Explore China’s Stock Market Soaring And Slumping In Prices From The Institutional Ethics Perspective

The story of "Pretend to play the Yu" is familiar by people. As we know, Nan Guo’s behavior is not entirely personal moral problem, but from the ethics educational aspect, which was the problem of selfish. In the modern society, everyone is selfish. When the chance of playing as a Nan Guo comes, with no punishment in cases of huge returns, incompetent person is bound to exist. As conclusion, if there is no perfect system foundation, moral ethics on the normative role wil be very limited.However, with a system, the market sometimes still cannot work orderly and fairly. The system itself is unfair. Currently, insider trading, market manipulation, false statements etc. are exposed in our stock market. Individual ethics is the absence of China’s stock market plummeted important reasons, but what’s more critical is the one behind the flaw. This paper is based on system ethics from the perspective of China’s stock market plummeted. Hoping from institutional ethics perspective, the paper could deeply analyze the institutional factors, which caused the stock market plummeted, from path role, inherent logic, deep reason, and other aspects. In the paper, the loss of system ethics contains three aspects:the system lack of the main ethical system objects, the system design and the ethical reflection lack on system standard.The absence of the system is an important reason for China’s stock market soars and slumps. In the institutional economics framework, institutional arrangements decide the participation. The behaviors of market participants affect the operation of the market and price formation. However, the reason is due to the design of the system of ethics or system absence and system of ethics missing. These factors cannot provide a fair, just and open stock market environment. If market participants are not balanced development, their behaviors will affect the equilibrium price of the stock market, even cause the unstable stock market and market’s soars and slumps. However, the reason leads to China’s stock market system of ethics missing is the exogenous institutional change in China’s super-intervention alternative to free economic contracts. Hayek (1973) think that institutional change should be the spontaneous evolution of an endogenous, rather than a so-called better person or group of rational design of man-made process. The stock market is originally a product of the highly developed market economy. It has a strong endogenous institutional change needs. Using government intervention to replace the regulatory function of the market or "the government’s implicit guarantee" to promote its development, is bound to distort the operation mechanism of the market itself; Using exogenous system supply instead of the endogenous system demand will inevitably lead its ethics missing system.20years ago, when China’s stock market began to establish in the soil of the planned economy, the market mechanism and legal system were under developed.But for the modern society, the government should play as a balancing part instead of a controlling part in our stock market, as a direction guiding part instead of directly change forcing part. In this way, market participants could become to the leading force in the institutional change. And the beliefs of market equilibrium outcome could come true. The system and its direction of institutional change could be come balanced and develop orderlyThe main contribution of this paper is:Firstly, deeply explain the understanding of the system and promote the wheeled relations of the system and ethics. The ethical is a higher level of system for the system to provide connotation. The system will gradually into moral,when it become a common belief.Secondly, a new ethics system content is given. The definition in the academic system of ethics is not uniform. This paper definite institutional ethics system from the systemic point of view, ethics of origin and constraints of the role: the system of ethics refers to the specific rules and norms of the market system and operational mechanism of ethics and systematic thinking and requirements.Thirdly, this paper introduces an ethical perspective into institutional economics framework. Under an environment of building the analytical framework of institutional change and institutional ethics, the institutional changes result in market participants balanced, the evolution of internalized moral long-tem system etc.