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January 2014 posts

What explains the lack of criminal prosecutions related to the financial meltdown?

Mark D. White

Many people, including in the media and academia, have wondered about the lack of criminal prosecutions stemming from the 2007-08 financial meltdown, especially related to fraud in the banking sector. In the new issue of Crime, Law and Social Change (61/1, February 2014), Henry N. Pontell, William K. Black, and Gilbert Geis probe this question in a paper titled "Too big to fail, too powerful to jail? On the absence of criminal prosecutions after the 2008 financial meltdown":

Various explanations have been offered regarding the causes of the current global economic crisis that was spawned by the collapse of mortgage-based securities in the U.S. that were sold world-wide and that contained "toxic assets" comprised of subprime loans. There is ample evidence that such loans were originated through fraud. Firms recorded huge profits, and executives were awarded large bonuses even though some had led their companies into bankruptcy and plunged both the U.S. and global economies into the greatest recession since the Great Depression. This paper assesses the reasons why there have been no major prosecutions to date, and compares the U.S. government's response to that in the savings and loan crisis. It analyzes the influence of large financial institutions on lawmaking, regulation, and the allocation of enforcement resources, the continued general lack of understanding of financial fraud including control fraud, and problems related to the higher status and power of potential defendants.

This paper promises to contribute a much-needed criminological insight to this question (which seems to bring out a retributivist sentiment in people who would normally disavow such ideas!).

Questioning Unconscious Influences on Decision-Making (in Behavioral and Brain Sciences)

Mark D. White

Forthcoming from Behavioral and Brain Sciences is the article "Unconscious influences on decision making: A critical review" by psychologists Ben R. Newell (University of New South Wales) and David R. Shanks (University College London):

To what extent do we know our own minds when making decisions? Variants of this question have preoccupied researchers in a wide range of domains, from mainstream experimental psychology (cognition, perception, social behavior) to cognitive neuroscience and behavioral economics. A pervasive view places a heavy explanatory burden on an intelligent cognitive unconscious, with many theories assigning causally effective roles to unconscious influences. This article presents a novel framework for evaluating these claims and reviews evidence from three major bodies of research in which unconscious factors have been studied: multiple-cue judgment, deliberation without attention, and decisions under uncertainty. Studies of priming (subliminal and primes-to-behavior) and the role of awareness in movement and perception (e.g., timing of willed actions, blindsight) are also given brief consideration. The review highlights that inadequate procedures for assessing awareness, failures to consider artifactual explanations of “landmark” results, and a tendency to uncritically accept conclusions that fit with our intuitions have all contributed to unconscious influences being ascribed inflated and erroneous explanatory power in theories of decision making. The review concludes by recommending that future research should focus on tasks in which participants' attention is diverted away from the experimenter's hypothesis, rather than the highly reflective tasks that are currently often employed.

As is the practice at BBS, the target article is followed by a number of short comments by invited scholars, in this case including Roy Baumeister and Ap Dijksterhuis (all in the same PDF file).

It's a shame Daniel Kanheman, Timothy D. Wilson, or Jonathan Haidt didn't contribute commentary, as they have all written in support of a strong role for the unconscious in decision-making. Nonetheless, this promises to be a interesting challenge to the current trend in behavioral science away from conscious rational processes in decision-making (a trend which is troubling to a philosopher/economist concerned with processes of ethical judgment!).

Call for papers: 2nd International Conference in “Economic Philosophy”

Mark D. White


2nd International Conference “Economic Philosophy”

Strasbourg, October Thursday 9th – Friday 10th October, 2014


 Deadline for abstract submissions: 31 January, 2014


The 2nd International Conference “Economic Philosophy” will be held at the University of Strasbourg from 9th to 10th October 2014. This conference is organized by the Bureau d’Economie Théorique et Appliquée (BETA, UMR 7522 of CNRS).

This international conference will host sessions on the theme “Oneself and the Other”, but any paper or session which addresses the Philosophy of Economics is welcome.

