The philosophical debate around the subprime mortgage crisis

Abstract

This dissertation is an attempt to understand the financial crisis of 2008 from a philosophical standpoint. It also tries to understand the role played by regulation in the matter. It attempts to assemble different initiatives that may offer hope for a recovery and attempt to avoid another crisis in the future. I argue in dialogue with thinkers such as John Maynard Keynes, Milton Friedman, and Philip Blond, that the problems caused by the financial crisis of 2008 were not merely the result of some greedy individuals but that there was a cultural problem that prevailed prior to the event in question. First, I will present the background and the development of the financial crisis. Second, I will outline the three main thinkers and examine their strengths and weaknesses. Thirdly, I will discuss the role of regulation in the light of the work of these three thinkers. Finally, I will present the idea of subsidiarity as part of the plausible solution. The argument as a whole leads to the conclusion that, although regulation should not be eliminated altogether, it must be accompanied by self-regulation through virtue education. Only in this way can we have long-lasting stability.