This is a very interesting essay by Philip Goodchild regarding the current economic crisis. Goodchild looks at the current crisis from a philosophical viewpoint and, of course, reveals that economics is philosophy. The day is over that anyone should think of any area of knowledge as a “science.” There is only philosophy revealed in different lexicons. Thus art or narration reigns supreme. Such is the only thing that saves the “facts” and makes any event, movement, or observation significant.
Here are some interesting quotes:
So the financial crisis is also ‘apocalyptic’ in the ancient, biblical sense: it is a disclosure of underlying powers. Political decisions have been shaped by economic forces. Far from a return to state sovereignty over economic affairs, the current crisis discloses the submission of the state to economics forces, often in complete opposition to the ideology of state leaders involved. The global financial system exercises its power of coercion through its own fragility. It is this predicament which discloses the problem I wish to consider here: What is the significance of this strange power of coercion that is exercises through weakness?
So our modern world has not been built upon knowledge alone. It has also been built upon promises. Markings on coins, paper currency, account books, bank statements, credit ratings, balance sheets and price charts have been essential because they record temporal expectations and promises. Human civilization has been constructed on the basis of faith in promises, that is, in terms of powers that are not demonstrable and cannot be subjected to experimental proof.
Whenever we take the most profitable course of action, we evaluate the world in terms of money. Money, as a unit of account, becomes a medium through which we think…rational conduct is expressed in determinate acts of sale or purchase at determinate prices. Now the value of money is not empirically evident: no one has ever seen or touched a dollar…
As George Cooper puts it: ‘There is no more powerful mechanism for the short-term amplification of corporate profits than to persuade some element in the economy—government, household or corporation—to spend above its income. Conversely, there is no surer way to erode corporate profits than to permit one of these groups to save their incomes.’ The economy is driven either by Minsky’s ‘paradox of gluttony’ or by Keynes’ ‘paradox of thrift’, without there being a stable equilibrium point. While it is theoretically possible for central banks to ensure some stability by controlling credit, forcing the economy to oscillate between these two, the economy as a whole cannot operate without an adequate supply of fresh credit. Overall, any engineered stability remains within a longer-term credit bubble. Excess credit can only be removed, in the end, by default and inflation, transferring wealth from the prudent to the reckless.
…The value of money is transcendent: it is a promise, taken on faith, and only realized to the extent that this faith is acted out in practice in contractual exchange.
That last quote reveals why our age is one of the most faith-based and religious of all ages. Too bad the false god of this age demands an endless sacrifice of natural resources, consumer debt, and empire backed by the threat of violence; and in return we get bright blinking lights, plastic smiles, surface celebrity, and shallow diversions. If you want to know what the future looks like for the modern west without any course changes, simply envision Las Vegas writ large.