The rise of new global corporate governance regimes raise important questions about the legitimacy of the actors attempting to hold transnational firms accountable. Recent summit meetings are proving to be a convenient vehicle for politicians to advance their own self-interest, and, since the meetings carry a price tag of hundreds of millions of dollars per year, the costly promotional vehicle is purchased at the expense of the world’s taxpayers. Even though the G-20 chiefs had already convened in New York the previous day for the annual launch of the U.N. General Assembly along with the full roster of dignitaries, they could not pass up the chance to treat themselves to one more high-profile occasion, replete with photo-opportunities, commencing the very next day in Pittsburgh.

Skepticism about governance regimes based on corporate social responsibility, or “CSR,” apply a fortiori to the shift in attention toward “financial stability.” What is especially pernicious about the G-20 dynamic is the manner in which the free market is in effect ceding economic control over to a global assembly of twenty nation-states, several of which fail to subscribe to the notion of a free-market economy to begin with.

All of this makes about as much sense as entrusting a team of avowed atheists with designing the curriculum content for an orthodox religious academy. And yet sage representatives hailing from principalities like Argentina, Indonesia, Russia, and Turkey were impaneled to supervise Wall Street executives to ensure their remuneration stays within appropriate bounds. Consider the irony of Argentina’s Cristina Fernandez de Kirchner judging the moral propriety of reaping too much personal financial gain, in light of her ties to the infamous maletinazo (suitcase scandal) and her appropriation last year of $29 billion from private pension funds to restock municipal coffers she and her husband had used up.

Even the staunchest critics of activist-led CSR programs often find themselves concurring with not only the spirit but also the substance of their underlying proposals. Helping businesses to play their proper role in the advancement of environmental sustainability, and improvement of labor conditions and respect for human rights in the developing world are admirable goals. What is objectionable, however, is the notion that parties having no role in the creation of profit should be accorded the authority to dictate the precise contours of corporate social responsibility. Similarly, in the case of the G-20, whereas broad objectives such as reining in incentives for financial misconduct, preventing hedge fund abuses, and establishing some reasonable oversight of the “shadow banking system are generally praiseworthy, the scurrilousness of the process and the dangerousness of the pattern being set are alarming. The U.S. GDP is equivalent to thirteen of the G-20 members put together, and the U.S. accounts for approximately twenty-four percent of the world’s economy, yet it has one-20th of a say in this forum. The market-based democracies of the world are unwittingly taking steps to establish a global economic governance regime that seriously jeopardizes individual financial freedom and imperils worldwide prospects for renewed and sustainable wealth.

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Delivering a good deal of blatherskite and patching together basically vapid protocols amounts to window-dressing, undertaken by President Obama and the other leaders he invited to Pittsburg to manufacture an illusion of achievement in orchestrating a worldwide economic recovery. If only it were so simple. In fact, there are many deep-rooted differences in corporate governance systems across nations, making coordination of them unrealistic. Some of them are utterly backward. Others are autocratically controlled. Consider, for instance, that Russia was socialist up until only twenty years ago. When the Soviet Union disintegrated, managers essentially helped themselves to the spoils of formerly state-owned enterprises. In Germany, where unions sit on the board of directors, business firms are much more regulated than in the United States. Moreover, executives around the world perform very different tasks, according to the laws of the country in which they operate.

Instead of convening more of such summits, a better approach is to abandon the fantasy that governments can be relied upon to establish sustained economic growth. Instead of mounting an attack upon entrepreneurs and market-based economies, both of which have enabled tremendous levels of wealth to be created across the globe, the representatives of the G-20 ought to own up to the reality that excessive governmental intrusion into the private mortgage market via the syndicated debt of Fannie Mae and Freddie Mac was a major contributing cause to the financial crisis, and that the private sector is where we need to look for sound economic advancement.

Some of the factors that led to the economic crisis are rooted in a deep-seated set of moral-cultural malaises.  It is difficult to say what led to excessive financial innovation and complexity, executive compensation, and neglect of moral hazard, but among the causes are factors such as technocratic, dehumanized economic thinking, egoistic individualism, greed, short-termism, repudiation of objective moral values, and a highly speculative culture. These underlying moral-cultural trends cannot be resisted or reversed simply by increased law and regulation, especially not from any directives arising from the G-20 summit.

The cultural causes of the crisis must be addressed by more nuanced ethical thinking and collective activity grounded in virtue, regard for the common good, and greater attention to the cultivation of intangible capital assets such as reputational and social capital Our thinking needs to be more sensitive to the complexity of relationships between ethics and economics and attuned to the importance of trust, truth and transparency, along with the need to establish localized and “spontaneous” social structures that are better equipped to foster such elements in business conduct than stepped-up regulation could ever be expected to do.

In the Nicomachean Ethics, Aristotle explains that human happiness arises from having chosen virtuous actions. A virtuous action fallswithin the golden mean, whichrestsmidway between two vices thatmake up theextremeendpointsof anytrait of character: deficiency and excess.Forexample, Aristotlestatesthat peopleshouldbe generous, meaning that they should neither be toowasteful norungenerous.Theyought tostriveto be temperate. As such they will preventhaving their livesdictatedby irrational appetiteslike envy and lustfulness.

Some types of executive compensation arrangements that are now being placed in the spotlight from the financial collapse—that is to say, schemes that offer inducements to cheat, perpetrate fraud, and cook the books in an effort to fabricate levels of reported corporate performance in order to elicit exorbitant payoffs—reward businesspeople for the immoral practices they carry out. Accordingly, such executive compensation plans are squarely counter-Aristotelian and contrary to virtue ethics. Executive compensation plans that motivate managers to manipulate performance levels rather than to engage in conduct aimed at building genuine value for their firms fail to promote virtue; instead they encourage and reward vice, namely the character deficiency of “acquisitive ungenerosity,” which for Aristotle amounts to the dishonorable worship of profit.

It must be remembered that democracy, the rule of law and a free-market economy in the United States have made this country great. Attempts to respond to the financial crisis with global governance regimes like the G-20 summit will not help in mustering the enlightened leadership required to advance beyond the crisis toward a preferable situation of a sustainable free market.

Let the market remain free from meddlesome mandates handed down from finance ministers and central bank governors hailing from communist, corrupt, and despotic states and instead channel attention towards reputational accountability of individual firms for standards of sound business that have developed from the traditions of market economies operating under democracy and the rule of law. The result of this shift in emphasis will be to reward virtue and punish vice in the respective practices of business enterprises.

Where corporate misconduct takes place, let the scoundrels be “named and shamed” according to established principles of enlightened business. Such an approach is preferable to assembling a global-financial-hit-squad whose membership includes heads of states committed to ideologies contrary to the ideals of ordered liberty and the free market held by our nation’s founders. In this regard, the current economic scandal provides a special opportunity to rethink moral standards for market participants. Rather than ceding our freedom by responding with excessive regulation, we need to look to moral reform.