The fetish of economy: Tomas Sedlacek

29 May 2014

Tomas Sedlacek is the the author of the bestselling book, Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street, and has been described by The Yale Economic Review as one of the “five hot minds in economics”. In his day job, Sedlacek is the chief macroeconomic strategist at Czech bank, SOB. He is also a member of the National Economic Council and a lecturer at Charles University, Prague. Sedlacek was the keynote speaker at portfolio institutional awards last month

Interviews

Fiscal policy really is a simulation, it’s a trick to pretend that there is demand when there really is none. Now this is as you say what got us where we are and that’s fine, up to the point where you don’t fetishsise it – and that brings us back to the beginning.

So do you believe we should give up on our quest for growth?

Growth is a result of market democracy. This, in my view, is the most fertile ground for growth, there is no other system which is as fertile for growth as market democracy. It’s a soil out of which many things grow – freedom of speech, creativity, art, human understanding – 10,000 good things. One of them is growth, and that to me is fine.

The problem is that we no longer believe this; we no longer believe that growth is a wonderful and welcome outcome of market democracy, but instead we believe it has become a condition without which [market democracy] doesn’t work.

If you deprive us of growth, we believe that markets will crumble; if you deprive us of growth, democracy will crumble. There was the worry that nationalism will go on the rise. There was a fear that if they rid us of growth we will cease to be Europeans. The threat was that if we don’t grow for long periods of time, then, a war will come. This is why I don’t think it’s a crisis of capitalism proper; it’s a crisis of growth capitalism, that’s what it really is.

Technically speaking, yes if you do overdo it then it can destroy you, like it almost destroyed Greece, like it almost destroyed Ireland, like it almost destroyed Hungary. If it hadn’t have been for government aid, the economy of the United States would crumble, most likely.

That to me is a problem. Growth? Fine. The way we’ve inverted our economy? Fine, but we fetishise it and we have sacrificed everything for this, including the very system itself.

That’s what greed is. I think a good definition of greed is when you want something so much it becomes destructive. Greed is a negative word and it might have positive consequences, I think we are in complete unison with this, but if the definition of greed is wanting something so much it becomes destructive, then the answer is in that definition itself.

If we want something so much it becomes destructive, it will be destructive.