"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Friday, December 19, 2008

The Financial WTF in Context

Walden Bello has put together a fascinating presentation putting the financial crisis in context.

It's more leftist in tone than I'd like, and I'm not sure it adequately understands the irrationality of growth addiction, which really is shared by left and right.

Also a couple of the slides are misformatted.

All that said, it does focus on the key role of manufacturing overproduction and excess capacity in the present financial disaster. I think it's a very helpful and insightful summary and I am definitely adding it to my conceptual arsenal. Maybe you should do likewise?

I stole the wonderful image from the presentation. It's based on what for all I know is, or at least once was, a heavily advertised bubble bath product called Mr. Bubble.

1 comment:

tidal said...

Simpler, more direct url is http://focusweb.org/pdf/wallstreetmeltdown-beijing-oct-17-2008.pdf