Justice Everywhere

a blog about philosophy in public affairs

Author: Peter Dietsch

Attaching strings now is key to shaping post-Covid-19 future

Let’s make the post-pandemic world socially and environmentally more sustainable – a better place.

This sentiment is common these days among both politicians and academics. At the same time, many crisis management decisions by governments, central banks, and other public institutions make an appeal to the idea that “there is no alternative” (TINA) when it comes to the policies we use in the immediate term to prop up the economic and financial system.

The disconnect between the laudable long-term intentions for change and what are perceived as short-term constraints is not just disconcerting, it is also potentially harmful. It ignores important lessons from recent crises, notably the 2008 financial crisis: short-term crisis management decisions can have significant, sometimes unintended, side-effects that undermine fundamental social policy goals.

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My pension fund, my conscience

In some situations, society permits individual citizens to not fulfil otherwise binding requirements when the latter conflict with the individual’s deeply held ethical convictions. The classic example are pacifists who obtain an exemption from military service. I submit that an argument along these lines also applies to collective pension plans. Such plans need to offer their participants a minimal level of influence over their portfolios to be legitimate.

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Why central banks must change before the next crisis hits

Our recent book Do Central Banks Serve the People? sheds a critical light on the actions of central banks in the wake of the 2007 financial crisis. Using the US Federal Reserve, the European Central Bank, and the Bank of England as examples, we show how they have stretched their mandate beyond their traditional tasks of price stability and financial stability. This short introduction to the book summarizes the argument that the expanded role of central banks has three serious drawbacks.

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