CHAPTER XYZ

Life And Death Economics: A Dialogue

Giorgio Baruchello and Valerio Lintner

Lintner: I am starting this exchange of views on the day that

Lehman Brothers commercial bank has collapsed, an event
which is unprecedented, at least over the last eighty years,
and which gives us an indication of just how serious is the
crisis of capitalism through which we are passing. Therefore
this seems a good time to evaluate just where we stand with
regard to economics and the assumptions about human
behaviour on which it is based.
It seems to me that the sub-prime mortgage crisis in the USA
which has led to today's problems, which incidentally do not
just affect bankers and politicians but also the lives and
livelihood of most citizens, throws up a number of issues
which you explicitly or implicitly cover in your excellent
chapter for the fifth volume of the series edited by Charles
Tandy.1 Wouldn’t you agree?

Baruchello: I do agree. The collapse of a major commercial

bank is no small event. Yet, it is also an event that, quite
frankly, might have been predicted. We might not have
known which specific commercial bank was going to go
bust, since we do not have access to their accounts , but we
could have expected that one would fail, and that others
would follow suit. In my previous contribution to the Death
and Anti-Death series I discussed at length the dangers of
today’s deregulated quest for ever-growing profits by the
world’s financial ‘juggernauts’ and the ideological myopia
underpinning it. This quest resembles very closely the path
of action, and of self-destruction, followed by their
‘ancestors’ in the early 20th century.

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After all, the spree of worldwide ‘liberalisation’ that we have
witnessed in the last thirty years or so was meant to do away
with institutional ‘constrictions’ that had been placed upon
trade, including the trade in currency and financial
commodities. Leading members of the American Republican
party, for example, voiced repeatedly and loudly their desire
to get rid of all the vestiges of Roosevelt’s New Deal, hence
of the capacity for State intervention that they required. It is
a process begun in the US with Nixon, I would argue, and
later followed by many governments worldwide, whether
rightwing and leftwing.
Blinded by the neoclassical dogma that wants the freer
pursuit of individual profits, if not sheer personal greed, to
translate into collective wellbeing, these governments never
paused to consider why certain ‘constrictions’ had been set
up in first place. George Soros, Andrew Glyn and yourself
have written and spoken about this folly; ten years ago, John
McMurtry argued that capitalism had already reached its
‘cancer stage’, for the immune defences of the planetary
social body were unable to recognise the biocide invasion
and actively cooperated with it by massive doses of further
liberalisation. Nevertheless, all these eminent critical voices
were ignored, underplayed, or attacked. And if you stop
taking your medication against a certain disease, you are
much more likely to catch it again.
What is going to happen, I presume, is that we will
rediscover the medication, or else the disease will eat much
of the world’s economy and, what is implied and never truly
spelled out in the mainstream media, the actual lives of
many. Millions’ employment and livelihood are now at stake
because of other people’s decisions and errors—the
educated, business-savvy elite of some still-then prosperous,
glittering country. At least, in the late 1920s, the Russian
Bolsheviks had a powerful propaganda machine that kept
some people in the West aware of who was responsible for
the West’s own faults. How difficult it is to do that in the
days of Fox News and Berlusconi!
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Incidentally, I do not express the hope that we may learn the
lesson once and for all, because humankind seems tragically
prone to repeating the mistakes of previous generations.
Rather, what worries me is that the medication the world’s
economy needs, a mix of socialism and effective political
leadership, can be administered in various ways. In the
1930s, for example, the State intervened and, gradually,
rescued the world’s economy from its irresponsible
‘champions’. However, in most of Europe that recovery
meant the affirmation of the fascist model of government and
its bellicose forms of public spending. One thing is to cure a
wounded limb with an antiseptic solution; another is to
amputate the limb—it is a fairly simple comparison of life-
value.

