Ethics Of Personal Money Management

There’s no ethical dilemma about robbing a bank or demanding money with menaces. It is wrong. But hang on a minute!


Picture of robber or tax man
Isn’t that what the tax man does? I’ve never seen a ‘pretty please’ from the income tax authorities.

One definition of ethics for the government

Perhaps the ethics of financial planning is too touchy a subject. So let’s get away from that topic and consider the ethics of protection rackets.

Hoodlums offered shops protection at a price. If the business owner refused to pay for the ‘service,’ the criminals smashed up the shop.

The government spends millions of our dollars protecting us from terrorists. Even the September 11th attack resulted in fewer deaths that year than doctors caused with legally prescribed drugs. There were more road deaths too that year. Is the government program working? It’s strengthening the terrorist organizations. But we hear about our secret services murdering relatives of people that have offended them.
Terrorism is wrong, but the government protection racket makes it worse.

That’s small-scale stuff. Most of the Middle East wars are about oil supplies for the USA. The army just keeps murdering Arabs until they agree to supply what the USA wants. That sounds like a large-scale protection racket to me.

It’s ethical for the Government secret services to murder me. But it’s an act of terrorism if I assassinate a member of the government.

Business Ethics for the financial industry

It seems that the very rich see no ethical dilemma in getting easy money by robbing us. Did you have shares in a big company that went broke for no apparent reason? Did you lose your entire investment?

It has happened to several businesses that are household names. Apparently, there are legal methods to siphon off money from a large company if you have enough money yourself.

Then you set up another company to get them out of debt. The rules say that the new company will get preference over the shareholders if their victim can’t keep paying the interest on the loan. A short time later, the company forecloses on the loan and grabs whatever money is left.

It leaves you wondering if there are any ethics in business for the rich.

Unethical activities of banks

Textbooks about economics still describe the ethical way that banks used to operate. Here’s how it used to work.

Picture of debtor fleeing an imaginary debt
You earned $100 and brought it into your savings account at the bank.

  • The bank paid you an annual interest of $2 for the loan of your $100.
  • The bank loaned your money to a business at 4%.
  • At the end of the year, the business paid the bank $4.
  • The bank then paid you $2 and pocketed the $2 change.

The textbooks are out of date. Banks use ‘funny money’ now. The money doesn’t exist until you borrow it.

Your financial activities

You have an ethical dilemma. Is it ethical to rob the robbers or even just to dodge them?

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1 thought on “Ethics Of Personal Money Management

  1. I’m convinced that it is ethical to short-change repayment of loans if you can get away with it. After all, the lender only pretended to give you a loan. I’d love to send them a fake money note of $83456 issued by the Bank of Fraud in complete repayment of a loan, but they would probably find a way to send me to prison.

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