Is Banking Immoral? Wrong Question.

Nicholas Kristof steps up in yesterday's New York Times to answer a Swarthmore student's question that "startled" him: is it immoral to become a banker?

Kristof's answer: No, because banking is a core part of the capitalism that makes us rich. But, he goes on to say, "When young people go into finance, I hope that they'll show judgment, balance and principles instead of their elders' penchant for greed and rigging the system." He then rightly deplores the "crony capitalists" who pursue political influence and favorable regulations instead of the good thing he calls "capitalism itself."

It's not usually worth quarreling with Times columnists. Except when it is. That is generally when they speak for "responsible" opinion and repeat its mistakes. Kristof, the Times' center-left Occupy sympathizer, shares his emphasis on the character of capitalists with his colleague David Brooks, the neocon you can take home to your mother. Brooks praises "repairing the economic moral fabric," especially if it's done "quietly and in private."

This is how we've learned to talk about our economy: as a matter of personal virtue and vice, from the overdrawn consumer to the one-percenter with the fifteen-percent tax rate and some senators' private numbers in his iPhone. So naturally students ask, "Is this job immoral?"

But it's the wrong question. "Immoral," the way people are using it in these conversations, means being a bad person or doing bad things -- mainly lying and hurting other people. By this standard, Kristof almost had to say no, banking isn't immoral. Our world is not set up so that most people make money by outright lying or hurting other people, and those who do are way, way down the food chain from anyone at Swarthmore. We're talking about the harsh Korean supervisor overseeing Cambodian workers in an outsourced factory supplying American garment companies whose executives may employ that Swarthmore banker. Maybe, on a bad day, he hurts someone, but everyone else's hands are clean, literally. They play by the rules.

So is it immoral to play if you have problems with the rules -- they make firing people too easy, benefits too low, unions too hard to organize, and generally encourage "schemes where the rich get richer," as a former Romney colleague from Bain Capital described that outfit?

Again, wrong question. The whole logic of capitalist markets is that money finds its way to profits, just as water finds the path of least resistance as it flows and cuts its way to the sea. That means that if a profit-making opportunity exists, someone will take it. If Kristof's Swarthmore graduate decides some proposed investment is too hard on workers or is more about clever deal structure than creating real value, she can have her "judgment and principles." But the next person, or the person after him, will take the deal and make the money. It doesn't matter who is making the decisions. What matters is that the money follows the profit, and, like a selfish gene, it will find someone to carry it. The banker who shows "judgment and principles" too many times will find herself doing something else. No one person or group of people makes much of a difference in what happens.

So, you pick your place in the system. It isn't just banker, lawyer, management consultant. It's also working for a university with an endowment, a publicly traded media company, a non-profit with a retirement fund. No matter which of these you do, you won't be hurting people directly, and, on the whole, "capitalism," whether we call it the crony kind or the real thing, will produce pretty much the same decisions.

This means, maybe oddly, that Mitt Romney's defenders have a real point when they say about Bain Capital, this is how the system works. It really is. On a certain level, Romney was just the big, vital, well-resourced primate that the selfish money gene picked to carry it around to all those Southern and Midwestern towns and then back to Wall Street, the City of London, and Hong Kong. Did he hurt anyone? Not personally. Did he produce different decisions from those that would have happened if he'd become a full-time Mormon theologian and left the private equity work to, say, Jain Capital? Not really. And, you can be sure, the selfish money gene would have found a Jain Capital to carry it.

The question we have to ask isn't about the morality of personal choices. That's at the heart of a lot of important issues, but not this one. We need to talk about whether the rules are just. Justice, or fairness, or whatever you prefer, is not the morality of individuals. It's not character. It's the morality of institutions and legal systems: the way they set up the rules to distribute power, opportunity, and reward. That's the tax code, the laws governing unions, regulations on capital movement -- the framework in which profit-making decisions happen.

We're more comfortable with morality and character because they're familiar from personal life and we imagine we can make sense of them. Justice is abstract, philosophical. It can even sound strident and ideological -- Justice! But it's the way to talk about an economic and legal system that makes sense. Otherwise we'll just be chasing our tails in circles. That is a perfectly moral thing to do. But, as sometimes happens, its morality is perfectly irrelevant.