We are excited to announce that Dr. Charles McDaniel, associate professor in the BIC, has a new book published in the Routledge series, Critical Studies in Finance and Stability. Civil Society and the Reform of Finance explores the recent financialization crisis that impacts not only the market economy but also the vital civic and moral traditions that support it. While this book is directed toward an academic and professional audience, it examines topics that certainly impact the world around each of us. We recently interviewed Dr. McDaniel to learn more about his new book and to discover his plans for future research and teaching in BIC.
Tell us a little about your recent book and how you became interested in this particular topic.
The book examines the civil society implications of recent changes to the financial system—how financial methods and techniques are changing the cultures of religious, educational, and other institutions—and proposes that these changes are potentially more damaging that the immediate financial instability we witnessed. It wasn’t hard to become interested in the subject given the financial crisis and its aftershocks. After all that’s been written and the seeming conviction that the crisis was as much the product of a fraying ethical foundation as technical factors, little has been written on the ethical flaws in the system. There are lots of stories about the “London Whale” and other players that contributed, but not much has been written about the moral hazards inherent in the industry’s structure. Given that the financial world is so critical to economic growth and global stability, when it shows signs of spinning, if not out of control, then certainly beyond comprehensibility, we can’t afford to turn a blind eye. Whatever one’s level of interest in finance, what goes on in the financial sector impacts us all not only in terms of our material welfare but society’s moral coherence. My particular point is that the financial complex involving mostly private corporations and government regulators has proven inadequate. We need an injection of America’s most important resource, its civil society, to make the kind of changes required. But civil society institutions must remain to some extent financially “disinterested” to be able to provide the kind of moral foundation that the financial system needs. We need ethicists, theologians, philosophers, etc., speaking out on financial issues. That requires doing much homework and being willing to cross boundaries that traditionally haven’t been crossed.
For those of us who are not academic scholars (the target audience of your book), how might your work impact the way we look at today’s world?
Continuing from my answer to the previous question, my hope is that the book helps people see the risks in implicitly turning over control of vital social and economic sectors to experts. As I state in the book, the financial system is evidence of an extreme narrowing of vision with respect to development to the point where specialists in an industry are able, in a certain sense, to “define value” independent of the society in which they exist. The financialization of society as a whole (the growing influence of financial values and practices in all social segments) demonstrates a course of cultural development that, without any form of political consensus, has enabled a great transition in power and wealth based on instruments and methods that few understand. Creation of complex products that amassed unimaginable wealth (hundreds of trillions of dollars) and were beyond the comprehension of 99+ percent of the population is a critical social problem, not just an economic one, regardless of whether the system has stabilized over the past few years. Where my book diverges from most of the literature is in its conclusion that the “financialization crisis” is a much larger problem than the financial crisis we recently went through. The financialization of society is a political, social, and moral quandary whether or not we acknowledge it as such. A society where most of the population has little to no knowledge of how their capital is being utilized because of obsession with whether or not it is being maximized sounds much like a ship without a rudder. Unfortunately, we are fast arriving at that kind of system.
You taught a BIC Capstone course under the topic “The Moral Ecology of Capitalism.” How was that experience? What kind of questions and conversations did you hope to initiate through the course?
Many of the themes from the book are covered as are some of the “old questions” of economics involving theories of value, the role of institutions, etc. Core positions of the various schools of economics (Austrian, neoclassical, Keynesian) are compared and we examine how the rising dominance of mathematics in economics has changed the discipline and its professions. Of course, I leave ample time for discussing the contemporary financial system and its implications. We conclude the course with a group project where teams are charged with comparing different companies within industries from a broad perspective, not simply profitability. The students look at companies from the vantages of their labor and environmental policies, corporate citizenship, and other criteria, and I have them develop their own models for assessment. The main question I hope to initiate with the exercise is what should be the overarching goal of the modern corporation? Is it just maximization of shareholder value as Milton Friedman suggested or is there potential for business corporations to better guide society to desired social and ethical ends and how can those ends be determined?
Where do you see your research and/or teaching going in the future?
Plans for the next book are already underway—it concerns the economic views of the American Founders and the extent to which the country has remained consistent with those views or not. Obviously, there were differences among the Founders as to their economic visions, but I see enough common in their writings to suggest that we can look at the present economic system and critique it in light of founding values and principles. I also have a paper underway for presentation at the Institute for Faith and Learning’s Spirit of Sports Conference in November. It examines the rising financial dominance of college athletics and whether Christian colleges and universities have unique roles to play in preserving the ethics of college sports.
How long have you been in the BIC? What do you enjoy most about teaching in the BIC and working with BIC students?
I’ve taught in the BIC for 8 years. The greatest enjoyment of teaching in the BIC is interacting with the diversity of students and faculty that comprise it. I think that diversity is the program’s greatest asset. It creates unique challenges but also offers great rewards both in the classroom and in research. The range of perspectives on critical social and moral issues available in the BIC always stimulates new ideas. Each semester allows me to approach issues/problems from perspectives I never thought of before, often because of a question from a student or a conversation with a colleague.