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Carlos Berzosa, vice-chancellor of the Universidad Complutense de Madrid, keynote lecturer in the sessions on the Financial Crisis

This first conference was introduced by the Vice-chancellor of the UAM José María Sanz, who presented his colleague from the Complutense, attributing his presence at these sessions “to what he is, not to where he is. We all know that Carlos Berzosa is currently chairman of the CRUMA (Conference of Vice-chancellors of the Madrid Public Universities), but his principal merit is being a committed teacher who has dedicated a lot of time to the study of economics and who is also a great communicator”.

Carlos Berzosa started his talk by questioning the hegemonic line of thought that usually characterises the study of economics, particularly that which had held sway over the last twenty years to the effect that the market regulated itself and state intervention was unnecessary, an idea that was criticised in its day, according to professor Berzosa, by both orthodox economists and those of a more social-democratic persuasion: “but nobody took any notice of either group because they were in a minority and that's how things happened.”

According to Berzosa, if the welfare state has not disappeared, it is because in Europe after World War II it had been greatly strengthened, but even so, he warned that the current financial crisis had greatly weakened it. Carlos Berzosa was clear in affirming that in Spain right now the state has very few tools with which to face the recession: “Public sector banks no longer exist, the main state-owned companies have been privatised, we can't devalue the currency because exchange rates are set in Brussels. Curiously now everyone is demanding that the state do something when the fact is we have been stripping its competencies from it.”

The problem of the economy, he said, is that “being as it is a social science, we have sought to convert it into an exact science, and that has led many economists into the area of abstraction, forgetting about how their forecasts affect individuals.” The only solution that Carlos Berzosa sees, in the short term, is a gradual return to the Keynesian model: “Keynes was right, and having observed how the socialist models have failed and seeing that the market's ability to regulate itself and thus the lack of need for intervention is pure illusion, we have to return to a mixed model of free market but supervised by public agents to avoid speculative transactions such as those that have brought us to this situation, in which businessmen have grown rich through financial transactions instead of by selling the products they offer.”

The future does not look bright, says Berzosa, and all measures that can be taken have to be seen as palliative care, “aimed at preventing the patient from deteriorating further, but we must accept that the current financial model is suffering from terminal cancer with irreversible metastasis.” In this situation, and in the hope of an understanding between the political parties “similar to that reached with the Moncloa Pacts.'' (1978 agreements on how to operate the economy during Spain's transition to democracy), Carlos Berzosa says there is an urgent need for a new model, which would not be original since it would be a continuation of that of the post-war economies with a strong state, but which would have to incorporate new values such as sustainability and gender equality in pursuit of a fairer and more equitable society.

Faculty of Economic and Business Sciences