The economy is a reflection of our social relations. Hence, the crisis in the economy is first and foremost a crisis in our interrelations...
According to classic economics, people aspire to maximize profits for completely egoistic motives. The 17th century British philosopher, Thomas Hobbes, put it this way: “Every man is presumed to seek what is good for himself naturally, and what is just, only for peace’s sake, and accidentally.” That view, which is still prevalent, asserts that social behavior is merely an after-the-fact result, and that our forefathers made social treaties only for the profits they yielded, not because they were drawn to each other’s company...
If we understand the critical impact that the nature of people’s relations has on the economy, we will understand the kind of economic system that we must build in order for it to carry out its roles effectively and maintain its stability. When the economic and financial systems adapt themselves to the global-integral world, where economic ties cross borders and firms, and where people depend on and affect one another, it will stabilize the socioeconomic system...
People cannot exist without regard to society. As social beings, we are compelled to live among people, be assisted by them, and contribute our share for the common good...
It is through commerce and exchange that today’s economy has evolved. This economy is driven by humankind’s egoism, which strives to profit, even at the expense of others. One person may be a farmer, another may be a manufacturer, and by connecting, they both benefit. This is why we have built all our connections in parity with our egoistic nature. In the past, it involved the exchange of products without the use of money. Later, we learned to use coins of precious metals, and then paper notes that represented the financial value of the one who issued them...
This crisis is expressed in our approach to the world and to society. The crisis is within us and in our interrelations. Nature works in harmony and balance, and now it is up to us to change ourselves and how we relate to others. As a result, the systems we have built, including the socioeconomic system, must be balanced and harmonious, as is Nature...
A more systemic explanation of the root of the crisis is that the world has become global and connected. Every system, including economic and social, is linked to another, affects one another, and is affected by one another. The money markets, for instance, are a single global system. Therefore, whatever happens in the U.S. affects Europe and the rest of the world, and vice-versa. The stock markets have long become a global barometer that expresses our hopes, our despair, our crises, and our growth...
By and large, the rise of a new economic system has taken humanity by surprise. In the past, we built connections and social and economic systems to match our needs and the way in which we interrelate. Now, suddenly, these systems seem insufficient to manage our lives so we can live in peace and comfort. Instead, the global-integral system seems to have its own laws...
At the end of the day, the network of connections between us determines everything. That network is spread out throughout the world, and consists of many elements—countries, armies, funds, raw materials, religious denominations, social ties, hopes for the future, and so forth. All are parts of that network among us, which is why that concept is so difficult for us to grasp... For now, those who can grasp it are those profiting most from it...
The toolbox of classical economics is inadequate for our time, and our antiquated thinking is driving us even deeper into the current crisis. Clearly, this must be changed, as Joseph Stiglitz, Nobel Prize laureate in economics, said in a lecture at the 4th Meeting of Economic Sciences at Lindau, “The standard macroeconomic models have failed by all the most important tests of scientific theory. They did not predict that the financial crisis would happen; and when it did, they understated its effects.”...