Chapter 8. "Exuberance and scarcity"

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Chapter 8. "Exuberance and scarcity" pages 173 - 199

Chapter 8. "Exuberance and scarcity" is the title of the eighth Chapter in the book Transcending Politics by David Wood.

"In this chapter, I’ll explore the likely effect on future financial stability from the trend that underpins all the others discussed in this book, namely the acceleration of technological innovation. Should that acceleration make us more apprehensive about forthcoming financial crises? Or will it instead diminish the importance of money? Indeed, if economics is the study of the allocation of scarce resources, and accelerating technology delivers a sustainable abundance of all the basic necessities of life, where will that leave economics? Will the displacement of scarcity by abundance transform the so-called “dismal science” (economics) into an unnecessary science?"


Lost fortunes over the centuries

One example from each of the last four centuries will set the scene for the question of: what next? The South Sea Bubble investment craze of 1720. The Panic of 1857. The Great Depression that followed the Wall Street crash of 1929. In more recent times, the collapse of the US subprime mortgage market in 2007 triggered multiple banking failures around the world.

Overconfidence over the centuries

What makes these financial crashes more ominous is their degree of apparent unexpectedness. "You've never had it so good", optimists tell the general public.

From slow change to fast change

In other words: financial systems can continue for a long time in the state of intrinsic instability, whilst casual observers just notice the outward signs of stability, and draw the wrong conclusions about likely future developments.

Financial clouds gathering again

It's not possible to provide any strict forecast of a timescale for a new financial crash. It may lie a decade or more into the future; alternatively, affairs could unravel within the next few years. Despite this uncertainty, we should notice at least seven factors which make it plausible that significate problems lie ahead:

1...

Economic maximisation is not enough

Stated more correctly, people often act in ways different from the axiom of "economic maximisation" from which many of the theories in mainstream economics care derived.

Animal spirits

Radical uncertainty - to use a phrase highlighted by John Maynard Keyes - isn't just that there's a spectrum of possibilities, to which we could in principle assign different probabilities based on our private prior experiences. It's a circumstance in which the only probabilities that can be meaningfully assigned are extremely vague ones.

A technoprogressive future for money

A technoprogressive account of the future of money starts with the recognition that money is a technology - a powerful, sophisticated technology. Like other technologies, money is a mechanism...

Investing for sustainable abundance

The world is not short of energy. It receives ample energy from the sun. The only challenge is to capture, store, and transmit that energy effectively.

Page 195 (page 15) She also Transpolitica roadmap

Constancy amidst change

If the technologies listed above undergo the kinds of investment and development envisaged - enabled by a new spirit of transparency - wide changes will be taking place throughout society over the next couple of decades. To the extent that the overall governance of these changes is wise, these developments will be hugely positive for humanity.

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