Lintner: It seems as if some of the lessons of the 1920s and

1930s have to an extent been learned. As far as
macroeconomic management goes, the Fed cut interest rates
repeatedly in early 2008, and the Bush administration
showered the population with tax rebates in order to
stimulate demand (which incidentally brings a wry smile to
many economists, given that this is the sort of pure
Keynesianism which the neo-cons have so ridiculed in the
past…). And you are right, there is going to be a move
towards more regulation in the future, and what is more
some massive direct intervention by the US government in
capital markets. The plan here is for the US government to
buy up the bad securities which are at the basis of the so-
called `credit crunch’ and thereby re-capitalise the banking
system, at a cost, it would seem, of some $700billion. The
plan, which needless to say is a controversial one, not least
among US Conservatives, is to buy the debt at full rather
than current market value, thereby effectively subsidising the
banks and exposing taxpayers to considerable risk and
possible big losses in the future. It is also important to
understand the potentially inflationary effects of such a
move. What about moral hazard one may ask?
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It seems to me this is a wonderful example of the old French
saying ‘privatisation of profit, nationalisation of risk’…
Nevertheless, there are undeniable similarities between the
early-20th-century experience and today’s. For example, we
live once again in a world dominated by free market
capitalism. Since the demise of central planning in the 1980s,
the market has established a virtual monopoly (excuse the
unintended pun!) across the world as a form of economic
organisation. Economic activity, and in particular the
financial aspect of free market capitalism, was substantially
de-regulated over subsequent years, according to the neo-
liberal economic principles that you expose in your book
chapter. These principles have come to dominate thinking
among academics and practitioners of the ‘dismal science’.
We have let the proverbial genie out of the bottle, and now it
is difficult to see how it can be put back.
However, I do not think that history repeats itself in an
identical manner. I believe today’s world economy to be
different in some fundamental respects from any previous
age. And these different, fundamental respects are actually a
further source of worry.
First of all, economic activity has over the last couple of
decades escaped from the boundaries of the nation state,
where it had been essentially rooted since the days of Adam
Smith, and moved to the supranational level. This
phenomenon commonly referred to as ‘globalisation’ is of
course is due to a number of factors including improved
technology, increased and unrestricted trade, the increased
importance of Multinational Corporations (MNCs),
accumulations of petrodollars which result from the balance
of payments surpluses of the oil producing countries and the
increased privatisation of welfare and savings. The
implication of this is that the world is now much more
interdependent: what happens in one place affects
everybody. To an extent this has always been the case. In the
1960s and 1970s it was commonly held that “when the USA
sneezes Europe catches a cold”.
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Today, however, the sneeze is much more infectious, as we
have seen from the way in which the sub-prime crisis has
spread across the Atlantic and beyond.
In addition, nation states could in earlier times quarantine
themselves and administer their own form of ‘paracetamol’
to mitigate the effects. Capitalism is now much more
difficult, if not impossible, to regulate. When, in the
nineteenth and most of the twentieth century, capitalism was
nationally based, it was relatively straight-forward for nation
states to develop regulatory frameworks designed to alter the
outcomes of the free market to the socially desirable. In
principle, people voted for governments that promised them
their preferred outcomes, and the governments legislated
accordingly: economic democracy in action. Today we live
in a different paradigm: supranational economic activity is
impossible to regulate and to police since we do not have a
world government or any other body which might be capable
of regulation free market capitalism. In addition it is clear
that the operation of nationally based macroeconomic
policies is much more problematic, as a number of local
crisis have shown, from the ERM crisis of 1992 onwards.

Baruchello: But aren’t we supposed to have international

institutions, including non-governmental ones, that monitor
and manage financial flows and banking practices? The
Basel Committee, the Financial Stability Forum—not to
mention the world’s central banks, the Bank for International
Settlements or the International Monetary Fund—are at work
to prevent massive crises like the one we are witnessing
today, or are they not?

Lintner: We actually have an international free-for-all on

our hands, the objectives of which are certainly not to protect
the interests of the vulnerable, or even the majority, and the
outcomes of which are probably de-stabilising and certainly
unpredictable.