The Philosophy of Economics primarily considers the economic agent as a moral subject. Economics, however, has long overlooked the agent’s moral—that is to say, reasonable—dimension, to focus instead on the strictly rational. The economic agent refers to “himself” (herself) in terms of his desire and passions, yet also refers to others besides himself. For the rational economic agent, what is the nature of this relationship with the Other? And should it not be understood as undergoing a transformation once we come to consider the economic agent as a reasonable being? Through what process does the Other pass from being an instrument at the disposal of a rational agent to being an end in itself for a moral subject? In other words, how does another become “an Other”?

In the act of producing, the economic agent has friends, masters and subordinates. The acts of exchanging, sharing and borrowing all involve partners. When an economic agent consumes, through the use of goods and services, he depends on other agents of the same kind. Could we claim, then, that in each of these actions there is an encounter with the Other? And would such an encounter not imply, moreover, an acknowledgment of the Other as “my equal”, irrespective of how different they may be? Deprived of the qualities of a moral subject, is the economic agent defined by Economics in a manner sufficient to be seen as a consciousness capable of discovering something within himself, or as a subjectivity capable of experiencing the pain of envy?

Such questions, with which current research is increasingly concerned, lead us to consider the philosophical dimensions of the science of Economics—they lead us, in other words, towards a re-examination of certain fundamental notions, and to a re-reading of certain great authors. It is precisely the study of these notions and these authors which the Colloquium on the Philosophy of Economics invites you to join. Presentations could address the following themes:

- The “just” and the “good” in the economy
- The passions which constitute the economic agent, from Adam Smith to the present
- The role of emotions in economic behaviour
- Economic rationalities
- The Kantian tradition and the question of “the Other”
- Justice and institutions
- Economics and religion
- Reason and the Other
- The question of social preferences
- Evolution of individual preferences: theory and experiments
- The Other and the utilitarian tradition
- Altruism and reciprocity
- Gift and counter-gift
- …

Keynote speakers

Catherine Audard (London School of Economics)
Philippe Mongin (CNRS et HEC)

Scientific committee

Erik Angner (George Mason University, USA)
Claude d’Aspremont (Université catholique de Louvain, Belgique)
Arnaud Berthoud (CLERSE, Université de Lille 1)
Ragip Ege (BETA, Université de Strasbourg)
Ricardo Crespo (Universidad Austral, Argentine)
Rodolphe Dos Santos Ferreira (BETA, Université de Strasbourg)
Samuel Ferey (BETA, Université de Lorraine)
Claude Gamel (GREQAM, Université d’Aix-Marseille)
Jean-Sébastien Gharbi (GREQAM, Université d’Aix-Marseille)
Muriel Gilardone (CREM, Université de Caen Basse-Normandie)
Harald Hagemann (Université de Hohenheim, Allemagne)
Jimena Hurtado (Université de Los Andes, Colombie)
Herrade Igersheim (CNRS et BETA, Université de Strasbourg)
André Lapidus (Phare, Université de Paris 1 Panthéon-Sorbonne)
Maurice Lagueux (Université de Montréal, Canada)
Pierre Livet (CEPERC, Université d’Aix-Marseille)
Patrick Mardellat (CLERSE, Science Po Lille)
Emmanuel Picavet (NOSOPHI, Université de Paris 1 Panthéon-Sorbonne)
Claire Pignol (PHARE, Université de Paris 1 Panthéon-Sorbonne)
Maurice Salles (CREM, Université de Caen Basse-Normandie)
Don Ross (University of Cape Town, Afrique du Sud)

Organization committee

Jean-Daniel Boyer (Culture et Sociétés en Europe, Université de Strasbourg)
Ragip Ege (BETA, Université de Strasbourg)
Samuel Ferey (BETA, Université de Lorraine)
Philippe Gillig (BETA, Université de Strasbourg)
Herrade Igersheim (CNRS et BETA, Université de Strasbourg)
Charlotte Le Chapelain (CLHDPP, Université Lyon 3)
Sylvie Rivot (BETA, Université de Haute Alsace)