ladder to Heaven. The Tower crumbled when the communication mechanisms
of finance were lost. In the last twenty years the global economy has undergone
enormous economic growth. Europe and North America, created a consumer
based, materialist Tower Babel made of debt and excessive leverage. This Tower
collapsed as confidence in the language of the financial world (debt, securitization,
leverage and antidotes trust, liquidity and interbank lending) collapsed.
Although the latest crisis appears to originate in the financial sector, the
origins are much deeper. Capitalism and the relentless search for competitive
advantage, has resulted in huge volumes and variety of goods and services.
Demand has to keep pace with supply, which marketers seem to understand, but
economists have ignored. Over the last twenty years, the manic search by firms for
competitive advantage has been most marked in the speculative mentality of the
financial sector, creating Towers of debt based on speculation.
The recent Tower of Babel, like the archetypal one, was built on illusory
foundations of symbols, or building blocks of assets that had value only so long
as people continued to deceive themselves that they had value. It was bound
to collapse at some time; the critical point occurring when the language of
communication broke down. The builders, suppliers and managers of the Tower
eventually ceased to communicate because they no longer believed the assets of
their trade, debt and liquidity have any real value.
But there are a positive effects, which may be dormant within the
complexity of the global financial network. They arise from its complexity and
independence. Perhaps we should understand the collapse of the modern Financial
Tower of Babel as signalling a critical point, opening up the possible emergence
of new languages and new understanding of dimensions of Being that include, as
well as the necessary game of increasing wealth (and as Keynes pointed out in
relation to the depression of the 1930’s, the game need not be played for such high
stakes, and with such inequity, as in the building of the Financial Tower of Babel),
dimensions of soul and spirit.
In 2011, the situation was largely influenced by positive news from the
world’s top-performing economies and from commodity markets. The leaders
of the global economy made every effort to mitigate consequences of the crisis
in the corporate segment by purchasing toxic assets and liberalizing monetary
policy. Such actions allowed for stabilizing corporate lending and, consequently,
supporting retail consumption.
For example, consumer spending in the USA, which accounts for about 70%
of the national economy, increased by 2.1%, having become the major source of
GDP growth in 2011. Trade deficit was also decreasing. The Eurozone, in turn,
supported economic growth with positive GDP changes (by approximately 2%,
annualized), industrial production growth (by 0.6%), and flat unemployment rate
All of the factors listed above positively affected the Russian market,
which managed to maintain domestic demand on the part of both consumers and
investors, despite a certain downturn in real disposable income of the population
(–1.4%) and a below-expectations GDP growth rate (3.6%, annualized, compared
to the previously expected 4.3%). The recovering lending market had a positive
impact on consumption and, as a result, the market showed a significant increase
in retail turnover (by 5.4% compared to the similar period of 2010). In addition,
starting from May 2011, the construction sector started growing faster, which also
contributed to GDP growth. All of this was supported by high prices for energy
However, as early as by the end of summer 2011, uncertainty about...