This is a sequel to my paper "Il denaro è un’opera d’arte", focusing on the metaphysics of those peculiar social objects that play an increasingly central role in the financial world—derivatives. On the analysis I offer, they appear to run afoul of Searle’s theory of social objects (or of the theory outlined in my earlier paper), and I put forward some suggestions on where to look for the necessary adjustments.

I argue that epistemic failings are a significant and underappreciated moral hazard in the financial services industry. I argue further that an analysis of these epistemic failings and their means of redress is best developed by identifying policies and procedures that are likely to facilitate good judgment. These policies and procedures are “best epistemic practices.” I explain how best epistemic practices support good reasoning, thereby facilitating accurate judgments about risk and reward. Failures to promote and adhere to best epistemic (...) practices contributed to the 2008 financial crisis. I identify and discuss some of the ways in which best epistemic practices were violated in the events that led to the crisis, with a focus on the role of the credit rating agencies. I go on to discuss some of the ways in which these failings have been redressed. I conclude by observing how proactive regulation for best epistemic practices might help us to anticipate and avoid future crises. (shrink)

In the last 10 years, after becoming the official member of WTO in 2007, Vietnam has made commitments to the comply with the US-Vietnam Bilateral Trade Agreement and other international economic agreements. Vietnam has also become a member of the AEC and entered into important free trade agreements, notably the Trans Pacific Partnership. The financial integration of Vietnam in the global economy has been increasing rapidly. However, Vietnam also witnesses the unexpected economic fluctuations domestically and internationally. The global (...) class='Hi'>financial crisis, especially the US financial crisis, exerts a major impact on Vietnam’s economy and its banking system. Accordingly, the real estate market, stock market and banking system in Vietnam have fluctuated remarkably. This article discusses the causes of the US financial crisis and analyses the US government’s solutions. The causes of the US financial crisis are distributed to lax lending standards, failures in regulations of derivates financial instruments, and lack of state control of banking systems. In this respect, recommendations are made for Vietnam’s case. (shrink)

The financial crisis of 2008–2009 presents us with the opportunity to not only understand what has happened in the markets but also to reflect on the purpose of the marketplace. Drawing from expert economic analyses, we first assess the central lesson of the crisis—the failure of self-regulation by rational self-interest to moderate externalized risk in financial markets. Second, we ask the philosophical question occasioned by the crisis concerning the moral meaning of economic activity: Is (...) market exchange solely for the sake of self-interest? Reflecting on the poetry of Kahlil Gibran and engaging with the recent encyclical of Pope Benedict XVI, we turn our attention from political economy to moral economy: the relationships among market exchange, self-interest, and the common good—and, in particular, the prior conditions of market exchange and their moral significance for the present crisis. (shrink)

We propose to understand the global financial crisis of 2008 as an historical event marked by public decisions, economic evaluations and ratings, and business practices driven by a sense of subjugation to powerful others, uncritical conformity to serendipitous rules, and a levelling down of all meaningful differences. The crisis has also revealed two important things: that the free-market economy has inherent problems highlighting the limits of (financial) business, and, consequently, that the business organisation is not (...) as strong as is usually assumed. We reconstruct some of the most dramatic events of that time by using the narratives of two former Lehman Brothers insiders. We then provide an interpretation of that world by using Heidegger’s notions of being and care. Our investigation uncovers persistent inauthentic relationships nourished by the public structure of the financial market, which, drawing on Heidegger, we call the they. In the financial market the what of the world becomes more important than authentic being and self. But a hitch-free switch to authenticity becomes possible through anxiety and the call of conscience. (shrink)

