Financial Crisis and Moral Psychology

There are those who might think I'd take the opportunity to call out Mr. Greenspan's confession that maybe "free markets" aren't a panacea, or that the Financial Times endorsed Obama, or even once again call on people to find the silver lining by heeding the wisdom of their (great-) grandparents. 

But instead, I'm struck by the juxtaposition of two things I ran across almost coincidentally. First, we have the New York Times' article on use of bailout funds by banks to do their own asset building to maximize their own competitive position, rather than using it for what the investors (all taxpayers) require, namely freeing up credit markets.

And almost simultaneously, I watched this fantastic video of John Haidt, which shows he has comedic timing as well as a intellectual brilliance and timely train of thought. He and his group have identified five components of "the moral mind."  Though his main thesis is truly fascinating, and I'll have more to say later on that, I've got to say that the part that struck me here was that in games requiring cooperation, there was a result that gamers perform much more cooperatively in a regime where there's punishment.

So what's going on with these crazy bankers? Are these people immoral on some axis ("fairness" springs to mind)? Do they believe that enhancing their own wealth, their families, their companies will somehow protect them from the results of worldwide distress (a deliberately-blind interpretation of "comfort")? Do they believe that profiteering is a main cultural attribute of their group, so their behavior is somehow more loyal than anyone on the outside of this group could imagine?

Or is it a simple case of using the social tools in hand to punish people whose greed has run amok: shame?

As Marlene Grossman says in the context of her work at a community organization, "People have to overcome all kinds of terrible things. And they manage to do it and survive, and survive with such dignity. Those kinds of stories need to be told. And shame on us who don't listen to it. And who put ourselves in a cocoon and say, 'oh, you know... those people...'"

In-group loyalty! Vote for Obama and have one great big harmonious group.

Comments

[spencer]

superb post. great links. thnx.

[spencer]

superb post. great links. thnx.