It is not speculated empirically whether the Greeks have endured a significantly greater struggle. Nevertheless, mandating the Greeks to swallow the same bitter medicine as other bail-out recipients is based on a fundamental misconception. The Greek economy is not strong enough to provide the means for the government to perform all tasks without creating massive social unrest and grievously impacting Greek citizens.
In situations where Greece lacks the fundamental capacity to alleviate the adverse effects of austerity on its vulnerable citizens; the moral dimensions of the creditor-debtor relationship are painfully evinced. The negotiators are challenged to find common ground by creating outcomes that are acceptable by all, yet optimal by none with the objective of giving relief to suffering citizens of Europe and ensuring the viability of the EU. Image Source: manager. His academic interests include administrative reform, innovation and organizational adaptability. Her academic pursuits relate to international antitrust with a focus on developing countries.
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The URI you had has compelled measures. We have meters to link that we are you the best policy on our methodology. You can Stay your strength data at any time. Though this economic co-operation emerged within the state of nature, the security of property rights was precarious there since it was left to each person to enforce them. As a self-serving bias was likely to affect individual judgments, and engender cycles of revenge, people eventually agreed to empower a referee.
It is governmentsanctioned theft. Locke, admittedly, provides the basis for such an argument and goes so far as to say that a majority decision by elected representatives counts as consent, since a unanimity requirement would incapacitate the government from acting ibid. However, nobody that runs monetary policy in the United States, the Chairman of the Fed and its Board of Governors, is voted into office.
The Fed, like other major central banks in the world, is specifically designed to have a measure of independence from the political process. Granted that the President, who appoints Fed officials, and the Senate, which confirms them, is elected, it is nevertheless the case that monetary policy is hardly ever a topic of debate in political campaigns. One would have to argue that the losses suffered by the longs are subsequently made up by an economic revival brought about by monetary easing.
Still, the fact that people sell bonds, switch to foreign currencies, and look to gold to protect the value of their money assets whenever their inflationary expectations rise suggests they do not really agree with that reasoning.
For both Aristotle and Locke, morality is predicated, albeit in different ways, on happiness -- whether in terms of its realization through the cultivation of a virtuous character or its pursuit as each of us sees fit in keeping with individual rights. To Immanuel Kant, however, what is morally vital is not the ultimate object of the human will, but the quality of that will.
Chelawat, H. Branding Please teach the helpful times to borrow banking and finance managing the moral dietitians if any and Are us to go large friends or donors. Do investors have any moral responsibility for the activities of the company in which they place their money? By more than half of all subprime loans were being originated by mortgage brokers rather than by banks p. The LIBOR would not have had any significance if trust in the honest nature of its calculation was not a given by all participants. The Guardian. Excessive leverage heavy borrowing throughout the financial system and the economy;.
Doing the right thing for its own sake, rather than for some higher end, is the point of human existence. If nature had intended us to be happy, then our instincts would have more surely inclined us in that direction. Instead, we have been left with our reason to decipher the route to bliss and it is not up to the task given all the unpredictable contingencies along the way. What is more, putting the intellect at the service of our desires would contravene what defines us as human beings, to wit, our rationality and ability to transcend our natural inclinations.
In the Kantian language, the prioritization of happiness would degrade us to a level of heteronomous, rather than autonomous, existence. Living up to the dignity of a rational being entails that we regulate our will in conformity with general and unconditional principles legislated by ourselves. To this end, Kant presents the categorical imperative. According to this formula, any prospective course of action can be morally tested by posing two questions.
First, can the act be willed as a universal law without contradiction? As an illustration, Kant considers an individual who needs to borrow money knowing full well that they cannot repay any loan extended to them. Of course, no one will advance credit to that person unless they promise to pay back the money.
Should this person, then, intentionally make a false promise in order to obtain the loan? Answering this requires that we contemplate the implications of establishing the rule that anyone in financial straits can borrow money by insincerely pledging to repay the loan. Such a rule would, Kant observes, render promises meaningless, since no one would trust any assurances made to them if it were commonly acknowledged that people could lie whenever they deemed it in their interests. Insofar as a promise ceases to be a promise when its falsity is generally allowed, the act of deceitfully vowing repayment of a loan cannot be universalized without contradiction and is, therefore, immoral ibid.
This maxim, a more concrete variation of the universalization requirement, enjoins us to treat other people as beings with their own goals and concerns, instead of objectifying them and using them for our own purposes, however exalted these might be. The answer is no. For one thing, money would lose its significance.
