NYTimes | That we all agreed about the moral ugliness of the bailouts should have led us to implementing new and powerful regulatory mechanisms. The financial overhaul bill that passed congress in July certainly fell well short of what would be necessary to head-off the next crisis. Clearly, political deal-making and the influence of Wall Street over our politicians is part of the explanation for this failure; but the failure also expressed continuing disagreement about the nature of the free market. In pondering this issue I want to, again, draw on the resources of Georg W.F. Hegel. He is not, by a long shot, the only philosopher who could provide a glimmer of philosophical illumination in this area. But the primary topic of his practical philosophy was analyzing the exact point where modern individualism and the essential institutions of modern life meet. And right now, this is also where many of the hot-button topics of the day reside.
Hegel, of course, never directly wrote about Wall Street, but he was philosophically invested in the logic of market relations. Near the middle of the “Phenomenology of Spirit” (1807), he presents an argument that says, in effect: if Wall Street brokers and bankers understood themselves and their institutional world aright, they would not only accede to firm regulatory controls to govern their actions, but would enthusiastically welcome regulation. Hegel’s emphatic but paradoxical way of stating this is to say that if the free market individualist acts “in [his] own self-interest, [he] simply does not know what [he] is doing, and if [he] affirms that all men act in their own self-interest, [he] merely asserts that all men are not really aware of what acting really amounts to.” For Hegel, the idea of unconditioned rational self-interest — of, say, acting solely on the motive of making a maximal profit — simply mistakes what human action is or could be, and is thus rationally unintelligible. Self-interested action, in the sense it used by contemporary brokers and bankers, is impossible. If Hegel is right, there may be deeper and more basic reasons for strong market regulation than we have imagined. Fist tap Nana.
Hegel, of course, never directly wrote about Wall Street, but he was philosophically invested in the logic of market relations. Near the middle of the “Phenomenology of Spirit” (1807), he presents an argument that says, in effect: if Wall Street brokers and bankers understood themselves and their institutional world aright, they would not only accede to firm regulatory controls to govern their actions, but would enthusiastically welcome regulation. Hegel’s emphatic but paradoxical way of stating this is to say that if the free market individualist acts “in [his] own self-interest, [he] simply does not know what [he] is doing, and if [he] affirms that all men act in their own self-interest, [he] merely asserts that all men are not really aware of what acting really amounts to.” For Hegel, the idea of unconditioned rational self-interest — of, say, acting solely on the motive of making a maximal profit — simply mistakes what human action is or could be, and is thus rationally unintelligible. Self-interested action, in the sense it used by contemporary brokers and bankers, is impossible. If Hegel is right, there may be deeper and more basic reasons for strong market regulation than we have imagined. Fist tap Nana.
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