Ethical Aspects of Monetary Reform

Abstract

Questions of monetary reform almost always have ethical implica? tions. Most of those who propose changes in the monetary and banking structure are utterly sincere in their conviction that existing arrange? ments and institutions work various kinds of injustices, and that the adoption of their proposals, as means of eliminating the inequities, would make a decisive contribution to the general welfare. Even the special pleaders who are interested, not so much in the advancement of the general welfare, as in the advancement of the welfare of par? ticular groups, shape their arguments to try to prove that the just treatment of such groups clearly demands the adoption of the reforms which they propose. In almost all instances, therefore, emphasis upon the justice and injustice of given situations quickly brings programs of monetary reform within the realm of ethics. The monetary economist may hold, however, that matters of justice and injustice, and therefore of ethics, do not concern him. He may take the point of view that his sole responsibility is to describe what effects upon the allocation of resources and the distribution of income will result from various groupings of monetary institutions, and to de? velop principles or theories which seek to establish a causal relationship between such groupings and a given complement of non-monetary con? ditions and developments. Looking at our existing monetary and bank? ing structure, he may be quite content to say, This is how it works/ and then to go on to describe how it works and to formulate his theories as to why it works exactly in that way. And looking at proposals for he may be satisfied to say, These would be the effects of the changes, and then to go on to describe what the effects would probably be in keeping with the theories already formulated. He may scrupu? lously avoid expressing a judgment as to whether the existing struc? ture is good or bad, andhe may likewise avoid the temptation to say that a given proposal for change is good or bad. All this means that the economist may strive to be as thoroughly scientific in his analysis of monetary phenomena as he tries to be in his study of other economic problems outside the immediate sphere of money. But the deliberate espousal of the scientific point of view on