Financial or multi-dimensional crisis? (Part 2)
M NadarajahPublished: Apr 16, 2009 11:28 AM | Updated: Apr 16, 2009 11:43 AM
For now, the real economy, which supports real people, their wages, production of real goods and creation of value, is in bad shape. Stagnation in the real economy has resulted in investors promoting the ‘financialisation of the economy’, a strategy to make money ‘out of nothing’...some sort of economic voodooism!
Financial institutions are creating profits out of nothing. Trillions of dollars have been created out of nothing and there is a huge financial world out there that operates solely on it. It is just an empty world that solely plays on the rise and fall of trends within paper-money markets. If that amount was really available and justly distributed in the real economy, we would not have poor people going to bed hungry.
For now, the real economy, which supports real people, their wages, production of real goods and creation of value, is in bad shape. Stagnation in the real economy has resulted in investors promoting the ‘financialisation of the economy’, a strategy to make money ‘out of nothing’...some sort of economic voodooism!
Financial institutions are creating profits out of nothing. Trillions of dollars have been created out of nothing and there is a huge financial world out there that operates solely on it. It is just an empty world that solely plays on the rise and fall of trends within paper-money markets. If that amount was really available and justly distributed in the real economy, we would not have poor people going to bed hungry.
Financial entrepreneurship has become more dominant in the national and global economies. As many creative minds are absorbed by the war economy to support wars, entrepreneurial creative minds are being tapped by financial institutions to create various financial instruments of ever-fancier derivatives, collateralized loan obligations, mortgage-backed securities and bonds. These are strategies to create not value but just profits.
Competition in the financial economy is often a zero-sum contest. For every investor or speculator who wins, there’s another who loses. It builds a ‘fictitious world’. But competition in the real economy generates creativity, better products and consumers. It builds the real world, however badly organised that is.
Influenced by profit
We have all consciously or unconsciously participated in creating the fictitious world. Today, the fiction is breaking up and coming to bite us ... with a vengeance. The real economy is going to ensure that this bite is a really hard one so that all of us would remember it!
Aren’t We Facing a Deep Cultural Crisis?
The present economic philosophy is gearing the world towards its slow destruction. The central tendency that drives us is profit and, closely associated with it, greed. Making profit anyhow is a value.
That has become the basis of social life and it influences every aspect of our everyday life expression. Our notion of progress, performance, success and achievement is also influenced by it.
Even within this profit-bottom-line economic framework, instead of paying attention to the real economy, we have allowed the financial entrepreneurs to lead. This has not only affected the real economy entrepreneurs who have been disciplined and held prisoners to the results of ‘fiscal quarters’ but also heightened the drive to achieve profit from ‘nothing’. Now, we are all floating on fictitious capital and building fantasy worlds on a foundation of ‘nothingness’ generated by the vacuous values of speculated futures.
All these have gone on for years deeply affecting Earth and all life. Without serious attention to ‘deep sustainability’ in an all-round sense (not just in an ecological sense but in terms of socio-cultural life, politics, economics, and technology), we have been moving towards ‘multi-dimensional crises’. The scant real attention to sustainability by mainstream economic activity and contemporary entrepreneurship has caused Earth and human societies great harm and continues quite unabated.
Indiscriminate consumption without any sense of limits has pushed us towards an ecological crisis. And the push of the darker side of the ‘American Dream’, which is based on consumption and more consumption, needs resources of about 6 more earths to match American consumption levels for the whole world. We are already living on resources of the future generations!
Permanent crisis
The present global unsustainable economic activity is also based on the benefits of a ‘permanent war economy’; wars will be invented, which directly depend on labour and creativity for the production of weapons and on sound strategies for killing human life. This also involves hurting the environment in such episodes of violence. US war on terror could cost about $2.4 Trillion by 2017 and many entrepreneurs see it as an investment in American security. This could progressively mean more of what was once seen as ‘war of independence’ within nations or regions being re-designated by media and foreign policy as ‘war of terrorism’ so that we can invest in them.
In addition, the present economic structuring of society contributes to inequality of haves and have-nots, which expose huge sections of the human population, including children, to “permanent crisis”. And, many more to periodic cycles of economic and financial crises.
According to a 1999 United Nations report, ‘the income gap between the fifth of the worlds' people living in the richest countries and the fifth in the poorest doubled from 1960 to 1990, from 30 to I to 60 to 1. By 1998, it had jumped again, with the gap widening to an astonishing 78 to 1’.
