As Wall Street Goes, So Goes "Liberal Ethics"

Last Updated Sep 23, 2008 2:09 PM EDT

Some are saying that the financial crisis signals "the end of Wall Street." Does it also signal the end of the traditional, liberal concept of ethics that have dominated in the West for the past two centuries?

Even before the meltdown, University of Exeter sociologist, Edward Skidelsky, writing in the U.K. journal, Prospect, was suspicious of modern liberal ethics, based as they are on the "rights and obligations" model of John Stuart Mill and not on pre-modern, native virtues like "courage, temperance, prudence and justice," and such old fashioned notions as "humility" and "charity." (By "liberal," Skidelsky refers to classical liberalism and not the set of current political beliefs and policies espoused by the political left and decried by the right.)

In Mill's reckoning, notes Skidelsky, "neither one person, nor any number of persons is warranted in saying to another human creature of ripe years, that he shall not do with his life for his own benefit what he chooses to do with it."

Building on Mill's thought, writes Skidelsky, modern liberal ethics have left us with an essentially de-moralized society, one in which anything is permissible, provided it is not against a law already predisposed to permissiveness.

In short, we are society without inherent virtue; one in which Wall Street's Masters of the Universe feel no compunction whatever about drawing down Croesus-like compensation packages, inventing "new financial instruments, creating a financial Frankenstein the likes of which we had never seen" -- and which no one but the quants who devised them understand -- selling high-interest, "subprime" mortgages to suckers with credit ratings so bad they can't even finance a car and dissembling to authority when called to account.

After all, they were just doing their own thing and it was all legal, right?

Skidelsky advocates a return to pre-modern, virtue ethics. Maybe he has a point. After all, if Wall Street's Gordon Gekkos had been able to keep their greed in check, tempering it with, say, thrift, humility, prudence and charity, would we be in this mess? Or would the new Romans merely give lip-service the virtues the way our current crop of Masters of the Universe do to "rights and obligations?"

(Image by keysofvirtue via Flickr, CC 2.0)