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Hence there was very little available to prevent the sub-
prime crisis: the classic accident waiting to happen. One
wonders how many more of these there are, and when the
next one will come out of the woodwork. The development
of the European Union (EU) and other supranational
organisations such as the Association of South Eat Asian
Nations (ASEAN) can be viewed as an attempt to develop a
competent authority capable of modifying the outcomes of
the free market on a regional basis. However, such
organisations are still a long way from being practically
effective regulators of the free market. This is also an issue
of democracy: the bankers and market operators that call the
shots are not elected by anybody. Democratically elected
governments are increasingly unable to control their own
economies, which begs the question of why should people
continue to vote for people who cannot deliver on the big
issues.2

Baruchello: I believe their impotence to be due to the beliefs

and behaviour of the actual individuals involved, rather than
to the existing structures—personal, moral factors, rather
than structural, organisational ones. The institutions needed
for supervision and regulation are there, yet they are not
used, or they are used inadequately. Often they even collude
with the most blatantly reckless sources of the havoc we are
talking about—the failed response of the immune system
discussed by McMurtry. Sometimes, major world leaders
and the directors of these institutions plead ignorance or
impotence vis-à-vis the gargantuan market forces that they
should be managing. Still, minor infringements of trade
agreements are detected and punished across the planet,
suggesting that we or, at least, the WTO, have both the
technologies and the expertise to follow countless
transactions taking place every month via telephone cables
and the world-wide-web.

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Lintner: I think it is a bit of both. Of course, the
international structures you mention do exist, but their
objective is usually to push the free market agenda on the
international stage–certainly that has been one criticism of
the WTO. It is arguable that they are part of the problem. In
addition, the existing institutions are not capable of
regulating the type of corporate behaviour and international
capital flows that we have experienced. As a minimum
requirement, the role and power of existing institutions needs
to be re-visited, and arguably we need a `new financial
architecture’ more capable of dealing with the issues we are
discussing. Naturally, this requires political will and
leadership.

Baruchello: As you know, in the book chapter of mine you

refer to, I suggest that the neoclassical paradigm has become
a forma mentis that prevents people from seeing that which
is necessary for collective wellbeing and sustainable growth,
and thus from behaving in a truly constructive manner.
Within the myopic boundaries of this forma mentis, value is
understood merely as money capital, not as life-
enhancement. Moreover, it is assumed that this pecuniary
value ought to be maximised always and anyway, as a sort of
Kantian categorical imperative turned ‘Rockfelleresque’. We
are somehow ‘designed’ to increase whichever initial capital
we are endowed with, says Smith. His disciples emphasise
that we ought to do it, therefore leaping from a factual
observation, whether correct or not, to an economic, moral,
and political imperative. This logic of maximisation is
further justified insofar as it is believed to be bound to
guarantee ‘optimal allocation’ of resources and ‘the wealth
of nations’ itself, as though Adam Smith’s ‘invisible hand’
were out there for sure, which is far from ascertained and
ultimately a matter of religious belief—an aspect of Smith’s
Protestant economics that contemporary economists seem to
have forgotten completely.

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Thus, a debatable hypothesis about human nature, indeed a
token of Smith’s religiously inspired philosophical
anthropology, becomes the cornerstone of individual and
collective agency, indeed the paradigm of human rationality
itself.

Lintner: I think you are spot on. The free market system is
essentially based on self-interest and short-termism, or if we
are to be ungenerous (and why not?) greed – remember the
quote from Keynes that you have on your wall at the
University?3 The sub-prime crisis is a classic example of
this. Salespersons sold mortgages to people who could not
afford them in order to rack up their own earnings. In this
they were encouraged by managers who had their own
careers and earnings in mind, in turn encouraged by
shareholders who want maximum returns now in order to
maximise their own wealth, or in order to keep their jobs if
they are fund managers. They were all allowed to do this by
a regulatory system which is essentially weak and turns a
blind eye as long as returns are good and the major actors are
happy. And what is more this very system allowed the
mortgage companies to then package these essentially
unstable and unreliable loans into financial derivatives and
products that were then sold around the world and used as
collateral for other deals. A pyramid based on a deck of
cards, the bottom layer of which was rotten. Of course the
collapse of this deck affects us all in one way or other: we all
by necessity have a stake in the system through our pensions,
our savings and the like. However, some have a much bigger
stake than others, for the demise of national regulation has
allowed the free market system to move towards an
inevitably more unequal society in which wealth is
concentrated in the hands of fewer and fewer people.

