Three Ethical Dimensions of the Financial Crisis

This chapter employs the virtue-practice-institution schema of modern virtue ethics theory to analyze the moral implications of financial crises. Within this schema firms produce two goods: external goods, which are associated with the firm-as-institution; and internal goods, which are associated with the firm-as-collection-of-practices. Although there is general agreement among virtue ethicists about the normative desirability of firms pursuing both internal and external goods, there is marked disagreement about the actual ability of modern firms, operating within modern global markets, to consistently pursue both goods. The chapter offers arguments to support the view that it is possible for modern business organizations, operating within contemporary markets, to successfully pursue both internal and external goods. Furthermore, this balanced pursuit is aided by periodic financial crises. In essence, financial crises—provided they are not as severe as to kill the firm-as-institution—help temper the corrupting power of practices.