Monday, November 28, 2011

The Great Perversion

Leonardo Boff's weekly columns are available in Spanish from Servicios Koinonia and in Portuguese on his blog. Some of his older columns are available in English at

by Leonardo Boff (English translation by Rebel Girl)

To solve the economic and financial crisis in Greece and Italy, governments of technicians alone without the participation of politicians have been formed, as required by the European Central Bank. It was based on the illusion that it's an economic problem to be solved economically. Those who only understand economics end up not even understanding the economy. The crisis is not one of a mismanaged economy, but of ethics and humanity. Both are closely related to politics. So the first lesson in basic Marxism is to understand that the economy is not part of mathematics and statistics, but a chapter of politics. Much of Marx's work is dedicated to dismantling the political economy of capital. When a similar crisis to the present one happened in England and a technical government was created, Marx harshly criticized it, mocking with irony, as he foresaw a total failure, as indeed happened. You can not use the poison that created the crisis as a remedy to cure it.

To direct the governments of Greece and Italy respectively, they have called people who belong to the high ranks in banking. The banks and stock markets have been those who have caused this crisis that almost destroyed the entire economic system. These guys are like the fundamentalist Taliban: they believe in good faith in the tenets of free market and the stock game. Where in the universe is the ideal of "greed is good" proclaimed? How do they make a habit (and, let's also say, a sin) a virtue? They are sitting on Wall Street in New York and in the City of London. They aren't foxes guarding the chickens, but devouring them. Through their manipulations they have transferred vast fortunes into a few hands and when the crisis exploded, they were saved through billions of dollars taken from workers and retirees. Barack Obama was weak, leaning more towards them than towards civil society. With the money they received, they continued the spree, since the promised regulation of the financial markets remained just on paper. Millions of people are unemployed and in precarity, especially young people who, outraged, are filling the streets against greed, social inequality and the cruelty of capital.

Are people whose minds have been formed by the catechism of purely neoliberal thinking going to get Greece and Italy off the hook? What's happening is the sacrifice of a whole society on the altar of the banks and financial system.

Since most of the establishment don't think (they don't need to) we will try to understand the crisis in the light of two thinkers who, in the year 1944 in the United States, gave us an illuminating key. The first was the Hungarian-Canadian philosopher and economist Karl Polanyi in his classic work The Great Transformation. What is it? It's the dictatorship of the economy. After the Second World War that helped to overcome the Great Depression of 1929, capitalism accomplished a master stroke -- it canceled politics, sent ethics into exile, and imposed the dictatorship of the economy. Since then, there hasn't been a society with a market as there always was before, but a market society. Economics structures everything and makes everything a commodity governed by cruel competition and shameless profit. This transformation ripped social ties and deepened the gap between rich and poor within countries and internationally.

The other is a philosopher of the Frankfurt School in exile in the United States, Max Horkheimer, who wrote The Eclipse of Reason (1947). There, the reasons for Polanyi's Great Transformation are given, consisting mainly of this -- reason is no longer guided by the search for truth and the meaning of things, but is held hostage by the production process and reduced to a merely instrumental role -- "transformed into a merely tedious mechanism to register facts." He laments that "justice, equality, happiness, tolerance, judged for centuries to be inherent to reason, have lost their intellectual roots." When society eclipses reason, it becomes blind, loses the sense of being together and is stuck in the quagmire of individual or corporate interests. This is what we have seen in the current crisis. The most humanistic Nobel Prize winning economists, Paul Krugman and Joseph Stiglitz, have written repeatedly that the players on Wall Street should be in jail as thieves and robbers.

Now, in Greece and Italy, the Great Transformation has acquired another name -- it's called the Great Perversion.

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