Three messages from the crisis

Comments - Banks, Europe, use of resources

by Luigino Bruni

published on Avvenire on 28/12/2011

logo_avvenireFinance and the economy are too important to be left with financiers and economists. I believe this could be summed up with the message that comes from the second and conclusive part of 2011. We noticed, and with more force than the first phase of the crisis (2008-2009), that the stock market indices and the “spread” are not distant affairs and are matters for experts, but are able to change the governments, our family budgets, and our life plans. So we all must address this situation, ‘living’ ever more in these places because if they remain inhabited by the citizens for a long period then they become inhuman. This crisis sends us three specific messages. The first relates directly to the banking world. Recent studies (University of Ancona: mofir.univpm.it), revealed that after September 15, 2008, banks have reduced lending to businesses, also to those virtuous.

This apparent inefficiency depends on the distance of the place where decisions are made and where the business operates. Banks are more distant and do not have the knowledge of the area, therefore the decisions are handled by objective indicators that do not show essential things that become visible only to the eyes of those who live in the area and know the people by name.

The first message that comes to us then is the need to ‘reduce the distances’ between the places of decision making and the places of living. Then a financial policy critique that strongly wanted the concentration of banks of those big, remote, and anonymous that has been the watchword of the last two decades. It is interesting to note that local banks are holding up better to its vocation in the crisis. All this suggests a kind of golden rule: give citizenship rights in everyday small and fragile relationship (waste time with the customers, invest resources in relationships that are not always financially rewarding, etc.), which makes them less fragile when big crises arrive. Instead, do not accept these fragile daily ‘crises’ because they make the institutions more fragile in front of the big crises.

Then there is a second clear message regarding Europe, who is now living the deepest crises since its foundation. If no one will put a hand on a true political union, the Euro will not stand much longer. Today, however, they are lacking the great statesmen of the postwar period, and their place can and should be occupied by citizens. It is up to them, it is up to us all to ask, from the bottom and with greater force, to have a more regulated politics and finance.

Finally, the third message: there is something wrong with capitalism which we have given life, especially in the West. This ‘something’ has nothing to do with finance and perhaps not even with the economy, because it plays on a much deeper level of our culture. The crisis we are experiencing is like a fever, an indication that something is amiss in the body. Because fever lasts for a long time and temperature rises, it should be taken seriously. There are at least two pathologies that are cared for. In the last decades we have robbed the environment, hurt it and humiliated it. Within just a couple of generations we are consuming a wealth of oil and gas that the earth has generated in millions of years, and in depleting these assets we are also hurting the atmosphere. All this says that we have messed up one of the foundational relationship of our existence, that with the earth and nature. And when an important relationship like this does not work, it is impossible that the other relationships work, as shown by the growing intolerance in our cities, increasing solitude, and how the relationship still largely shows the marauding with the resources of the African people, where every day they perpetrate new ‘slaughter of the innocents.’ The second cause of the fever is the growing economic inequality in the world, also thanks to the finance revolution. Without economic inequality, that does not only play on the profitability axis but also on work, the principle of equality is too abstract because people cannot achieve the life they want to live. Equality is the second word of modern triptych, and denying it signifies denying also the other two, for equality, liberty and fraternity have to be together or not one is authentically achieved.

Europe will rediscover itself if it will be able to give life back to Humanism of three dimensions, from which will also bloom ‘public happiness’ at the center of the program of Modernity. As Antonio Genovesi, an eighteenth century economist from Naples, reminds us, “it is the law of the universe that we cannot make our own happiness without making that of the others.”

All of Luigino Bruni's comments on Avvenire can be found under Avvenire Editorial.

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