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This of course has many implications, but what interests me
particularly is the motivation of the super-rich, many of
whom dominate the international economic scene and are the
driving force behind many of the developments we are
experiencing. Why is it that people who have so much
money they would need ten lifetimes to spend it want to
accumulate more and more? And indeed why are they
prepared to exploit and endanger the interests of us all (and
in particular the hundreds of millions who are living on the
breadline and for whom economic crisis is not just an
increase in mortgage payments, but the difference between
life and death) in order to get enough money to last them
twenty lifetimes? What motivates them? Why do they do this
rather than concentrate on enjoying what they have got?
How does this bring them happiness? It seems to me that
until we understand more about this we cannot begin to
fathom the new international economic realities.

Baruchello: To date, I believe that the most insightful

studies on the mentality of the rich are still Thorstein
Veblen’s, to which, perhaps, I would add some later
reflections by Kenneth Galbraith—two economists, hence
colleagues of yours, as a matter of fact!
Veblen observed the wealthy elites of the belle époque. He
concluded that two patterns of behaviour seemed to
characterise them, namely ‘conspicuous leisure’ and
‘conspicuous consumption.’ Typically, the rich spent more
time in idleness or on vacation than the rest of the population
and they threw their money around as much as possible and
in as many ways as possible. In this perspective, as Galbraith
noted seventy years after Veblen, the rich-filled casinos have
served the peculiar end of allowing the rich to lose money in
public. And why did they want, and still want, to do all this?
Because conspicuous leisure and conspicuous consumption
are the two main ways in which the rich can show the world
that they are rich.

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Lintner: Do you think they were suggesting that the pursuit
of profit was an end-in-itself from a subjective point of view
as well, in addition to being the defining element of
capitalism as an economic system?

Baruchello: I believe they thought it could be so for many

people. However, Veblen and Galbraith painted a more
articulate picture of the wealthy individual’s ‘human
condition under capitalism’, if you allow a rather
philosophical expression. Being rich meant then, and still
means today, the certainty of gaining social status. Thus,
what Veblen and Galbraith ultimately argued is that the
pursuit of wealth is instrumental to the pursuit of status,
which is something that the non-rich strive for too, and may
even attain by virtue of, say, political power or cultural
recognition. Yet, in their studies, Veblen and Galbraith
maintained an unwavering emphasis on wealth. No other
instrument seems to be as effective in obtaining and
maintaining social status. The rich may be feared, hated,
resented, envied or despised, but they are so by the multitude
looking at them from the bottom of the pedestal upon which
the rich stand.
In this light, political favours and careers, visible statements
of cultural distinction, and all the rest that the rich may have
bought with their money, are aimed at securing their status,
whether directly or indirectly. Ministries, party leaderships,
seats at the House of Lords, foundations, art galleries, villas
in Sardinia or the Bahamas are status symbols. Certainly, as
Galbraith observed, the typology of status symbols may vary
as often and as quickly as the weather, although there tends
to be always a rough distinction between the ‘tasteless’ and
‘flashy’ symbols of the parvenu, i.e. the new rich, and the
‘sophisticated’ and ‘subtle’ ones of ‘old money’, i.e. the
well-established elite. At times, this distinction is
unintended. More often, however, it is the result of an
ongoing competition between two or more groups within the
larger family of a society’s wealthiest members.
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Should I go for a big, polluting, uneconomical monster-
limousine or a smaller, green, fuel-efficient hybrid car? By
opting for either path of conspicuous consumption you side
with a certain ‘party’ within the elite, while at the same time
showing that you are well above the hoi polloi.

