Italian ethical transparency in the age of COVID-19

The current outbreak of the coronavirus is a severe test on people capability to abandon individualistic points of view and self-align personal behaviour towards a common good, like for climate change.

Italy has been testing this difficulty in recent days, as the first European country to face a dramatic yet needed decision to contain contagion effects of a new disease that would otherwise force the collapse of the health care system. The core element is not that everyone is at risk, per se, but that the weakest part of the population might not be capable of receiving sufficient care as the number of intense-therapy beds could easily fall shorter than the spiking requests for treatment. This has forced Italy to “war type” harsh decisions.

This poses an ethical question that goes beyond the need of individual self-preservation but involves our capability to express empathy towards the "weakest links" in our society and bear the economic costs, because losing those links (both family and friends or distant ones) can disrupt the whole as if this “ethical judgement” is written biologically in us as homo sapiens.

Can this be imposed top down? Indeed this requires an institutional approach to work, as great coordination is needed throughout society. However, this can only truly succeed in presence of two key elements that generate wide-spread consequentialist ethics:

• deep transparency on real data
• capability of institutions to communicate about fundamental uncertainty.

This is why I applaude the promptness and professionalism of Italian doctors who didn't shy aways from transparently tackling all issues related to COVID-19 and started testing the population at risk by openly reporting the evidences as requested by the WHO.

It seems that no one else did the same in Europe, apart from Italy. The price of opacity against transparency means reporting casualties under other statistics such as German "died with" as opposed to "died of" coronavirus. From Italy come the only reliable statistics on the continent which will help build a proper learning curve helpful to whole of us at European level.  

Locking down an economy, no matter how small or large, is always a complex decision which requires high level of synchronisation among all citizens, economic actors and political players for the common good. For that to work, the first and most important element is to provide actual and transparent communication of all data evidences, their weak spots and their uncertainty around forecasting indication.

The core principles of my recent philosophical and economics essay "Financial Market Transparency" are indeed about infusing transparency in our economic action and regulatory frameworks to build progress out of change, in order to allow investors capability to gauge fundamental uncertainty over the irreversible time which are two biological micro-foundations of finance. The cover itself shows a human being standing behind the cover page of The Financial Times, to remind us that the real purpose of financial markets is not just prices and algorithms but the creation of a mechanism that favours the financing of human progress (our biological best) by protecting the weakest links (eg, retail investors). How do these relate?

• Fundamental uncertainty is what we are experiencing today, that is our desire to survive (whether COVID-19 or any other situation in more regular times). Similarly, we would want our investments to survive uncertain futures while navigating market swings, knowing that some investments might prompt a loss but our holistic wealth won't collapse.
• Irreversible time is what we face as we go through life, explaining our need of purpose and relationships (time synchronisations) while ageing. Similarly, we are more and more aware that we shall invest responsibility and with purpose towards common goods as defined by the UN Sustainable Development Goals (SDG).

Clearly, high rate of survival against climate change (via SDG) or coronavirus CANNOT be achieved ONLY by forcing top down allocation of resources. It won’t be enough!

Common good can only succeed by leveraging on (and always respecting) liberal values through consequentialist ethics, allowing every responsible agent to act generating positive network effects tested on the weakest links. The consequence of such an approach for institutional transparency is the generation of consequentialist ethics within society, because individuals are equipped to face fundamental uncertainty and synchronise their behaviour by aligning their personal irreversible times. This synchronisation is possible when goals are clearly communicated (eg, isolation or reduced physical contact), all data assumptions are openly reviewed and potential consequences are stress tested in order to let people learn about desired or undesirable outcomes.

By the same token, investors must focus on theirs goals (and hierarchy) with theirs advisors to cope with stress on the financial markets.  This is the foundation of trust in any advisory relationship. 

Italians are struggling and we can all support them and learn from their work of transparency notwithstanding their difficulties, the imprecisions or mistakes. We all do. What they teach us today is that only transparency on incentives, costs and consequences (impact) at individual and ecosystem level of any individual economic action (of which banking and fintech innovation) can reduce fundamental uncertainty, and allow to synchronise our times to build more anti-fragile outcomes.

You can check my work on my author's page thepsironi.com

#sustainability #sdg #economics #innovation #finance #banking #coronavirus #covid19

Follow me on LinkedIn for more conversations about Digital, Fintech, Banking, Ethics, Economics, Literature.