Moral Hazard!

One great irony of our current public discourse is that finance people have been talking abundantly about what they call moral hazard. Our capitalist masters of the universe have not suddenly become delicate moral theologians. Rather, they make quite cool-headed assessments about the ways that in the global economic crisis, say, rescuing the Greek government from its profligate spending or preventing large firms from failure has deleterious effects. How so? It’s human nature. What seem like well-intentioned efforts at solidarity in fact often encourage individuals, corporations, and governments to continue doing exactly what brought them into crisis in the first place, with the blithe assumption that it doesn’t really matter because the adults will make it all okay.

Of course, in progressive circles and, alas, also in certain segments of the Church, this seems rather a rationalization for why, even in a time of obvious crisis, the wealthy and disciplined will not practice generosity and solidarity towards the poor and improvident. But you have to have a no-fault view of human character to think that removing the consequences of our choices will not have sometimes bad consequences. We saw it in welfare disincentives and now at the other end of the economic spectrum.

It tickles me that the bankers, financiers, stock traders, hedge fund managers – what the Bible calls the moneylenders, I think – with no help from philosophers and theologians, are talking about moral hazard. In my experience, talk of morals is radioactive in public, and in most philosophical and theological circles. Educated people today just do not talk about morals, though not that long ago Kant – inheriting an older tradition – had no hesitation in writing “Groundwork of a Metaphysics of Morals.”

We prefer instead to talk about Ethics, an honorable term starting with Aristotle. But in modern discussions, ethics is a pre-sanitized zone, fenced with a certain etiquette. Institutions and individuals that would die of embarrassment caught talking about morals, gravely set up ethics committees and sagely pull chins when asked whether healers have an obligation to let babies die who survive abortion attempts or whether deficit spending will eventually bankrupt some enterprise or nation (that’s a tough one, hey?).

For years, I’ve read with great amusement “The Ethicist” in the NY Times Magazine, written by Randy Cohen and a virtual textbook for how high-minded secularists police the frontiers of ethics. This sort of ethical reflection makes sure that no one will ever have to encounter anything outside received liberal opinion. Occasionally, The Ethicist will grow stern at failure to apply the liberal ethos consistently. Otherwise, readers usually come away comfortably assured of their own righteousness and sensitivity – ethics, properly understood, should never spoil a weekend in the Hamptons.

A reader recently wrestled with the question whether to call the police on a mysterious thief of cans and bottles from her carefully sorted recycling bins, presumably for cash (thus depriving the city of revenue). The Ethicist found this too cold-hearted towards the poor and misdirected given the BPs, etc., of the world.

But occasionally there’s something you could not make up, like this from last week:

I am a straight woman, and I was set up on a date with a man. We got along well initially, but I grew concerned about how evasive he was about his past. I did some sophisticated checking online – I do research professionally – and discovered that he is a female-to-male transgendered individual. I then ended our relationship. He and I live in Orthodox Jewish communities. (I believe he converted shortly after he became a man.) I think he continues to date women within our group. Should I urge our rabbi to out this person? NAME WITHHELD, N.Y.

The Seinfeld-style setup here raises doubts about authenticity. (Orthodox Jewish women ask the NYT about such matters?). But you probably know the answer. The Ethicist wistfully opined that perhaps the transgendered individual should be a “bit more forthcoming.” (Cohen is a foe of closeted lives.) But then he strictly applied the self-evident scale of values for all right-thinking people today. Privacy, especially privacy over sexual matters – certain sexual orientations particularly – takes obvious precedence over personal loyalties, moral complexities, and even the ancient Orthodox faith of Israel.

A Catholic may be glad to belong to a body with broader and more rigorous morals, and often just simple horse sense. But as we know, the picture is not uniformly bright. There are not a few places where something similar has crept into the Church. A pet peeve: the priest who sets out at Mass calling to mind our sins “and failures,” as if the latter were like when your business goes bankrupt. Worse still, the celebrants who start improvising vaguely about “all the times when we have not lived up to the grace and freedom we have received as God’s people. . . .” When sin, which Jesus Himself tells us may separate us from God eternally, is formulated like this, it’s no wonder our people are clueless about moral hazards.

A shrewd priest of my acquaintance tells me that schoolchildren now sometimes come to confession and say something like this:

            – Father, I did something inappropriate.
            – Well, could you be a bit more specific? Confession is about acknowledging sins, you know.
            – I really don’t feel comfortable talking about it.

What kinds of catechetical preparation have they gotten – and what kinds of households do they live in – that this sort of thing, which clearly they pick up from so-called adults, has now entered even into the confessional?

Lots of Catholics have forgotten the unkind moral hazards they are exposing our children and adults to precisely by trying to be kind. Their version of the moral life seems really no great matter, certainly nothing a God would need to die on a cross to redeem. And they set in motion moral hazards that even the tax-collectors and moneylenders know will, unchecked, lead to widespread bankruptcy.

Robert Royal is editor-in-chief of The Catholic Thing and president of the Faith & Reason Institute in Washington, D.C. His most recent books are Columbus and the Crisis of the West and A Deeper Vision: The Catholic Intellectual Tradition in the Twentieth Century.