Lintner: It is true that riches are a tool for social

advancement and social recognition but, as an economist, I
cannot avoid seeing how social advancement and
recognition, and the status symbols you are speaking of, are
often also a tool for gaining or retaining riches. They can be
publicity stunts, long-term investments, or ways to humiliate
and destroy one’s competitors. For example, recently there
have been a spate of rich individuals using their enormous
wealth to buy football clubs here in the UK. An example
would be Abramovich at Chelsea, but I believe there is also
an Icelandic example at West Ham. It doesn’t matter how
much money you’ve got, nobody might have heard of you,
but if you own a football club you are on the back pages all
the time and you become a public figure.4 Also, wealth seems
to me to be much more stable in time than the various status
symbols it can buy. If you like, it is the best status symbol
there can be. Nothing beats a hefty bank account—as long as
people know that you have it, of course. Yet, what interests
me, is that there must be some deeper psychological drive at
work here, which explains why money, qua ‘king’ status
symbol, and its ‘vassals’, things like yachts and private jets,
are accumulated by people who have already enough of
them.

Baruchello: Status symbols are a matter of fashion, a

dimension of social existence that is always characterised by
a tension, a contradiction, between conformity and
distinction.

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As the sociologist Georg Simmel argued, an individual
follows fashion to fit in a group of people, yet s/he wants
also to stand out, hence s/he introduces an element of
variation in the existing fashion, which may become
eventually a new trend altogether to which people conform
and modify for the sake of distinction, and so on.
If Simmel is correct, and I believe he is correct, this means
also that even the wealthiest few are never entirely pleased
with their immense fortunes and what they can buy with it, if
there are other very rich persons that can do the same, or
even outdo them, which sooner or later is likely to happen.
There may be exceptions, of course, but even if only a
minority of the world’s most affluent individuals plays this
game, then they can affect the lives of millions who, either
directly or indirectly, depend on the factories, enterprises,
capitals and speculations manoeuvred by this minority.

Lintner: I doubt that we are talking of a minority: look at the

size of the worldwide trade in luxury goods, works of art,
and top-level real estate, or at the glossy magazines targeted
at the super-rich and ‘wonna-be-rich’… As for the majority
of the population, the irony of course is that the pursuit of
individualism seems not bring happiness. Some economists,
for example Andrew Oswald at Warwick University, have
begun to take an interest in this, and surveys on both sides of
the Atlantic suggest that people are no happier now than they
were fifty years ago, despite huge increases in National
Income. Interestingly enough, reported happiness is highest
among the highly educated, women, the young and old (not
middle aged people who are directly involved in the `rat
race’), people who are married and retired, those staying at
home and those who are self-employed. Material prosperity
clearly comes at a cost. It is certainly true that ‘it is better to
be rich and unhappy than poor and unhappy’ (my
grandmother), but the ‘those who say money can’t buy
happiness don’t know where to shop’ (anonymous) brigade
don’t quite get the whole picture, it seems.
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Baruchello: Indeed. It is also ironic that the logic of the
struggle with one’s peers for status is the same amongst the
super-rich as it is amongst the kids in a Brazilian favela or a
Nigerian bidonville. As the poor kid steal to have the fanciest
Nike trainers in his group, so does the rich banker crave for
more, and sometimes steal, in order to display the supreme
luxury item of the moment that the others can’t buy, whether
it is a Picasso, a football team, a younger trophy-wife or
trophy-husband, or a mega-yacht. This logic is reproduced at
all the levels of the social hierarchy: employers and
employees, CEOs and part-time cleaners, aristocrats and
plebeians. Yet, instead of wearing an overpriced, mass-
produced, coloured plastic wristwatch, the very rich are to
boost an outrageously expensive, custom-made, gold-and-
diamonds watch.
Besides, in this circus, the very rich set the tone of the whole
show. They are the role-models for everybody else in the
capitalist society, since no alternative economic order is
either praised or permitted (see what has happened to the
communist bloc or to Islamic economies). And to make sure
that the tone is heard and followed, this form of gluttony is
fuelled and refuelled ceaselessly by scientifically-crafted
advertising. It is even theorised and justified by neoclassical
economists as a natural and good disposition of the human
being, just like Adam Smith’s presumption concerning the
human being’s natural and laudable tendency to augment the
initial capital available. They dub it the ‘non-satiety
principle’ and that is why I find the word ‘gluttony’ very
appropriate.

