Reflections on the FCIC Report

The Financial Crisis Inquiry Commission issued its report on the financial crisis of 2008 this past week. The biggest controversy arising from the release of the report is whether the financial crisis could have been avoided. In what I believe is a fairly balanced and well-argued article in today's New York Times, Joe Nocera argues that it could not have been avoided - not so much because it was a phenomenon beyond the control of mere mortals - but more along the lines of "it has ever been thus." Nocera suggests that it is probably impossible to pinpoint the blame on a single person, agency, group, or circumstance. Rather, it was all of these - plus misbegotten human intentionality and human foibles. He notes that we need a psychologist more than an investigator to help us understand all that went on in creating this crisis. He ends by noting that the question about the financial crisis is not whether it will happen again, but when it will happen.

I pretty much agree with Nocera. At the same time, as an ethicist I think it is important to recognize that the ethical problem with the financial crisis was the number of people in the financial sector who jumped at the chance they saw to reap huge profits from the new laws. Even the part about encouraging people with scant financial resources to take out mortgages beyond their means didn't give them pause. This is a serious moral problem. It is for this reason that undergraduate and graduate business programs must not only teach business ethics but also need to teach virtue. This of course opens up the whole debate about whether such things can be taught. I think, though, that we are beyond this debate. Virtue must be taught. Surely there are enough ethics centers at universities in the country to take up the creative task of teaching our young some moral integrity.

This summer I'm reading Barry L. Padgett's Professional Morality and Guilty Bystanding: Merton's Conjectures and the Value of Work. I'm going to be using it in my business ethics class this fall. While teaching the course last semester, I discerned that I needed a "formation" component to the course - that is, I felt the students needed to be coaxed out of their "business" mindset and invited to reflect upon who they are and what is important to them.

One of the favorite buzz phrases in business these days is "thinking outside the box." It is so ubiquitous among business students that I am tempted to ban its use from my classroom. It is a vanity, really, because people use the phrase to flatter themselves that they are "thinking outside the box" when really they are doing nothing of the sort.

Truly thinking outside the box requires profound self-knowledge of the Socratic sort. At one point Padgett notes, "self-reflection is a necessary component of living a moral life at all" (p. 107). I was so excited to read this sentence, as it expresses something that I've known all along and was not quite able to articulate. If we are going to go beyond mere compliance and become truly moral, we need not just to know the ethical theories and apply them to case studies, we need not just to memorize the four Franciscan principles of Marian University. We need to engage in deep and life-long self-reflection; we need to be open to what we learn from that reflection; and then we must act accordingly.

I'm looking forward to offering my students an adventure in self-knowledge this fall.

Padgett, Barry L. Professional Morality and Guilty Bystanding: Merton's Conjectures and the Value of Work. Newcastle Upon Tyne, UK: Cambridge Scholars Press, 2009.