Part 2: What is to be done?

A great discussion on the world economy and economics

Casino in Las Vegas.
Written by Editors

Many economists rightly warned of the threat of a financial crisis before it came true in 2008. Yet even democratically elected parliaments failed to take these warnings properly into account and discuss ways to prevent the crisis. There was no discussion afterwards, either. Similarly, the risk of a pandemic was well known before 2019. Still, even in the middle of the COVID-19 pandemic, no one seriously questioned why preventive actions had not been taken.

Responsible politicians and social and economic scientists should launch a broad, simultaneously academic and popular, theoretical and practical public debate on banking and the role of the central banks.

The starting points for the discussion should be the obvious facts that, firstly, the current economic system is prone to financial crises, and secondly, in the current conditions, political decision-makers, directors of central banks, and banking supervisors are not able to prevent the crises.

We believe that it is impossible to have a serious debate on economic theory and economic policy unless it is extended to the history of capitalism (not just as an economic system but as a whole social system).

The collapse of all forms of socialism proves that a centrally planned economy, a one-party system, and the absence of the rule of law lead to totalitarianism and economic collapse. Despite this, the history of the democratic market economy is impossible to explain if experiences of the labour movement, the communist world movement, and socialism are ignored.

The golden age of capitalism – the Keynesian state-led market economy – was, in a sense, a synthesis of the two systems. The labour movement played a key role, especially in the creation of the so-called Nordic welfare state.

We think the current stage of economic development, the dominant position of speculative financial capital in the world economy, cannot be explained on the basis of any existing economic theory. No economic theory alone is enough. We need a view on the entire history of humankind and, on that basis, a new view on human essence and the development of society.

Recommended Quotes

…economics is supposed to be concerned with real people. It is hard to believe that real people could be completely unaffected by (…) the Socratic question, 'How should one live?' - a question that is also a central motivating one for ethics.

QUOTE:

Sen Amartya, On Ethics and Economics, The Royer Lectures, Blackwell Publishing 1987, 2.

FEATURED IMAGE
Casino in Las Vegas.

Casino in Las Vegas. Today, the connection between equity trading and the real economy is often so remote that we can rightly speak of mere betting, the casino economy. PHOTO: © New History Association.

OUR VIEW: Humanity first! Towards an ethical civilization.

PART 2. WHAT IS TO BE DONE?

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