Lintner: This is all very interesting and important, and it

may explain the motivations of some of the people we are
discussing, although I still find it unfathomable how
intelligent people can have so little self-analysis and self-
awareness.

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I guess these kind of attitudes are ingrained in our societies,
and have been increasingly so at least since the demise of the
post-World War II settlement, which in Europe at least had
emphasised the `social market’ and a degree of collective
consciousness and responsibilities. One of Thatcher’s most
significant sayings was ‘there is no such thing as society’, for
example. The attitude right now seems to be that the market
has seen off the competition, and cannot be challenged.
Former Labour government minister and now European
Commissioner (for trade!) Peter Mandelson, Blair’s adviser
and confidant, is quoted as saying that he was ‘immensely
relaxed’ at the prospect of the emergence a class of super-
rich people in the UK–if you can’t beat then, join them!
These people clearly set the societal moral and philosophical
agenda, which since the 1980s has been firmly based on self
interest.
In terms of the analysis of individual behaviour, historically
economists have attempted to analyse behaviour and social
phenomena, but have not really managed to escape the
straightjacket of an economic rationality based on self-
interest. The Nobel prize-winning economist Garry Becker is
a good example of this. More recently, some economists
have toyed with the idea of analysing happiness, but the
numbers that are interested in this is very limited, and their
work is firmly outside of the mainstream.
Having said that, it is one thing understanding why people
behave as they do, and quite another to tolerate the
essentially anti-social implications of this kind of behaviour,
and so we return to the issue of regulation…

Baruchello: Regulation and culture or, if you like, moral

education. The mind is the place where we turn modifiable
human arrangements into dogmas, cages and straightjackets;
but it is also the place where we can be freed from them.

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You mention the analysis of happiness. Much of the horror
and folly that we have been eviscerating is due to a largely
mistaken notion of happiness, which characterises
modernity. This is particularly blatant to a person like me,
trained in ancient and medieval philosophy. Back then, as
savage and ‘unscientific’ those times may have been, the
mainstream notion of wisdom was tied to the notion of
reducing needs, not satisfying wants. ‘Non-satiety’ was a
nightmarish option, which only the child, the hedonist and,
in essence, the unwise would choose.

Lintner: Yes, in the UK and some parts of northern Europe

we have the puritan tradition, which incidentally is still
strongly present in some of the green and alternative schools
of thought here. I do have a problem with aspects of this
approach; however, as it seems to me that some people here
seem to revel in tokenism, depriving themselves and others
seemingly for its own sake.

Baruchello: Certainly, these ideas were the offspring of ages

in which extreme misery was much more common than
today, and consolation could be found in sharing poverty
rather than in generating more wealth for all. Mass cynicism,
early Christianity and many medieval ‘heresies’ exemplify it.
Still, I believe they teach us something of fundamental
importance. Material affluence may be important, but it is
neither the only nor the most important dimension of human
existence, individual and collective. Aristotle and Epicurus,
for instance, were regarded as rather relaxed vis-à-vis
material goods: they were not ascetic enough for many of
their colleagues. They nevertheless lived and preached a
mantra of moderation, reduction of needs and focus on what
truly matters in life: peace, health, friendship and the
cultivation of spiritual abilities.

