Friday, April 10, 2009

Deconstructed Business Systems and Our Present Financial Crisis

I throw out the following rough thoughts to help clarify our present financial dilemma. Legal minds will be able to present a clearer analysis but this might help get the ball rolling. It only takes, after all, a few people asking the same question to get a lot of other folks to start thinking and reflecting.

The present state of the economy should lead almost any thinking person to the question: what really happened here? There are many particular answers but no one satisfying or perhaps general answer seems to have emerged. It is our contention that the deconstruction of causality that has been underway in America for the past fifty years by intellectuals who fear any sort of hierarchical moral or spiritual causality that might lead backwards to God, Spirit or Source lies at the root of our current difficulties. Deconstructed causality is reflected in business systems that systematically exploit the notion that the left hand, so to speak, should NOT know what the right hand is doing. (The left hand might be thought of as the law and the right hand, moral judgment.)

If we consider the notion of CDOs, the idea of what constitutes the generation of real value has to be considered outside the larger issue of legality. The SEC, charged with the oversight of financial markets, has argued that because CDOs were legal that they had no power to curb their explosive growth. The larger issue is related to a non-legal issue--the financial morality, so to speak, of the product that should have been considered as an extra-legal issue or part of general due diligence as it is commonly understood both inside and outside considerations of applicable case law.

There is an extraordinary blindness in American jurisprudence due to the notion that all law is positive, i.e., that it refers only to itself and not to any larger set of moral or intellectual values--unless they have been embodied in some way via case law. This kind of moral neutrality serves us well when the issues are fairly pedestrian but for many of the larger life and death issues, it starts to break down. Abortion, pornography and gay marriage are issues that require more than just the positive aspects of the law for a full analysis of their moral and legal sustainability. Why in fact, and for example, should murder be wrong? It sounds like a silly question but if there were no law against murder would it be okay? The obvious answer is irrelevant as far as the law is concerned, If murder were not illegal then it would be legal. (Such is the case presently with abortion.)

The absurdity of this position is indicated by the following true story: several years ago, some parents in Arizona started selling their children to earn extra money. Legislators discovered to their horror that there was no law against the selling of children in Arizona. This situation illustrates the opportunity that the positive aspect of the law presents to those unwilling to consider larger moral elements. The fact that there was no law against the selling of children in Arizona made the courts unable to prosecute those who were, in fact, selling their offspring. Of course the law was changed but the larger issue is that most people would have no difficulty in seeing the need to arrest anyone found selling their children by adverting to the larger moral law available to anyone possessing common sense. The law, however, and until it was modified by subsequent legislation, would have continued to allow the selling of children simply because it was legal. Likewise, it was legal to kill Jews in Nazi Germany. The law does not advert to any principles larger than those encompassed by its own very literal definitions and this is a fundamental weakness for a nation when only the positive aspect of law is relied upon for business conduct.

The limitations of law in this regard may appear obvious but there are many examples that are not so obvious but equally deleterious. Companies that manufacture sub- standard parts or machinery may not be doing anything illegal but they are engaging in a kind of corporate immorality that can have horrible results. The Challenger Space Shuttle was destroyed, in part, due to a faulty "O" ring, the quality of which had come under review but was ignored due to a series of non-causal and smokescreen arguments by the manufacturer. Basically, the manufacturer needed more proof that the parts were defective and until one of them failed radically, there was no legal proof that they were in fact defective. Given that their morality appears not to have extended beyond what was legally required of them, no investigation of potential hazards was necessary. That would have involved moral or imaginative considerations, which were simply not required by any of the applicable laws.

Larger moral issues almost always come into play in developing a body of law but then they are discarded once the laws are enacted in favor of the self-referential definitions that consequently appear to be complete in themselves. The Founding Fathers used a vast body of moral and spiritual knowledge in codifying both the Declaration of Independence and the Constitution--likewise the Bill of Rights. Once these documents were codified the original moral foundations that the laws were based on gradually began to be seen as irrelevant. A classic example is the notion of separation of Church and State. It was never the intention of the Founding Fathers to remove the notion of God from education. They simply didn't want any one religion to get the upper hand. They were interested in, what we would call today, a level playing field. Note how this law is cited by the rabidly anti-religious as proof that even the mention of the word God is a violation of Church and State.

The very real relevance of the original moral and spiritual considerations of the law of the land has come back to haunt us with such positive legal absurdities as having to define marriage as being between a man and a woman or legislation that allows life to start whenever the court indicate that it starts, instead of at the beginning.

Without an acknowlegement of the moral and spiritual foundations of law, that body of knowledge starts to drift further and further from anything that resembles a rational and coherent body of thought. This is why we could have a former President of the United States say with a perfectly straight face regarding the nature of his sexual escapades: "It depends on what you mean by is."

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