Towards a New Economic System

The global financial crisis is abated and while most are glad to see it drop from the top spot in the media, there is still a danger that the underlying reasons why it occurred have not been resolved.

As Sonja asked last year, what would the Baha’i answer have been? Of course, the Baha’i Faith does not pretend to be an economic system. It neither endorses a laissez-faire economic system, nor a Marxist, socialist or communist system.

The world is by now becoming keenly aware that none of the frameworks implemented throughout history have been successful. The failures of Marxism and communism provided the right with a few decades to gloat. However, the recent collapse of the world economy is a sharp slap in the face of the Chicago school of thought.

Understandably, everyone is confused. Experts, economists, and politicians argue incessantly about what happened and why and what should be done. As always, there are a few who tenaciously cling to the old, fatal ideas, claiming that they are valid but their implementation was flawed. This is the tired refrain we’ve heard so many times from the left to excuse the collapse of communist states. And so it is equally invalid.

People are angry. The gap between the rich and the poor has reached epic proportions not seen for more than 80 years. Michael Moore who has his finger on the pulse of the masses has captured the zeitgeist yet again and released a scathing new documentary: “Capitalism, a Love Story”. Here is the trailer:

Being the agent provocateur that he is, Michael Moore doesn’t pretend to offer answers in this documentary. Instead, he exposes a broken system by asking a lot of daring questions. One of his main ones is that both capitalism and socialism are constructs 100’s of years old. We are now living in the 21st century – isn’t it time we created a new financial system for today’s world?

And most damning of all: how can we pretend to live in a political democracy when our economy is not democratic? Can we ever have true democracy when the top 5% of Western society control the majority of its wealth? When that top 5% uses money to influence politics to protect the status quo?

Of course, answering these questions and proposing new paths for humanity is complex and will take time. But if you look carefully, even right now, amid all the chaos and injustice, there are a few glimmers of hope. One that I learned about recently is a micro-credit project being spearheaded by a Baha’i NGO in South America. They are working with the locals to set up self-sustaining banking institutions, run democratically by the community, for the community. While these tiny micro-credit institutions have a Baha’i model built in, the vast majority of the members and participants are non-Baha’is.

The work they are doing is amazingly good as you can see from this documentary. It is a bit long at 40 minutes but well worth it. I encourage you to watch it. If you can’t in one sitting, come back and see it in two or three installments. And make sure you share it with your friends. It is life affirming and during difficult times like these, it is important to be reminded of the good in the world:

I’m not suggesting that these simple community based finance institutions are the panacea for an incredibly complex and interwoven global financial marketplace. But the underlying philosophy is what is important. Had the animating spirit behind these micro-credit institutions also powered Wall Street, we would not have gone through the wrenching financial crisis.