- The fragility of a stock market economy. The present world economy is founded, even more than the economy of the 1920s, on the speculative frenzy of transnational stock markets, a totally unreal world: the Dow Jones, Nikkei, or CAC 40 direct the economy toward ultra-short-term considerations and day-to-day speculative spirals (generating immediate profits, panics, and sudden euphoria), while any notion of political economy is abandoned and long-term realities neglected. With the slightest bad news, speculative investment, the motor of the new economy, risks collapsing. We’ve already had a warning shot with the ‘Asian crisis’ of the 1990s. Frédérique Leroux writes, ‘With the intrusion of the smallest grain of sand into the gears, the virtual mechanism comes to an immediate halt.’ It’s like the ‘butterfly effect’ in weather: the most minor event can provoke an investors’ panic. A speculative world economy is nothing but a giant with feet of clay. ‘Given the ephemeral nature of its economic nirvana, the tiniest changes turn an ‘irrational exuberance’ into an anorexic depression . . . We’ve reached that critical point in the long economic cycle today where the stock market, this jittery entity to which we have abandoned ourselves, has taken over the economy. Growth, fundamental to the economy, has completely escaped government or public control. It’s now at the mercy of those euphoric or depressive moods particular to speculation. It’s significant that Europe (unlike the United States) no longer has a monetary policy, a first in her history. Based entirely on speculation, the so-called ‘new economy’ is simply an aggravation of financial economics, speeded up by digital technologies.
- The exponential growth of world debt, public and private. All the countries of the world, rich and poor alike, are in deficit and there’s talk of annulling Third World debt. Who is going to pay the bill? The world economy resembles an enterprise on the verge of bankruptcy, but one always supported by some virtualist banker. The bulletin of the brokerage firm Prigest, hardly anti-capitalist, noted in July 2000, ‘Private debt is rising at a frenzied rate. It has become a circular transmission belt, linking rising stocks and economic activity. And it’s making the system increasingly fragile, however much it gives the impression of increased growth.’ The bulletin also speaks of the new economy’s irrational exuberance as it glides along the chasm. An economy based on debt (a monetarist dogma) — and not on labour or non-market considerations (demographic, ecological, energy, etc.) — is bound to be short-lived.
- The demographic ageing of Europe and other advanced industrial countries, compounded by economic and immigration burdens. For the moment, we can bear these blows, but it won’t last. The paucity of active workers, pension obligations, and health costs will, beginning in 2005-2010, gravely aggravate Europe’s economic burdens. Productivity gains and advanced technologies (a favourite remedy) will then cease covering the costs of the changing demographic situation. Far from compensating for the decline of an active native workforce, Europe’s colonising immigration will present her with the problems that come with unskilled workers and massive welfare payments. Immigrants, moreover, are going to become increasingly more expensive (in terms of insecurity, criminality, and urban policy). The economic collapse of Europe, the world’s foremost economic power, will bring down the United States and the other advanced economies.
- Contempt for ecological limits. The extensive pollution caused by the planetary development of mass industrial economies (nowhere resisted by the ecological impostors bought off by the oil barons) is already starting to take its toll, which keeps rising in the form of catastrophic climate changes, exhausted fishing reserves, desertification, diminished fresh water supplies, destroyed forests, and the depletion of sea phytoplankton responsible for renewing the Earth’s oxygen, etc.
* * *
Despite the infantile euphoria of the ‘new economy’, the Internet, and the purely conjunctural upswing, the world economy is in the red and will likely lead to a gigantic world economic crisis early in the Twenty-first century. Our civilisation — based entirely on the exaltation of market society, monetary values, and economic primacy (whether socialist or capitalist) — risks perishing from the economic functions upon which it rests.
The situation is analogous to that of a militaristic society that perishes because of the ongoing wars it wages and eventually loses. Those who actually know something about the economy (such as Maurice Allais or François Perroux) have warned us about idolising it — like those soldiers who warn civilians about the dangers of militarism.
Structural factors (notably demographic and ecological ones) are never taken into consideration by those fixated on immediate, short-term results.
The apostles of the new economy are like children masquerading as adults. The new world economic order these false prophets extol is nothing but the swansong of the old order.