Tuesday, October 2, 2012

Legal is not necessarily moral

I know, I know what I stated in the title of this post is obvious even to the most casual of observers. Not long ago, one of my FB friends posted a quote by economist Walter E. Williams in which he posed the question, "How does something immoral, when done privately, become moral when it is done collectively?" Williams goes on to wonder if legality is enough to establish morality, before concluding, "Legality, alone, cannot be the talisman of moral people."

I realize I have to tread lightly here, but this gets to the heart of the kind of economics I support, which is not merely humane, but human, and questions the long-ignored biblical directive not to loan money at interest. What prompted this post was listening to a Morning Edition interview with novelist Dennis Lehane about his latest novel Live By Night, from which he read an excerpt wherein his main character, Joe Coughlin, speaking to his brother says,

You, you buy into all this stuff about good guys and bad guys in the world. A loan shark breaks a guy's leg for not paying his debt. A banker throws a guy out of his home for the same reason, and you think there's a difference. Like the banker's just doing his job, but the loan shark's a criminal. I like the loan shark because he doesn't pretend to be anything else, and I think the banker should be sitting where I'm sitting right now
To that end, I also offer a link to an article, "Inequality and its Perils," by Jonathan Rausch, which I posed on this blog's FB page yesterday, as a main reason behind why I said in my homily that we all should be concerned about the growing gap between the one percent and everyone else. Here is one of several quotes that hit home with me from that article:
Inequality may also be destabilizing in another way. “Of every dollar of real income growth that was generated between 1976 and 2007,” Rajan wrote, '58 cents went to the top 1 percent of households.' In other words, for decades, more than half of the increase in the country’s GDP poured into the bank accounts of the richest Americans, who needed liquid investments in which to put their additional wealth. Their appetite for new investment vehicles fueled a surge in what Arkansas State’s Brown calls 'financial engineering'—the concoction of exotic financial instruments, which acted on the financial sector like steroids
Calling Goldman-Sachs, which NPR did a puff piece on this morning. Hell, oftentimes even loan sharks donate to charity.

I also like the way Lehane concluded his interview with Steve Inskeep, by answering Inskeep's question, "Did you worry about romanticizing crime as you wrote this novel?" by saying, "No. I was raised far too Catholic to think I'm going to write a gangster book in which the gangster gets out scot-free. And it's very early in the book that his father says to him violence procreates violence, and the children of your violence, metaphorically speaking, are going to come back for you."

You can read a free excerpt of the book, courtesy of NPR.

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