Research On The New Developments Of Thoughts Of Economic Ethics After Subprime Mortgage Crisis

The subprime mortgage crisis since 2007 has initiated global recession with ongoing impact on global economy. This crisis triggered the transformation of capitalism as well as the new developments of western economic ethic thoughts, inspiring the investigations on the origin of the crisis, bailout plans, and the outcomes of the crisis. Our research collected the thoughts of different schools of economists, political philosophers and social activists. These thoughts are not only from Keynesianism and Neoliberalism but also from classical Marxism, modern and contemporary western mainstream economists trying to unveil the external causes of the crisis:unrestrained free market or government intervention; the internal causes of the crisis:giving priority to efficiency or to equality. And unveil the visions of western economists, political philosophers and social activists on how the crisis affects the future and destiny of capitalism. The findings on the developments of their characteristics are summarized as follows:First, both Keynesianism and Neoliberalism failed in the European debt crisis and subprime mortgage crisis. After the crisis, the mainstream of western economic ethic thoughts is changing from Neoliberalism to Keynesianism. However, we also observed a merging trend of Keynesianism and Neoliberalism on some parts of their thoughts such as inequality and government intervention. Second, after the crisis, instead of giving priority to market efficiency, the western economic ethic thoughts are focusing more on the negative impact on the economy caused by inequality than the previous focus on market efficiency. Third, although the western society's dissatisfaction of capitalism morality is deepened, the essential purpose of economic ethic thoughts from western economic schools'theories is still to maintain and improve the capitalism.The western economic crisis is actually leading to a capitalism moral crisis, as quoted from Stiglitz:"We have created a society in which materialism overwhelms moral commitment, in which the rapid growth that we have achieved is not sustainable environmentally or socially, in which we do not act together to address our common needs". These latest developments of western economic ethic thoughts also bring China valuable lessons learned to prevent crisis.