Foreword

Two issues mark 2011 as a turning point in history. The first is the worldwide social unrest, and the second is the global economic crisis.

The social unrest began with “the Arab Spring,” an uprising that led to the fall of regimes in Egypt and Libya, and chaos and bloodshed in Syria. Social unrest quickly spread to Europe, with tent-cities appearing in Spain, riots in Greece and the U.K., and various forms of civil protest in several other countries. Finally, protest arrived in the U.S. with the “occupy movement” that began in New York City and spread like bushfire throughout the country.

This global unrest had a common root—the sense that social injustice was being perpetrated. Finally, people rose up, determined that their voices would no longer be ignored; they demanded that economic sufficiency and democracy, in the case of the Arab Spring, would be given to all. In Europe and in the U.S., another demand was put on the table—to narrow the gap between the wealthiest 1% of the population and the other 99%, and to change, or at least mend the capitalist system that has allowed such gaps to be created.

The second major issue was the global economic crisis. The tools that decision-makers used, such as cutting interest rates, pouring torrents of money into the market, or establishing aid funds, had become utterly inefficient as the global economy continued its downward spiral. The world stopped behaving the way economists had predicted it would because the world had changed since the paradigms of classical economics were laid out. Unfortunately, economists had not changed their paradigms accordingly. The new world is a global-integral one, where every event, whether a natural disaster or a global crisis, affects the entire world. The interdependence among all elements of the global system is a fact that must be taken into account, as both the debt crisis in Europe and the earthquake in Japan clearly demonstrate.

The social unrest and the global economic crisis are closely linked. As the same groups carried out protests against both the economic system and social injustices, it became clear that economy and society are interlinked. In fact, our economy reflects the nature of our society, the way we relate to one another.

The expansion of global trade and technological advancement helped tighten our connections even more, transcending borders, culture, religion, and race. The world has now become a small village, where anyone is one free internet call away from anyone else.

And yet, the economic paradigm that we have been following for decades has become obsolete. Worse yet, its premises of free competition and maximizing personal gain, founded on the belief that those traits would keep the system healthy and running, have proven themselves wrong. We have made consumption a culture we call “consumerism,” we have consecrated and venerated individualism and entitlement, and we have created inequality so extreme that 1% of the world population possesses 40% of the world’s wealth! The rest of the world suffers from deepening financial insecurity, or worse. Even in the most developed countries, millions go to bed hungry each night, tens of millions have no health insurance, and millions are not only indigent, but hopeless.

The Earth can provide abundantly for all of us, but our mutual alienation prevents us from distributing food and other necessities to those in need. The global crisis and global protests testify that people are no longer willing to tolerate this injustice, and that transformation has become the call of the hour.

The first thing to change must be human relations; after all, that is the root of the problem. When that element has changed, the rest of life’s systems will change accordingly. In a global-integral world where all are interdependent, the prevailing spirit of human relations should be one of mutual guarantee, where all are guarantors of each other’s well-being.

If we ponder the meaning of the network of connections we have formed through globalization, we will see that the incongruity between our self-centered approach and the interdependent nature of our connections is the cause of the crisis. And since globalization is an irreversible fact of life, what’s left is for us to adjust our relations to this reality. Therefore, if we assume a modus operandi of mutual guarantee—which is congruent with interdependence—we will resolve both the global crisis and social unrest.

This book contains thirteen “stand-alone” essays written in 2011 by several economists and financiers from different disciplines. Each essay addresses a specific issue and can be read as a separate unit, but one leitmotif connects them—the absence of mutual guarantee as the cause of our problems in the global-integral world.

You can read the essays in the order of your choice. We, the authors, believe that if you read at least several of the essays, you will form a more inclusive picture of the shift suggested in the pages ahead, the transformation required to resolve the global crisis and create a sustainable, prosperous economy.

To facilitate the shift as quickly and smoothly as possible, the influence of the environment is key. The key to a successful transition from independent to interdependent paradigm lies in expansive education and circulation of a) the necessity to change, b) the nature of the required change. The media and the education system can and should play a lead role in creating an environment that both informs people of the kind of change required, and supports its expansion.

A solution must not be forced. This will only lead to a painful failure. To achieve mutual guarantee, we must mutually take part in rebuilding our social values. This should be done within the framework of a social-economic treaty, and it should unfold gradually, maintaining broad consensus and deliberation throughout the process. If we work in this way, we believe that the global crisis will manifest as a golden opportunity for all of humanity. It will enable us to live in lasting economic and financial security, based on a connection of mutual guarantee among all people. The change must, of course, begin with us.