November 20, 2008 (LPAC)--Italian Economics Minister Giulio Tremonti was the first member of an acting government to ever open the academic year at the Catholic University in Milan. Tremonti developed the theme of his speech, "social market economy," by calling for a new economic system that allows the long-term survival of society, and described the current crisis as due to globalization. He repeated his call for dealing with the derivative bubble in the only way possible: cancel it.

"If I can use an image, it is like living in a video-game, with a key difference: In a video-game you can turn it off and the game is over. This is a video-game that will not be over. And just like in a video-game, you face a monster, you beat him and you start to relax, but another one comes, bigger than the first one; thus, the first monster was the sub-prime and somehow it was managed; the second monster was the collapse of credit and it was somehow managed; the third monster is the bankruptcy of the main financial institutions and it was somehow managed; the fourth one is the collapse of the stock markets, but behind the corner there are more monsters: the credit cards, the expected corporate bankruptcies due to troubled classification of corporate bonds, and then the monster of monsters, the derivative one, where the folly of incalculable risk appears, of non-intentional but collateral effects, definable not ex ante and not manageable without procedures that could evoke in the economic realm, the old wisdom of sabbatical year."

Tremonti quoted Cardinal Ratzinger in a 1985 paper, in which Ratzinger forecasted the collapse of a system based on market rules in the absence of "a discipline based on a strong ethical and religious order.. "We are in a terra incognita", Tremonti said. "In the current moment we are inside a situation characterized by big critical complexities. I said in a conference that this is not a recession cycle but a discontinuity... of a crisis that nevertheless leads to a solution, but you must go through it. I think that we must have scientific ignorance, knowing of not knowing. I think we should be diffident towards those who do not know that they do not know, those who, not having forecast the breakout of the crisis, want to explain to you how it will develop."

Tremonti listed a series of key changes introduced by globalization, that caused the crisis. Among these, he mentioned the rejection of Luca Pacioli's system of "double-entry bookkeeping". Calling it a "tribute we owe to an ancient Franciscan," Tremonti said that this shift was not a simple accounting change, but "a fundamental political and moral shift." "The real account is the world of values and the economic account is the world of prices. The real account is the world of values where you see the structure, the history, the origin, the present and the future of a society, as well as its industrial and moral mission." "The crisis we are living in is the crisis of a paradigm, which in the last 10-15 years has been dominated by the ideology of demand for consumer goods, often superfluous ones, better if purchased through debt... and eventually, the crisis of positivism that, at the same time, like in an insane oblivion of natural law, has deceived us into thinking that everything could be dominated by other than what is in our tradition, in the idea of a fair order, in the view of a fair social order which inspires the magistracy of the Church. The separation of moral law and economy, the effect of positivism has produced a view of man and of society in which morality is nothing but a subjective choice, and irreducibly so. Law [has become] nothing but the exercise of command by those who detain power, justum quia jussum, and the economy is nothing but an anonymous mechanism of satisfaction of individual and irrational whims, de gustibus non disputandum est... Moral law and economy have been separated, and globalization has accelerated this process, sublimated it, and favored the illusion that the individual person can always and increasingly distinguish between good and evil without the help of moral, of tradition, [but] on the basis of pseudo-scientific abstractions rather than on the basis of historic reason, as if one could crush man, values, time, space and history".

The solution to the crisis goes through a new system, that "will replace the paradigm of demand for superfluous and debt-driven consumer goods, it will be a moral, civilian and political paradigm that organizes demand on collective investments done for the common good: not for the present but for the future, and not debt-driven but made on a solid, ground-laying perspective. It will no longer be the market but individual and collective consciousness to judge power, not the other way around. One thought can inspire us on this road, an old and wise thought by Plato: `The only good currency to be changed with all others is phronesis: a practical intelligence.' Above all if it is guided by God."