The culture of financialised capitalism

After the righteous fury that pervaded Royal Commissioner Hayne’s interim report on the financial system, the final recommendations came as a letdown to everyone (except of course the insiders who bid up bank shares in anticipation of the news).

This ought not to have been a surprise. Hayne correctly identified greed and dishonesty as the key drivers of wrongdoing. But greed (or, more politely, incentive) is the guiding principle of financialised capitalism as is seeking profit to the limits of legality, even when this involves what would ordinarily be called dishonesty. In these circumstances, it’s unsurprising that those limits are regularly breached, particularly given that most such breaches go undetected, and the few that are detected go largely unpunished.

The financial system is at the core of the problem but, as Bernard Keane observes in Crikey (paywalled, I think) its effects are pervasive. As he says, it’s not individual industries, it’s our system. Ross Gittins is also good on this. Even Eugenie Joseph of the Centre for Independent Studies has noticed that there is a big cultural problem here.

The only thing that will change the culture of greed and dishonesty is a reversal of the policies of financial deregulation that produced it.

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