"Whatever is not forbidden is mandatory" -- George Orwell.
I've been working at talking with students about the current financial crisis in these terms. In part, as an effort to counter the idea that somehow the fault lies with individual "greedy" capitalists and CEO's.
What the striking lack of regulation in these strange new markets trading in mortgage debt has meant is that every risk becomes not just possible, but mandatory. The competition to produce the highest rate of return possible insures that those too squeamish to pursue unforbidden risks will fall behind. This is different from individual greed. It is institutionally required greed. This line of thought has been spurred on by a recent post from Rough Theory and a reminder of this passage from Marx:
I do not by any means depict the capitalist and the landowner in rosy colours. But individuals are dealt with here only in so far as they are the personifications of economic categories, the bearers of particular class-relations and interests. (Preface to the First Edition, Capital, Volume I.)Capital makes mandatory all that is not forbidden. Capitalists just carry out these mandates.
This line of explanation seems to have been somewhat successful. It has worked to tie these recent headlines back to other areas where students also tend to see individual moral failings rather than institutional requirements: sweatshop labor, greenhouse gasses, polar bears, child-labor, mountaintop removal, genetically modified food, pesticides, nuclear power, health care reform, etc. All of these areas can be discussed as a result of the imperative to maximize capital accumulation, rather than from the simple moral ignorance of individual managers and capitalists that can be remedied by forceful enough moral arguments.
The impulse seems to be to try to excuse capitalism by blaming its failures on the "imprudent bearers" of its class-relations and interests. Finding ways to move beyond these moral arguments is always difficult.
Note that this makes the current crisis very different from the Savings and Loan scandal and the Keating 5 which was garden variety forbidden fraud. Capital, though, never does very well at obeying the restrictions placed on it. In note 15 the end of Chapter 31 in Capital, Volume I, Marx reproduces this amazing quote:
With adequate profit, capital is very bold. A certain 10 per cent will ensure its employment anywhere; 20 per cent certain will produce eagerness; 50 per cent positive audacity; 100 per cent will make it ready to trample on all human laws; 300 per cent, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged. If turbulance and strife will bring a profit, it will freely encourage both.This seems a salutary quote to consider this month in particular.