Ethics is often seen to be a luxury, or a nice-to-have; if deployed suitably publicly, it might enhance an organisation’s licence to operate, or give their brand a virtuous glow. The business case for ethics is, however, less cynical and more strategic: it’s not so much about brand personality than it is about risk.
So what went wrong? Liquidity. Why? Exposure to sub-prime assets through complex financial instruments designed to reduce risk made banks chary of lending to each other. The knock-on effect of this was a collapse in confidence, as signalled through stock market indices. Self-righteous hindsight bemoans capital adequacy – which might have increased liquidity – and the hubris that led to over confidence in secularisation. But schadenfreude won’t restore confidence. Read More
Skins, pots, beads, gold, coins, camels, land, wine, stamps … throughout history and across the world communities have had different stores of value. The innovation of coinage created liquidity for barter economies, and the innovations of credit and fractional reserve banking have accelerated this liquidity to a froth. Stiglitz and others talk about economies as being reducible to information. Perhaps it helps to regard the universal store – the universal language – as value itself, as expressed through price. This abstracts from the material into the relative and, communicated through information flows, allows a more exact matching between supply and demand. Meanwhile, people have themselves become banks, living on fractional reserves, such that their lives become a house of cards, held up by trust, a trust in the faceless millions whose total actions sustain a securitised economy. Read More
