Culture, Government and Markets

Document Type


Department or Administrative Unit


Publication Date

Summer 2009


In this paper I explore the nature of self-interest, and the notion that culture in its interactions with self-interest has been instrumental in bringing about the present financial crisis. In particular, I pursue a discussion in the paper that interrogates the question: what is the role of culture in such crises, and the role of government in imposing morality on the markets? This paper argues that government through its institutions has a critical role to play in maintaining vigilance and the telling of the right story to prevent such crises in the future. In particular policymakers should pay attention to research that emphasizes the persistent role of animal spirits in leading us to repeated crashes and should craft institutions that do not assume that individuals are rational economic agents whose pursuit of unmitigated self-interest will lead to the greater good.


This article was originally published in Forum on Public Policy.

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