• Increase font size
  • Default font size
  • Decrease font size
You are here:
Unconsidered aspects of the economic crisis PDF Print E-mail
The Labour Movement-Economy

Sovereign credit default swapsIn all planning there is the motive, the general purpose, and the aim. The same applies to the economy. The motive and the general purpose of the economy are factors which lie outside the economy; they are to be found closer to the psychological make-up of humans than to economic science in itself.

The aims as specific planning now function under the influence of the more general purpose and of the motive which set that purpose, even though the aims themselves can also have many gradations, until they arrive at the field of the completed realisation of the purpose.

If we attempt to explain the economy in so-called economic terms, we will not get any satisfactory answer, because the economy takes many things for granted or 'self-evident' (and the 'self-evident' is the assassin of the truth), and, apart from that, we will miss the broader perspective, as we move in the sphere of a predetermined purpose of economic practice, leaving the purpose itself untouched.

The purpose of the prevailing economic thinking in the age in which we live is evident and freely admitted - it is uncontrolled profit (in spite of the fact that for many the economy cannot escape from the issue of survival). But human beings rarely ask themselves about the true face of unrestrained profit and the probable complications which this gives rise to. This does not mean that a controlled economy is unclouded. It is precisely the observation of this double failure that should prompt man to think deeply, outside the calculating economy which cannot apparently provide solutions with the fanatical and superficial oppositions between systems which it proposes.
Certain features of the economic complications of our times are projected by the mass media and politics without the necessary, simple, rational commentary, within the context of an absurd lack of cohesion and of fundamental rational thought. And there is no need for one to be an economist to note the glaring absurdities, which can be formulated indicatively as follows:

1. The inflation of economic magnitudes and the economic 'bubble' cannot be excused by the term 'errors', or by isolated references to various suspect economic products and economic circumstances.

These references are inadequate, and presuppose, naively, the conviction that economic management on the part of the powerful has been superficial, and that, after the collapse, led to an attempt to counterbalance economic loss or opportunistic profiteering. But in this way we do not come close to the heart of the problem, and, furthermore, specialist economic knowledge is required, thus rendering true knowledge inaccessible. This does not mean that the necessary knowledge must be rejected and things must be unduly simplified, as the elites, the politicians, the lazy, and the ignorant do. But, certainly, this must not be bound either by the lack or the existence of specialist knowledge when the latter is used to conceal a different truth – one which does not involve the field of knowledge itself, but is the cause of its creation. It can, of course, be argued that all knowledge and thought has an ulterior motive, but this cannot be avoided, even if it is the crutches of fanaticism. In the last analysis, both complicated and futile knowledge and the fanatical rejection of knowledge are - both of them - a part of totalitarianism of thought.
The economic 'bubble', then, was based on the production of money which was not derived from real, but from entirely imaginary, property. It was derived, for example, from mortgage loans which it was known in advance could not in reality be secured, but which were nevertheless credited, and this credit was used as money or as a financial product, something which was the so-called 'plastic' money, money, that is, which had no backing in the real economy.
Why was this embarked upon? In the circulation of money, it is not possible to distinguish money which is real from that which is not, or money outside the real economy from money derived from the real economy; in other words, from money based on fantasy and expectations of power and not on the real economy. Whoever, therefore, possesses, in the end, the largest quantity of money (regardless of its provenance) can apply investment-related pressure, penetrate the real economy, and control it. This can be seen from the extensive purchases of land by wealthy investors in various parts of the world, such as in Africa and South America, for giveaway prices, and with unknown consequences for the local populations in the future, as well as for the world community. And while the legal entities, the banks, for example, went bankrupt, the individual wealth of some of their shareholders increased, and how it will be used is not known. Furthermore, these corporations were subsequently rescued by the citizens (the states), and without any change of ownership.    

Money, then, has ceased to be an economic magnitude - and probably never was from the beginning - and has become a vehicle of power and force. It has become a means of exercising control, not only when it has accumulated, but also by its very nature and function in its entirety (as regards the groups which have the strength to control it). Furthermore, the excessive accumulation of wealth itself cannot in any circumstances simply serve real needs which can be served by money (health, education, survival, recreation, etc.), but only psychological needs of man functioning in the sphere of the abnormal. This, naturally, calls for extensive analysis, and, again, it would not be possible to touch upon every single aspect, because each human being is complex and individually unique.

This is the unadmitted truth and points to the distortion of the economy's function, the overturning of the relation between supply and demand, with the wholehearted participation, of course, of the peoples who succumb to any advertising pressure and to every desire for recognition and superiority through the acquisition of things and with the division of the economy into the real and that which pretends to fill the human void.

