"Freedom of enterprise" or "freedom of the market"?

16:10 04.03.2010 • Armen Oganesyan , Editor-in-Chief, International Affairs

Part Two: "The man in the boa hat"


"The elephant in the boa hat," was drawn by a little prince and resembled an ordinary hat, touching in its naivety the correctness of the child's drawing. "The man in the boa hat" is a scary, but prophetic dream of today’s world. Today Gogol would more likely to have exclaimed: "it is stuffy to live in this world, gentlemen!" However, one can get used to the stuffy atmosphere ... And therefore of particular interest to us are the people, or rather, those of their thoughts, which were born in the unclouded atmosphere that failed to absorb the miasma of the stuffiness of the mind.


Some of them were born in the time whose spirit reminds you of our time. I am referring to the years on the eve of the First World War before the storm, in the atmosphere of "total scientific, philosophical and religious unrest, which increasingly covered the world of humanity" when "the old barriers were breaking which before had hermetically partitioned off different areas of thought, and " rapid "changes in relationships and boundaries " were becoming increasingly ephemeral. Already at that time one solid fact was sounded: "One of the significant hallmarks of the historical being of our age is, no doubt, economism." Note that this is not about ideology, not about a view of the world, but about the health of a certain mass, a spontaneous condition of the people, "when issues of economic life powerfully occupied one of the primary positions in thoughts and feelings." While militant economism was still in its infancy, which would later demand "the economic nature of the whole of human culture and creativity."


Of course, the world still did not fully comprehend what an economic crisis was, with its "cycles" and imaginary laws, with its depression and despair, with its poverty and disappointment. But contemporaries had already heard "these whispers" and seen "these gloomy faces, leaning over mankind." It was there that the "main question" was asked, in which, as in a grain of wheat the cause of all economic disasters, depressions and crises was hidden and concealed:


"Is the economy a function of the person, or is the person a function of the economy?"


It is considered that with the collapse of communism, world capitalism, having strained its forces in the confrontation with the Soviet Union and the socialist camp, lost its balance, lost some of its vital energy, becoming lazy and fat. This is partly true, but only partially. The most terrible blow to capitalism was done from the inside and exactly by those who have so generously lavished the laurels "winners over communism." "Reagonomics" and "Thatcherism", relying on the Friedman free market model and his theory of self-regulation of the economy, have become the epicenter of a protracted, global upheaval of the entire structure of the world economy.


"Free enterprise", being an individual act of creation, became in the grip of heavily-modeled abstract concepts that have created a virtual ideal of the "free market" that has never existed and is unenforceable by virtue of its complete detachment from the "individual phenomena of economic life." The "free market" is like a boa constrictor swallowing the freedom of the entrepreneur, whilst muttering, "It's nothing personal." But gluttony is not given to it for nothing. Humanity, as individuals took their revenge in the "most insidious" manner. The "freedom" of the market was taken advantage of, as always, by those who, in the time of classical capitalism and "free enterprise" were on its margins, if not pariahs: speculators, financial players, irresponsible managers, masters of financial fraud, greedy bankers, and political scoundrels. Throwing stones from a glass house, they become destroyers of the modern model of capitalism, which was all built on a rational conception of a quasi-irrational phenomenon of the market, especially in terms of its globalization. And then it turned out that "there is fatal passion everywhere, and there is no escape from fate!" This was followed by a series of dramatic revelations. Josef Ackermann, CEO of "Deutsche Bank", stated: "I do not believe in the self-healing power of the market", and Alan Greenspan, who in the recent past led the U.S. Federal Reserve, watching the ruined hopes of bank depositors, spoke of "the shocking loss of faith" in the existing financial and economic order.


Of course, one can hear other voices that say something like this: as long as somebody like Copernicus does not appear in business, who turned the minds of people, replacing the geocentric model of the universe, with the heliocentric, let us not give up "free-market values." "The paradigm of modern development cannot be considered to have collapsed, until another is born, able to take its place" (Michael Skapinker, "Financial Times" 16.02.10). It's as if someone said, "For me, God is dead, but has left me the gospel with his moral values." The expectation that in the area of economic thought there will be some Copernicus, who will outline his miracle new encompassing "saving" ideas, can only be regarded as a dream. Also it is unlikely to correctly carry the logic of scientific discovery, dealing with a world that man has not created in the area of human ideas, ignoring the fact that the science of the economy is of a human kind, rather than an exact one. Incidentally, the theory of paradigm shifts belonging to Thomas Kuhn is also criticized for the fact that even in the sphere of natural sciences the next paradigm of knowledge is not always better than the earlier one.


Quantum physics did not repeal Newton’s laws and classical mechanics, and Lobacheskvian hyperbolic geometry has not overshadowed the genius of Euclid. And if human civilization has evolved from polytheism to Christianity and then on down to "human centrism" and "consumer goods centrism," it does not mean that all these "paradigms" have disappeared from the memory and deeds of men. This does not mean that we have to resort to the "bad infinity" of an omnivorous synthesis. The cure involves a synthesis of a different kind.


In contrast to the stilted model of the so-called "free market", "freedom of enterprise" was organically inherent to a greater or lesser extent at all times and eras. It served as a basis for the implementation of creative energy within the global economy and that as a kind of artistic freedom is the most important value to this day. But the freedom of entrepreneurship as a form of art can be harmoniously realized only under a condition strongly cut-off from the extremes of "militant economism 'and' uneconomic idealism" and nihilism. Speaking about the role of the state and society, the honest businessman expects the guarantee of such interference. The role of the state and society cannot be reduced here to a set of economic, legal and fiscal instruments. The recent crisis has shown that the global outcome of economic activity depends on the morality of the criteria of the entrepreneurs themselves, if you will, from their personal "business philosophy."


Coming back to the beginning of our conversation, it's worth asking the same question: "what was the reason for the deed?" As an example from the history of capitalism, from the late XIX to the early XX century in Russia, we know how much good, intelligent and honest things were done through the efforts of the Russian businessman, merchant and banker. Having great wealth, often huge, they "did not keep it to themselves," leaving them free to dispose of their wealth for the benefit of their neighbors and the Motherland. They fully fulfilled the covenant, which read: "Children! Keep yourselves from idols. "


On March 4th, 1921 the newly elected President of the United States W. Harding assumed his duties. That morning, he said in a speech, remembered by many Americans, deeply, according to witnesses, of "the strongest ethical inspiration." "The whole world craves a bowl of good will, he said. Service - that's the greatest content in life. In this democratic country, I would gladly welcome that era, in which the golden rule would be autocracy of service. "


"Christ did not come to be served, but to serve many" (Mk.10: 45).<!--EndFragment-->


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