During the current financial crisis, the need for an alternative to a laissez-faire ethics of capitalism (the Milton Friedman view) becomes clear. I argue that we need an order ethics which employs economics as a key theoretical resource and which focuses on institutions for implementing moral norms. -/- I will point to some aspects of order ethics which highlight the importance of rules, e.g. global rules for the financial markets. In this regard, order ethics (“Ordnungsethik”) is the (...) complement of the German conception of “Ordnungspolitik” which also stresses the importance of a regulatory framework. This framework is needed not to tame the market, but to make it more profitable in the long run. -/- The conception of order ethics relies heavily on contractarianism, especially on James Buchanan’s work. Unlike many other conceptions of ethics, it does not start with an aim to achieve, but rather with an account of what the social world – in which ethical norms have to be implemented – is like. Our social world is different from the pre-modern one. Pre-modern societies played zero-sum games in which people could only gain significantly at the expense of others. And the types of ethics that we are still used to today have been developed within these pre-modern societies. -/- Modern societies, by contrast, can be characterised – by economists and other social theorists alike – as societies with continuous growth. This growth has only been made possible by the modern competitive market economy which enables everyone to pursue his own interests within a carefully devised institutional system. In this system, positive sum games are played, which makes it in principle possible to improve the position of every individual at the same time. Most kinds of ethics, however, resulting from the conditions of pre-modern societies, ignore the possibility of win-win-situations and instead require us to be moderate, to share, to sacrifice, as this would have been functional in zero-sum games. These conceptions distinguish – in more or less strict ways – between self-interest and altruistic motivation. Self-interest, more often than not, is ultimately seen as something evil. -/- Such an ethics cannot be functional in modern societies. Ethical concepts lag behind. Within zero-sum games, it was necessary to call for temperance, for moderate profits, or for a condemnation of lending money at interest. Within positive-sum games, however, the morally desired result of a social process cannot be brought about by changes in motivation, by switching from ‘egoistic’ to ‘altruistic’ motivation. The second theoretical element introduced by order ethics is the distinction between actions and rules, which was already mentioned. Traditional ethics concerns actions: It calls directly for changes in behaviour. This is a consequence of pre-modern conditions as reconstructed before: People in the pre-modern world were only able to control their actions, not so much however the conditions of their actions. In particular, rules like laws, constitutions, social structures, the market order, and also ethical norms have remained stable for centuries. In modern societies, this situation has changed entirely. The rules governing our actions have increasingly come under our control. -/- In this situation, ethics has to focus on rules. Morality must be incorporated in incentive-compatible rules. Direct calls for changes in behaviour without changes in the rules lead only to an erosion of compliance with moral norms. Individuals that continue to behave ‘morally’ will be singled out, because the incentives have not been changed. Moral norms which are to be justified cannot require people to abstain from pursuing their own advantage. People abstain from taking ‘immoral’ advantages only if adherence to ethical norms yields greater benefits over the planned sequence of actions than defection in the single case. Thus ‘abstaining’ is not abstaining in the long run, it is rather an investment in expectations of long-term benefits. By adhering to ethical norms, I become a reliable partner for interactions. The norms do indeed constrain my actions, but they simultaneously expand my options in interactions. And people consent to rules only if these rules hold greater advantages for them, at least in the long run. -/- In general, ethics cannot require people to abandon their individual calculation of advantages. However, it may suggest improving one’s calculation, by calculating in the long run rather than in the short run, and by taking into account the interests of our fellows, as we depend on their acceptance for reaching an optimal level of well-being, especially in a globalized world full of interdependence. -/- The problem of implementation can now be placed at the beginning of a conception of order ethics, justified with reference to the conditions of modern societies I have sketched. Under the conditions of pre-modern societies, an ethics of temperance had evolved that posed simultaneously the problems of implementation and justification. The implementation of well-justified norms or standards could then be regarded as unproblematic, because the social structures allowed for a direct face-to-face enforcement of norms. Pre-modern societies not only favored an ethics of temperance, they also had the instrument of face-to-face-sanctions within their smaller and non-anonymous communities. This instrument is no longer functional in modern anonymous societies, and so we have to face up to the problem of implementation right at the start of our ethical conception. Simultaneously, an order ethics relies on the implementation of sanctions for enforcing incentive-compatible rules. In modern societies, rules and institutions, to a large extent, must fulfil the tasks that were, in pre-modern times, fulfilled by moral norms, which in turn were sanctioned by face-to-face sanctions. Norm implementation in modern societies thus works by setting adequate incentives in order to prevent the erosion of moral norms, which would happen if ‘moral’ actors were systematically threatened with exploitation by other, less ‘moral’ actors. -/- This conception of order ethics is then elaborated further in the area of business ethics. -/- . (shrink)

The discourse of ‘the end of ideology’ put forward by Bell in 1960 was centred on the notion that an ideological consensus had been reached, especially in developed countries, and that ideologies were no longer necessary given that economic growth had replaced political growth as the predominant subject of debate. With the fall of the Berlin Wall and the collapse of real socialism in parallel to the breakup of the USSR, the discourse that liberalism constitutes the dominant and only paradigm (...) rose dramatically in prominence alongside the neoliberal policies implemented following the economic crisis in the 1970s. Undoubtedly, one of the most important works in this trend was the ‘end of history’ thesis put forward by Fukuyama in the 1990s. This study is rooted in the need to reconsider these ‘finalisation’ theses founded on liberalism’s supposed lack of alternatives in the aftermath of the 2007–2008 global financial crisis. Offering a critique of historical economic-political liberalism, it aims to demonstrate the failure of these ending theses, both of which are still accepted and promoted by defenders of neoliberalism. This study employs historical and hermeneutic qualitative research methods. Its most important finding is that neoliberalism cannot be both a political and an economic ‘end’. (shrink)

