If you are like most Americans, you’ve watched your retirement savings shrink with the plunging stock market. You might be one of the hundreds of thousands without work searching for a job as unemployment soars. And the forecast out of Washington, D.C. these days says we’re in for tough times. America isn’t the only country rocked by such economic turbulence. Countries around the world are in the same boat.
Which is why the current global economic crisis was the hot topic at last week’s G-20 summit of world leaders in London. After much discussion, the leaders pledged $1 trillion in loans and guarantees to bolster the economies of struggling countries. While that development is newsworthy, for me the most striking moment occurred during a speech by British Prime Minister Gordon Brown given to religious leaders assembled at St. Paul’s Cathedral last Tuesday.
In short, Mr. Brown argued that banks and financial markets ought to adopt the “family values” of integrity, honesty, and fairness if the world is to turn around the global economic crisis they face. Mr. Brown said in order to have a stable and prosperous economy the “markets need morals.” In other words, this isn’t just an economic crisis—one solved with bailouts and government oversight—but a crisis of values.
That’s a radical perspective.
Mr. Brown is saying the infusion of cash alone isn’t the long term solution to our problem. Rather, he argued that banking institutions and businesses should adopt a higher standard of moral excellence. Mr. Brown said, “In our families we raise our children to work hard and to do their best and do their bit. We don’t reward them for taking risks that would put them or others in danger, and we don’t encourage them to seek short-term gratification at the expense of long-term value.”
In his view, one that I agree with, Brown stressed, “Our task today is to bring the imperatives served by our financial markets into proper alignment with the values held by families and business people across our country—hard work, taking responsibility, being honest, being fair.” I’m encouraged that political leaders are recognizing the values deficit in the leadership of the business community. That’s an important first step to solving the decline in the economy.
It’s also not a new concept.
Adam Smith, 18th Century economist and champion of free trade and free market economics, coined the phrase the “moral sentiments”; Smith believed there can be no strong economies without morals and manners—which is at the heart of Mr. Brown’s message. Put another way, you can pump all of the money into the world economy, but without honesty, integrity, fairness—yes, without a moral compass—that investment will be wasted. Even our own Founding Fathers said morals and manners were more important than laws.
Regarding the need for a resurgence of family values, I believe that stable, loving families, partnering with churches and other faith-based organizations, are the best way to instill a moral compass in the next generation. As our children, equipped with this finely-tuned moral compass, enter the banking institutions and the marketplace, future generations can, and will, reap the benefits.
It’s a long term strategy.
It’s a strategy that will work if we have the patience to do our part now.