Ethics Newsline®

by Rushworth M. Kidder

It’s been said that if you wanted to define water, you wouldn’t ask the fishes. In a similar way, the last people capable of defining the current financial atmosphere may be the news junkies. So immersed are they in their craft — its headlines, news flashes, commentaries, and backstories — that they rarely remember that news is framed rather than ordained. They can forget, in other words, that they’re seeing the world through a particular frame, language, or paradigm.

That latter word belongs to Thomas Kuhn, whose 1962 classic, The Structure of Scientific Revolutions, introduced the idea of a paradigm shift. More on Kuhn in a moment. To understand paradigms, however, just scan the headlines. What you’ll find is that nearly everything we know about the financial crisis has come through one of two languages, that of economics or that of politics. The first examines wealth, studies numbers, and asks, “Where’s the bottom line?” The second looks at power, tracks influence, and asks, “Who’s winning?” These two ways of coming to terms with the world have become the default languages of journalism.

The problem is that today’s situation — a global economic crisis shot through with political interventions — is rapidly outstripping the capacity of these frames to explain it. As a result, a third language is coming into play — the language of ethics. Talking not about wealth or power, it talks about values. Tracking neither numbers nor influence, it examines moral sensibilities. Instead of asking about bottom lines or winners, it asks, “What’s right?” Its focus is less on resolving the crisis than on seeing what it tells us about ourselves.

Under the influence of this third language, what began as a discussion of money has shifted into a conversation about metaphysics, character, and integrity. This shift came clearly into view during the third week of October, bookended by the twin iconic figures of investment guru Warren Buffett and former Federal Reserve chairman Alan Greenspan. On October 17, Mr. Buffett proclaimed his intention to buy and hold stocks regardless of uncertainties in the market. His op-ed piece in the New York Times was a powerful declaration, looking back over a long personal history of successful investing. Framed in the language of economics, it seemed to make sense of a familiar world.

Six days later, Mr. Greenspan told a congressional committee that, having trusted overmuch in the markets’ capacity for self-regulation, he was in a state of “shocked disbelief.” In a public recalibration of his long-standing free-market principles, his testimony pushed through into an introspective examination of identity. While still relying on economic and political framing, it had more than a hint of a moral discourse as it accepted the presence of a new world around us.

Can things really change that fast? Here’s where Kuhn helps. As a historian of science, he was intent on explaining how revolutions in scientific thought come about as we move from, say, Copernicus to Newton to Einstein. Though he’s writing about science, his thesis helps explain how wholesale changes in thought typically happen:

• They arise after “frequent and deep debates” over methods and standards, leading to “the need constantly to reexamine … first principles” — as Mr. Greenspan was doing.
• They are “generally preceded by a period of pronounced professional insecurity,” arising from “the persistent failure of the puzzles of normal science to come out as they should” — showing up today as a lack of confidence in economics itself.
• They grow from a sense that something is “fundamentally wrong” with current ways of thinking, especially in the presence of a “cumulative acquisition of unanticipated novelties” that researchers (or Treasury officials) can’t explain.
• Political revolutions, like those in science, arise when a minority of the community senses that “existing institutions have ceased adequately to meet the problems posed by an environment that they have in part created.”
• Significant change, whether political or scientific, is less evolutionary than revolutionary, less gradual than sudden, and often encounters significant resistance from the community’s most respected members — some of whom are in Congress.
• While such change is sometimes anticipated, usually “no such structure is consciously seen in advance.” Instead, “the new paradigm, or a sufficient hint to permit later articulation, emerges all at once, sometimes in the middle of the night.”

True, there are significant differences between scientific and economic change. But what if the analogy works? What if today’s economic mistakes can’t be corrected within the system? What if this “persistent failure” indicates that our “first principles” are “fundamentally wrong”? What if this turmoil presages an entirely new order of thought, where ethics is integral to free enterprise rather than simply an adjunct to it?

I’m not arguing for an ethics revolution. I don’t think economic and political language will join alchemy and the four humors in the museum of outgrown paradigms. But public thought is clamoring for philosophical depth and personal integrity, articulated in a language where right counts as much as wealth or power. If that clamor leads to a more ethical capitalism and a more moral democracy, don’t be surprised if the change emerges all at once in the middle of the night.

©2008 Institute for Global Ethics

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