The Ethics of Mortgage DefaultsYeah I know, I do tend to preach. It comes down to whether a person believes that right and wrong is situational or unchanging. If you accept that right and wrong is situational, as Matt Yglesias does, there is no end to the justifications available for bad behavior. But don't we all operate under a social contract based on absolute right and absolute wrong? Shame motivates each of us to uphold our social contract for the betterment of all.
Matt Yglesias makes the case for guilt-free mortgage defaults:
My mortgage is an agreement I’ve made with Bank of America which is a publicly traded for-profit corporation. Companies like that, unlike people or people agencies or other kinds of institutions, don’t recognize any kind of goals other than monetary ones. Under the circumstances, any relationship you might have with Bank of America is a purely transactional, purely commercial one and if you treat it as anything other than that you’re being a sucker.My local Wal-Mart has a number of consumer electronics items that I’d enjoy owning. And I’m a pretty smart guy; I’m pretty confident I could figure out how to sneak them out of the store without paying for them. Moreover, Wal-mart is among the nation’s worst abusers of eminent domain for private profit, which I regard as little better than legally-sanctioned theft. So in a sense, shoplifting gives Wal-Mart a taste of its own medicine.
Yet I’m not planning to shoplift from Wal-Mart. And the reason I won’t isn’t only, or even primarily, the relatively small risk that I’d get caught. Partly I don’t shoplift because that’s not how I was raised. And partly I don’t shoplift because I understand that a culture in which shoplifting was condoned by most people would be a poorer society. If shoplifting were widely condoned, retail establishments would spend more resources on security, and they would be forced to treat their customers with greater suspicion. I don’t want to live in that world, so I respect Wal-Mart’s property even when it’s not in my interest to do so, and even though I don’t personally like Wal-Mart very much.
In college, I had a friend who occasionally shoplifted. I wasn’t shy about voicing my disapproval of this practice, and I would have cut off friendship with him if he kept doing it. This anti-shoplifting norm benefits everyone. The stigma against shoplifting is a much more powerful, and less costly, check on the behavior than anything that happens in the formal legal system.
It seems to me that negative social consequences are routinely downplayed in favor of the individual when it is convenient. As a conservative I reject government micro-management of my personal behavior but I believe I have a personal responsibility not to inflict harm on society. If people simply decide that they will walk away from homes there will be a negative impact on society as a whole. The choice is not morally neutral.