The death of the gods: Crisis shatters the myths of the market

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By
Max Castro                                                                      Read Spanish Version

majcastro@gmail.com

In
1950, at the start of the Cold War and toward the end of Stalin’s
rein in the Soviet Union, six leftist writers — André Gide, Richard
Wright, Ignazio Silone, Stephen Spender, Arthur Koestler and Louis
Fischer — collaborated on a book (The
God that Failed)
in which they related their conversion to and disillusion with
communism.

“The
God that Failed” would be an equally apt title for a work that
would describe events of the last few months in the global economy.
For, in a matter of a few weeks, a major deity has bit the dust, the
myth of the Market as an infallible engine of wealth creation and
economic allocation to be interfered with at one’s own peril.

Never
mind that the state (and not God’s invisible hand) always has been
the essential element underpinning and supporting this alleged
divinity, the Market. It’s too bad, mere collateral damage, if the
implacable laws of laissez-faire mean that the many who work for
their money will earn little while the few whose money works for them
will make out like bandits.

The
divine right and righteousness of the market is beyond question. What
are, after all, 45 million without health insurance in the United
States — or many times that number in Africa, Asia, and Latin
America — who die of infectious diseases and malnutrition every
year? Call it what you will, the luck of the draw, the way the cookie
crumbles, or the law of supply and demand. Just don’t call it a
disaster, a systemic birth defect, or a crisis.

A
crisis is when the stock market takes a nose dive almost every day. A
crisis is when the biggest fish in the pond — Lehman Brothers, AIG,
General Motors, Citigroup — drown or are in danger of drawing their
last breath.

This
is a disaster of such proportions as to shake the faith of Alan
Greenspan himself, the Maestro of the Market Mythology. It is a
breakdown of such magnitude that it even justifies suspending the
illusion, in effect making the invisible hand visible — to the tune
of three-quarters of a trillion dollars.

Ever
since the era of Reagan and Thatcher, the masses have been taught —
indeed with some effectiveness here and the world over — that
messing with the Market and printing and handing out cash are
cardinal sins, fools’ errands, major mistakes. Now that the veil
has been lifted, that the magician has revealed his tricks, what are
the mythmakers going to tell the people when they clamor for medicine
that is not mercenary, schools that really teach, water that is
really clean, air fit to breathe? Are our rulers going to say that
there is no money when the money that is never available for vital
needs appears like magic when it comes time to bail out the biggest
gamblers, the most reckless players of all?

In
his latest book, (The
Upside of Down:
Catastrophe, Creativity, and the Renewal of Civilization),
Thomas Homer-Dixon, a professor in the Faculty of Environment at
University of Waterloo, argues that the enormous problems facing the
world will be tackled successfully only after a major systemic
breakdown of such a scale that it sweeps away the multitude of vested
interests that, under normal conditions, would block any and all
significant structural transformations. Have we reached that point
now? Are we on the way there?

The
least that can be said is that the current crisis, and especially the
spectacle of massive government intervention in the economy, has put
seven-hundred-fifty billion dents in the myth of the omnipotent,
flawless, hyper-efficient Market. We are living in a moment of great
irony and potential, a moment in which the desperate actions of the
high priests of the religion are shaking and shattering their own
icons.

Let
us seize this instant, in which the institutional and ideological
edifices that seemed eternal are collapsing before our very eyes,
sweep away the debris left by the dying paradigm, and build a New
Democracy more consonant with our human dreams, needs, and
possibilities.