In the last 10 years, after becoming the official member of WTO in 2007, Vietnam has made commitments to the comply with the US-Vietnam Bilateral Trade Agreement and other international economic agreements. Vietnam has also become a member of the AEC and entered into important free trade agreements, notably the Trans-Pacific Partnership. The financial integration of Vietnam in the global economy has been increasing rapidly. However, Vietnam also witnesses the unexpected economic fluctuations domestically and internationally. The global financial (...) crisis, especially the US financial crisis, exerts a major impact on Vietnam’s economy and its banking system. Accordingly, the real estate market, stock market and banking system in Vietnam have fluctuated remarkably. This article discusses the causes of the US financial crisis and analyses the US government’s solutions. The causes of the US financial crisis are distributed to lax lending standards, failures in regulations of derivates financial instruments, and lack of state control of banking systems. In this respect, recommendations are made for Vietnam’s case. (shrink)

After the 2008 crisis, there were several debates on the bail-out and the lack of accountability of financial institutions; this supposedly affects politica l values such as equality and responsibility: it implies transferring resources from the public (for instance, poor people) to specific economic agents who have chosen to incur certain risks. On the other hand, it is arguable that it would not be up to the regulators to protect investors’ interests, and that there would be more (...) efficient and less burdensome instruments associated with prudential regulation. Our goal is to provide a justification for the bail-out and for holding bankers accountable. In section 2, we present a brief description of the problem in the context of the crisis, followed by a justification for the bail-out through the incentives argument, based on Rawls’s difference principle. In section 3, we provide an ethical discussion over the corresponding moral hazards, and investigate how to mitigate it through coercive measures. (shrink)

"Over three years of study and fellowship, sixteen Muslim, Jewish, and Christian scholars sought to answer one question: “Do our three scriptures unite or divide us?” They offer their answers in this book: sixteen essays on how certain ways of reading scripture may draw us apart and other ways may draw us, together, into the source that each tradition calls peace. Reading scriptural sources in the classical and medieval traditions, the authors examine how each tradition addresses the “other” within its (...) tradition and without, how all three traditions attend to poverty as a societal and spiritual condition, and what it means to read scripture while facing the challenges of modernity. Ochs and Johnson have assembled a unique approach to inter-religious scholarship and a rare look at scriptural study as a pathway to peace. “Scriptural reasoning, the growing practice of Jews, Christians, and Muslims reading their scriptures together, makes good academic and common sense in a time of crisis. This ground-breaking book, the outcome of an imaginative 3-year experiment by the Princeton Center of Theological Inquiry, shows scholars and thinkers of the Abrahamic traditions going deeper into the traditions and into their contemporary situation. The result is something new, wise, and relevant… full of promise for the future. Where else can one find testimonies to Jews, Christians, and Muslims coming together not only in study, thinking, and wisdom-seeking but also in play, joy, and friendship?”--David F. Ford, Regius Professor of Divinity, University of Cambridge and Director, Cambridge Inter-Faith Programme". (shrink)

The objective of theatre establishments as business concerns remains predominantly to cover costs and make profits. Of all the avenues generation, gate-takings remain readily available and have been used by theatres for centuries now. But due to fraudulent activities, theatre establishments can be short-changed. Consequently, revenues can be lost and the establishments unable to meet their obligations; taxes, honoraria, rents, wages etc. it is therefore imperative to adopt measures that would strengthen gate-takings as revenue machinery, devoid of fraudulent practices. This (...) work examines theatre as a business and prescribes measures that can be adopted to safe-guard gate-takings, as part of internal financial control in theatre establishments. (shrink)

Islamic Banking and Financial Crisis, edited by Habib Ahmed, Mehmet Asutay, and Rodney Wilson, definitely has merit. The book comes at a time when conventional financial institutions face stress and, in many instances, utter failure as a result of the 2008 global financial crisis. While the book is not designed primarily as a retrospective, it does offer an opportunity for reflection.

An exchange of letters among proper names and natural-kind terms, dealing with various identity and individuation problems (rigid designation, use-mention ambiguities, translation) from their point of view.

El propósito de este ensayo es indagar en los fundamentos últimos u originarios de lo ético como fenómeno humano presente en cualquier ámbito social, en cada etapa de la historia, en toda cultura. Se hace referencia no a la Ética como doctrina filosófica, sino a cierta noción de bien desde la que se juzga el objeto valorado. Las preguntas cruciales aquí son: ¿por qué necesitamos una ética -así en minúscula-, una noción del bien, un concepto de lo justo, de lo (...) bueno, de lo correcto, desde el que podamos juzgar los fenómenos, procesos y acontecimientos que se relacionan con nuestra vida? ¿Qué certidumbre tenemos de que esa noción desde la que valoramos sea la adecuada? ¿Cómo llega lo ético a convertirse en ético? En resumen, ¿Cuáles son los fundamentos de la ética? Se trata de un tema de importancia trascendental justamente para la vida, con múltiples nexos hoy con los problemas globales que ponen en riesgo la supervivencia misma de la humanidad. (shrink)

We analyze the properties of optimum portfolios, the price of which is considered a new quantum variable and derive a quantum analog of the Black-Scholes formula for the price of financial variables in assumption that the market dynamics can by considered as its continuous weak measurement at no-arbitrage condition.

