“Politics”, wrote Aristotle, “is morality by another name”.Recent events with the collapse of share prices and the near-collapse of major UK banks highlight the truth that economics and morality are much more closely intertwined than we might have thought.

It was once said the market is value-free, or subject to the laws of positive economics which had the status of a pseudo-science. However, the idea of money itself is, I suggest, a metaphysical idea. Money doesn’t represent any thing, it is not backed up by gold or anything of intrinsic value: money simply is what money buys. It is an illusion, which only works if you believe what you re told.

Consider two questions which lie at the heart of a study of ethics.

Does the means justify the end? And what is meant by “virtue”?

A virtue, according to Aristotle, is the mean between two vices, the vice of deficiency and the vice of excess. So if the virtue is moderation, the vice is greed (excess) or abstinence (deficiency).

In the city of London the huge bonuses of £17bn paid out last year would suggest excess. 3,000 people received a Christmas present of a bonus, or free gift of over £1m. Setting aside questions of justice, the issue is whether these excessive bonuses constitute a vice.

The market system, where bonuses are linked to short-term profits, suggest that it is greed that has produced the accumulation of bad debts. The virtue of prudence has been sacrificed on the altar of short term profit.

Then there is the question of means and ends. A student once said to me: “I will do almost anything to get on”. Did he really mean “anything”? Is there any sense in which morality limits or restricts behaviour?

Kant suggested you should never lie under any circumstances. But the concealment of bad debts, the exaggeration of one’s own performance and skill, suggest that this crisis has been generated under a cloak of moral deception. If the end is profit, it is simply not true that anything justifies the end: exploitation of labour at low wages, slavery, abuse of children, all these have served the end of profit in previous generations.

Today it is the fruit of pragmatism, the enemy of Kantian ethics, that has seen the world economy brought to the brink of ruin.

And we are left with a strange conclusion. Money, like God, has a metaphysical quality. When you believe in him or it, miracles can happen. Stop believing, and you realise that he or it may be an illusion, they may not exist in any substantial form at all. Money can lose its value completely when you stop trusting it.