Mary Branscombe (marypcb) wrote,
Mary Branscombe
marypcb

Consensual commercial reality

I'm wondering if we could try an experiment. I know that there are plenty of valid economic reasons for the current mess, but there is also the thing that makes treating economic as physics a bad idea - human nature. Money is essentially a consensual fiction that we agree to believe in and honour without demanding that we be able to prove the specific causal connection to anything material or productive in every case; that makes banks Tinkerbell, fading away if we stop believing in them. Take Washington Mutual, which ran into problems because savers took their money back because they were worried it was going to run into problems. The markets fall because traders are worried about the economy, and the economy looks rocky because the markets fall; there are external forces, but there's also a lot of internal feedback and loss of belief. And some of that belief was always in something essentially imaginary, an agreed-upon abstraction that bordered on fiction. Any sufficiently advanced economics is indistinguishable from magic to the mass of the population.

So where there aren't provable external forces - beyond that loss of belief - at work, could we perhaps try suspending disbelief again and see if the abstraction works again? Because otherwise it takes the emperor a long time to put the suit on again...

BTW, much of the technology industry has always been driven by the financial services industry; and while the latter is in a mess, the financial companies that do survive are going to be looking for more technology rather than less, to keep productivity up, to stay on top of the regulations, to look for competitive advantage - and to deal with all that M&A...
Tags: money, politics
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