GreyMail: Is It immoral to Play the Stock Market?

The other day, my brother emailed me to ask if it was wrong to play the stock market.  Since I was going to take the time to write him, I thought I’d share my response on my blog.

In the first place, it’s important to note that the stock market is inherently neutral, morally.  By this I mean that the stock market, as a non-human entity, cannot go to heaven or hell and, as such, cannot be inherently moral or immoral by its own state of nature.

In the second place, it’s important to note the sources of immorality within the stock market.  Karl Denninger has documented massive amounts of fraud among traders, particularly among firms that engage in automated trades.  Furthermore, many companies traded on the stock exchange engage in illegal and immoral business practices.  Many trades are based on fraud (think of businesses that lie about their balance sheets and income statements).  Also, many people engaging stock trades are highly immoral.

Does this then mean that one can never trade stocks?  Of course not.  If it were immoral to trade with those who are immoral, then no one could buy groceries or clothes, or engage in any kind of trade.  And it is not inherently immoral to be the victim of fraud (though it is foolish).  Interacting with those who are immoral does not cause their immorality to transfer to you by the merits of trade.

However, those who are immoral can end up having an influence simply by the virtue of your continued interaction with them.  This does not mean that the venue of your interaction is immoral.  Rather, your decision to allow those who are immoral to drag you down to their level is immoral, and it is you who will bear the guilt and blame for that decision, not the stock market.

It is worth noting, though, that if playing the stock market troubles your conscience then you should refrain from playing the stock market (cf. Romans 14).  And it is also worth noting that there are many major players in the stock market who are simply looking for a sucker of which to take advantage, and that the government has often turned a blind eye to the fraud that usually accompanies this.  As such, though it is perfectly moral to play the market, it is at this point in time quite foolish to do so.

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