Why Stewardship of Finance? - Softcover

When in the autumn of 2011 I was first approached by Michel Flamee on behalf of the Vrije Universiteit Brussel about the chair I'm privileged to speak from today, the question of how it would ultimately be called was still undecided. The Flemish phrase used in the early discussions was "ethisch financieren": financing in an ethical manner. "Ethical finance", "responsible finance", "sustainable finance", so many phrases have been used to name chairs with similar intent as this one. The difficulty I see however with such ways of speaking is that they have been used in the past sometimes as mere euphemisms when referring to investors in search of a good conscience in the choice of an investment out of a mere concern for political correctness. Generally speaking, "ethical", "responsible", "sustainable" finance, all refer to finance as an object that can be qualified one way or other, that is, its actual meaning being restricted in scope through adopting a particular perspective when examining it. That seems to suggest that left to its own devices finance as such will never be acceptable but can be brought into submission if restrained in a sufficient degree. The question of what finance actually is, how it operates and how it fits into the global societal setup is then conveniently left in the dark. What if finance itself had something to say about how it sees its actual role within society as a whole? When I say "it" I mean of course the practitioners embodying it. Before it became an economic sector in its own right, trading in a commodity called "money", and most prominently nowadays, acting as the bookmaker of bets on the variations of prices, when not betting itself with the highest possible leverage, finance was, in a way similar to mathematics being the servant of the sciences, the servant of the economy, providing it with its bloodstream. What if finance came up now with a view of its own on how it should perform the tasks which are specific to it instead of claiming independence and running affairs as it sees fit and in need then of being tamed, subdued one way or other, in order for us in the community to benefit from its operations?

Paul Jorion, Ph.D., holder of the chair "Stewardship of Finance" at the Vrije Universiteit Brussels is columnist at Le Monde-Economie. More info at www.pauljorion.com/blog.