In a deeper sense, and as a growing critique of the indigenous people movement of the dominant economic development paradigm, we have lost touch with the older holistic cosmology to the present ‘commercio-centric’ one. While the former created a culture and mentality of very close relationship between Nature and Society, the later separated them to the detriment of both. While the former created a deeper sense on ‘inter-being’ marked by mindful inter-connectedness of all creation, the latter formed us into islands and as a species that dominates all living and non-living Nature and plays God. In this context, it is interesting to note that there is a growing popular cultural theme, to some extent generated by Hollywood films, that depicts the human species as a parasite or a virus that needs to be controlled or exterminated for the planet to survive!
The dominance and arrogance of the commercio-centric culture and mentality are certainly the basis of all economic/financial crises. But today this crisis must be seen together with all other crises we have brought upon ourselves: ecological crisis, a crisis in legitimacy and democracy and socio-cultural crisis. This is a period when we have to come to terms with ‘multi-dimensional crises’.
If you make a cursory examination of the online religious/spiritual interventions in addressing the present crisis, the focus is on the critique of values that animate us and the career of those values and on the need to re-evaluate our values orientation. However, mainstream institutional efforts today are directed only at seeking to treat the symptoms of a deeper socio-cultural crisis.
By design or default, a vast majority of us have chosen to ignore a deeper solution to the multiple crises-prone economic system we are in. A deeper solution would result in dismantling the basis of economic and political power, re-organising production, ownership and distribution of wealth, and re-structuring legitimacy and leadership for a global society based on principles of authentic justice, equality and freedom. There is much to lose and too many institutional changes for some very powerful people, corporations and institutions.
We, as governments, simply do not have the will to do it. Even with the growth of all kinds of philanthropy, including corporate philanthropy, global multiple bottomlines initiative and social codes of conduct, the hand that claws in, grabs and takes just refuses to become a hand that nurtures, protects and gives. That requires a massive cultural shift.
‘Going Down’ as Part of the Script of a Global Human Drama
So, in the meantime, as the history of economic/financial crisis cycles goes, we will eventually come back to where we are today, maybe in another 10 to 15 years. The crisis then may not be as serious as today. It will be just another episode with its own specificities in a global human drama series that seems to continuously deny itself an all-together new season with a different breed of producers, authors, cast and crew. It is like watching some Hollywood or Bollywood film: we really know what is going to happen but we still watch, don’t we?
(ENDS)
Financial or multi-dimensional crisis? (Part 1)
DR M NADARAJAH is a sociologist by training. He belongs to the Asian Public Intellectuals (API) Community, a community of film-makers, theatre people, songwriters, poets, activists and academics working in Thailand, Malaysia, Indonesia, Philippines and Japan for a better Asia. His work focuses on cultural and sustainability issues.
Financial institutions are creating profits out of nothing. Trillions of dollars have been created out of nothing and there is a huge financial world out there that operates solely on it. It is just an empty world that solely plays on the rise and fall of trends within paper-money markets. If that amount was really available and justly distributed in the real economy, we would not have poor people going to bed hungry.
Financial entrepreneurship has become more dominant in the national and global economies. As many creative minds are absorbed by the war economy to support wars, entrepreneurial creative minds are being tapped by financial institutions to create various financial instruments of ever-fancier derivatives, collateralized loan obligations, mortgage-backed securities and bonds. These are strategies to create not value but just profits.
Competition in the financial economy is often a zero-sum contest. For every investor or speculator who wins, there’s another who loses. It builds a ‘fictitious world’. But competition in the real economy generates creativity, better products and consumers. It builds the real world, however badly organised that is.
Influenced by profit
We have all consciously or unconsciously participated in creating the fictitious world. Today, the fiction is breaking up and coming to bite us ... with a vengeance. The real economy is going to ensure that this bite is a really hard one so that all of us would remember it!
Aren’t We Facing a Deep Cultural Crisis?
The present economic philosophy is gearing the world towards its slow destruction. The central tendency that drives us is profit and, closely associated with it, greed. Making profit anyhow is a value.
That has become the basis of social life and it influences every aspect of our everyday life expression. Our notion of progress, performance, success and achievement is also influenced by it.
Even within this profit-bottom-line economic framework, instead of paying attention to the real economy, we have allowed the financial entrepreneurs to lead. This has not only affected the real economy entrepreneurs who have been disciplined and held prisoners to the results of ‘fiscal quarters’ but also heightened the drive to achieve profit from ‘nothing’. Now, we are all floating on fictitious capital and building fantasy worlds on a foundation of ‘nothingness’ generated by the vacuous values of speculated futures.
