Capital Flight and what it tells us about how to address global problems

1.  Rapid capital flight from so called emerging economies like Brazil and India demonstrates the profound and inherent volatility of global financial markets

2. Also shows Minsky-ian nature of markets: speculators get out because they fear others may do so first, creating self-sustaining cycle

3. And it’s not at all clear that tools of international cooperation, including the IMF, are adequate to mitigate this volatility and prevent negative consequences (indeed, there’s a strong argument that IMF prescriptions in eg Greece have made things much worse)

4. Thus showing, as in other global problems like climate change, that international machinery, premised on inter-governmental cooperation, is inadequate for managing let alone solving global problems: there is a “category” mismatch between the nature of the problem and the structures to deal with it.

5. Solution?  World government is implausible and inherently anti-democratic, we therefore need to “build in” effective measures from the bottom up

6. Such agent-based measures have proven most effective compared to top-down alternative in effecting change in complex systems, such as the world economy (indeed the world) today

7. This is the philosophy behind @OccupyMoneyCoop and @MajuroDec, one to address financial system, the other climate change, by promoting bottom-up action

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