Mammon in a crisis

an evangelical outlook to the current situation

Let us hope that this crisis will result not only in our increased poverty but also in a deep paradigms shift for our contemporary life. Hopefully, well be able to shed the illusion that money alone is needed to generate more money; that intensive growth is the only alternative; and that a virtual economy is preferable to the real one. At this junction, though, we need to be bold enough so as to rediscover the centrality of production and work; the centrality of the business and of ideas that work; the centrality of sustainable policies and of those that promote welfare and justice. To emerge from this crisis, we will need the courage to re examine the details and the delicate parameters of the existing model. But thats not all: we will also need to change our centre of mass and bring about a deep reform of the central perspectives governing social life. In this regard, three elements are particularly noteworthy.

First of all, there needs to be a rethinking of who the actors, the real characters, of the system are. And in doing so, there needs to be a clear accent placed on the centrality, even in economic matters, of the relational element. Economics are relation based. Their crisis and their failure are always and primarily breakdowns in trust. The problem, as a matter of fact, does not originate with a lack of liquidity within the system. In many countries, the push has been to buy much and delay payment. Real estate purchasers trusted the banks and their ability to continue to generate revenue. In turn, the banks trusted them. Thus, the market rewarded investments based on a chain of trust and fiduciaries. Now, however, companies feel the tightening of credit constraints; there is no longer trust; investment plans get cut; purchases are stagnant; and soon, we will see the fall of the very aggregated demand. In summary, the virtuous trust cycle has been broken, shattered. It needs rebuilding, and this needs to be done beginning with the real characters, and placing value on relationships and responsible economic behaviour.

Secondly, this crisis gives us the chance of recovering the contextual dimension, the real dimension of economic systems. Each economic construct comprises three essential elements and their interaction determines the levels of welfare and development achieved. These elements are: a) the production of goods and services; b) the distribution of resources; and c) the consumption. Although there was a strong production push coming from the West, the ideological fulcrum and its related social worries have been focused, for decades now, mainly on the system of distribution. The tension between the role of the plan and the role of the market has been important and it has been, de facto, solved by the market and its principles globally colonizing life. Contrary to what was thought, the crisis of Mammon suggests to us that the choice between socialism and market economy wasnt as fundamental, after all. If we reduce politics and economics to the mere choice between two distribution systems, sooner or later we will come to the realization that it is simply the choice between two roads that will eventually lead both to hell, as Augustine of Hippo already said in his The City of God (loosely quoted, where we place our love determines who we are and signals the city were we live and the preoccupations we cultivate).

The distribution problem has been thus deflated while simultaneously creating a new focus, not merely ideological, on consumption and its processes. Many are the pointed critiques, and often we tend to agree with them, that due to the consumption logic the economic structures have been reconfigured into idolatrous places, where moral and spiritual infection is spread, the very same epidemic Marx so aptly described when speaking of the fetishism of goods. So much so, that the financial world and its tools have been taken over by this consumerist culture. It might be helpful to add here some clarifying data. There is an unbearable dualism, a very worrisome unbalance between the real realm and the financial realm. It would seem that a little over 5% of international money transfers pertain to the purchase of goods and services. The remaining 95% comprises financial transactions, often speculative in nature. For years, the world of finance has been anchored in the real economy (the production and consumption of goods) and it dealt with according credit, titles and shares, property transfers, currencies, and the like. It would have been totally unthinkable to witness such an incontrollable explosion of financial

fluxes. It is true that no real economy can grow without the presence of a financial sector, but what financial system is able to forego, in the long term, a stable and responsible real economy? This crisis might put an end to the neognostic and dichotomist tendency present within the system.

Thirdly, this crisis highlights the normative crisis of the economic actions. Who gives us the right to analyze and worry about the behaviour of the banks? Which institutional construct should we think? Why would we wish to recover the dimension of responsibility? In every attempt at explaining a social problem there is always an existent presupposition that favours some sort of higher authority. Refusing to come to terms with the implications of justice, of oikonomia, invariably leads to having to be satisfied with circular bromides or with some convenient tautology. The only way out of this crisis would be through a nonreductionist prospective. The choice, after all, is always between two (alternative) types of faith. One kind of faith underscores mans autonomy and generates a mechanic vision along with a disproportionate trust in the effectiveness of mechanical systems. The other kind of faith accepts the world as a datum, which needs to be discovered and worked with in a responsible and just manner.

This, in part, explains Mammons crisis. The financial world has become the generator of hope for the whole world. So much so that new forms of obedience and attention to the markets have come into being. After all, they were the ones which, for decades, have decided the destiny of both companies and governments, of people and of the lowly. How can we turn the financial markets into our friends? This is the real issue. It reveals a religious and idolatrous profile which we can no longer ignore, particularly now that its mask is down. 21st September 2009

Giuseppe Rizza