Greed, corruption and arrogance have had a long and fruitful run and are as old as mankind, but it appears we have had more financial booms and busts in the past 30 years than we have had in the preceding 200. Why? Have we become more efficient? Or have we lost our moral compass?

Actually, it is both.

As a society, we have become more efficient because we have managed to successfully remove social context and ethical consideration from discussions about economic development. This was easy to do. All that had to happen was to realign our focus away from people and their well-being to what statistical analysis stated was the best way to make a lot of money.

Economics, the historical handmaiden of social development, had become the prism through which we view all development. This is not the economics of Adam Smith, Thorstein Veblen, John Maynard Keynes, Hyman Minsky, Joseph Stiglitz or Amartya Sen. It isn’t even a science. It has become an economics of free market ideology.

Well, not really a free market ideology because banks expect to be bailed out when they run into trouble.

It contains no reference to human needs, human instability or human welfare. It does not test its hypotheses in the real world or allow for argument. This form of economics brooks no discussion. After all, how could statistical models possibly be wrong? Citigroup’s models showed the risk of default to be 10,000 to 1.

As we can all appreciate, statistics are a flexible tool. The well-known economist Paul Krugman stated, “Anyone who has seen how economic statistics are constructed knows that they are really a sub-genre of science fiction.”

Job losses are not just statistics. People lose their incomes, their homes, sometimes even their families or their lives. Pension fund manipulation and loss is not just about a financial write-down. It’s about people who have worked their whole lives and now find they can no longer afford to retire, while the management in charge of the pension funds continues to receive substantial salaries and bonuses, and investment institutions collect large transaction and management fees during all the “refinancing” discussions.   
The relationship between financial pressure, divorce, mental and physical health issues is well known and well documented.  

Reference to ethics and purpose — even reference to reality — has been successfully removed from discussions of the role money and finance play in society. Add to this our inability to control a small number of morally corrupt individuals and we seem to have created the perfect financial storm.

North America was founded on two guiding principles: “Peace, order and good government,”  and “life, liberty and the pursuit of happiness.”

For many years, as John A. Macdonald and Benjamin Franklin both understood, these principles were not mutually exclusive. Somehow, over the past 30 years, a small morally questionable element has put these principles at odds with each other.

Perhaps it is time to once again remember that one of our first economists,  Aristotle, understood that economic life and development was about “living well” — for all society.

(The Honourable Consiglio Di Nino is a businessman and Conservative  Senator from Ontario.)