Ethical causes and implications of the global financial crisis in Ireland: Political Contagion and Political Transformation

Ray Kinsella and
Maurice Kinsella

Issue 391, vol.98, Autumn 2009

Where financial innovation was concerned, exploiting loopholes became the order of the day – and regulatory arbitrage increasingly trumped socially useful purposes. In Ireland, the present intertwined ideologies of finance and politics (of profit and power) have led the country to the brink of the loss of economic autonomy, with the intervention of external agencies – including the IMF – possibly yet being required.

The failures of economics, of regulation and standards of corporate governance, are however essentially secondary causes of the crisis. The root cause lay in a failure of ethics – not just business ethics, but the most basic human sense of ethics.

In the absence of this consideration, it is simply not possible to begin the political and societal transformation that is necessary to restore stability and sustainability.

The solution to the crisis will require a reference point which lies outside of political power and shareholder value – namely, The Common Good. This would dictate that the maintenance of employment should take precedence over subsidising shareholder-based banks with borrowed funds. Only a leadership oriented to Service Of The Person will know how to ensure that political stability is not subverted by a rise in our jobless-figure to half-a-million people.

The Government reaction so far has been to cut domestic demand (and therefore jobs) and activity without simultaneously promoting entrepreneurship and growth. This collapse in employment in many countries as a result of the failure of corporate capitalism – and of the decision to bail-out banks rather than to support the businesses which generate jobs – strikes at the very heart of families’ lives; and, in so doing, de-activates these ultimate ‘shock-absorbers’ in an economic crisis (who might otherwise have been persuaded to mobilise themselves as spring-boards for growth).