I read it before you deleted it, Black Swan. You were way off base and your analysis was flat-out wrong. Just kidding of course, although I did read the post. Something about philosophy professors and ethical constructs. I believe Kant was in there somewhere.
Sitting in an airport bar in Philly typing on my iPad so I’ll try to be brief. BS basically countered with wht I would have said. Apparently I haven’t been clear enough for some though. My position: if taken in a vacuum, defaulting on your mortgage when you otherwise have the ability to pay is borderline unethical, even if it may be a good business decision (and that’s obviously debatable). That’s it. The reason I think it would be beneficial to this thread to come up with an agreed upon definition of Ethics, is be we are all on different pages. And that’s to be expected. Ethics isn’t an objective subject, especially when diving into the minutiae like we are. at the very least we’ve proven that. I believe ethics is doing what’s right. Pretty simple in theory, extremely complex in practice. Sometimes I believe defaulting on a mortgage may be e right thing to do; from a business and personal perspective. Btw JDV, I can’t believe you pulled the “I have black friends so I can’t be racist” argument. I don’t care who you have beers with. In the future, leave your critique of how I construct my posts to yourself. If you don’t like the direction I was trying to go feel free to keep your opinions to yourself and just stick to constructive comments. It’s a rare occasion I’m not the most condescending person in a thread. Nicely done.
I didn’t say anything like “I have black friends I cant be racist:”. I have no idea what you are talking about. But, yeah, I did get condescending. I think the notion that marriage changes your ethical commitments to a third party is pretty dumb. Theer are ethical arguments I don’t agree with and then there are those that are just dumb. That one is just dumb.
That’s the black friend/not racist stance. As long as you know a philosophy professor… Anyway, you’re taking my example too literally. A happy marriage is beside the point. As I’ve stated a few times now, and you simply ignore, I’m saying there other considerations you must take into account before judging the actions of others. Admittedly, it’s difficult to debate you since you feel you’re above having to define what ethics means to you. Like I said previously, taken by itself I think we’re actually not too far apart on the core issue of defaulting on a loan. I’m just expanding my stance to say your view is impratical in a real world setting. Such is the case when trying to be practical with an academic.
In a discussion where I’ve been criticized for using what I think are fairly apt analogies, I think the black friend/racist comment is way off base. Read one way it’s also a very inappropriate ad hominem assault. Is it some backhand way of accusing me of being a racist? So we really want to go down the road of what ethics means to me… I don’t understand why we need to go excessively academic on these discussions. I can do it if necessary, but in general I think making ethical questions more academic rarely leads to any clarity. But viewed ala Kant - the question about defaulting on a mortgage is pretty clear. There is the very clear dichotomy between “good” (defaulting on the mortgage) and “right” (paying back the mortgage). Kant would surely be dismissive of posing some complicated framework of a person making blah dollars, married, loves his wife, etc as a silly basis for making a moral judgment becauss there is no universality in it and it relies on intuition instead of reasoning. Kant would say that we have a perfect duty not to default on loans because the moral proposition “It’s okay to default on loans” assumes the existence of loans. If we universalize the principle, then everyone defaults on their loans which means there can be no loans which means the proposition contradicts itself. That means we have a perfect duty to pay back loans. That establishes the categorical imperative. If we were going to continue down this path (and I really don’t think there is much here), we would first establish that sometimes default is inevitable and cannot be controlled, thus cannot be always unethical. Thus, a proposition like “It’s okay to default on a loan if it is impossible to pay it back” is not contradictory. I would say that the proposition “It’s okay to default on a loan because the bank has already been compensated for it” fails the universality test; the only way this works is if the bank is compensated for the full value of the loan and that creates the absurd situation that to get a loan you have to give the bank the full value of the loan. That means in a Kantian framework, you are going to have some trouble coming up with an argument that says it’s morally ok to default on the loan because the bank is compensated for it. Then we have the imperfect duty to act in ways that will not lead to a collectively undesirable or unstable state of the world. Since banks giving out loans creates a collective good, we need to come up with some set of rules that allows people to default on their loans (because this is inevitable thus not unethical) while recognizing that defaulting on loans is generally unethical. That goal is not well-served by posing examples (Kant hated arguing moral principles with examples). That’s why I went down the “undue harm” route which I think makes sense in this framework. All that seems kind of pompous to me and reminds me of being in college. I am fairly mystified by the paired demands to “define ethics” and look at this in “a real world setting” and the notion that you are trying tp be “practical with an academic”. Do we want the debate to be more academic or less?
