Spengler at the Asia Times looks at whether it possible to have a society in which value is determined simply by market price. He cites the then Cardinal Ratzinger’s “prophetic” prediction of what would happen when the means were decoupled from the ends.
“President Roosevelt is magnificently right,” John Maynard Keynes wrote of president Franklin Delano Roosevelt’s decision to devalue the American dollar in 1933. If any economic policy stance deserves such praise today, it is that of Pope Benedict XVI, whose views on ethics and economics occasioned a flurry of comment last month. Italy’s Finance
Minister Giulio Tremonti observed, “The prediction that an undisciplined economy would collapse by its own rules can be found” in a 1985 paper (see Market Economy and Ethics, Acton Institute) by then Cardinal Joseph Ratzinger, which Tremonti called “prophetic”. I don’t know whether it was prophetic, but the future pope was right, and magnificently so.
An unethical economy, he argued, will destroy itself, and economics cannot determine whether any activity is ethical or not. Internet stock valuations, the market delusion of a decade ago, presumed that pornography, gaming, music downloads and shopping would be the driving forces of the future economy. It is easy to ridicule this Alice-in-Wonderland accounting after the fact, just as it is easy to laugh at television advertisements that even today urge Americans to buy homes because their prices double every 10 years (for example this commercial by the National Association of Realtors posted on YouTube). But what should we say of an economy based on consuming as much as one can without troubling to bring children into the world?
The core of Ratzinger’s argument was the assertion that capitalism promised to free us from morality; that it offered the prospect of not “having to depend on the morality of its participants” that “the true play of market laws best guarantees progress and even distributive justice … and perhaps even more astounding presupposition, namely, that the natural laws of the market are in essence good (if I may be permitted so to speak) and necessarily work for the good, whatever may be true of the morality of individuals.”
But I’m not sure it is true that people looked to the markets to be the oracle of morality. What may truer to assert is that many believed it would measure our beliefs and thus obviate the need to refer to the sacred texts. Instead of the texts we would have the “wisdom of crowds” which would stand as a proxy for everything we held holy. What it did not envision was the prospect of a society in which nothing was held sacred.
If you wanted to know what was right there was no need to meditate or reflect on the tradition. All you had to do was test market an idea or take a poll. Bill Clinton was famously said to ask his pollsters what he should believe today. But it’s not the pollster’s fault nor the market’s. Just Bill’s. Today it is perfectly respectable to argue that because “six out of ten Americans oppose the war in Iraq” then the Iraq policy is wrong, just as it possible to say that since 9 out of 10 dogs like a particular pet biscuit the product is best. The market simply reflected our ethical values. Maybe the reason we don’t make time to raise children and save for their future welfare is that we don’t want it as much as “pornography, gaming, and music downloads”. Capitalism unfortunately, gives us what we want and if we don’t want what we get, we should ask the mirror.
Spengler’s greatest fear is for the future. He argues that the West is behaving like it doesn’t want to live. But then, this may be the consequence of caring only for the present. The “me generation” got its name for a reason. Spengler says we are consuming our seed corn. What’s the problem with that if we don’t care about the future? Spengler sees catastrophe coming, even for markets.
Underlying the crisis is the Western world’s repudiation of life, through a hedonism that puts consumption or “self-realization” ahead of child-rearing. The developed world is shifting from a demographic profile in which the very young (children four years and under) outnumbered the elderly (65 and older), to a profile with 10 times as many retirees as children aged four or younger. Economics simply never has had to confront a situation in which the next generation simply failed turn up.
And when nobody turns up in that barren future, everything — including markets — will die. “Markets are part of society, and if society passes the demographic point of no return, the market will die along with all other social institutions.” But is that the market’s fault? For much of capitalism’s history, including the first sixty years of the 20th century, the markets supported a growing population and indeed made it possible.
If markets are pandering to our demographic collapse by promoting buy now pay later schemes, one reason may be that our intrinsic values have changed. In the 19th and early 20th centuries, the tacit rules of Western culture — a combination of Judaeo-Christianity and rationalism — made people “value” certain activities. But when Judaeo-Christianity and rationalism were supplanted by whatever one wants to call the shapeless ideologies that have come into vogue — something we loosely refer to as post-modernism or political correctness — we no longer valued them. Cardinal Ratzinger was right to believe that values and the market place did not exist independently. Where he may be partly mistaken is believing that markets solely drive our values. They are a powerful feedback mechanism, but the circle begins with ourselves.
John Paul II often spoke of the “culture of death”. It would be a mistake to think this was a narrow reference to abortion. It really refers to a loss of belief in our own worth. Many no longer believe that our own culture is worth defending; our beliefs worth spreading; and our societies worth surviving. And if we believe this, the market will provide.
Here’s Alec Baldwin in the movie Glengarry Glen Ross describing what’s important in a salesman’s life.