This void is expressed by the many as consumerism and by the elites as power. Consumerism is a small form of power over the lifeless thing possessed, whereas power, as such, imposes itself over everything, lifeless and living. It is the power to destroy subjects, which in this way are turned into objects, such as slaves, and, consequently, it is a power which is deeper and more satisfying because it imitates death.
It is our belief that the explanation of the function of the economy can be made more intelligible if we operate outside the economistic framework which it sets up, in the sphere where its purposes and methods take shape. Otherwise, even with a full knowledge of its terms it will remain at an impasse.

2. They do not explain why they do not concern themselves at all with private debt which is, perhaps, greater than public.
For example, Iceland's debt was entirely private, but Great Britain demanded its undertaking by the state, in spite of its position on the rejection of state intervention in the economy.
This is owing to the choice made by the elites of strengthening the private factor, in which the public interest will not play any role and those who are already powerful will without doubt be the victors as they possess all the power of coercion. In fact, competition does not exist between power and the powerless population, or among the strong, where a redistribution of power can take place. In these circumstances, the state ceases to exist, under the mandates of the 'free' economy, except as an agent of social welfare and a mechanism of control and receipt, collecting from the many and granting its economic aid to the few powerful private individuals.

But here we must note that the constant demands of the masses for money and equality of means, but in the absence moreover of the assistance of critical thought as to the role of profit in human life and its real anthropological value, seduce man into following directions mapped out by power, through the models which are put forward, which tend towards the cancellation of the possibilities for true peace, since they are by their nature competitive and dependent on the deeper quality of the model.  For this reason, a critique of the function of wealth alone is not sufficient to deal with the problems, because this critique may at times be based on competition and not on a different approach to life, and, moreover, may conceal a similar tendency towards coercion on the part of many people, which, however, cannot be put into practice for various reasons, or gives expression to the conception that a system is by nature superior to human beings, and, therefore, solely responsible for their options. In this way it denies man's prospects for genuine freedom. It is not that a system does not have such potential, but this is the potential which man permits it to have. The strange thing with responsibility is that it lends freedom to man, but also the subjectivity related to [allied with] that freedom.

3. Bad management on the part of states, and the expenditure of peoples beyond their means are represented by politicians and figures in the world of economics as negative criticism.
This is true, but what is not said is that this exceeding of means was something engineered by themselves, on the model which they supported and which projected consumerist models of happiness and manufactured false needs, with the result that the product of human efforts has been channelled towards senseless destinations, instead of being creative to the benefit of the whole of society and individuals, with the degree of voluntariness required to avert totalitarianism. Such voluntariness calls for the appropriate culture and liberty, which, however, are not thought deserving of funding.
Naturally, mindless consumerism and the identification of human beings with having is their responsibility, which, however, does not eliminate the concurrent responsibility of the elites. The responsibility of the one does not cancel that of the others, and, consequently, cannot serve as an excuse or grounds for irresponsibility for anyone.

4. The European leaders and the experts invoke the activities of profiteers as responsible for attacks upon the economies of Europe and make the fact that they must be dealt with a subject for discussion. But they themselves created these profiteers, since they guided and pressed for laws which permitted the economy and profiteering to be unbridled, and established their unregulated status by law. Lack of transparency has become an institution by means of the institutionalised confidentiality of deposits, the permitted free movement of capital to destinations which remain obscure (e.g., by means of off-shore companies), and by means of corporate anonymity and complexity, which means that natural persons cannot be detected, either because they are holders of unregistered shares, or because it is practically (even if not legally) impossible for the average citizen to gain access to their particulars, and, a fortiori, to acquire the whole of the interrelating corporate picture of each natural person who may own or have shares in a great many companies and even be promoting contradictory activities.
Their concern, therefore, about profiteering is superficial; their words, that is, do not correspond with their actions.

5. The control of states by their creditors has been accepted, unlike the control of failing companies by the states which lend to them.     
This is what is happening in Greece. The Constitution has been overturned, because the principle (of dubious legality) that the country's creditors can impose their will upon it in accordance with the principles of private law (even though not even these are observed in reality), and buy up anything of economic value as state property, and, moreover, at knock-down prices, has been accepted. But, at the same time, an inconsistency has also been accepted: when the state gives its aid to banking legal persons, it is not permitted for it to control these in the same way that the country's creditors do; it is not permitted, that is to say, for it to control the way in which the money it gives is used, or for it to acquire real rights over these legal persons. Consequently, the principles of the so-called free economy are not universal. On the contrary, they are not even principles, since they do not have general force. They are, simply, an imposition of power for unrevealed purposes.

