The housing market crisis

Everyone is worried not only about the US housing market but also about its ripple effects on the world economy. Oddly this demonstrates that what everyone considers a virtue -- the dynamics of the marketplace -- may well be a recipe for long-term disaster.

The economy -- as Panurge (i.e. Rabelais) understood it five centuries ago -- is based on the willingness of people to purchase the useless and, why not, nefarious to keep money (means of payment) circulating and expanding the overall supply. If people only looked after fulfilling their real needs, the economy would appear to stagnate. Of course, doing so might also impel them to think about what real needs are, which will always be a matter of controversy but happens to be one of the bases of human culture in general and all human cultures. Our clever deduction -- made concrete by the evolution of industrial economies -- that the only "serious" human need is for money is founded on our mathemetical intelligence: money is the only recognizable common denominator and furthermore is a (presumably) manageable resource. It is this "scientific orientation" that sets our "globalizing" culture apart from all other human cultures of the present or past.

It may seem odd to say that the crisis of the housing market is an instance of the perversity of our "needs analysis" glorifying the useless and nefarious since housing is unquestionably a basic human need. But does the suburban US house -- with all the sociology that goes with it -- really represent a human and social need? Can there be a problem of "lebensraum" at the level of families as there is with nations? Isn't the model itself one that creates a gravitational pull towards the fabrication and consumption of the useless and nefarious? This has in fact been seen, in Panurgian fashion, as the main driving virtue of the model, duplicating Panurge's insistence on enjoyment as the principal consequence. But with its long-term consequences on the environment (now readily recognizable) and its less apparent but possibly deeper effects on social relations, both direct and indirect (through the fraying of bonds of solidarity), the US housing market may be the indicator of the weakness of the paradigm. The useless and nefarious have a price, or rather two prices: the one you pay for the goods themselves and the one humanity pays for the unsettling effects of those goods on our physical and social environment, effects that will be magnified for future generations.

In cultural terms the analysis may seem so simple as to be simplistic. We deeply believe that a dynamic economy is good because it creates not only jobs, but also wealth itself (partly through jobs) and ever more virtuously spreads that wealth (partly through jobs). Politicians know that the only thing that "sells" is the promise of jobs ("It's the economy, stupid"). This becomes more morally complex when the suppliers of jobs are companies like Halliburton who prosper when the most morally contestable policies are enacted, but the overall impression is that its all for the good since activity is ensured (activity = money and money is the measure of all good). One of the reasons why war is actually perceived as “good” – especially since the “godsend” of WWII that allowed the US to emerge from the depression -- is that it is a guaranteed form of activity, creating credit and debt and employing millions of people within a system defined by a hierarchical logic that makes things easy to manage because not dependent on the anarchy of the marketplace and largely immune to the hazards and debilitating effects of moral reasoning (Hamlet style).

It is our belief in the "goodness" of the equation that appears to be unshakable and linked to our notions of the goodness of democracy. After all, it's people with jobs who vote! And it's people with jobs who buy houses. It may even be that the regular crises of the economy (recessions and even the occasion crash) serve the purpose of reinforcing our faith in the principles that underlie the system.

My feeling is that the predicted "clash of civilizations" will not be between regions or religions but rather between human cultures (which still do exist and whose most visible but not unique or even essential glue is often religion) and the globalizing Panurgian culture of debtors and creditors who thrive in a state of mutual dependence obliging them to create the useful and the useless, the good and nefarious. We may in fact have no choice as the price of our purchases continues to mount and the means of payment, constantly increasing, turn out to be permanently and fatally insufficient because with the creation of one type of value (mercantile) other more fundamental values are ignored in the best of cases and destroyed in the worst. Compounding the issue is that thanks to our unshakable belief in the virtue of creation for its own sake, we become unable (or at least unwilling) to measure what is being destroyed. Awareness of this principle and the severe risk it entails could be taken as the common denominator of the ecology and the global protest movement (altermondiste), which has yet to formulate an alternative set of cultural values, focusing primarily on physical conservation or the imaginary return to an undefined and idealistic status quo ante bellum (the war being the industrial-capitalist revolution). Not that it should be held to exercise that responsibility, since it actually belongs to the cultures of the world to do so more or less locally.

The clash I would foresee (but which I’m not predicting as an historical inevitability) is between the globalizing finance-rooted economy on the one hand, and, on the other, the world’s diverse cultures somehow allied with a global protest movement and endowed with a certain persuasive force that will be acquired lesst through efficient organization and more through the increasingly obvious failures of the Panurgian paradigm as the useless is increasingly revealed to be nefarious.


A brief reminder of Panurge’s ideal world of debt and credit :

« Représentez-vous un monde autre, onquel un chascun preste, un chascun doibve, tous soient debteurs, tous soient presteurs. O quelle harmonie sera parmy les réguliers mouvemens des cieulx...Entre les humains, paix, amour, dilection, fidélité, repous, banquetz, festins, joie, liesse, or, argent, menue monnoie, chaisne, bagues, marchandises troteront de main en main... »

Very modern vision, in’t? At least Paris Hilton (if she read French) might recognize it. Panurge continues

« Charité seule règne, régente, domine, triumphe. »

Charity (Agape) is here the notion of non-libidinous love (call it “loving concern and empathy”), not the giving away of surplus money. But the fact that Rabelais uses the word in this context (in the first quote he writes “amour”) shows how much of a visionary Rabelais was, hinting that the traditional Christian virtue of Agape would become a mechanism of the future debt-based economic culture!