My knowledge of his enormous PR operation which he uses to influence the opinion formers of Britain and his repeated moves to block the inquest into the death of Princess Diana adds credence to what might otherwise be considered 'poppycock'. Download here approx 8Mb http:
By John Hendry Despite the best efforts of all concerned, the financial sector continues to have a bad reputation for illegal and unethical behaviour and to be more prone to ethical lapses than other business sectors.
John Hendry explores why this should be, and what might be done about it in practice. Why has the financial sector such a bad reputation for illegal and unethical behaviour?
Partly perhaps, because of ignorance and prejudice. Most people have very little understanding of finance, and throughout history its practitioners and their core activities — lending, borrowing and speculative trading — have been seen as morally distasteful.
Nowadays everybody who has a bank account is a lender, everybody with a pension or life policy is a speculator, and most of us are also borrowers, but the moral stigma somehow remains. There is more behind the bad reputation of finance than that, however.
There may be a problem of perception but there is a real problem as well, and it is a problem that refuses to go away, despite the best efforts of firms and regulators to address it.
This situation prompts a number of questions. The first and most important is: We need to come up with something better, and to do this we need to ask two further questions. What kinds of ethical problem are we up against here?
And what is it about the financial sector that gives rise to these particular kinds of problem? The Problems Like any other business, or any other competitive activity, finance has its share of fraudsters and cheats, its Madoffs and Levines, but this is not the heart of the problem.
What is characteristic of ethical lapses in finance is not intentional, but unintentional wrongdoing — not immorality so much as moral oversight or neglect. Three kinds of problem in particular stand out.
What is characteristic of ethical lapses in finance is not intentional, but unintentional wrongdoing. In all these cases and many others it is clear from the outside — and clear in retrospect even from the inside — that the actions taken were wrong. They were perceived, perhaps, as stretching the rules, but not as breaking them, and it was the rules of the game, the technical norms, that were perceived as relevant, not the social and moral norms that underpinned them.
The second kind of problem, and the kind that impacts most immediately on the public, is exemplified by the mis-selling of personal or small business financial products: No-one here set out to deceive.
By and large all those involved set out to provide a genuine service to the customer. Both the financial labour market and the market for financial services are demonstrably inefficient and competitively highly imperfect. The third kind of problem is not generally recognised as a problem within the sector, but needs to be recognised if progress is to be made.
It can be summed up in two contradictions. First, the core function of the financial sector is to secure the most efficient allocation of financial capital across the productive economy, but its most significant achievement over the past 30 years has been the large scale extraction of financial resources from that economy.
Even in the wake of the financial crisis, financial practitioners have not only been getting richer than anyone else but also getting richer at the expense of everyone else. Second, the core value of the sector is the maintenance of free, efficient and perfectly competitive markets, but both the financial labour market and the market for financial services are demonstrably inefficient and competitively highly imperfect.
Like anybody else they want to advance their careers and make money, but like anybody else they also start out with a predisposition in favour of a principled, moral approach. They believe that people should in general behave ethically, and they include themselves in that. Moreover, although there may be some fuzziness around the edges, they have a pretty good idea of what is right and what is wrong and when it comes to a conscious choice they would prefer to do what is right.
Two sets of factors stand out, one relating to the nature of money and the financial system, and the other to the norms and techniques of financial practice.
All businesses deal with money, but finance is concerned exclusively with money and monetary products, and money and morality always have been, and always will be, uneasy bedfellows. Unlike the goods and services produced or traded in other sectors, money has no physical impact on society, no immediate psychological impact, and no obvious moral effects.
It also has no intrinsic value and in this context little symbolic value. Its value is an exchange value, and of a particularly pure form. Most things with exchange value — reputation and social standing, for example — are culturally specific and tied to particular communities.
Money is culturally neutral and has a global reach. It is not tied, as goods and services are, to the context of a community, and since moral values are essentially community values — indeed, they are what hold communities together — money eludes them.Business Ethics and Corporate Social Responsibility – Is there a Dividing Line?
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