To the extent that this promise is compromised, money becomes less and less a power of commanding goods for its possessor and more and more just another piece of paper. Pumping up the quantity of money can only work on the assumption that individuals and firms are not onto what the Fed is doing.
As soon as a company realizes that the extra demand for its product is owing to newly printed money, it will simply increase prices instead of raising production.
This takes away any incentive that businesses might have had to augment investment due to a lower real wage bill having to be paid to inflation deluded employees. With output thus unaffected, all that transpires is a general rise in the price level, leaving those locked into fixed income arrangements and paper asset portfolios as losers. Yet as Kant makes clear, an action can only be willed universally if one could conceivably consent to it wherever one might be situated ibid.
No one would agree, surely, to be the holder of a five year certificate of deposit or a fixed annuity in an inflationary scenario. Given, too, what sequentially takes place upon the easing of monetary policy, no would want to be in the place of someone receiving the new money in the later stages of the liquidity injection. As if that were not bad enough, such individuals would be liable to being used as a means of furthering the interests of a more financially sophisticated party in exchanges.
Nor should it be forgotten that if anyone is using individuals as a means, it is the Fed in deliberately attempting to diminish the purchasing power of those using its currency in order to advance its economic and political objectives. Whereas the Kantian theory opposes both Aristotle and Locke in rejecting the idea of happiness as a morally decisive factor, utilitarianism tells us to return to that idea and systematically apply it.
Though the elements of this teaching are to be found in Epicurus, Frances Hutcheson and David Hume, the original founder of utilitarianism, particularly as it is practiced today by its most avid exponents in the economics profession, is Jeremy Bentham, the 19 th century English jurist and philosopher.
For Bentham , conduct is to be judged by its consequences to the community. Utility is understood in subjective terms as the net balance of whatever a person finds to be pleasurable and painful, with the former obviously increasing that balance and the latter decreasing it. Rather than being conceived holistically as an entity in its own right, the community is nothing more than the name we give to a collection of individuals ibid.
It can be calculated by placing the number of those positively impacted by an action, weighted by the intensity and duration of their net pleasure, in the positive column and then doing the same in the negative column for those negatively affected by net pain. If the positive side of the ledger exceeds the negative, communal utility rises and the action passes the moral bar; and vice versa if the negative column outweighs the positive.
Everyday experience amply confirms that, as a general matter, individuals derive pleasure from riches and pain from poverty. According to its findings, individuals in wealthier countries report higher degrees of satisfaction with their lives than those in poorer countries. Likewise, within the same country, people in higher income brackets say they are happier than those lower down the income ladder Frey, , pp. Keeping this wealth-maximization criterion in mind, the Fed and its supporters basically make the following utilitarian argument in support of its flooding of liquidity: whenever a boom turns to bust, there is always the danger of deflation materializing once banks and financial markets lower the availability of credit to deal with losses incurred on investments made when the deal making grew feverish in the late phases of the expansion.
This risk is all the greater now in light of the high leverage that developed in the financial system, the low level of personal savings, along with the widespread exposure to declining house prices. Only an aggressive increase in the quantity of money can counter the deflationary threat posed by the post-boom deleveraging process. While this strategy carries the risk of sparking inflation, the far worse outcome would be to let deflation take hold.
For once this happens, a vicious spiral comes into play in which lower prices lead firms to lay off workers, who then lower their purchases of goods, which subsequently leads to further price cuts and employment losses Posner, At the same time, people form expectations of lower prices, causing them to delay any non-necessary purchases, while preventing bargain hunting behavior from halting the downtrend. With falling prices, the real burden of debts increase as well, further lowering consumption and giving rise to personal bankruptcies that leave creditors in the lurch.
Without a dramatic expansion in the money supply, therefore, most will end up poorer, whether because of reduced employment income, the failure of their business, or losses on their equity and corporate bond portfolios. About the only people standing to gain are those that maintain their jobs and salaries and, moreover, have saved all their money in government treasury securities or a safe bank. If the Great Depression is any guide, this group is able to purchase goods at cheap prices Johnson, , p.
To the extent that the utilitarian case above supposes a trade-off between unemployment and inflation, the happiness studies literature finds that people are more aggrieved by unemployment than inflation Blanchflower, Yet all these points assume that deflation is as harmful as the Fed believes and that inundating the economy with liquidity is an effective way to impede the damage. However, very easy monetary conditions slow down the necessary liquidation and restructuring of the malinvestments made during the upswing Mises, , p.
The inflation created by trying to delay this process with excess liquidity will eventually have to be curbed by a tightening of monetary policy. In this way, unemployment is simply put off into the future and the volatility of the economy is amplified.