Edited by Lisa Herzog
- Inventing the Market; Smith, Hegel, and Political Theory (2013)
- Just Financial Markets? Finance in a Just Society (2017)
Just Financial Markets? Finance in a Just Society
- features new and original work from leading international scholars from different disciplines
- provides an accessible introduction to financial ethics and the relation between justice and financial markets
- provides an interdisciplinary study of financial markets
Well-functioning financial markets are crucial for the economic well-being and the justice of contemporary societies. The Great Financial Crisis has shown that a perspective that naively trusts in the self-regulating powers of free markets cannot capture what is at stake in understanding and regulating financial markets. The damage done by the Great Financial Crisis, including its distributive consequences, raises serious questions about the justice of financial markets as we know them.
Just Financial Markets? brings together leading scholars from political theory, law, and economics in order to explore the relation between justice and financial markets. Broadening the perspective from a purely economic one to a liberal egalitarian one, the volume explores foundational normative questions about how to conceptualize justice in relation to financial markets, the biases in the legal frameworks of financial markets that produce unjust outcomes, and perspectives of justice on specific institutions and practices in contemporary financial markets.
Written in a clear and accessible language, the volume presents analyses of how financial markets (should) function and how the Great Financial Crisis came about, proposals for how the structures of financial markets could be reformed, and analysis of why reform is not happening at the speed that would be desirable from a perspective of justice.
"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. [...] While each chapter would deserve a more thorough examination, the present review focuses rather on two issues that, I believe, are common to most of them. The first is that they do not look into the potential external sources of injustice that led to the 2007 financial crisis and that affect how financial markets relate to justice. By external sources, I mean those sources that do not relate to the functioning of financial markets (such as lack of information, of liability or of proper incentives) but lie in other markets. [...] The second issue concerns potential reforms. Some authors consider systemic reforms. [...] Most authors, however, point to individual solutions. [...] While placing more responsibility on the individual for his or her wrong actions may be praiseworthy it amounts nevertheless to placing a lot of faith on individual morality and on market process, which is supposed to coordinate individual behaviour efficiently. [...] Relying only on individual behaviour is not sufficient for tackling all injustices on the financial markets: properly regulated institutions may still be needed (including creditrating agencies). Despite these disagreements, this new book is certainly worth reading for all those interested in financial ethics. Although several of these normative issues would deserve a further analysis, the book provides a very useful examination of the ethics of financial markets, which should interest both economists and philosophers."
Table of Contents
- Introduction: Just Financial Markets? Finance in a Just Society (Lisa Herzog)
I. Normative Foundations
- Justice, Financial Markets, and Human Rights (Rosa M. Lastra and Alan H. Brener)
- A Capability Framework for Financial Market Regulation (Rutger Claassen)
- Financial Markets and Institutional Purposes: The Normative Issues (Seumas Miller)
- Can Incomes in Financial Markets Be Deserved? A Justice-Based Critique (Lisa Herzog)
II. Legal Structures
- Punishment in the Executive Suite: Moral Responsibility, Causal Responsibility, and Financial Crime (Mark R. Reiff)
- A Culture Beyond Repair? The Nexus Between Ethics and Sanctions in Finance (Jay Cullen)
- Money's Legal Hierarchy (Katharina Pistor)
- Investor Rights as Nonsense- on Stilts (Aaron James)
III. Institutions and Practices
- Normative Dimensions of Central Banking: How the Guardians of Financial Markets Affect Justice (Peter Dietsch)
- Information as a Condition of Justice in Financial Markets: The Regulation of Credit Rating Agencies (Boudewijn de Bruin)
- Gender Justice in Financial Markets (Roseanne Russell and Charlotte Villiers)
- It Takes a Village to Maintain a Dangerous Financial System (Anat R. Admati)
About Lisa Herzog
Lisa Herzog studied philosophy, political theory, history, and economics at the Universities of Munich and Oxford and completed her doctoral thesis in political theory as a Rhodes Scholar at New College, University of Oxford. Her areas of research include political philosophy, philosophy of the market, business ethics, and the history of political and economic thought. Her work has appeared in journals such as Philosophy, Politics and Economics, Philosophy and Rhetoric and Deutsche Zeitschrift fur Philosophie, and she occasionally writes for newspapers such as Die ZEIT. She has recently received the Sir Ernest Barker Prize for the Best Dissertation in Political Theory and the Ernst Bloch Forderpreis. She is a Postdoctoral researcher at the Goethe University Frankfurt and the Institut für Sozialforschung.