Wednesday, October 28, 2009

Individual Choices and the Free Market

I recommend Edward Harrison's article at Credit Writedowns. Lots of food for thought here, beginning with an argument against using the rhetorical tool of dehumanizing individuals with terms like "bankster" and "bureaucrat," Harrison goes on to ask some philosophical questions about the culpability of an individual in a large impersonal system like banking:

What blame could/should an individual like this bear for alleged predatory lending at Washington Mutual (I hate to pick on the employee in this example as her instincts seem to be in the right place)? If we individually make the wrong moral decisions, do we collectively risk a market failure like the one we saw in the recent spate of predatory lending? I think the answer is yes. But I also think it is difficult for one individual to make a difference in a system where the incentives go against doing the right thing. This is a major argument in favor of regulation.

The entire article is worth a read.