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Questo articolo è stato pubblicato il 02 agosto 2010 alle ore 14:42.
CAMBRIDGE – A specter is haunting Europe – the specter of market confidence.
It may have been fear of communism that agitated governments when Karl Marx penned the opening line of his famous manifesto in 1848, but today it is the dread that market sentiment will turn against them and drive up the spreads on their bonds. Governments all over are being forced into premature fiscal retrenchment, even though unemployment remains very high and private demand shows few signs of life. Many are driven to undertake structural reforms that they don’t really believe in – just because it would look bad to markets to do otherwise.
The terror spawned by market sentiment was once the bane of poor nations alone. During the Latin American debt crisis of the 1980’s or the Asian financial crisis of 1997, for example, heavily indebted developing countries believed they had few options but to swallow bitter medicine ‧– or face a stampede of capital outflows. Apparently, now it’s the turn of Spain, France, Britain, Germany, and, many analysts argue, even the United States.
If you want to keep borrowing money, you need to convince your lender that you can repay. That much is clear. But in times of crisis, market confidence takes on a life of its own. It becomes an ethereal concept devoid of much real economic content. It turns into what philosophers call a social construction – something that is real only because we believe it to be.
For, if economic logic were clear-cut, governments wouldn’t have to justify what they do on the basis of market confidence. It would be evident which policies work and which do not, and pursuing the right policies would be the surest way to restore confidence. The pursuit of market confidence would be superfluous.
So, if market confidence has a meaning, it must be something that is not pinned down simply by economic fundamentals. But what is it?
In his Communist Manifesto, Marx went on to say that it is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the specter of Communism with a Manifesto of the party itself. Similarly, it would be nice if markets would clarify what they mean by confidence so that we would all know what we are really dealing with.