Public debate: Economy and ethics in crisis

Eurozine News Item

The third in the series of public debates “Europe talks to Europe”, co-hosted by Eurozine and the Romanian cultural weekly Dilema Veche in cooperation with the Erste Foundation, took place at the Romanian Cultural Institute in Bucharest on 31 March. Guest speakers were Austrian author and journalist Robert Misik and Romanian economist and former minister of finance Daniel Daianu. Entitled “Economy and ethics in crisis”, the debate asked into the ethical and political implications of a globalized economy. Does the financial crisis mark the end of neoliberal politics? Has the failure of political and economic structures opened up a new-old east-west divide in Europe?

On 31 March, Austrian writer and journalist Robert Misik and Romanian economist and former Minister of Finance Daniel Daianu met in Bucharest to discuss the causes of the recent financial crisis and what conclusions can be drawn from it.

Not trying to hide his dismay, Daianu described the financial crisis as both the result and the manifestation of a moral failure in the economic sphere. The development in the last few years has dealt a severe blow to the view that economy and ethics have nothing to do with each other. If we cannot rediscover the moral compass that got lost during the decades of de-regulation and private greed, we are heading for social catastrophe, since both Europe and the US are entering a period that will be characterized by significantly less growth than we have been used to in the past. “Unless more people rediscover the sentiments of shame and guilt, which are basic ingredients of the social glue that makes society function, we will face even bigger problems in the years to come.”

But all economic systems are based on some sort of ethical ideas, Misik replied. This also holds true for neoliberalism, which not only said that the homo economicus should maximize his material profit, but also that his “private vice” will in the end be transformed into a “public virtue” when everyone is better off. Good, if it was true. The problem is it wasn’t.

There might also be good reasons to separate moral sentiments from economics, Misik continued. In economy things have to work, that’s the bottom line. The fact is that history shows that the more equal a society is, the better it works, both economically and as a society.

When moderator Mircea Vasilescu, editor-in-chief of Dilema veche, asked whether the financial crisis has opened up a new divide between western and eastern Europe, Dainu protested loudly. It might very well be that the crisis initially re-awoke perceptions in the West of eastern Europe as unruly and unpredictable. But today the concerns lie elsewhere. The real and much more dangerous dividing line runs between the relatively stable economies north of the Alps and the southern members of the Eurozone. Countries such as Poland and the Czech Republic are in economic terms not so different from Germany or Austria. And though Hungary and Romania have problems that should not be underestimated, they are rapidly adapting. Greece, Spain, Italy and Portugal are the problem children of today, not the new member states.

The good news, said Daianu, is that many of the economies in eastern Europe are perfectly compatible with the core of the Monetary Union, or at least much more compatible than some of the countries in the South. The bad news is that the North-South divide threatens not only the Monetary Union, but could also lead to “a complete breakdown of the European Union as a whole”.

About Indah Sri Wulandari

Gerak Ekonomi untuk Daulat Kemanusiaan Lihat semua pos milik Indah Sri Wulandari

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