Current research

by Peter Norberg, Ph.D.
funded by the Swedish Research Council
 


"Professional Ethics and Moral Behaviour
in the Financial Market"


1, Re-enchantment

Keywords: financial markets, meaning, morality, re-enchantment

Technology has contributed to what Max Weber termed the disenchantment of the world. Presently, we observe that once again allowing magic, narrative and questions about morality into what was constructed to be a rational reality is an important social trend; thus
reviving an enchanted world. This could help us understand the evolution of post-modern markets. 

This piece of research takes a micro-sociological interest with the mentality and culture of financial markets. It also has a macro-sociological character in dealing with the process of rationalisation in society. This study contributes to theory about the evolving entertainment economy under the heading of re-enchantment.

The experience of meaning or alternatively deprivation of meaning is decisive for behaviour and interaction at work. Technology in work is vital for this. I study four important aspects of a desired re-enchantment; sense of community, expression, myth and magic, and morality.

Publications:
co-author Lundblad, N, e-nchantment - Wiederverzauberung in Contemporary Computer Games’, 14th Bled Electronic Commerce Conference, Bled, Slovenia 25-26.6 2001.

SSE/EFI Working Paper Series in Business Administration
No 2003:15
'Re-enchanting financial markets'


2, The Embeddednes of Financial Markets

Keywords: financial market, embeddedness, technology, networks

While working in financial markets, employees aim at being rational maximizers. This competitive dimension is balanced with tendencies to co-operation. The market depends on, and is thus embedded in non-contractual elements such as morality and social capital. Custom creates the basis upon which exchange may take place and facilitates the organisation of economic activities. Trust enables us to engage in economic action. With a similar background, education, and by means of being part of one and the same culture, employees in financial institutions share a set of values and beliefs. Actors use norms and habits that reduce the complexity of their work. Resources embedded in social relations and networks are accessed for utilitarian purposes. To some extent also investors do so.
 
Financial markets are disembedded while local contexts are replaced by a world-wide scope. Financial capitalism nonetheless becomes increasingly integrated in society, as eighty percent of the Swedish population own shares either directly or through funds. Media takes an increased interest for securities markets. The exclusivity of financial markets decreases. 

Publications:
Mentalitet i finansmarknadens nätverkNordiske organisasjonsstudier, No 2, 2002, pp. 5-26.

SSE/EFI Working Paper Series in Business Administration,
No 2004:6 'Börsmäklarens diskreta charm - finansmarknadens inbäddning i samhället'


3, Professional Ethics and Moral Behaviour in Financial Markets 

Keywords: Professional ethics, moral behaviour, financial markets, codes of conduct, ethics of virtue

This investigation has three objectives. One aim is to describe professional ethics and discuss the question if responsible behaviour can evolve from within a sector of business-life. Self-regulation often means that insiders erect walls excluding outsiders, thus doing harm to the common good. Secondly, focus will be put on desirable virtues in financial markets. Is intrinsically immoral behaviour likely to lead to success? Greed is fundamental to the mentality of financial markets, and plays an important role for the formation of incentives to employees in financial markets. Education in economics reproduces the belief in the justice and efficiency of the invisible hand. Financial actors justify their actions with help of this abstract rationality instead of taking much immediate moral responsibility. They tend to disregard the moral foundation of their business. Thirdly, attention will be put on the question how employees understand ethical codes.

Employees together training a sense for what is acceptable behaviour are consistent with theories in ethics of virtue. A virtuous character is the result of enduring practice. Popular is to take for granted that codes of conduct improve communality and the acceptance of a business.


Publications:
SSE/EFI Working Paper Series in Business Administration
No. 2004:10:
Facing Restrictions - Codes of Conduct in the Eyes of the Broker



4, The Global Financial Identity.

Information technology facilitates the formation of a global financial identity. By means of technological development, a global financial market emerges as disembedded from local contexts. The relevance of the physical setting diminishes. Financial markets can be regarded as virtual communities, where certain forms of interaction take place, and norms and morality emerge.


5, Technology, Impersonal Relations and Amorality

In trading rooms, reality is transmitted and fictionalised. Work becomes less real and instead similar to computer games, thus demanding less empathy. If abstraction magnifies into a forceful disappearance of reality, does morality disappear? There will no longer be actual people to feel responsible towards. Always interacting with digital projections of reality makes us less skilful in relating to the real. This makes us morally numb in encounters with fellow man.


6, Regulation in Financial Markets - a Question of Culture and Morality

Keywords: financial markets, responsibility, morality, regulation, culture 

Western financial markets were deregulated during the 1980s with an early start in the United States already in the late 1970s. As regulations have been abolished, the speed with which financial capital and ensuing shock-waves transcend national borders has multiplied. Rhetorically, the market works as a restriction. In order to justify policy, financial markets are used as a given force demanding alignment. People are supposed to behave in accordance with market signals.

Employees in financial markets regard themselves as serving the invisible hand. Instead of taking much immediate responsibility, financial actors justify their actions with help of this abstract rationality. There is in the working-role little feeling of responsibility for the common good and the chain of consequences that actors initiate.

Markets can not be controlled in detail. Financial markets harbour a strong tradition and culture. Not taking account of cultural aspects while making law is likely to lead to failure. One aim of this research is to discuss self-regulation, the question if responsible behaviour can evolve from within. 

Publications:
SSE/EFI Working Paper Series in Business Administration
No. 2003:11:
From Periphery to Financial Centre


 









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