Morals and Markets: Some Theoretical and Policy Implications of Ethical Investing

Abstract

Margaret Thatcher was fond of retelling the parable of the Good Samaritan. In her version the main point was not only that the Good Samaritan was shown to be putting into practice neighbourly concern, but also that he had the money so to do. By implication, a government prepared to restrain public expenditure and reduce taxation is handing moral responsibility for the provision of welfare back to individuals. With a reduced tax burden, the government can be seen as empowering people to put their money where their morals are, which they may exhibit by giving to charity and making provision, through private insurance and savings schemes, for schooling, future health needs, and retirement.