Tuesday, March 17, 2009

The Loose Morality of Accountability in Banking

A correspondent drew my attention some time ago to a statement in Moral Sentiments, which was withdrawn from edition 2, but is reproduced in edition 6 as an editor’s footnote on p 111 (Oxford University Press edition):

A moral being is an accountable being. An accountable being, as the word expresses, is a being that must give an account of its actions to some other, and that consequently must regulate them accordingly to the good liking of this other. Man is accountable to God, and his fellow creatures. But tho' he is, no doubt, pricipally accountable to God, in the order of time, he must necessarily conceive himself as accountable to his fellow creatures before he can form any idea of the Deity, or the rules by which that Divine Being will judge of his conduct.’ (TMS III.1.3. footnote [2], p 111)

Apart from this being an example of Smith's editing out of earlier several references to God and the Deity, the idea of accountability to ‘fellow creatures’ may have some relevance to those bankers, traders, fund managers, and their assorted ilk, who seem to have escaped accountability even to today’s, and future, taxpayers who are paying to keep them in business and, apparently, in bonuses.

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