Excessive abstraction is the root of our current problems.

[Xyan]

The impact of the financial crisis that started with defaults in the subprime mortgage market in the United States, leading to the bankruptcy of the U.S. investment bank Lehman Brothers, has now spread to encompass the whole world.

The present crisis inevitably provokes associations with the nightmare of the 1930s, when a severe economic depression created the conditions for the global conflagration of World War II. The situation remains fluid and unpredictable, and there are growing signs that the financial crisis is undermining the real economy, bringing about a global recession and driving up unemployment.

The main cause of the crisis can be traced to the rampant dominance of speculative financial assets, whose scale is said to be four times the cumulative value of actual goods and services. The origin of the crisis is found in the fact that the financial markets, whose true function should be to support and lubricate other economic activities, have thrust themselves to center stage, with market players becoming the "stars" single-mindedly pursuing earnings and profit, often with no thought for the impact on others.

As I have pointed out in these proposals on a number of occasions, the deepest underlying root of the crisis is the love of money itself, of currency, the global Mammonism that constitutes an essential pathology of our contemporary civilization. The currency that controls and dominates market economies has, of course, virtually no use value, it has only exchange value. And exchange value stands only on the foundation of understanding and agreement between people; in its essence it is both abstract and anonymous. It is not directed at such concrete (and therefore finite) objects as real goods and services; thus, as the object of human desire, it has no real or inherent limits.

Soon after the end of World War II, the French existentialist philosopher Gabriel Marcel offered a penetrating perspective, examining the "spirit of abstraction" as a key causal factor in war. While the ability to develop and manipulate abstract concepts is indispensable to human intellectual activity, to Marcel the spirit of abstraction is destructive, a process in which abstractions are alienated from concrete realities, taking on a life of their own.

For example, it is only possible to participate in war if we first deny the individual character and humanity of the opponent--reducing him or her to an abstract concept such as fascist, communist, Zionist, Islamic fundamentalist, etc. Without this kind of reductionism, it would be impossible to justify or find meaning in one’s participation in war.

When looking at the present financial crisis, we have to ask if we as a society have not been caught up in this spirit of abstraction. Have we not fallen prey to the Medusa-like spell of the abstract and anonymous world of currency, losing our essential human capacity to see through to the underlying fact that--however necessary it may be to the functioning of human society--currency is nothing other than an agreement, a kind of virtual reality?

If, for example, a company loses sight of its public aspect of contributing to the larger society, and serves only the private interests of its stockholders--their insistence on short-term profit--it will relegate to secondary or even tertiary importance its concrete connections with the real world of real people--whether these be management, employees, customers or consumers.

We must find ways of applying the brakes to the runaway aspects of financial capital. We also need to take swift and bold measures, such as fiscal and financial support and strengthening social safety nets, in order to respond to the dramatic slump in corporate performance and the accompanying rise in unemployment.

In this sense, it is especially vital that we keep in mind the global dimensions of the issue of poverty, which threatens the opportunity for meaningful work that is a core human activity, and on which hinges the sense of purpose and hope that are vital to human dignity and the survival of society. We must put all our energies into engaging with this critical issue.

At this crucial juncture, it is especially essential that political leaders exercise their talents for the greater good and from a broad and impartial view, as the state and the political system have a large role to play in taming the runaway stallions of capitalism. At the same time, we must absolutely heed the lesson of the 1930s, in which an excess of state control was intertwined with the rise of fascism.

The time has now come for a new way of thinking, for a paradigm shift that will reach to the very foundation of human civilization. During the Great Depression 80 years ago, socialism offered an alternative paradigm to capitalism, something that is lacking today. While socialism, and in particular Soviet-style communism, cannot today be considered a viable antithesis to capitalism, if we accept the premise that we are facing a crisis of modernity itself--modernity as a system which has capitalism and democracy at its heart--then the imperative to discover a new perspective and principles becomes all the more pressing.

While immediate measures must of course be taken to help avert a further deepening of the financial and economic crisis, we cannot settle for merely remedial measures. We must also work to find a principled worldview that can function as a "lever" to change the direction of history itself. For better or for worse, the processes of globalization have reached the point where this kind of fundamental response is required.

Full article at http://www.sgi.org/peace2009sum.html

 

[Perfection]

I don't think it's abstraction, it's just people being greedy jerkfaces.

 

[Mise]

Can someone summarise this into a 300 word abstract please? Fanks!

 

[Godwynn]

Can someone summarise this into a 300 word abstract please? Fanks!

That'd be a big distraction.

 

[warpus]

If, for example, a company loses sight of its public aspect of contributing to the larger society, and serves only the private interests of its stockholders--their insistence on short-term profit--it will relegate to secondary or even tertiary importance its concrete connections with the real world of real people--whether these be management, employees, customers or consumers.

I'm sorry, but how many companies out there have "contributing to society" as a major driving force behind what they do?

99.99999% of companies out there are just trying to make as much money as possible; that's the nature of capitalism.

I get what the guy (who wrote the article) is trying to say, and he isn't really wrong.. but he isn't really right either.

We're having problems because people are greedy. This greedy-ness has created strange levels of abstraction as a consequence. The abstraction isn't the cause here - it's a product of greedyness.

America is sort of founded on this principle though, so I don't see it going away anytime soon. Paradigm shift talk all you want, everyone wants to get back to the status quo, instead of re-inventing society.

 

[Sidhe]

The route of our problem is greed, compounded by risky capital ventures and over lending to people who can't afford it. I wish they'd stop trying to read too much into this. At least the educated economist admit that the economy is predictably unpredictable, and no one knows if anything is going to work. Still I've always said you don't go into business if you are that clever, you go to Harvard and tell everyone else they are idiots.

Last night though I watched some two bit professor of Economics try and blame it on the Newspapers to some serious extent because they warned people a year ago. He was trying to make out it was a self fulfilling prophecy and it seriously dented consumer confidence, despite the fact that just about everyone saw it coming, if not a year ago, at least 6 months ago. Lame, who is to blame, finance, simple as.

 

[GoodGame]

Can someone summarise this into a 300 word abstract please? Fanks!

I'm gathering it says "financial derivatives are bad and risky". That is not news. And many financial gurus are big dumb fatheads.

The main cause of the crisis can be traced to the rampant dominance of speculative financial assets, whose scale is said to be four times the cumulative value of actual goods and services. The origin of the crisis is found in the fact that the financial markets, whose true function should be to support and lubricate other economic activities, have thrust themselves to center stage, with market players becoming the "stars" single-mindedly pursuing earnings and profit, often with no thought for the impact on others.

And then it goes on to say 'Money love is bad, love they neighbor', 'Socialism good, Capitalism bad', and finally we should embrace a new catchword "Humanitarian Competition" rather than capitalism. And finally it advertises the author and their happy humanitarian research institute, that the author founded. But remember, capitalism bad.

 

[Brighteye]

Where it says what we already knew, it's right. We knew it already though.

 

[Mise]

Thanks GoodGame, I shalln't bother reading it in that case

 

[GoodGame]

It does have a couple of interesting world peacenik ideas on abolishing nukes, tragedy of the commons, etc... but if you been to school, you already knows them.

 

[Masquerouge]

I'd say the fact that we totally suck at long-term planning is the root of our problems.

 

[Irish Caesar]

It's not that we suck, it's that we just don't care.

 

[Masquerouge]

It's not that we suck, it's that we just don't care.

fair enough. Our suckage is indeed the direct byproduct of our apathy.