Amerika

Joschka Fischer, the former German vice-chancellor, has issued a bleak assessment of Europe’s prospects for surviving the financial crisis, warning that leaders of a “self-weakening” continent are failing to come to grips with its decline.

“Modern capitalism is based on a global ponzi scheme,” he said. “There is no quick fix to this very severe crisis. It will transform global reality in a similar way as the collapse of the Soviet Union transformed the global system 20 years ago.”

Global power was shifting from West to East, “and it’s completely short-sighted to believe that other powers will look after our interests”, Mr Fischer said in a speech to the London School of Economics.

As Eastern EU economies crumbled, “there is a serious question mark: whether richer European economies understand that they must contribute to the refinancing of those economies. Otherwise, enlargement is in danger… [and] we will invite other powers to play games in a very unstable and insecure situation. I’m not talking just about the economy, but about peace and insecurity on the European continent.”

The Telegraph

He’s right about so much and wrong about the rest, especially the solutions.

First, this is a recession, not a complete failure of the capitalist system. Capitalism acts as it always has, but when you pile enough restrictions, government programs, etc. into it, it is much less consistent. Periodically it re-adjusts to make value more closely match reality. We all knew American consumers had a giant debt bomb waiting for us; why are we surprised when it explodes?

Second, capitalism is not my favorite value system because the idea of “if it makes money, it’s good” is misplaced social darwinism. There needs to be some value system that guides society at large, and to whose end capitalism serves, otherwise it becomes people with a pretense of freedom indulging an ethic of convenience. America has become more of a giant open-air mall since the Clinton years.

Third, it was a leftist program of lending to minorities that created this mess; lending to more impoverished populations in the east won’t help.

Fourth, what’s killing Europe is not capitalism. It’s general civilization decline as described by Plato in The Republic. That’s a bigger topic than can be handled here.

He’s right the economy is a Ponzi scheme. This is why usury used to be considered a sin. But the solution is not to try to bundle east and western Europe together — it’s to get serious about our society, kick out what failed and plunge ahead with what will succeed. And that’s not a soundbite-able statement.