Short-sighted speculation harms economy, endangers peace, Pope writes in World Peace Day message

CatholicCulture.Org ^ | Vatican, Dec. 11, 2008

[GonzoII]

In a stinging analysis of the current turmoil in the word's financial markets, the Pope writes that the international economy is "experiencing the negative repercussions of a system of financial dealings-- both national and global-- based upon very short-term thinking, which aims at increasing the value of financial operations and concentrates on the technical management of various forms of risk." He argues that much of the financial world has been "completely turned in on itself, lacking any long-term consideration of the common good." That approach, he said, "becomes dangerous for everyone, even for those who benefit when the markets perform well."

[mr_hammer]

“Ahem. Yes. Perhaps you should read his 1985 paper on the deterministic folly of socialism and the requirement for morality in the free market. Something tells me you should have dictionary handy when you do.”

It was brillintly done! That writing was ten miles deep and broached subject matter I never even considered. Too bad many did not heed his warnings then...we might not be in the mess we are in today, if some had.

[jobim]

If I might insert myself:

All the Emperor did was share his opinion. Now, as an avid reader of Pope Benedict, I agree with you, Hand, but I disagree with the ad hominem tactic. What a person posts on his personal page, or if he's been a member less than a year, does not speak to the point he is making.

May I suggest, in the interests of constructive discourse, that we deal with ideas rather than the person making them?

[OldNavyVet]

“Short-sighted speculation”

An interested choice of words from the Pope ... considering that Earth’s been around for about 4,500,000,000 years.

[Emperor Palpatine]

“Money, not morality, is the principle of commerce and commercial nations”.

-Thomas Jefferson

[angkor]

>>>I don’t suppose it would help to go into a conversation that speculators stabilize prices.<<<<<

The cultural bias against speculation is ironic.

Even though the goal of (most) speculators is to profit, the result to society is that they establish price parameters, or upper and lower price boundaries.

The bias against speculators is irrational and based mainly on his insistent amorality about both long and short trades.

But that amorality is a good thing, because as you said it stabilizes prices on both ends.

[In veno, veritas]

An interesting read, but I think is off on a number of points. First, based on my own reading of Adam Smith, I believe he is dead wrong to say that Smith inaugurated the thought “...that the market is incompatible with ethics because voluntary “moral” actions contradict market rules and drive the moralizing entrepreneur out of the game.” Smith's Wealth of Nations and Theory of Moral Sentiments seem to imply that markets promote moral actions. Second, which is related to the first, the laws of the market are neither good or bad. They are what they are, like the laws of physics. However, which might be what the future pope was trying to describe, an immoral society will result in a poor economy (via the laws of econ). Basically, my (and others) theory is that the market is really based on trust, and good institutions are developed in ways to verify trust. Contrast with O’Reilly’s “system of greed.” Anyhow, the above are the main issues, which get into why I disagree with many other areas.

[GonzoII]

“Theory of Moral Sentiments seem to imply that markets promote moral actions.”

—

Put presure on, sure, but “promote”? I don’t see his logic.

Moral actions are free.

[In veno, veritas]

A classic example is with prejudice. Say a highly qualified woman wants to work at my business, but since I don't like women, I'll higher a less qualified or more expensive male. Well, she goes to my competition and now I'm losing out because I can't compete with the talent or prices my competitor has. Similar arguments happen for basketball and race. Discrimination comes at a cost in the market, so yes, in a way, markets promote morality. If I lie or cheat in a market, I may win in a few of the early stages, but eventually information in a free market gets out so that I lose in the long run. Someone who enters that is more honest will be able to take my business (or my customers just don't deal with me). In this way a market promotes honesty.

I guess you could debate with my usage of the word "promote," but I intended it to mean "to contribute to the growth of" (M-W.com) since immorality is usually punished in the market.