The period of crisis is a time of realization and reflection- especially when, just like at the present juncture, the crisis is multileveled – not only economic but also moral, cultural and political. It is a period of controversies even for those who used to or strangely still side with the ‘religious’ doctrine of the free market.[1] But what exactly is the issue of controversies? Is it the ‘golden boys’ and the uncontrolled granting of mortgage loans or the whole ideological structure of the free market as it was theoretically justified?
What is under question now is the viability of the system itself, which has been imprinted on our conscience as something natural, ‘un-historical’, above politics, namely as something mythical.[2] Thus, in order to examine and interpret the present crisis in a rudimentary ‘logical’ way, one must dethrone the free market system (i.e. to reject the idea that this is an inevitable system, which just happens to walk on thin ice) and strip it from any cloak of naturalness, universality, scientificity and eternity.
The three main myths, upon which the ideology of the free market was founded, are the following: 1) man is a rational being 2) the invisible hand regulates the market and 3) the market is efficient. This essay will focus on one of the most significant mistakes of the economical theory, the myth of rationalism, which constituted the cornerstone of the conception of homo economicus, as well as of the Efficient Market Hypothesis. The axioms, according to which human beings –while acting rationally– seek exclusively the maximization of profit and the market as a sphere of economic transactions is always balanced, proper and extremely efficient, were shaken to the core by the 2008 crisis. Therefore, we are not facing just a financial bubble, but an ideological one as well.
Read full article: http://intellectum.org/wp-content/uploads/2012/05/ITL08_010017_An-ideological-Bubble_Athena-Avgitidou_superfinal.pdf
