2009 will not only go down in the history books as the year in which the economies of great nations as well as financial behemoths, like prominent banks, were humbled if not decimated in the worst global recession the world has experienced since 1929.

Last year will also be remembered as the year in which a major tenet of economic theory, previously regarded as gospel truth, has been challenged and in some cases proved wrong. Those who believed that the free market should be allowed unfettered freedom, expecting it to be equipped with the mechanisms that balance out supply and demand, will remember 2009 as a very humbling year.

The efficient market hypothesis, devised decades ago by prominent economists within the University of Chicago, stated that the free market has within it all the necessary checks and balances required for it to function serenely, and that allow it to automatically correct any undesired tendencies in favour or against a perfect balance between supply and demand. This theory had become the bible of those practising in all financial fields, gaining blind faith across the board by bankers, financiers and multi-national companies alike. The free market suddenly became an end within itself, and the human worker was a mere tool to reach this end.

This theory and its exponents came crumbling down last year, as the greatest recession of modern history showed how blind faith in money and under regulated markets alone will lead to the destruction of the market itself. The mammon of money had been busy sowing the seeds of destruction for the past decades – that matured last year in the loss of thousands of jobs and grief worldwide.

For many in Europe, the secret to keep the balance within the European internal market and keep it free from monopolies while assuring complete competition was economic liberalism, that was believed to result in a better price and service to the end consumer. Anglo-Saxons especially believe that the ‘pains’ brought about by free competition is justified by the search for efficiency and fairness. On the other hand the French will argue that the coin indeed has another side to it - solidarity and protectionism by the state – an eternal debate that was rekindled lately in the light of the nomination of the French Commissioner for the internal market, which raised eyebrows in the City of London.

PN-led governments in Malta which have always believed in a social market since 1987, have been proved right in last year’s financial meltdown. An economic policy that opened the market to free trade and competition in a way that flourished efficiency and contributed to a boom in private sector employment, but also paid attention to those in need, helping them and incentivising their growth. A policy that looked out for those on the margins of society and helped them get on their feet and move on. Empowerment is our guiding light.

I truly believe that one of the main reasons why following such a terrible 2009 we only got away with it, with a few scratches rather than the metaphorical bruises greater countries incurred, is the economy with a human face we always embraced.

Classical Rome prided in this maxim: In medio stat virtus, or virtue lies in the middle. Salivating in the face of extreme positions is wrong, and this applies in economical and monetary thinking. It is essential that we strive in this chosen road as a party and as a government, because it is the road that mitigates as far as humanly possible crises like last year’s whilst providing wellbeing to our people.

Jason Azzopardi is Parliamentary Secretary in the Finance, Economy and Investment Ministry

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