All these have gone on for years deeply affecting Earth and all life. Without serious attention to ‘deep sustainability’ in an all-round sense (not just in an ecological sense but in terms of socio-cultural life, politics, economics, and technology), we have been moving towards ‘multi-dimensional crises’. The scant real attention to sustainability by mainstream economic activity and contemporary entrepreneurship has caused Earth and human societies great harm and continues quite unabated.
Indiscriminate consumption without any sense of limits has pushed us towards an ecological crisis. And the push of the darker side of the ‘American Dream’, which is based on consumption and more consumption, needs resources of about 6 more earths to match American consumption levels for the whole world. We are already living on resources of the future generations!
Permanent crisis
The present global unsustainable economic activity is also based on the benefits of a ‘permanent war economy’; wars will be invented, which directly depend on labour and creativity for the production of weapons and on sound strategies for killing human life. This also involves hurting the environment in such episodes of violence. US war on terror could cost about $2.4 Trillion by 2017 and many entrepreneurs see it as an investment in American security. This could progressively mean more of what was once seen as ‘war of independence’ within nations or regions being re-designated by media and foreign policy as ‘war of terrorism’ so that we can invest in them.
In addition, the present economic structuring of society contributes to inequality of haves and have-nots, which expose huge sections of the human population, including children, to “permanent crisis”. And, many more to periodic cycles of economic and financial crises.
According to a 1999 United Nations report, ‘the income gap between the fifth of the worlds' people living in the richest countries and the fifth in the poorest doubled from 1960 to 1990, from 30 to I to 60 to 1. By 1998, it had jumped again, with the gap widening to an astonishing 78 to 1’.
In a deeper sense, and as a growing critique of the indigenous people movement of the dominant economic development paradigm, we have lost touch with the older holistic cosmology to the present ‘commercio-centric’ one. While the former created a culture and mentality of very close relationship between Nature and Society, the later separated them to the detriment of both. While the former created a deeper sense on ‘inter-being’ marked by mindful inter-connectedness of all creation, the latter formed us into islands and as a species that dominates all living and non-living Nature and plays God. In this context, it is interesting to note that there is a growing popular cultural theme, to some extent generated by Hollywood films, that depicts the human species as a parasite or a virus that needs to be controlled or exterminated for the planet to survive!
The dominance and arrogance of the commercio-centric culture and mentality are certainly the basis of all economic/financial crises. But today this crisis must be seen together with all other crises we have brought upon ourselves: ecological crisis, a crisis in legitimacy and democracy and socio-cultural crisis. This is a period when we have to come to terms with ‘multi-dimensional crises’.
If you make a cursory examination of the online religious/spiritual interventions in addressing the present crisis, the focus is on the critique of values that animate us and the career of those values and on the need to re-evaluate our values orientation. However, mainstream institutional efforts today are directed only at seeking to treat the symptoms of a deeper socio-cultural crisis.
By design or default, a vast majority of us have chosen to ignore a deeper solution to the multiple crises-prone economic system we are in. A deeper solution would result in dismantling the basis of economic and political power, re-organising production, ownership and distribution of wealth, and re-structuring legitimacy and leadership for a global society based on principles of authentic justice, equality and freedom. There is much to lose and too many institutional changes for some very powerful people, corporations and institutions.
We, as governments, simply do not have the will to do it. Even with the growth of all kinds of philanthropy, including corporate philanthropy, global multiple bottomlines initiative and social codes of conduct, the hand that claws in, grabs and takes just refuses to become a hand that nurtures, protects and gives. That requires a massive cultural shift.
‘Going Down’ as Part of the Script of a Global Human Drama
So, in the meantime, as the history of economic/financial crisis cycles goes, we will eventually come back to where we are today, maybe in another 10 to 15 years. The crisis then may not be as serious as today. It will be just another episode with its own specificities in a global human drama series that seems to continuously deny itself an all-together new season with a different breed of producers, authors, cast and crew. It is like watching some Hollywood or Bollywood film: we really know what is going to happen but we still watch, don’t we?
(ENDS)
Financial or multi-dimensional crisis? (Part 1)
DR M NADARAJAH is a sociologist by training. He belongs to the Asian Public Intellectuals (API) Community, a community of film-makers, theatre people, songwriters, poets, activists and academics working in Thailand, Malaysia, Indonesia, Philippines and Japan for a better Asia. His work focuses on cultural and sustainability issues.
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