The purpose of this paper is to examine income tax evasion in Jordan and set forth various cures for this problem.

The argument is that (1) the spiritual crisis that Zhu Xi discussed with Zhang Shi 張栻 (1133–1180) and the other “gentlemen of Hunan” from about 1167 to 1169, which was resolved by an understanding of what we might call the interpenetration of the mind’s stillness and activity (dong-jing 動靜) or equilibrium and harmony (zhong-he 中和), (2) led directly to his realization that Zhou Dunyi’s thought provided a cosmological basis for that resolution, and (3) this in turn led Zhu Xi (...) to understand (or construct) the meaning of taiji in terms of the polarity of yin and yang; i.e. the Supreme Polarity as the most fundamental ordering principle (li 理). (shrink)

There are two major puzzles in Hume’s epistemology. The first involves Hume’s fall into despair in the conclusion of Book One of the Treatise. When Hume reflects back upon the results of his research, he becomes so alarmed that he nearly throws his books and papers into the fire. Why did his investigations push him towards such intense skeptical sentiments? What dark discoveries did he make? The second puzzle concerns the way in which Hume emerges from this skeptical crisis (...) and proceeds with his investigations. Why the sudden change of heart? What accounts for the return of hope? Each of these puzzles represents a serious challenge to traditional approaches to Hume’s epistemology. A proper solution to them requires a careful examination of Hume’s claims about the untrustworthiness of our cognitive faculties as well as his strategy for improving their performance. (shrink)

According to a common assumption, truthfulness cannot have an intrinsic value in business. Instead, it is considered only instrumentally valuable for business, because it contributes to successful trust-building. Some authors deny truthfulness even this limited role by claiming that truth-telling is not an essential part of business, which is a sui generis practice like poker. In this article, I argue that truthfulness has indeed an intrinsic value in business and identify the conceptual confusions underlying the opposite view. My account of (...) truthfulness as a virtue shows that truthfulness is both valuable for its own sake and instrumental to further valuable goals. It helps pinpoint the implicit contradiction in claiming that truthfulness has an instrumental value only. I then challenge the reasons for considering business exempt from the constraints of truthfulness and elaborate on the analogy between game and business, which in fact supports instead of undermining my claim that business is a truthful practice. Finally, I illustrate my argument with a case study of the current crisis of trust faced by the pharmaceutical industry. (shrink)

Are intellectual property rights for talented people justified by Rawls’ criteria of justice? In this paper, I argue that Rawls’ theory of justice is ill-equipped to answer this question. Tailored for rival goods and, as a result, centred on the distribution of benefits, it tends to restate questions of justice about unequal rights as questions about economic inequalities. Therefore, it lacks the tools necessary to distinguish among different forms of incentives for talented people. Once social and economic inequalities observe equality (...) of opportunity and improve the least advantaged, the theory is indifferent as to whether talented people are allowed to compete for monopoly rights or for direct financial reward. (shrink)

Desde la última década del siglo pasado, tras el declive de los “Annales”, el presente y futuro de la Historia como ciencia ha motivada un intensa polémica académica de orden “global” y en la que están participando no sólo historiadores sino filósofos -de la ciencia y la Historia– como también especialistas de las restantes ciencias sociales e incluso de otras disciplinas afines a la Historia, como son la genética y la biología. Más allá del debate epistemológico clásico al respecto, están (...) ausente del mismo otras áreas del conocimiento las que, como las llamadas TICs –técnicas de la información, comunicación y conocimiento– tanto han aportado a la “maduración” de la casi generalidad de las ciencias y respecto de las cuales la Historia persisten en estar alejada. Este trabajo intenta motivar algunas reflexiones en la aludida polémica de la que podría ser la Historia de siglo XXI; la que, ciertamente, está aún por nacer. (shrink)

This paper argues, through conceptual analysis, against an objection to the disapproval of banks for the 2007-8 crisis: the idea that they could not have acted otherwise (at least not rationally) and that no one should be blamed for a fact one could not have avoided. If true, it would threaten the justification of corporate social responsibility and the legal liability of managers. Identified as the ‘inevitability thesis’, this objection is illustrated by an analysis of the film Margin Call (...) (2011) and associated with other investigations on ethics and responsibility. The target thesis stems from a confusion between different notions of responsibility (for a task, for a decision, for causing an event and for repairing it) and leads to an incoherent form of fatalism. Finally, it is suggested that the invocation of ‘inevitability’ may be a way of rationalizing the decision, obscuring reasons to the contrary. (shrink)

Although Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks (...) and although some scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis. (shrink)

