Values are at the heart of the cascading economic crisis. The elite have nurtured a financial system in which there was only one metric — raw profit. When profit is the only virtue, things like this are bound to happen and very difficult to fix. One silver lining of the continuing pain can be the realization that values other than money must guide societal actions going forward. Comparing the controlling values in our financial systems with a system in which altruism is the defining virtue can make this clear.
Consider the Wall Street bailout first. Christopher Cox, the head of the Securities and Exchange Commission, admitted last month that his voluntary oversight program for Wall Street's investment banks, which relied on honestly of these banks, was "fundamentally flawed from the beginning." This system, which ceded the SEC's regulatory powers to "self-regulation" by the banks that we are now bailing out, came into existence five years ago after heavy lobbying for the plan from all five big investment banks, according to a recent story in The New York Times. None other than Treasury Secretary Hank Paulson was head of participant Goldman Sachs at the time.
One of the most startling examples of the ramifications of profit as the sole value can be seen in the government's initial bailout last month of the world's largest insurance company, AIG. Those who know of the Great Depression have some sense, at least, of the need for the government to step in and help banks. But why are we bailing out the world's largest insurance company? According to a recent story by Gretchen Morgenstern in The New York Times, it turns out that AIG was intimately connected with Goldman Sachs, which stood to lose $20 billion if AIG fell by itself. In mid-September, Paulson convened a meeting to consider the AIG bailout. Suspiciously, there was only one investment banker in the room, Lloyd Blankfein, the current head of Goldman Sachs. AIG and Goldman were linked by a complex web that "existed for the most part inside the financial world's version of a black box," according to Morgenstern. What was Blankfein doing in the room helping to decide the fate of AIG? Goldman's CFO claimed that his firm's exposure to AIG problems was "immaterial."
It is easy to understand why financiers operate like this. They work in a system in which no value matters other than the personal accumulation of wealth. I have yet to read a story of any banker or investment manager who is willing to do anything to help out in the situation they got us into, without taking a piece of the action. In fact, the financial papers are full of stories of financial sharpies trying to take advantage of the coming misery. Yet, we the American people are being asked to be altruistic toward them.
Compare this to another existing system that plays a major role in the lives of many Americans, the organ transplantation system. Late this summer, my sister-in-law received a kidney transplant. I can't help but contrast the values in the system that allowed her to get a kidney from a person she did not know with those in view in the Wall Street debacle in which we will be bailing out people who we do not know. The transplantation system is startlingly different for one primary reason — it is based on different values. It could operate on the value of profit alone, but those involved in the system have refused to allow this to happen.
The system of kidney transplants that has developed over the years depends on locating kidneys that can be matched to needy donors for transplantation. Matches are currently overseen by the United Network for Organ Sharing, a nonprofit group that contracts with the federal government. There are today nearly 100,000 Americans waiting for kidneys, according to figures on the UNOS website. Yet, due to a shortage of usable kidneys, only about one quarter of the people on the list are able to get transplants in any given year. My sister-in-law had kidney failure and, fortunately, had to wait for only a few months for a replacement. Due to her unique biological fingerprint, a matching kidney was found from a deceased man from Tennessee in many fewer months than is typically the case.
The old system of matching kidneys, one by one, has not satisfactorily dealt with this backlog, nor produced enough donated kidneys from live donors. In response, new systems of altruistic daisy chains are emerging, in which donors are willing to anonymously give one of their kidneys to another. John Roberts, the chief of the Division of Transplantation at UCSF, believes they "make a lot of sense." The basic idea is that the person receiving the kidney has to agree to locate a kidney to be donated to another person, so that the chain can go on and on. Often the person receiving the kidney has lined up a family member or friend who is willing to donate a kidney, but is unable to use it due to a biological incompatibility. This "Never Ending Altruistic Donor" chain can transform a single act of human kindness "into a never-ending cascade of benevolence," its proponents believe. These networks are something to be admired.
Put the two systems side by side. Both involve many people who are often unknown to each other, cover large geographic areas, and involve necessary and important human interactions. The reason for the differences in the systems relates to the values explicitly promoted. The daisy chain of transplants promotes kindness, altruism, and community. The values of 21st-century business are profit, selfishness, and individualism. When the profit motive is exalted as the controlling principle, it is nearly impossible for altruism to thrive. Where altruism and benevolence are the anchor values great things can happen. People will do the right thing in these systems.
I do not think financiers are going to replace the profit principle with that of benevolence. But if we let business get away with saying individual profit is the only metric, we are sure to see awful situations like this reoccur, and probably not too far in the future.
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