Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (34615)	7/26/2010 6:17:30 PM
From: pltodms	Read Replies (1) \| Respond to of 46821

Hi Jim, Your post on “Systemic Fear, …” was a mesmerizing read. I was planning to only scan through it but it gripped my attention and could not put it down till I reached the end, all 42 pages. This paper presents a lucid overview, in what I found to be in simple terms, of the wondrous invention called capitalism. How it allowed creativity to flourish by its forward-looking foundation on risk-taking. The results have been spectacular with what we’ve seen in the exponential growth of capital (aka societal value) over the last century. At the same time it warns of the danger that this forward-looking (NPV) approach to pricing capital can work precipitously to promote a collapse of the whole edifice our society is founded upon, if the economic power structure starts to fear the uncertainties of the future (peak oil, climate change, resource limits, perpetual war). The paper’s bibliography is also interesting. It does mention Tainter’s “The Collapse of Complex Societies”, which brings to mind related SI post : Message 26447011 Here are some excerpts for those who may not be as inclined as I was to read the complete essay:: As noted, systemic fear is not unique to capitalism. But in our opinion, the likelihood of systemic fear turning gradual decline into rapid collapse is much greater in capitalism than in any prior mode of power. There are two related reasons for this claim. First, modern capitalism is much more “complex” than earlier modes of power, and that complexity makes it susceptible to implosion. Second, unlike other modes of power, the ritual of capitalization acts as a “time transformer”: it condenses the long future into the singular present, and that reduction can turn capitalist expectations – particularly during times of systemic fear – into an immediate reality. Let’s consider these reasons more closely. (…) Korowicz’s collapse scenario focuses on peak oil, but its dynamics can be readily generalized. Regardless of whether the capitalist of mode of power is expanding, declining or collapsing, the forces that drive it – social as well as ecological – are always mediated through the ritual of capitalization. This ritual is unlike any the world has ever known. It endows every member of society with a miraculous power previously reserved to wizards, oracles and prophets: the ability to “transform” the future into the present. By discounting expected future earnings and risk, capitalization encapsulates their complex social and ecological causes into a single value – and then sends it back to the present. Under normal circumstances, this all-encompassing “time transformer” enables capitalists to manage their fears and exert their power in ways that previous rulers could only have dreamed of. But the ritual also has a dark side, a lightning-like menace that prior rulers could not even fathom. As long as capitalists take their mode of power for granted, capitalization makes their power appear unassailable. But when they begin to doubt their own ability to rule, any serious future threat – from peak oil and climate change to the inability to further redistribute income and reduce earnings volatility – can be time -transformed into an immediate collapse. (…) As the dismal record of apocalyptic prophecies warns us, predicting collapse before it happens is much harder than explaining it afterwards. One stumbling block is that, until recently, historical societies simply didn’t provide the kind of quantitative information with which physicists, biologist and environmentalists make their predictions. (…) The arrival of capitalism abolished this scarcity. For the first time in history, social quantities became abundant to the point of being virtually free. The price system quantifies everything that can be owned – from tangible and intangible objects, to human beings, to social structures – and the application of probability and statistics shapes these quantities into an infinitely complex numerical structure. This is the quantitative context from which political economy, the first mechanical science of society, came into being; it is the bedrock on which social sciences could subsequently flourish, and it is the raw material that gives contemporary students of society the confidence that they can scientifically articulate its future. (…) But unlike in nature, the rules of society are autonomous. They are created not by an external logic, but by society itself. And that autonomy implies that the collapse of society and the disintegration of its rules, by definition, are one and the same. (…) But unlike in nature, the rules of society are autonomous. They are created not by an external logic, but by society itself. And that autonomy implies that the collapse of society and the disintegration of its rules, by definition, are one and the same. --- "Systemic Fear, Modern Finance and the Future of Capitalism" Message 26709489 ---------------- This essay posted by Frank relates to the above so I felt it is warranted to included here. Whatever the way out of the direction the “System Fear… “ essay points to, intellectual capital has to be the foundation of any new economic system. Such a system needs an education structure that is not monopolized by the few elites and IP rights have to be redefined accordingly. Edu Essay: The structure and silence of cognitariat By Christopher Newfield \| Edu Factory \| Jan 2010 Message 26708258