Globalization is regarded as a process or a project or a process/project which is most rapidly developing. Globalization, in case of occurrence, will put its impacts on all dimensions of human life including knowledge and practice. Particularly, its impact on epistemology and education would be remarkable. Given that the appearance and development of informational revolution is the most important background for globalization, the first challenge of globalization relates to the nature of knowledge. According to the information revolution, the most important (...) characteristic of knowledge is to be sought in this equation: knowledge = information. This involves reducing different facets of knowledge to quantitative information which leads to knowledge legitimacy crisis. In addition, having a communicational dimension, knowledge will be qualified by means of the shape and characteristics of community in the era of globalization. The viewpoint of virtual community calls us from another side to rethink on knowledge as well as on the problem of identity because in the consequence of virtual community, virtual identity of pupils is being claimed which involves indentity fragmentation. To deal with these challenges, education needs: a) to resist the reduction of knowledge to information and equate knowledge with wisdom rather than information; b) to extend imaginative and creative procedures; c) to develope interdisciplinary studies as an important way of extending imagination; and finally, d) to provide relationship between virtual and real communities of the pupils. (shrink)

This article analyzes the global causes of the contemporary crisis and the possibilities to eliminate the most acute problems that have generated this crisis. It analyzes both the negative role of the world financial flows and their important positive functions including the ‘insurance’ of social guaranties at the global scale. In connection with the outcome of the crisis it analyzes the conditions of possible transformations of the world system and the possibility of various global scripts of (...) its near future. It gives a characteristic of the coming ‘epoch of new coalitions’; it gives some futuristic prognosis. (shrink)

The paper deals with the basic concepts and key problems of creating financial stability, as well as the role of central banks in its provision. The role of central banks in providing financial stability is extremely important and has a double manifestation - is the maintenance of the stability of the national currency and the responsibility for the stability of commercial banks and the banking system. The central element of any financial system is always banks, so the (...) emergence of systemic instability in the banking sector always has a negative impact on financial stability in general and has extremely negative socio - economic implications for the country as a whole. The present study provides a thorough analysis of the essence of financial stability, the main challenges faced by central banks in monitoring financial sector and examines the global experience of central banks of different countries to ensure financial stability and their role in these processes. This paper highlights the common and distinctive features of the activities of the central banks of the most developed and developing countries towards the achievement of financial stability. Our paper focuses on the activities of the National Bank of Ukraine. In particular, its role in ensuring financial stability of the country is described and directions of its consolidation are indicated. The major task of the National Bank of Ukraine on the way to financial stability in the post -crisis period selected, the maximum possible mitigation Ukrainian banks consequences of the global financial crisis; increase of financial stability of banking institutions; strengthening of public confidence in banks and the banking system. As a result of the conducted, the key factors of achievement of the set tasks, as well as the main directions of application of monetary instruments of the National Bank of Ukraine in the activities aimed at increasing the stability of banks and ensuring financial stability, were determined. (shrink)

Despite the enormity of the financial losses flowing from the 2008 financial crisis and the outrageousness of the conduct that led up to it, almost no individual involved has been prosecuted for criminal conduct, much less actually gone to prison. What this chapter argues is that the failure to punish those in management for their role in this misconduct stems from a misunderstanding of the need to prove that they personally knew of this wrongdoing and harbored (...) an intent to defraud. But not only would negligence be a sufficient legal and moral basis for imposing terms of imprisonment in these cases, mere causal responsibility would also be enough, for causal responsibility has embed in it all we need to find those causally responsible morally responsible too, and once some basis for moral responsibility is established, the imposition of terms of imprisonment is both legally permitted and morally just. (shrink)

In this chapter, one considers finance at its very foundations, namely, at the place where assumptions are being made about the ways to measure the two key ingredients of finance: risk and return. It is well known that returns for a large class of assets display a number of stylized facts that cannot be squared with the traditional views of 1960s financial economics (normality and continuity assumptions, i.e. Brownian representation of market dynamics). Despite the empirical counterevidence, normality and continuity (...) assumptions were part and parcel of financial theory and practice, embedded in all financial practices and beliefs. Our aim is to build on this puzzle for extracting some clues revealing the use of one research strategy in academic community, model tinkering defined as a particular research habit. We choose to focus on one specific moment of the scientific controversies in academic finance: the ‘leptokurtic crisis’ opened by Mandelbrot in 1962. The profoundness of the crisis came from the angle of the Mandelbrot’s attack: not only he emphasized an empirical inadequacy of the Brownian representation, but also he argued for an inadequate grounding of this representation. We give some insights in this crisis and display the model tinkering strategies of the financial academic community in the 1970s and the 1980s. (shrink)

After the financial crisis of 2008, many economists expressed dissatisfaction with the state of macroeconomics. They criticised deficiencies in the dominant dynamic stochastic general equilibrium modelling approach and conceptions of good macroeconomic research behind that dominance. This paper argues that there is a deeper problem in macroeconomics, which remains unaddressed. I connect existing literature critical of the institutions of macroeconomics and of economics in general to the institutional preconditions of effective criticism outlined by the philosopher Helen Longino. (...) I find that as an epistemic community, macroeconomics does not function in a way that adequately supports critical evaluation of established beliefs, norms and practices. This failure may partly explain why many views on macroeconomic modelling, the tenability of which economists questioned after the crisis, were able to persist for so long. My analysis gives additional support to several recent proposals for institutional reforms in economics. (shrink)

