PhD research at Cambridge and Groningen
My Cambridge PhD dissertation contributes to the philosophical understanding of money and finance. It is titled ‘How to make money: Distributive justice, finance, and monetary constitutions’ and was awarded the 2018 Best Dissertation Award of the Society for Business Ethics.
One of the central questions in the study of distributive justice is which economic inequalities are permissible and which are not. Philosophers have put forward detailed theories of distributive justice that focus on welfare, economic resources, capabilities, social power and standing, but have largely neglected money and finance. This is a striking departure from our everyday moral and political discourse, and I think it is a mistake. In the dissertation, I argue that because political philosophy has given insufficient attention to money and finance, it lacks adequate normative concepts to respond to the ever-growing role of financial markets in advanced capitalist economies.
As a part of the dissertation, I put forward a new account of the relationship between financialization and economic inequality. The rise of finance since the 1980s is now widely recognized to be an important cause of growing economic disparities. As a philosopher, I ask how to evaluate these developments. Existing accounts focus on the effects of financialization on the distribution of income and wealth. I draw on the economics of asymmetric information to formulate a further objection. Capitalist financial markets provide the wealthy with much better options for credit and saving. The distribution of options for credit and saving is itself unfair and not unfair only because it exacerbates inequalities of income and wealth. This example illustrates how financial markets raise their own issues of distributive justice. It also illustrates how economics can inform philosophy.
Because of their focus on income and wealth, philosophers have neglected the position of financial institutions among the major social and political institutions of a capitalist society. In the dissertation, I introduce the idea of a monetary constitution to explain the crucial role of the authority over money creation. This authority is not entirely in public hands, as proponents of socialism or full reserve banking require. Nor is it entirely in private hands as libertarian free bankers would ideally have it. Instead, the supply of money to the economy takes place through a hierarchical order of money creation. Money issued by the central bank stands at the top of the hierarchy. Below it, private financial institutions issue different forms of credit money. In this sense, the monetary constitution is a hybrid of both public and private authority over money.
I discuss the monetary constitution as part of an argument for more extensive public control over private money creation. Complementing my discussion of economic inequality, the dissertation explores a range of objections to banking systems as they exist today. I discuss environmental sustainability, the effects on business cycles, financial instability and the political power of the banks. I end with a discussion of the public authority over money as governed by existing constitutional structures of central bank independence. You can find the dissertation here, an extended dissertation abstract here, and the first accepted article to come out of the dissertation here.
I have written the dissertation as part of a four-year programme in a financial ethics research group led by Professors Alex Oliver and Boudewijn de Bruin. I defended it in January 2018 and am now enrolled at the University of Groningen to complete an Economics dissertation under the supervision of Dirk Bezemer and Boudewijn de Bruin. This project extends my theoretical work to the Eurozone with a specific focus on the ECB and its collateral framework. I am currently a Max Weber Fellow at the European University Institute in Florence.
In my research, I criticize and extend analytic political theory, while also engaging with relevant empirical disciplines. This fits my own academic background, which is predominantly philosophical, but also spans the disciplines of psychology, economics, the history and philosophy of science, and the history of political thought. I will draw on these different disciplines in my future research on banking reform, to which I now turn.
Future research: Economic inequality and banking reform
Long before the collapse of Lehman Brothers in 2008 there were serious objections to the ever-growing role of finance in advanced economies. This situation has not changed since 2008. My proposed research takes this observation as a starting point for an empirically informed philosophical critique of the last decade of banking reform.
During the Global Financial Crisis of 2007 to 2008, banking failures confronted governments around the world with a dilemma. They could let banks go insolvent, as happened with Lehman Brothers, but at the cost of dramatic systemic consequences. Their alternative was to bailout banks with public money. With the experience of the crisis in mind, the primary aim of governments in regulating the global financial system has been to prevent disruptive banking failures. No effort has gone into reforming the financial system as a catalyst of economic inequality. Financial sectors are still an important cause of economic disparity, both domestically and globally.
The aim of my research in the coming years is to reflect on the last decade of banking reform and propose a new way forward. I do this from the perspective of political philosophy.
I will develop my current work on finance and distributive justice. In the past decades, political philosophers have debated what metric should be used for the intersubjective comparison of distributive shares. Philosophers have put forward detailed theories that focus on the distribution of welfare, economic resources, capabilities, social power and standing, but have largely neglected money and finance. This is a striking departure from our everyday moral and political discourse, and I think it is a mistake. In this part of my research, I synthesize recent debates in the developing field of Philosophy of Finance to argue against the neglect of money and finance from John Rawls’ A Theory of Justice onwards.
I will also develop a critical historical account of the past decade of banking reform. This research will take place at the interface of political philosophy and political economy. The research will bring out how outdated economic ideas continue to drive policy thinking by governments, central banks and the Basel Committee. I use case-studies on topics such as monetary policy, the regulation of mortgages and offshore financial institutions.