Last Saturday I read an article by the Chief Rabbi, which talked about the need for a new moral basis to the market economy - to return to a time when if someone said "my word is my bond", they meant it. The Chief Rabbi's argument was that bankers had got away with making huge errors, not just because of failure by Government or the market, but through the weakening of social capital - of values that differentiated between right and wrong.
I thought about this as I attended a dinner yesterday evening. A famous Peer and tough self-made businessman (who started one of our most famous retail chains), began to talk about the concept of 'duty of care'. His argument was that the main reason for the financial failures by the bankers was not because of greed (this vice had always existed and would continue to exist in the future) but because of a failure of 'duty of care'. In contrast to nurses, doctors and teachers, bankers and City folk were not bound by a duty of care - and this had led to the disastrous decisions that had helped ruin our economy (alongside Gordon Brown). Rather than regulating, establishing a duty of care, would solve the problem of bankers mis-managing assets and savers deposits etc.
Duty of care is defined by Wikipedia as:
Duty of care may be considered a formalization of the social contract, the implicit responsibilities held by individuals towards others within society. It is not a requirement that a duty of care be defined by law, though it will often develop through the jurisprudence of common law."
I think this businessman had a fascinating thesis - the question is how one would establish a duty of care for bankers et al, that would be supported and respected by the profession and recognised by the appropriate authorities? Incidentally, this businessman also said that he had once offered to fund with substantial sums of money, a Chair of Economic Ethics for a famous University in London. His proposal was turned down by the Dean on the grounds that economics was a science and did not have an ethical dimension.