Our planet contains 194 independent states and much more nations. They share membership of the United Nations and in consequence they subscribed the Universal Declaration of Rights. These are rooted in the modern universal conception of states and human rights formulated by philosophers of the Enlighten Age like Locke, Kant., Montesquieu, Voltaire and Rousseau. Concepts like democracy are mirrored to the organization of the political life as it was developed in North America and Europe at the end of the 18th (...) and the 19th century. Universality was deeply rooted in the Western intellectual, moral and religious tradition of that part of the world. Even globalization of the economic and social life is governed by the same Western standards and worldwide consumed basic goods like prime matter,. food and energy is expressed in terms of Western currency like dollar, pound sterling or euro. Despite this economic globalization there were two contradictory political evolution to discern: At the one hand more than 70 new states where created and on the other hand 28 European states started to integrate to a political European Union. The latter trend was based on a deep economic integration and since the creation of the euro also a financial integration. Basic idea was the creation of a free economic market as bases for a political unified Europe. Euro criticism is not only identified with conservatism, nationalism, narrow mind and even racism, euro criticism is deprived from any intellectual significance. However other trends put some shadow on the European project. First the Soviet experience around Marxism, Leninism and Stalinism unified more different nations than the European Union but ended in a complete political and economic chaos. Secondly the financial euro crisis involves only the tacit undermining of the national political independence of the member states, but does not make room for a deep analysis what the fundamentals are of this crisis such as lack of confidence of the citizen in the created unified political and financial market and its main instruments like banks that we consider as the fundamental boundary conditions of the worldwide globalization of goods, power and all aspects of human life. Furthermore we claim that this market in al its aspects is the worst answer to the inconvenient yet unavoidable truth that Western way of life of consumption includes a ecological footprint that exceeds since many years the sustainability of our planet. -/- . (shrink)

The novel coronavirus (COVID-19) has imperatively shaken the behavior of the global financial markets. This study estimated the impact of COVID-19 on the behavior of the financial markets of Europe and the US. The results revealed that the returns of the S&P 500 index have been greatly affected by a lockdown in the US owing to COVID-19. However, the health crisis generated due to the novel coronavirus significantly decreased the stock returns of the Nasdaq Composite index. The (...) results also showed that the economic crisis generated from the pandemic in Spain has had more impact on the IBEX 35 as compared to the health crisis itself. On the other hand, in the long-run, Italy’s stock markets are more affected by the health crisis as contrasted with the economic crisis, while, in the short-run, both lockdown conditions and economic instability lower the stock returns of FTSE MIB. The UK stock markets witnessed that in the short-run, deficiency of health management systems imperatively damaged the stock returns of the London Stock Exchange. The investigation revealed that deficiency of health systems and lockdown conditions have imperatively damaged the structure of financial markets, inferring that sustainable development of these nations is at risk due to COVID-19. The study suggested that governments should allocate more of their budget to the health sector to overcome a health crisis in the future. (shrink)

In the wake of the global financial crisis of 2008, the greatest economic disaster since the Great Depression, the cover story of the July 18th 2009 issue of The Economist, entitled “What went wrong with economics,” opened with an unequivocally incriminating statement: “Of all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself.” In the months surrounding this indictment, many influential economists, including several Nobel laureates, were drawn to (...) the same embarrassing conclusion. Despite the existence of a handful of Cassandras, economists, as a group, had failed to foresee the crash. This short essay reviews the criticisms addressed to modern economic theory in the immediate aftermath of the crash. Overall, the main issues raised by critics were that (a) economists versed in the dominant models in macroeconomics and finance have been blinded to the possibility that we live in an uncertain and complex world; and (b) that the content of current economics education has sidelined many of the relevant insights to be found in the history of the discipline. This has led the critics to call for changes in the institutional structure of discipline, with a particular emphasis on the promotion of interdisciplinarity, and theoretical and methodological pluralism. (shrink)

The 2007 financial crisis has deeply shaken the world economy. The causes and consequences of this crisis have been hotly debated in economics ever since. However, the impact of financial markets on justice is also a growing field of study, to which the book recently edited by Lisa Herzog provides a valuable contribution. The book is not intended to tackle technical discussions on the functioning of financial markets and institutions, which are broadly presented in the (...) introduction (chapter 1). Rather, it aims at making clear how financial markets and institutions affect justice and at proposing potential institutional reforms. The book is divided into three parts. The first four chapters scrutinize several possible normative frameworks for studying financial markets beyond the simple ‘free-market’ model. The second part studies the legal framework that applies to financial markets, discusses how it failed to prevent harm and injustices, and proposes reforms. The final part looks at particular financial institutions and analyses how they impact justice. (shrink)

