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Regulation and American History
Durham, NC - To historian Ed Balleisen, the ongoing debate over regulatory governance isn't just a political battle, but a means of recapturing important historical elements of the American story that have become lost.
"Something was recalibrated in the United States over the past 20 to 30 years," Balleisen said. "You see this in expressions of how absolute central finance is to the global economy and the social value of what that work is. That's where you get [Goldman CEO] Lloyd Blankfein saying Wall Street is 'doing God's work.' Where did that come from?"
It comes from changing world views in America, he said. Balleisen noted that it's one thing to gain riches through the pursuit of self-interest and an entirely different thing "to be engaged in something that benefits you and to be able to put it in an accepted moral framework that justifies it to broader society."
Consider the topic of innovation. "Innovation allows us to do things better, do them more effectively and create opportunities," Balleisen said. "From roughly 1990 to 2007, financial innovation meant the creation of a number of new strategies, tools and instruments that appeared to lower the cost of capital and make credit more available, especially to people who couldn't access it previously. Who could be against that?"
But two years later, those same strategies, tools and instruments lay at the heart of the world's greatest financial crisis since the Great Depression. Nevertheless, strong political and cultural actors still make the claim that those financial innovators were acting in the common interest for the betterment of all, he said.
Balleisen's take on Occupy Wall Street and related movements is that they are developing a counter narrative that parallels to some extent the same ethical approach the Duke project is taking. In doing so, they ask the question, What does America stand for?
"Right now, we're seeing a drumbeat for killing the regulatory state," Balleisen said. "But in the U.S., there is a complicated political tradition that goes beyond prizing individual freedom. It also includes an activist state, sometimes progressive and sometimes conservative, that values the commonweal.
"In this strand of American civic life, democracy represents the capacity of disconnected individuals to come together through democratic structures, and other institutions created by democratic structures, to construct fair ground rules of shared lives. This rationale rests at the heart of our regulatory framework, but it's one that has receded from many people's thinking."