6. The 'continuous' development which is invoked and pursued remains unclear to the average person, and, moreover, to economists, otherwise why do these two very basic questions remain unanswered:
- first, how can this development, and the over-consumption which it entails, be related to environmental problems?
- second, what is its meaning for human life?
There are many other questions which could be asked, but these two are the most crucial.

Very few people talk about de-development. However, the meaning of a correct and happiness-orientated de-development could not be elucidated unless we understand the causes of man's tendency towards continuous development. What is the meaning of this tendency of man towards continuous development? What is certain is that it has no connection with economic development. Economic development operates in the sphere of need and under the fear of death, with the distortions which this causes, and attempts by means of the excessive amassing of wealth to escape from the need, into a 'freedom' which enslaves everyone else as power, because, in reality, it is not possible truly to escape from the sphere of need. The human tendency towards development, on the other hand, is related to the urge for duration, victory over death, and expansion, which are related to the tendency of the consciousness towards development and towards unity through a broadened apprehension and response, given that nothing is static. If, however, the consciousness, through these processes, is ignored, then this tendency turns into a cumulative factor - for example, in the economy. Much could be said here on this subject, but it is not our concern at present. However, it was for this reason that Nietzsche, the intellectual of power, rejected a concern with the consciousness and regarded it as a corrupter of power.

7. The acceptance of the 'free' economy is regarded as indisputable and self-evident, whereas it is obvious that it has already failed, at least as far as the world's peoples are concerned. It is an assertion which perhaps has as its aim to take human apprehension by surprise, by suggesting that only truth could lie behind such a strongly-held certainty. Any involvement of states in this failure is not a justification, because, a fortiori, private factors, whether as business interests which apply pressure in the political field, or as public servants functioning as private individuals and not as agents of the public interest, or as citizens who look upon the state as an inexhaustible reservoir of benefit without any obligation on their part, are responsible for the failure of states. The private individual factor is obviously the fundamental cause of failure, and for this reason cannot, in any circumstances, support a truly free economy for the greatest good of the greatest number - which is, according to the great liberals Mill and Bentham, the desideratum.

8. Closer control of the functioning of the economy - which others favour - is not absolutely sound and adequate, precisely because it is these imperfections of man that undermine its foundations and give rise to a host of distortions. Here, that is to say, we have a double failure of human systems of economy and governance. Totalitarianism lurks as a possibility in every domain, and this fact has to lead man to a revision of his whole manner of approach, without looking for systems which will serve as a panacea on his behalf and without his own responsibility.

9. The need for competitiveness is invoked, without, however, two of its features being adequately explained:
(a) Its nature - the issue, that is, of what competition can lead to, since its aim is undoubtedly total superiority, a fact which is obvious from the power games of the strong. If its aims were equality and peace, then it would not be needed even as a means of attaining balance; such balance would be based on human maturity and sobriety. But it is only intermittently that the various distortions are used to achieve 'calm' or 'balance'; if, however, this is not reached in a timely and correct manner, the moment comes when the distortions lead to collapse - as in the present situation.       
(b) Whether the competitiveness proposed will work at the expense of their own (Western) economies - which, of course, cannot possibly be meant. If, however, it is meant that their expectation is that the competitiveness of Greece, for example, will work against the economies of the East, where wages are exceptionally low, it is as if they are requiring the peoples of the West to live on the borderline of starvation, as, for example, the Chinese do. But everything remains in a nebulous state of obscurity, very convenient for those who do not wish to think, but to remain complacent.

10. Sound organisation and administration are required. Although this is correct, it must not be an end in itself, but the result of a real well-being, material and anthropological, because these things, on their own, do not guarantee true success for man, the foremost example of this being those - the same - people who have plunged the world into disaster with the policies they have implemented and their models. Here it is true that "organisation and 'sound' administration are not an end in themselves; if the element of freedom is missing, we have to feel fulfilment in its futility".[1] But cynicism rejects with irony whatever is not realised profit alone for power and comfort.
Other issues also must be elucidated, but these are perhaps the most serious, since they are the causes of the rest. It is our belief that fanaticism cannot supply answers at the level of causes. But nor can pessimism, apathy, or distress because of the complexity of the present conditions be of any use. The destiny of man cannot be this: for him to be a prey to circumstances and his passions.
To sum up: it is correct to say that "economy is needed in the application of the economy - the economy is not an end in itself, and for this reason we must restrict it to what it is".[2]

[1] From an unpublished text on the economy by the writer Ioannis Zisis.
[2] Ibid.

Ioanna Moutsopoulou, lawyer 
Member of the Secretariat of Solon NGO

Photo from wikimedia

Creative Commons License
Under the following conditions: