More to life than money

2009-03-10 00:00

AS a youngster I was a keen stamp collector. I loved the orderly layout on the page and what the stamps could tell me about faraway places. But most people simply asked, “So what are they worth?” Quite early on I learnt a valuable lesson in economics and life: in monetary terms they were worth absolutely nothing except what someone was willing to give me for them.

A similar realisation will have occurred to millions of people in the current world economic meltdown: much of what we think of as wealth is virtual, not real, and simply a reflection of confidence. Politicians and commentators are putting a brave face on it, but gradually extending their forecasts about the promised upturn. The scale and pace of what has happened may indicate that we are being hoodwinked. There are indications that this might not be just a cyclical downturn, but a fundamental crisis of confidence in the management of the capitalist system.

In the sixties, progressive politics and economics embraced social democracy and government planning in the name of human rights. Thatcherism and Reaganomics put paid to those ideas in the eighties and established the orthodoxy of the last three decades. But now the bankers and businessmen who banged the drum of unrestricted free enterprise are screaming for — and receiving — bailouts right, left and centre. Financial services in the Western world are quietly being nationalised. Manufacturers who despised regulation now demand that their businesses be subsidised.

It should be comeuppance time for the financiers who thumbed their noses at regulation; and the yuppies who thought that by the time they were 25 they could earn what many hard-working, well-qualified people would never receive in a lifetime. Many of those entrusted with the earnings of millions of trusting people have turned out to be little more than crooks who thought they could turn water into wine; and that morality and social responsibility, never mind the rules of honest banking, did not apply to them. It’s a story of greed and living beyond one’s means, all sanctioned in the name of economic growth.

And how do the world’s finance ministers plan to cope? First, they have become de facto socialists without admitting it. The free market is sacrosanct until those who routinely abuse it are caught out. Second, they intend spending their way out of recession, not on socially productive public works as happened in the Great Depression, but on consumer goods. In short, they are intent on solving a problem by repeating the mistake.

There are significant absentees from the debate: the elderly living off pensions and savings spring immediately to mind. After years of toil and prudence some have seen their assets dwindle to nothing. Interest rates near to zero encourage spending by young earners, but do nothing for their retired grandparents or anyone keen to save. This is a crazy, short-sighted way to run the world’s major economies.

In the United States millions of dollars in state subsidies are being thrown at the car industry and the same is about to happen in South Africa. All this in a world that needs far fewer cars, not more. Why is the crisis not being used by governments to push the use of two-wheeled vehicles and mass transit systems?

Living beyond one’s means has not only discredited the financial system, but also damaged the environment. Belated efforts are being made to harness cleaner forms of energy, but the great god of economic growth is paramount. Sustainability is generally a postscript. Maybe recession will force enough minds to think more seriously about the global food crisis, the consequences of wasteful travel and mass consumption of unnecessary goods, and the importance of recycling. With luck it might bring to an end the obscene amounts of money paid to sports people, others in the business of entertainment and all their hangers-on.

The political consequences could be monumental: food riots have already broken out among the desperate in so-far obscure corners of the world. It will be worth watching European countries like Greece and France where violent street protest is a political tradition. We are almost certainly witnessing a deserved end to the philosophy of those right-wing radicals, Margaret Thatcher and Ronald Reagan, who masqueraded in the clothes of political conservatism — an honourable tradition — while cynically laying waste to worthwhile institutions and moral standards.

And with their narrow value system dead and buried we might get back to thinking about the important things of life rather than the superficialities of lifestyle.

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