IN 1797, the great German writer Johann Wolfgang von Goethe (1749-1832) wrote a poem entitled Der Zauberlehrling, “The Sorcerer’s Apprentice”. It relates the unfortunate experience of an apprentice sorcerer who, in the absence of his master, conjured up a magic spell over a broom to carry water for him into the room where he wanted to have a bath. But he couldn’t stop the flood that followed until the sorcerer himself came back and controlled it! Through the poem Goethe might perhaps have symbolized some reflections on his epoch. Europe was in a crisis: French revolutionary ideas were releasing forces beyond the control of established powers. Hence the remaining influence of the tale over the ages.

Our epoch is one of them. For more than ten years, global crises have occurred one after the other. In the summer of 1997, the Asian financial crisis gripped the developing countries of South-East and East Asia to a point that the contagion was threatening to generate a global economic meltdown. That was one of the first signs of financial and economic globalization indirectly induced by new information technologies. The inter-connectivity without which such phenomenon could not so quickly develop is also an important factor of the emerging following crises. Just to mention a few, the traditional sources of energy (coal and oil) are decreasing; hence the intense global competition in their quest and the research for alternative new resources. Among them, more recently, the bio-fuel technologies have attracted great attention and hopes, but with important negative consequences for the agricultural growth of developing countries, and this in particular through the use of information technologies employed by the virtual trading on the global free market. Purchases and sales orders are exchanged at great speed that affects the prices of food and raw materials around the world. Obviously such speculation does not care to ship these goods to where they are most needed.

This mixture of the virtual economy of trade with the real economy of goods has appeared more clearly through the financial global crisis of the world banking system that developed in the last eighteen months (2007). The narrative of the drama is now quite well-known. Based on the healthy attitude of trust that permits financial credit to be given to many people in need of a home, despite the risks involved, the tragedy began when greed and hubris bewitched finances: greed, for the financial conditions of the “subprimes” were finally too heavy for the borrowers to bear; hubris, for the debts incurred by the banks on the unfulfilled contracts have been “securitized”, that is transformed into “securities” (void of any capital) and sold like any other ones. From bank to bank the trust began to crumble. Hence the “credit crunch tsunami” that has surged throughout the present world economy among banks, investors and so many small depositors! In this respect, even without any crook ( ! ), to coin an antonym from a great movie name: “No risk too far!”

The recent development of capitalism has transformed banking and finance into closely related industries having their financial and banking products. But capitalism is known also through various schools of thought on the ways it needs to properly be implemented —either totally free from external intervention on the world market or with more regulations to prevent crises (1929, 1997, 2007) from occurring again. With its new sophisticated financial and banking products, in order to cast away the spell of greed and hubris, the virtual economy of invested funds that capitalism generates by itself should not boast to be solely rational. Its relation to the real economy of goods in the global market is essential for it to remain responsible for the common good of many in the world and so ethically reasonable. No doubt this is the wish that the Sorcerer should offer to his modern apprentices to restore trust in 2009!


Yves Camus 赵仪文, Editor

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