The Global Financial Crisis of 2007–2009 exacerbated two distinct concerns about the independence of central banks: a concern about legitimacy and a concern about economic justice. This paper explores the legitimacy of independent central banks from the perspective of these two concerns, by presenting two distinct models of central banking and their different claims to political legitimacy and distributive justice. I argue primarily that we should avoid construing central bank independence in binary terms, such that central banks either (...) are, or are not, independent. I will argue that we should instead construe central bank independence in scalar terms, so that independence admits of degree, thus allowing us to develop an account of independence in which central banks can retain it to the extent necessary for economic efficiency, while meeting reasonable concerns regarding democratic legitimacy and economic justice. (shrink)

Before pandemic the world economy had a pre-crisis situation which was characterized by unprecedented imbalances in the global financial and economic system, the lack of growth in world GDP, which posed a real threat to the world economic order. Almost all global analysts predicted a global economic crisis at the end of 2019. For the first time since time immemorial, bank interest rates in all countries have dropped to unprecedented low levels. Often interest rates were 0% or (...) even negative. The EU’s financial system has been so disfigured by the VAT tax that fraud with this tax has reached a scale far exceeding hundreds of billions EUR and in fact got out of control of the authorities. (shrink)

The study aims to analyze the impact of top management support for strategic planning on crisis management in UNRWA-Gaza Strip field in Palestine. Several descriptive analytical methods were used for this purpose, and a survey as a tool for data collection. Community size was (881), and the study sample was stratified random (268). The overall findings of the current study show that top management provides needed HR for strategic planning but with no financial support. Also there are shortcomings (...) in the way that organization manages the crises before and after they occur. A crisis management is only practicing during the crisis. The study suggest that top management must provide the financial support for strategic planning, periodic meetings to prepare how to deal with potential crisis in the future, establishing a specialized team and provide them with all sources needed. (shrink)

Product-harm crisis is an important organizational management topic due to the potential detrimental business impact. Organizations are more vulnerable than ever to the possibility of product related incidents disrupting business at any point in the supply chain. To counteract this implicit threat to an organizations reputation and financial wellbeing, if properly deployed, continuity management fosters the ability to run in the face of a crisis event; whereby business continuity management induces the means for appropriate product-harm crisis (...) responses. In this study, the author synthesizes selected published research presenting product-harm crisis management considerations. Based on an assigned literature review; the author summarizes article content, compares and contrasts methods and extrapolates results and conclusions garnered from the selected scholarly research; then provides an actionable recommendation for enabling effective product-harm crisis management. (shrink)

The current economic crisis caused by the COVID-19 pandemic has created new changes and challenges for society, which has led to a deeper identification of pressing problems and to develop strategies and models for overcoming crises in various countries, industries and businesses. The formation and improvement of modern strategies and models of crisis management is impossible without optimizing the resources of economic entities, providing assistance at various levels of government to support priority sectors of the economy, finding additional (...) sources of funding to combat the COVID-19 pandemic. To ensure the effective develop and implementation of modern strategies and models of crisis management it is necessary to have information about the state of economic entities, relevant commodity, raw materials, financial markets, explore the internal and external environment, determine the impact of risks on current activities business entities or industries. The effectiveness of crisis management strategies and models is determined by the ability of the management system to ensure the support of business activity of economic entities in the relevant market and to stimulate effective consumer demand. The purpose of writing this scientific monograph is to substantiate the theoretical and methodological foundations and to form and improve strategies and models of crisis management taking into account new changes and challenges for society related to the COVID-19 pandemic and declining business activity of economic entities. The object of the author’s research was the process of formation and improvement of crisis management strategies and models in the conditions of market imbalance and change of the external environment, reduction of activity volumes of economic entities, growth of budget expenditures to combat the COVID-19, formation of new forms of activities and penetration of information technology into various spheres of life to optimize the negative consequences of a pandemic. The subject of the study were socio-economic, organizational and institutional processes of formation and effective implementation of strategies and models of crisis management in various areas of economic activity; substantiation of mechanisms for ensuring the competitiveness of economic entities and the formation new forms of entrepreneurship; development of modern information technologies; consideration of best practices in business process management and digitalization using world experience in various sectors of the economy caused by the COVID-19. (shrink)

This article identify catalysts of synthetic economic crisis. These catalysts are the subject of transnational corporations, international financial, trade organizations, regional integration groupings. Generalized mechanism for the flow of synthetic economic crisis and their types. This article also proves that the response of governments to the process flow of synthetic economic crisis with the help of the classical fiscal, monetary and administrative-legislative instruments are not effective.

