The difficulties facing our political
leaders in deciding how to navigate the
perilous economic waters are manifest.
leaders in deciding how to navigate the
perilous economic waters are manifest.
As George Soros asserts in his book
The Credit Crisis of 2008 and what
it means - 'the
prevailing paradigm for
financial markets - that markets tend
towards equilibrium and deviations
are random - is both false and is
misleading'.
He describes his theory of reflexivity
-
that in seeking to understand a
complex world, financial players base
their investment decisions on
imperfect
knowledge, compensating for their lack
of understanding of what is happening
at lightening speed in
the interconnected
global financial markets 'with guesswork
based on experience, instinct, emotion,
ritual and other misconceptions'.
While these weaknesses in understanding
leave us largely at the mercy of
the
unknown, what is certain is that Gordon
Brown's huge increases in public
spending and state
control, occurring
within his constantly changing economic
cycle, bring into question the future of
free-market economics, with bureaucratic,
severely risk-averse banks
cutting the
ground from under small businesses,
which are the backbone of our economy.
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