Return to morality

PUBLISHED : Friday, 10 July, 2009, 12:00am
UPDATED : Friday, 10 July, 2009, 12:00am

The complications of many of the financial instruments that have landed the world in the mess it is struggling to rise above are still beyond me. I can get my head around economics, though, and what is blatantly clear is the manner in which financial institutions have been allowed to function above and beyond the capitalist system. Free markets are about sinking and swimming; companies that fail must go under and those that succeed should be left to grow and flourish. The bailing out of banks, insurance firms and financial houses by governments is therefore wrong and unfair.

Authorities have all but acknowledged this. They have explained their actions by saying that to do otherwise would have brought economies crashing down even further. What they have not addressed is the clear message being sent out: that the financial sector is the most important element of society.

Correct me if I am wrong, but since when were bankers and brokers more important than teachers, nurses and police officers? How are the services of people who manage money above those of citizens who educate and save lives? Why do we pay those who have caused so much mayhem and misery so handsomely yet offer relative crumbs to the essential mainstays of our community? But my most searching question is this: how is it that we expect the highest morals and standards from the staff in our schools, hospitals, police stations and elsewhere, but disregard what is happening on Money Row?

The hoodwinking, conniving and cheating that has taken place, and continues to, is not grounded in what we have been taught or our laws dictate. Greed, purely and simply, is the driver. Being greedy and uncaring is nothing to be proud of or something to aspire to. Yet this is exactly what we have done, and have pushed our children to graduate towards.

Life was not always like this, of course. Pensions have not always been tied to stock markets. Nor do we have to look back too many years to when banks were places that helped us save for the future, rather than try at every opportunity to drain away what we have put in their care. People used to invest in companies with their retirement in mind; now it is more often than not with an eye only on making a quick buck.

Capitalism, commerce and the free market are not to blame. The founders of economic theory took great pains to underpin their arguments with moral thinking. Adam Smith, David Hume and their ilk believed capitalism would make us more moral and civilised. They admitted that there could be failings, but generally upheld the case that honesty and transparency would dominate. Of course, they did not bank on governments that embraced free markets giving an unfair advantage to financial institutions.

Financial-sector bosses are not evil; they have merely become greedy gamblers. This must change. I don't advocate a return to the early 18th century when, after a financial crisis known as the South Sea Bubble, England's Parliament considered a resolution that bankers be tied up in sacks filled with snakes and thrown into the River Thames. Rather, such people should be brought down off their pedestals and others more deserving put in their place.

A shift in government thinking has to take place. Banks are no different from trading companies. Stock and insurance brokers are not more important to our well-being than the people who educate our children or take care of us when we fall ill. Quite the opposite is the case.

Creating this mindset is not difficult. The first step is to treat the financial sector as we do other companies. Firms, no matter what their business, are all equal. They must rise and fall as the market wishes. Bad managers must not be rewarded by being bailed out and protected for making poor decisions.

In tandem with this process, we must turn back the clock. Teachers, doctors, nurses and police were once the backbone of communities. They still are. It is time that their position in society, and the salaries and respect we give them, reflected this.

Peter Kammerer is a senior writer at the Post