Bank Regulations and The Free Market
See also: Wall Street reformThe argument against regulating banks is that the regulations would violate the proper functioning of the free market economy. Severyn T. Bruyn disputes this argument in his article "The Moral Economy".Bryun 1999 He states that the extreme disconnection between market actions and morals was never the intent of the market economy's founding thinkers, specifically Adam Smith. He argues that putting standards and regulations in place that rest on the basic morals of society should not conflict with the free market, but are actually an important part of the proper functioning of the free market. His conclusion is based on statements made by Adam Smith. When Smith first envisioned the market economy, he did not divorce morals from the market. In fact, morals were supposed to be a natural part of the workings of the market economy. He believed that economic transactions should be the result of mutual agreement and should involve morality and friendship. He stated that selfishness could obstruct the market economy from running morally. If interpersonal relationships did not play a part, then the interdependency experienced by individuals could vanish and unfair play based on greed and mistrust would exist. Bruyn discusses today's society as one that has lost its basic morals in the market. He states that there is a need for a reigniting of civil society.Bryun 1999 Originally, civil society was assumed to be naturally able to regulate the morality of the market, but with the great distances between individuals involved in transactions as time has passed, governments became the prime regulators of morality in economic exchanges. In recent history governments have been pressured to stop interfering in the economy. This has allowed bodies such as corporations, which operate immorally or at best amorally, to create extremely damaging outcomes without legal or societal penalty. Bruyn promotes the resurrection of civil society, calling society to demand fair practices and to regulate the morality of the economy.Bryun 1999 One way people could influence civil society would be to act as economic regulators by choosing to do business with banks that do not finance corporations such as the aforementioned.
Rudolf Steiner suggested that capitalism has the task of funding economic initiatives; capital should be directed into directions productive for society. He proposed that rather than prices being set through either the total control of government regulation, or the total lack of control of a free market, each industry could have self-regulating associations of producers, wholesale and retail businesses, and consumers. These associations would determine prices fair to all three groups. The state would not interfere with purely economic decisions but would be responsible for protecting human rights (this could include a minimum wage and safety in the workplace) and equality of its citizens' rights. (See Threefold Social Order.)
Ayn Rand suggested that all the evils, abuses, and iniquities, popularly ascribed to businessmen and to capitalism, were not caused by an unregulated economy or by a free market, but by government intervention into the economy.Ayn Rand — Free Market48
Read more about this topic: Ethical Banking
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