This financial crisis is, in all likelihood, only the first stage of an economic crisis that may be the worst since the Great Depression of the 1930s. No country, no sector of the economy will escape the crisis which did not come out of the blue. There had been warnings from different quarters. Caution was also advised by veteran world leaders from Trilateral Commission and the World Political Forum, who were concerned that the financial markets were becoming a dangerous bubble with little or no relation to the actual flows of goods and services. All those warnings went unheeded. The economic model rooted in the early 1980s is falling apart. It was based on maximizing profit by abolishing regulation aimed at protecting the interests of society as a whole. For decades we have been told that this benefits everyone: "a rising tide lifts all boats." Yet, the statistics say that it didn't.
So this is the bottom line: cutthroat capitalism for the majority and "socialism", or government help, for those who are already rich. Yet, three or four years down the road, with the acute phase of the crisis behind us, these same people will be telling us that raw capitalism works best and that we should free them from regulation. Until the next, even more destructive crisis?
The current globalisation model has led to the deindustrialisation of entire regions, deteriorating infrastructure, dysfunctional social structures and tensions caused by uncontrolled and unregulated economic, social and migration processes. The moral damage has also been enormous. The concept of sustainable development to protect the environment has been supplanted by the idea of free trade as a panacea for any problem. The roles of the state and of civil society have been diminished, with humans seen, at best, as "consumers of government services". The result is an explosive mixture of social Darwinism-the strong survive, the weak die-and the philosophy of "after us, the deluge".
The growing crisis of the world economy is now, finally, focusing the minds of policy-makers. For understandable reasons, they are concentrating on immediate rescue measures. Those are of course necessary, but there is also a great need to reconsider the foundations of the socio-economic model of modern society-even, I would say, its philosophy. The time has come to call for combining morality and business. This is a difficult issue. Of course business must profit, or it will die. But saying that the only moral duty of a businessperson is to make money is just one step away from the slogan of "profit at any price." And, whereas in the real economy of production there is still some transparency-traditions, trade unions and other institutions-that give society some influence, the area of "financial engineering" is without such institutions. There is no glasnost there, no transparency, and no morality. The consequences have been devastating.
So this is the bottom line: cutthroat capitalism for the majority and "socialism", or government help, for those who are already rich. Yet, three or four years down the road, with the acute phase of the crisis behind us, these same people will be telling us that raw capitalism works best and that we should free them from regulation. Until the next, even more destructive crisis?
The current globalisation model has led to the deindustrialisation of entire regions, deteriorating infrastructure, dysfunctional social structures and tensions caused by uncontrolled and unregulated economic, social and migration processes. The moral damage has also been enormous. The concept of sustainable development to protect the environment has been supplanted by the idea of free trade as a panacea for any problem. The roles of the state and of civil society have been diminished, with humans seen, at best, as "consumers of government services". The result is an explosive mixture of social Darwinism-the strong survive, the weak die-and the philosophy of "after us, the deluge".
The growing crisis of the world economy is now, finally, focusing the minds of policy-makers. For understandable reasons, they are concentrating on immediate rescue measures. Those are of course necessary, but there is also a great need to reconsider the foundations of the socio-economic model of modern society-even, I would say, its philosophy. The time has come to call for combining morality and business. This is a difficult issue. Of course business must profit, or it will die. But saying that the only moral duty of a businessperson is to make money is just one step away from the slogan of "profit at any price." And, whereas in the real economy of production there is still some transparency-traditions, trade unions and other institutions-that give society some influence, the area of "financial engineering" is without such institutions. There is no glasnost there, no transparency, and no morality. The consequences have been devastating.
The alliance of politicians and businessmen, who for decades have been pressing for deregulation and spreading laissez-faire economics throughout the world, whose solution to any problem is to "decontrol everything" has been destructive and often corrupt. We saw that in Russia, where those recipes were promoted with truly manic frenzy during the 1990s. Now that this pernicious and immoral pyramid is collapsing, we must think about a model that will replace the current one. I am not calling for tearing it down without thinking, and I do not have ready-made solutions. Change will have to be evolutionary. A new model will have to emerge, and it cannot be based entirely on profit and consumerism. I am convinced that, in a new economy, public needs and public goods must play a much bigger role than they do now. The public needs are clear: the need for a healthy environment; a modern, functional infrastructure; education and health systems; and accessible housing. To build a model emphasising those will take an intellectual breakthrough. But there is one thing policy-makers who bear the ultimate responsibility for overcoming the current crisis must understand: Without a moral component any system is doomed to fail.
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