Monday 22 December 2008
by: Frédéric Worms, Libération
Frédéric Worms: "If injustice is the source - even indirectly - of all our evils, justice - and first of all, its pursuit - alone may be the principle - not of some absolute good we could claim to achieve, but of what we must first defend, or rather, advance." (Artwork: "Justice," ceiling tondo, by Sanzio Raffaello ca.1509 Stanza della Segnatura, Palazzi Pontifici, Vatican)
George W. Bush's term as president of the United States opened and closed on two catastrophes, though certainly of two very different orders: September 11, 2001 and September 15, 2008 (if one chooses to date Lehman Brothers's fall that day as the real point of departure for the present financial crisis). Now, there's a commonality between these two events, and it's not the one people generally believe. It is essential to understand it with precision if we also hope to understand what we may legitimately hope from the new American president, Barack Obama.
In both these cases, in fact, the source of the catastrophe was an injustice and no remedy other than a renewed pursuit of justice will cure either of them. Certainly, this origin - in both cases also - is not an explanation, still less an excuse. In both cases, injustice went through decisive mediations before leading to catastrophe. Nonetheless, the essential point remains the following: It will not suffice to attack those intermediary mechanisms and responsibilities, however important they may be (and they are very important). We must also return to the very source itself, to the injustice and the risks it provokes - and to justice, which is not the opposite of utility, but rather its very principle.
Also see below:
The Deep Origins of the Crisis •
This is in no way "justifies" 9/11. That act, in itself an injustice that, moreover, risks leading to a virtually infinite cycle of injustice, is the responsibility of specific people who have used injustice much more than they have fought it and who must be judged. But neither is that a reason to forget - as Pierre Hassner emphasized in France immediately after the event - that such an act would not have been possible had the serious conflicts then transpiring been really subject to the pursuit of justice, had the feeling of that pursuit, that objective, been present at the heart of those conflicts (even the most apparently inexpiable) as it ought to have been. Failing to hold that discourse afterwards, aggravating things still further, even violating national and international law and rights, ran precisely the risk of creating the cycle which now must be stopped.
Nor is this about entirely explaining the financial crisis by the inequality - become intolerable - in access to housing, protection, health care, in the United States. It is certain that there also, it is not "finance" in general, but certain specific mechanisms, certain specific practices, certain specific actors that are responsible and guilty. It is even possible, as recent Nobel laureate Mr. Yunus has shown at another level with "microcredit," that lending may be a real way out of poverty. Yet, all the same, how can we not see that here also and again, there is an injustice that also finally led to catastrophe? How can we not see that the "confidence" so-longed-for was shaken first of all among those who were not rescued when their most essential needs were not met? How can we not see, there also, a virtually indefinite cycle of injustice?
So, there is in both these cases a question concerning what is just and what unjust, a political question, at the source - although indirect - of certain major shocks we are experiencing.
Consequently, there is now an opportunity it is urgent to respond to. I'm certainly not talking here about a miracle solution, about the definitive contents of this justice discourse. What's necessary is to avoid the worst by beginning, first of all, that justice discourse. If I had to get somewhat more specific, then I'd say this: that the justice discourse not only conflicts with a discourse of force or power; it also consists of helping the weak and self-limiting power. It contrasts first of all with force: It consists, in fact, of acknowledging the other and the conflict with the other, and not in trying to eliminate them. But it goes further. It seeks, in the first place, to rescue the weak. In that regard, it's not only a pursuit of equality: It is supportive and connecting, active and responsible - in solidarity. Finally, it self-limits power: In other words, it submits power to a common norm, to absolute interdictions that are not arbitrary and abstract rules only, but, essentially, a way out of war.
Such is the discourse of justice that we have finally begun to hear once again. It was necessary to attempt to detail it here, since, if injustice is the source - even indirectly - of all our evils, justice - and first of all, its pursuit - alone may be the principle - not of some absolute good we could claim to achieve, but of what we must first defend, or rather, advance.
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Translation: Truthout French language editor Leslie Thatcher.
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The Deep Origins of the Crisis
Saturday 20 December 2008
by: Eric Pineault, La Presse
The recent announcements of suspensions, production slowdowns and business closures confirm that what had been a financial crisis only has become an economic crisis, the impact of which will be deep and long-lasting.
In such a scenario, all economic actors are going to reduce their activities and defer their investment projects until later, even as they desperately pursue liquidity. The measures that have been envisaged to respond to the crisis up to this point (reduction in interest rates, loan guarantees, recapitalizations of certain big companies and financial institutions) are necessary to avoid the system's complete collapse, but cannot guarantee a viable recovery. The acceleration of public spending on infrastructure may also help to avoid the worst, but the public investments announced up until now are perhaps still too limited to break the deflationary/depressive cycle.
Certain people believe that a return to "normal" would be possible to the extent banks and companies manage their liquidities prudently. The way out of the crisis should pass through a clean-up of household and company balance sheets in the form of an increase in the savings rates. In the long run, that would guarantee a recovery of consumption to the level experienced in the last two decades.
It is important to recall, growth in North America rests essentially on the rhythm of household consumption. Now, most commentators on this question omit consideration of one reality at the origin of the actual crisis from their scenarios.
The Link between Indebtedness and Income Stagnation North American households' role as "consumers of last resort" constituted itself in a context of the stagnation of their real salaries; that is to say, the income of the vast majority of employees has not progressed at the same rate as economic growth over the last 30 years. That has, among other things, allowed companies to rake in significant profits they then invested in financial markets and kept in liquid form to the point that over ten years in Canada and the United States, the big companies' sector had become - right up to the threshold of the crisis - an overall creditor rather than a debtor.
Households were able to play their role as guarantor of economic growth solely by way of an exponential progression in their indebtedness. A progression that the inflation of their real estate assets temporarily veiled and that the securitization of their debts by banks gave a temporary appearance of viability. To desire households to maintain their economic role as consumers of last resort by demanding that they adopt aggressive savings' practices, is profoundly contradictory and highlights the extent to which the fundamental question is taboo.
As Keynes highlighted 70 years ago, an economy cannot grow if it is split by significant inequalities in income. We shall eventually have to pose the question of the level of ordinary household salaries and the security of their incomes if we wish to reestablish growth based on their consumption which, at the same time, cleans up their balance sheets and frees them from a significant rate of indebtedness.
The present crisis should lead us to review the distribution of income between company profits and the level of salaries, as well as those market mechanisms that dig an unsustainable gap between the stagnant incomes of a majority of employees and the upward explosion in the incomes of a minority. For these, in our estimation, rather than the cupidity of some and the negligence of others, are the factors at the origin of the crisis.
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The author is a professor in the sociology department at UQAM and director of research for the Globalization, Citizenship, and Democracy Chair.
Translation: Truthout French language editor Leslie Thatcher.
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