Sunday, November 9, 2008
Postmodern Financial Reality
The world financial system is in chaos as governments seek to control the damage. There are as many economic projections as there are economists and many honest economist admit they had no idea that this crisis was coming and no idea what will happen in the future.
Economics grew out of the Enlightenment period when it was believed (and indeed is still proposed by many) that every thing can be understood if we analyse it enough! There is a belief that universal explanations can be found for all scientific and human phenomena through disciplined research.
The problem with this idea is that world conspires against such theories by becoming more and more complex, fragmented and unpredictable.
It is clear that the unregulated financial markets have become more and more complex and uncontrollable and are really underwritten by human emotion not some rational system as claimed.
It is the complexity of technologies offering instantaneous and simultaneous transactions from as many points on the globe as there are stars in the sky combined with the real human emotion of fear that makes the global financial market so hard to understand and to control.
Rationalities founded in the optimism of the Enlightenment that look to universal explanations will be inadequate in identifying these crises and their cause.
In the end we have to live in an exciting world of unpredictability, complexity and fragmentation and manage risk as best we can without the comfort of the Enlightenment promise of understanding, managing and exploiting everything.
For a proposal for a new Economy read David Korten article "Beyond the Bailout:Agenda for a New Economy" http://www.yesmagazine.org/article.asp?id=3050
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