"Discussing the Financial Crisis" - Entretien de Tommaso Padoa-Schioppa - La Repubblica
Entretien réalisé par Massimo Giannini, La Repubblica, 6 octobre 2008.
Uniquement en anglais.
1. Some compare it to the Great Depression of '29, others talk about a crisis unlike any other in history. What type of crisis are we experiencing? Is it a cyclical crisis (perhaps sharper and more unusual than the others, but still temporary), or is it a structural crisis (which will completely change the global financial system?)
This is not a cyclical crisis even though all crises pass eventually. However, the question we should ask is a different one: after the crisis will the world be the same, as was the case after the '82, '87, '94 and '98 crises? The answer is no. This time, the "before" and the "after" will not be the same. This crisis marks a structural change. It is a change that concerns economic ideology, the US growth model, financial methods and practices, attitudes of the authorities, balance between economic and political power, relationships between large geographical areas and the role of politics.
2. Is this really what Tom Wolfe called the Bonfire of Vanities? In other words: is this really the end of capitalism as we knew it, and as such the end of an era, which Minister Tremonti would call "mercatismo" (literally: market-ism)?
I would use the market economy concept rather than the ambiguous word capitalism. And I think we are not witnessing the fall of the market economy in a way that could be compared to the fall of the centrally planned economy which marked the end of the Soviet system. What we observe now are the consequences of an ideology and an economic policy which believed in a market without rules. Like the democratic system in the field of politics, the market system is a device that enables to rectify mistakes, it is not a device that prevents the mistakes. Both systems are effective only if they follow strict rules because they cannot exert self-control. Both systems contain the germ of self-destruction, but if they produce enough anti-bodies they are able not only to rectify isolated mistakes (e.g. an incorrect investment, an unfit ruler) and even to reorganize as a system. The crisis here was due to the infringement of elementary rules of caution and correctness, which the public supervisory system failed to enforce.