Research Council Special Research Centre), Charles Sturt University and the University of Melbourne. His research interests include political violence, the ethics of war and business ethics. His book Insurrection and Intervention is due to published by Cambridge University Press shortly. John C. Harrington is President and CEO of socially responsible investing and shareholder advocacy firm Harrington Investments Inc. and is a Manager of Community Commercial Ventures, LLC. He is the author of Investing With Your Conscience: How to Achieve High Returns Using Socially Responsible Investing (1992) and The Challenge to Power: Money, Investing and Democracy (2005). Seumas Miller is Professor of Philosophy at Charles Sturt University and the Australian National University (joint position) and is Foundation Director of the Centre for Applied Philosophy and Public vii

viii List of Contributors Ethics (an Australian Research Council Special Research Centre). He is also a senior research fellow at the 3TU Centre for Ethics and Technology at the Delft University of Technology. Matt Peterson is a postgraduate fellow in the Global Justice Program at the MacMillan Center for International and Area Studies at Yale University. His work focuses on contributions that global, political and economic structures make to human rights violations. Peterson is an active member of the Health Impact Fund project, which aims to improve access to medicines among the world s poor, and is the producer of Public Ethics Radio, a podcast that engages ethicists in discussion of pressing political dilemmas. Thomas Pogge is Leitner Professor of Philosophy and International Affairs at Yale University and is Professorial Fellow at the Australian National University division of the Centre for Applied Philosophy and Public Ethics (an Australian Research Council Special Research Centre). He received his PhD in philosophy from Harvard and has published widely on Kant and on moral and political philosophy.