Trust in the Global Economy and the Consequences of Unethical Behavior

No law or regulation will pave the way out of the global economic crisis, nor prevent another financial catastrophe from happening.  Economic prosperity is based on trust among the masses. When the masses perceive widespread unethical behavior by individuals and other economic participants, trust is lost, and economic chaos ensues.  The only way to bring back economic prosperity is to regain trust among the masses.  Economic participants must commit to a standard of ethics, and live by that standard to rebuild trust, or suffer the consequences.  The perception held by the masses is reality.

The late Tlingit civil rights leader Elizabeth Peratrovich reinforced this idea before the Alaska State Legislature in her quest to pass the nation’s first civil rights bill.  Asked by Alaska Senator Allen Shattuck if Peratrovich thought the proposed bill would eliminate discrimination, the Alaska Native Sisterhood Grand President queried in rebuttal, "Do your laws against larceny and even murder prevent those crimes? No law will eliminate crimes but at least you as legislators can assert to the world that you recognize the evil of the present situation and speak your intent to help us overcome discrimination."

When individuals and institutions did the ethical thing and took a public stand against discrimination, they changed how the public perceived this issue.  And eventually, they changed the world.  When people behave ethically and stand against unethical behavior, the public trusts them and their institutions.

Peratrovich’s powerful statement is as true today as it was in 1945, and it applies to this recession and our eventual recovery.  Many of the economic problems in the United States and the rest of the world are the result of fraud, abuse, and corruption – a general lack of ethics from a broad range of economic participants.  No law, rule, or regulation, and we have plenty of them, was able to keep mortgage bankers from selling loans people could not repay, professional athletes from using steroids or doctors from billing Medicare for services not performed.  Regulators are there to hold bad actors accountable, but when corruption is prevalent on such a large and far-reaching scale, the regulators are rendered impotent and trust in the market as a whole is lost.  No force on earth is more damaging to the global credit markets than loss of investor trust: without it, there is no credit, and therefore no economy.   

Clans are a good model for enforcing accountability of individuals and working for the good of the whole.  Historically, individuals of a clan were inseparable from their group, and they were expected to work in the best interests of the clan.  People wore their crests, thus allowing other people to identify them and the clan to which they belonged.  A clan member who acted unethically would shame not only themselves but their relatives and ancestors identified through their crest.   The clan member would be punished accordingly, and the clan as a whole would make amends to the offended party.  This model worked for thousands of years in Southeast Alaska, where the Native economy was so prosperous, individuals had time to master art forms that today are considered some of the best art in the world.

Contrast that with modern Western society, where emphasis is placed on individual achievement despite the needs of the group.  Individuals will justify unethical behavior for profit where they are not cognizant of the shame their misdeeds bring to their relatives and ancestors.  We learned in 2008 that when unethical behavior becomes systemic, catastrophe ensues, and society as a whole is brought down.

I believe the United States economy will recover eventually.  However, in order to prevent the next crisis and create a sustainable and efficient economy, “we the people” must commit to a standard of ethics and conduct.  Our leaders can do a better job enforcing rules and casting aside those participants who choose to take advantage of our trust for their own gain and benefit.  But, we must live and act ethically all the time, individually, if our economy is not only to recover, but to prosper.  A higher ethical standard exhibited by all economic participants will make for a more sustainable and efficient economy.

We as Alaska Natives can exhibit this commitment to act in an ethical way and start changing the perception, and therefore reality.

as a side note, this essay placed as a finalist in the Native Insight Essay Contest, sponsored by Alaska Federation of Natives, National Congress of American Indians and Office of Hawaiian Affairs.