I think that was one of the better posts this thread has seen. That’s all I was looking for - discussing the topic using an actual ethical framework. It only took us three pages. I still disagree, but admit by adding in other moral variables the core issue gets muddled. And, no, I wasn’t calling you a racist. As for what direction this should go? My feet are pointed toward the door. It’s Friday, this topic is boring me, and I want a beer.
I’m not sure Sweep the leg truly meant “define ethics”. I believe he is saying that you need a theory of ethics or some sort of ethical code to answer ethical questions. Most ethical questions can be answered in a relatively straightforward manner given such a code. The truly interesting part is the debate over the code and I think that’s really where you two disagree (ie. you both would likely grant the conclusions reached given you held the other person’s code). So the real question is why Joey’s ethics is better than STL’s ethics, or why not.
I don’t believe that and I think it’s just an academic red herring that leads to this sort of moral relativism that says that since there are lots of different ways of coming to an ethical conclusion, ethics don’t matter. I quote Kant, you quote Schopenhauer, etc… And if ethics don’t matter because all ethical decisions are ultimately based on equally valid ethical codes then people always do what is best for them not what is ethical under just about any system. Of course, that leads to CFA Institute deciding that they should decide what’s ethical and we get the idiotic code of ethics that we have all spent lots of time learning (I would like to understand the categorical imperative that implies that calling SweeptheLeg a “CFA” is unethical). I am also quite sure that most ethical issues in finance do not require debating Kant and Schopenhauer. Most ethical debates in finance come down to some pretty fundamental conflicts, very often the right a person to take a lot of money from a diffuse group of other people. It’s Kant’s classic the good vs the right. There are two standard arguments that are used to defend “the good” - “it’s legal therefore ethical” and “they assumed the risk therefore ethical”. Neither of those holds up to any scrutiny under any sensible ethical system and it is just not proper to say that those are ethical constructs and therefore just as good as any other constructs.
The problem is that most people wouldn’t take your argument to its logical conclusion. So you’re talking about the importance of a universal ethical principle (categorical imperative) and some kind of innate good vs. evil. If you argue that theft is wrong, then consistently applying that principle would imply you couldn’t have government (since taxation is basically theft). So then you’re like, well sometimes theft is okay under some circumstances (like when it will reduce harms against others under the government). That’s your ethical code. I also wouldn’t say all ethical codes are equally valid; I think that’s a ridiculous statement. I believe you could come up with a philosophical basis (akin to categorical imperative) for the point that a universal, consistent ethical code should be preferred to an ethical code that is not. There are probably other requirements that should be made for a “good ethical code”, but that still wouldn’t say much about why to prefer one vs. the other. Since the legal system rarely has the characteristics of a good ethical code, I agree that “it’s legal therefore ethical” is not a good argument. However, the ideal legal system WOULD be consistent with a theory of ethics (the ethics of justice, not of morality distinction that I made before). I would also say that the CFA’s ethical code is incomplete, to the extent that we are not able to satisfactorily answer this question. So the question is what is a better code that can answer this question. I certainly agree that theft and that sort is unethical. However, what we’re dealing with is a contract and an agreement to transfer property from one person to another. I have argued from the beginning that if explicitly or implicitly in that contract is something about when you do not have to follow through with it, then you should not be punished in a ideal legal system (this is the whole ethics of justice). My point neither answers the ethics of morality of whether you SHOULD or SHOULDN’T do this nor the question of whether the CFA SHOULD or SHOULDN’T allow investment advisers to do this or not.