I had more responses to last week’s blog posting, Greed is Still Good, than any since I skewered Reverend Jones last September (Is That What Jesus Would Do? Really? ). I was pleased that the responses were thoughtful and articulate. While the core of my argument was about the economic theory known as the Law of Creative Destruction, most of the responses were a reaction to the headline. Apparently mentioning one of the seven deadly sins is a great way to get a response.
Of all the responses, most interesting to me was a comment from the Mensa group on Linked In by Richard Irwin. Here it is:
“There is no point in having wealth and power if it is just to serve our own ego. Wealth should be spent so others benefit from it, not hoarded, for that is miserly. Power should be used to serve others, not ourselves, as true happiness is not achieved through the domination of others. Equally, poverty is of no benefit to the individual or the society they find themselves in.
“We now need to look at sustainability and balance and learn to rebuild the diversity of the world we inhabit. The ancient Egyptians had a concept they called Ma’at which was the presence of truth, order, balance and justice in the world. I believe that after a century or more of world conflicts and unrestricted exploitation, that the concept of bringing Ma’at back into the world through the deeds we undertake in our lives is a valuable one.”
I must confess that I had never heard of Ma’at who, as it turns out, was an ancient Egyptian goddess representing the concept that Mr. Irwin describes.
In reading about Ma’at, I found myself thinking of Practical Wisdom, the principle defined by Aristotle. The result of the application of Practical Wisdom is a virtuous society. Two great books, published in the last year, examine Aristotle’s thinking in the context of modern society. The first is "Justice: What's the Right Thing to Do?" by Harvard professor, Michael J. Mandel and the other is "Practical Wisdom: The Right Way to Do the Right Thing" by Swarthmore professors, Barry Schwartz and Ken Sharpe. Schwartz gave a great lecture on the topic last November which can be found on TED.com by clicking HERE.
The critical element of Practical Wisdom in its application to how our society works is the flexibility to bend the rules -- to use judgment to structure the best outcome for society and its inhabitants. Schwartz compares it to Jazz improvisation. The notes are on the page but the musicians play a variation that results in beautiful music. My interpretation is that he is talking about the difference between rules and principles (a construct first pointed out to me by a colleague).
In American society, our response to people and institutions that are unprincipled is to create rules to govern their behavior. But Schwartz points out that doesn’t work. Hence we have laws like No Child Left Behind that leaves children behind and Dodd-Frank Financial Reform that doesn’t reform the financial system.
On the topic of bankers – that target of the OWS crowd – Schwartz points out the bankers are smart people and “like water, they will find the cracks in any set of rules”. What we need, posits Schwartz, is the moral will to do the right thing and the skill to figure out what that is. In other words, we need principles.
He further points out that rules (or regulations in government parlance) “create people who only respond to incentives”. If you reward teachers for their students achieving higher test scores, that’s all they will teach. If you reward doctors for doing too many medical procedures, they will perform too many medical procedures.
Great thinkers like the college professors who have written on this topic make a material contribution to our society by creating a construct for our institutional leaders – commercial, religious or government -- to absorb and adapt to a practical application. But for most of us there is a simpler way to look at it.
It’s not what you do but how you do it. There is nothing inherently wrong with being a lawyer; however, lawyers who put their own interest ahead of their clients are unethical. There is nothing wrong with being a doctor; however, prescribing too many procedures so you can make your next boat payment is unethical.
Examples abound… Journalists who bend the truth to create a headline that will please their editor… legislators who are guided by special interests that make donations to their campaigns… Auto mechanics that convince you to make repairs you don’t need. And so on.
During the years before the financial crisis, Goldman Sachs sold Collateralized Debt Obligations (CDOs) to their customers while their proprietary trading desk was “shorting” those same securities through the purchase of Credit Default Swaps (CDS’s). They made money while their customers lost a bundle. Unethical? Definitely. This is a simple principle anyone can grasp.
Illegal? Maybe. We’re still sorting that out. Legal is about the rules while ethics is about principle.
Is investment banking in and of itself unethical? In practice, investment bankers arrange for capital financing to enable entrepreneurs and corporations to invest in business growth spurring demand for goods and services and creating jobs. Is that unethical? I think not.
Wall Street – the financial services industry – provides a valuable service that enables the prosperity of American society. That investment bankers can make millions while doing so is neither illegal nor unethical. The OWS crowd may take issue with that. Despite the lack of a coherent platform, one clear message from these protests is that our system lacks social justice.
Perhaps we can find some guidance in Ma’at. Consider this from the Tour Egypt website:
“Ethics" is an issue of human will and human permission. It is a function of the human world of duality. What is "ethical" for one group is sin for another. But Ma'at, the reality that made all groups what they are is transcendent of ethics, just as a rock or a flower is amoral, a-ethical, without "truth or falsehood." How can a flower be "false" or "ethical?" It just is. How can the universe be "ethical or moral, right or wrong"? It simply is. That is Ma'at.”