posted on May, 3 2010 @ 11:24 PM
reply to post by slank
It seems to me that bubbles have become the de-facto engine of growth in the developed world if not the world in general, despite their inherent
irrationality. I would not call this a good development and generally I'm on the "doom-y" side of things. Yet I sometimes wonder if it is
theroretically possible to drive an economy indefinitely with bubbles, despite their underlying lack of substance. If forced to anwer one way or
another at gunpoint I would say "no," and yet the carnival merry-go-round seems to keep turning year after year, long after reason suggested to me
that the game would have ground to a halt.
One interesting possible underlying trend is that technology, efficiency, and productivity may have reached a point already where there really has
been a "paradigm shift" in terms of creating more new value. True paradigm shifts, while rare, are not unknown -- look at the Industrial Revolution,
for example; we have not even come close to retreating from the gains made since the 1700s, and few would argue that life is not genuinely better for
humans now than then, at least in the developed world. Of course, the arguments of total sustainablity and other fundamental limits challenge the
assumption that we *won't* retrench to pre-eighteenth-century levels.
If we have indeed reached such a shift, the profusion of bubbles would show a flaw in the general distribution-of-wealth model rather than in the
process of underlying value creation, and could be a symptom of the need to adjust to fit new levels of value creation rather than a sign of long-term
collapse or malaise. Going even further out on a limb, I think its possible to at least conceive
of a system in which a boom-bust cycle (i.e.,
a more extreme and erratic form of the old business cycle) could serve as a catalyst or even basic framework for value delivery itself, albeit in a
rather rough-and-tumble manner.
[edit on 5/3/10 by silent thunder]