Tomáš Sedláček on Greed, Debt, and the End of the Economic Priesthood

By
Tomas Sedlacek, chief macroeconomic strategist at ČSOB

In 2007, the Yale Economics Review named Czech economist Tomáš Sedláček one of the “Five Hot Minds in Economics,” and since then, he has failed to disappoint. Sedláček’s book, The Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street, published in English in 2011, propelled him onto the global stage.

At the CFA Institute European Investment Conference in 2012, he issued a warning about selling economic stability to buy economic growth. As a participant in the State of Europe Forum 2013, Sedláček explained that economics, which has been fetishized by modern society, has now enslaved us.

The unique quality of Sedláček’s message is its inclusion of and reliance on the observations he has gained from an astounding array of sources: religion, philosophy, history, mythology, psychology, literature, and even contemporary movies. One example is his statement that “the original sin has the character of excessive, unnecessary consumption. . . . Greed is the beginning of everything.” In his view, greed, taking the form of indebtedness, has created an economic environment that is unsustainable. Interestingly, Sedláček points out that the word for “debt” is the same as that for “sin” in Latin, Greek, and Aramaic.

But Sedláček’s viewpoint is anything but preachy. He interweaves lessons from the fields of psychology, characterizing the developed world’s economy as manic-depressive, in which we are desperately seeking a return to the manic state of growth; from Aristotelian philosophy, decrying the dangers of excess (and its byproduct interest—i.e., debt); and from the film Fight Club, based on the novel by Chuck Palahniuk, in which a central character laments that people are working in jobs that they hate to buy things they don’t need.

Indebtedness is so destructive to an economy that Sedláček states “it could quite easily be that one of the ways the West could go down is. . . we will indebt ourselves.” Sedláček is optimistic, however, that the time of economists as “priests” is coming to an end. He hopes that a metamorphosis to an economy that values the invaluable and where economics operates, as Keynes once envisioned, as a “maintenance service” rather than a “religion” is our future.

Don’t miss Tomáš Sedláček’s current thinking on the global economy when he speaks at the 67th CFA Institute Annual Conference in Seattle, Washington. You can register to attend the conference and follow this blog for news and updates about the event.


The content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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One Response to Tomáš Sedláček on Greed, Debt, and the End of the Economic Priesthood

  1. Valerie Ridings says:

    Great eye opener. Spot on when it comes to impulsive behavior in society. Enjoyed reading this.

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