On September 7, 2008 the executive administration of American President George W. Bush announced that his government would take over the giant mortgage finance companies Fannie Mae and Freddie Mac, costing the citizens $200 billion. One week later, the 160 year-old American investment bank Lehman Brothers filed for the largest bankruptcy in U.S. history. What would soon be known worldwide as “the financial crisis” had begun. In response to that crisis, less than a month later, on (...) October 3, 2008, the United States Congress passed the Emergency Economic Stabilization Act of 2008, which established the Troubled Asset Relief Program and authorized the use of $700 billion in taxpayer funds to bail out the banking and finance industry. As a result, the U.S. Treasury reports that the total bailout gave Bank of America $45 billion, Citigroup Bank $45 billion, AIG Bank $40 billion, J. P Morgan $25 billion, Wells Fargo $25 billion, General Motors $10.4 billion, Goldman Sachs $10 billion, Morgan Stanley $10 billion, GMAC $5 billion, and Chrysler corporation, a mere $4 billion. This response to a perceived crisis was not limited to the United States. On October 12, 2008—in one day alone—the United Kingdom coughed up the equivalent of €679 billion in bank relief. And in Germany, Der Spiegel reported on December 23, 2008 “The German government whipped its €480 billion bank bailout package through parliament in record time.". (shrink)

This article reviews the recent crisis in Detroit focusing on the placement of an Emergency Manager in charge of financial decisions, and a bankruptcy process. This political disenfranchisement harmed the pensions of city employees and offered valuable real estate to investors at low prices. While the crisis was long in the making, with deindustrialization and residential segregation beginning in the 1950s, the crisis was exacerbated in 2008 with the mortgage crisis and with water shut-offs (...) to residences. The greatest harms were felt by African American families in the city. The article takes toll of the harms suffered and chronicles movements of resistance against Emergency Management and community organizing efforts. (shrink)

The paper is devoted to the study of determinants determined the level of financial security of economic systems. It is shown that the financial security of an economic system implies the achievement of a level of financial stability that will contribute to simultaneously maintaining financial equilibrium and ensuring targeted growth in line with the development strategy. The level of financial security of rail transport in Ukraine was analyzed and it was determined that the decline in (...) its security was the result of a complex interaction of external and internal factors, the main of which were tight government regulation, shifting the financial burden of social responsibilities to Ukrzaliznytsya, PJSC, lack of competition in the transportation of the main nomenclature of cargo and the unsatisfactory state of non-current assets. Based on the Argenti’s method, it is shown that the consequence of the inefficient financial management of Ukrzaliznytsia, PJSC are the reduction of its insolvency. Three main determinants of the financial security of rail enterprises were identified: a reduction in traffic volumes, an unstable capital structure and the impossibility of timely repayment of current liabilities. An additive model for assessing the impact of selected determinants on the level of financial security of Ukrzaliznytsia, PJSC is proposed. The analysis of the model parameters showed that the greatest impact has the index of industrial production, which is due to the predominant formation of its own financial resources of rail transport due to income from freight traffic. A complex of measures designed to improve the financial condition of rail enterprises was proposed. It is substantiated that in order to equalize existing threats, it is necessary to take political decisions aimed at improving the financial condition of Ukrzaliznytsia, PJSC by reducing the intensity of leaching of its financial resources, as well as implementing an anti-crisis financial strategy aimed at optimizing the capital structure and financial rehabilitation of rail enterprises. (shrink)

One of the explanations for the Great Crisis of 2007-2008 was that financial authorities should have issued stricter regulations to prevent the housing bubble. However, according to Alan Greenspan, President of the Federal Reserve System (FED) from 1987 to 2006, this is to judge with hindsight. No one can guess when a “bubble” begins, nor when it ends; they happen because of the “irrational exuberance” in investors’ behavior, which causes boom and bust cycles. Regulators are not in (...) a better situation for assessing risks, though: since market participants supposedly know their own risks better than the regulator (a kind of informational asymmetry), an intervention (except to ensure law-enforcement) would imply unjustified paternalism. However, a regulator does not have to be conceived as a paternalistic authority. We sketch an objection to Greenspan's argument, arguing that crises don’t require a defective reasoning such as the “irrational exuberance” – our usual bounded rationality might be enough to provide the kind of “self-fulfilling prophecy” observed in the rise and fall of bubble assets value. Given the possibility of grave externalities, authorities are justified in adopting measures to ensure investors behave in a prudent way, even if they supposedly know better their own risks. (shrink)

This is an introduction to a special number of Midwest Studies discussing the 2008 global financial crisis and the ethical issues it raised. The immediate origins of the crisis are discussed, as are some of the exotic financial instruments involved, and some of the strategies for valuing and trading these instruments. This is necessary background for attributions of moral responsibility and blame to both individuals and institutions in the American financial system and its counterparts (...) elsewhere in the developed world. (shrink)

Citizens are the most important economic priority for the economy of Ukraine in comparison with any territory values in the number of its territories and from this position easy needs any position. The pandemic economic crisis did not reveal anything new, but it finally and irrevocably confirmed and proved the priority of the human factor in the economy of any state over the geographical boundaries and regional structure of the state.

A review of Boudewijn de Bruin's book, "Ethics and the Global Financial Crisis - Why incompetence is worse than greed".