15
An esteemed colleague of mine, German historian Markus
Meckl, claims that capitalist societies are characterised in
late modernity by a depressing lack of higher ideals, which
we face most brutally when we want to tell our children how
they should lead their lives. Be successful? Make a lot of
money? Become a professional footballer or a TV starlet?
Our forefathers had a much more interesting set of things to
say: be virtuous and save your soul, serve your God and your
country, be a good example. Today, we have all these
beautiful material goodies and yet even the super-rich flock
into rehab clinics or get caught with crack and heroin in their
purse while entering the American Embassy in London.
They reflect on the grand scale the far-too-common
condition of meaninglessness that pervades modern societies.
The loss of religious belief, but perhaps the unseen faith in
Smith’s ‘invisible hand’, has been a sign of emancipation
from superstition and oppression, but it came at a cost.
‘Rationalisation’, as Weber called the modern liberation
from ignorance and superstition, brought the whole universe
within reach of the calculating human intellect—scientific
and economic—thus depriving it of mystery, beauty, and of
the awe-inspiring ‘otherness’ that was commonplace in
previous ages. ‘Disenchantment’, he dubbed it; to the point
that we have been trying to re-enchant it with things like
scientology and Star Trek’s unknown alien species to be
discovered!
But there is another aspect that I find most troubling and that
connects with the issue of economic rationality that you have
just mentioned. What sort of rationality can this be, I
wonder, that is leading the world to the brink of ecological
collapse? How shallow is this reason that treats the damage
done to the very basic environmental structures that sustain
life as ‘externalities’, as though those structures were not in
fact the most ‘internal’ dimension imaginable?

16
Without those structures, life would not be possible; and
without life, your clever rational agents would never be able
to trade freely whichever goods may lead them to be
mutually satisfied and bring about optimal allocation. It is a
rationality that seems to favour the short-term gratification of
whichever immature yen one may have and be willing to pay
for, rather than the long-term satisfaction of well-established
needs of human communities across generations. It is a
rationality that seems unable to see and deal with life and its
essential requirements; and whenever it stumbles into these,
it sacrifices them to the interests of balance sheets and higher
rates of return. I must confess that this rationality looks
rather like a grand-scale Freudian ‘rationalisation’ of base
instincts.
As for the super-rich, they operate as role-models of life-
destructive consumption. Their private jets, big cars,
expensive furs, rare-woods furniture, blood-covered
diamonds and many and often empty villas are the ideal
horizon towards which the non-rich direct their gaze and, as
far as possible, imitate.

Lintner: I share yours views regarding economic rationality,

and I am also painfully aware of the number of people out
there who ‘know the price of everything and the value of
nothing’. I was also wondering when we would arrive at the
issue of the environment and its compatibility with
capitalism. This is clearly the issue of the day since, as you
mention, it is pointless to argue the toss about philosophy or
economics if there is no planet! Now it seems to me that the
problem here is that most economists have been either in
denial about climate change, or alternatively have no real
answers to the problem. Denial has been increasingly
difficult recently, in the face of pretty overwhelming
scientific evidence, although enough economists still cling
on to the opinion that ‘it isn’t happening’ (the Bush
administration), or, if it is, then the market and technology
will automatically solve the problem, so why worry.
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The emphasis of the non-deniers has therefore turned,
sometimes reluctantly it would seem, to possible solutions.
The suggested way forward has in one way or other involved
the market and the price mechanism, in the tradition of the
theory of state intervention in the market in the presence of
the ‘market failure’ and the ‘externalities’ to which you have
referred. The approach has been to advocate price increases
to reduce the demand for car use, air travel, and other
activities which are likely to have a negative effect on the
environment (although some other activities like road
haulage and even military activity seem mysteriously to have
been ignored – one wonders what the carbon footprint of the
wars in Iraq and Afghanistan might be…). A variant of this
has been the introduction of carbon trading, which in
principle attempts to reduce carbon emissions by pricing
them – economic agents are given permission to emit carbon,
and these permits can then be traded. The problems with
carbon trading are both practical and philosophical: firstly,
the permits so far assigned have been far too liberal to have
any effect on the environment. More centrally, this is an
attempt to solve problems by using the very mechanisms
which, as we have discussed, have been partly responsible
for creating many of the problems in the first place. In fact a
result of carbon trading is that it has spawned yet another
way for wheelers and dealers to make more money. Putting
economists in charge of tackling climate change is
tantamount to putting Dracula in charge of a blood-bank, or
Tony Blair in charge of peace in the Middle East!
Even if the use of markets to tackle climate change did have
an effect, it is important to note that the ‘burden of
adjustment’, as economists refer to the pain that results from
change, would fall almost exclusively on the shoulders of
those least able to bear it. The poor would be effectively
excluded from activities such as flying and driving, while the
rich of course would continue merrily along their trajectory
of conspicuous consumption.

