Crisis as an Opportunity

In medicine, diagnosing an illness is considered a good thing. It allows us to pinpoint the problem and treat it. The same applies to the economy. The economic and financial crises are global, affecting virtually every country in the world. It is hard to estimate the overall damage wrought by the crisis, as we are nowhere near its end. However, it is clear that the crisis is a continuation of the downturn of 2008, and has emerged as the greatest economic and financial challenge the world has faced since the 1930s’ Great Depression. How governments, federal banks, and international financial institutions handle this evolving, expanding crisis will have a major impact on the future of the planet...

The Great Depression of the 1930s and the failure to resolve it with the paradigms of classical economics led economist John Maynard Keynes (1883-1946) to develop the Keynesian model. This model asserts that to assure economic growth, there must be active government intervention in the financial markets...

The global crisis has put two of the tenets of capitalism to a test—one they seem to be failing. Those tenets are 1) that supply and demand balance themselves, and 2) that by working in one’s own interest, an individual actually benefits the public. To pinpoint the issue let’s return to the origins of capitalistic thought...

One example of the influence of human interconnectedness on economic dynamics is called “negative externalities.” This term describes the cost inflicted upon others by an action to which those affected have no connection. Thus, if a factory pollutes a nearby lake, killing the fish in that lake, it inflicts harm on the fishermen whose livelihoods depend on the fish in the lake. This is a negative externality...

The failure of capitalism, as expressed in the current crisis, demonstrates our urgent need to build a new economic paradigm. The heads of the Organization for Economic Co-operation and Development (OECD) and the International Labor Organization (ILO) recently issued a warning that “The overall number of unemployed is still at 200 million worldwide, close to the peak recorded at the depth of the Great Recession.”...

The new world is pushing people closer, forcing us to care for one another in genuine solidarity, and to rethink aggressive competition and excessive consumerism. This crisis is leading us, kicking and screaming, into harmony with the laws of the global-integral system...