If we are to live in a capitalist society—and deal with the financial sector in particular—then we must “[adopt] a more nuanced view of human nature,” Yale economist Robert Shiller writes in his new book, an excerpt of which was published today by Bloomberg.
And just because financial professionals may be forced to conceal or mislead people in order to represent the best interests of their clients doesn’t mean they are bad people.
His argument goes something like this: “sleazy” financial professionals are often tempted to conceal the truth, and their brains adapt to rationalize this behaviour in order to preserve their self esteem. But in reality, their behaviour may not be so immoral.
The practice of finance doesn’t universally incline its practitioners to sleazy behaviour. It also rewards people with a certain kind of moral purpose — one that may be visible to outsiders only intermittently. Day to day, it is hard to see the moral purpose inherent in helping one’s clients, and so it is easy to conclude that such moral purpose doesn’t even exist among people in finance. However, most people naturally project such purpose onto their daily routine. Most of us instinctively want to be helpful and good, within limits, to those around us.
On the other hand, it is silly to see people simply as profit-seeking in monetary terms, because they are also interested in boosting their self-esteem—something that can be influenced by moral behaviour.
The moral calculus of accumulating large sums of money over a lifetime can be extremely opaque. Most of us never have a true reckoning of our own moral purpose, let alone the moral purposes of others.
Shiller elaborates by explaining that we can never know the real motives behind John D. Rockefeller Sr.’s massive philanthropic endeavours; did he give for the selfish purpose of preserving his legacy, or were they part of some “deeper moral purpose”?
Being less than truthful—though perhaps morally repugnant—is sometimes a driver of our society’s economic success, he concludes. Thus our future relies on us finding a way to reconcile this capitalist being with our moral beliefs:
The further success of financial capitalism once again depends on people adopting a more nuanced view of human nature as it is expressed in a financial environment. In an economic system that is essentially good overall, we have to accept that there will be some less-than-high-minded behaviour.
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