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The good news, such as it is, is that there are some
economists, such as the New Economics Foundation in the
UK, who seem to be aware of the issues that we have been
discussing and are actively involved in seeking alternative
solutions. These must inevitably involve a combination of:
- stricter and more effective regulation
- changes in the fundamental way in which we
approach life and the planet, which brings us back to
the basic issues we have been discussing: everything
is connected
- international co-operation. The environment is the
classic example of a global issue: it is pointless for
countries to act in isolation over global warming. In
this the developed countries find themselves in a
moral dilemma: how can we ask China and India to
approach growth in a different way, when it is us in
the developed world that have caused the problem
over the last century or two? Of course it is in the
interest of the developing world as well to tackle
climate change, since they too will have their lives
and their livelihoods disrupted (more so in the case of
the poorest countries in Africa, which are likely to be
worst affected). So the way forward is fraught with
difficulty. An example of this is the shenanigans over
Kyoto, which have clearly demonstrated the
difficulties of acting in concert in this area.
Nevertheless, there are some encouraging signs
emerging, many to do with the election of Obama as
President of the United States.

Baruchello: I share your worries, and your hopes. Partly

because of this, I have been attempting to spread knowledge
of John McMurtry’s work outside of Canada. His philosophy
is, straightforwardly, a philosophy of life, acknowledged and
supported by the United Nations themselves. No other
contemporary philosopher has spoken as adamantly as he has

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done against the ongoing ecological collapse and its direct
relation to today’s predominant economic-political ideology.

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Perhaps through your work British and Continental
economists may become more influenced by ‘McMurtryan’
ideas. Whilst through my work philosophers, especially but
not exclusively in the Nordic and Mediterranean countries,
might get a sense of what the New Economics Foundation
stands for. More than anything else, I believe this chapter—
our dialogue—should serve as a sign of how relevant
insights on contemporary issues can transmigrate from a
given area of inquiry to another, across disciplinary
boundaries. As stated before, the mind is the place where we
turn modifiable human arrangements into dogmas, cages and
straightjackets; but it is also the place where we can be freed
from them, disciplinary fields and fences included.

Bibliography

Charles Tandy (ed.), Death and Anti-Death, Volume 5:

Thirty years After Loren Eiseley (1907-1977), Palo Alto: Ria
Press, 2007.

F. Brower, V. Lintner and N. Newman (eds.), Democracy

and the European Union, Federal trust, 1994.

Endnotes
1
Giorgio Baruchello, “Deadly Economics: Reflections on the
Neoclassical Paradigm”, Death and Anti-Death, Volume 5:
Thirty years After Loren Eiseley (1907-1977), edited by
Charles Tandy, Palo Alto: Ria Press, 2007, pp. 65-132.
2
See F. Brower, V. Lintner and N. Newman (eds.),
Democracy and the European Union, Federal trust, 1994 --
in particular the chapter by V. Lintner.
3
The quote at issue reads: ‘Capitalism is the extraordinary
belief that the nastiest of men for the nastiest of motives will
somehow work for the benefit of all.’
4
There is of course the added attraction of possible capital
gain.
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