August 3, 2008

Not so irrationally exuberant

A few days ago I wrote a short, bumptious piece where I asserted that:

1 The current financial crisis will be short lived and have less economic effect than many are currently predicting.

2. We are on the edge of one of the most productive and expansive periods of human development in the whole of our history.

Now, of course, I could be wrong about both. The current financial crisis may be more serious than my reading of it and we may screw up so badly that the second doesn't happen. But my sense is that we will find that while the current financial crisis is less apocalyptic than some are suggesting, it will not be the last of such financial shocks. These will continue until it is grasped that wealth capture as opposed to wealth creation is in the end chasing after fool's gold and becomes thoroughly discredited. Only then will there be a shift from financial investment to productive investment, which will usher in a new era of human creativity and productivity, which, incidentally, will include developing a more sustainable way of life.

Now, I base my assertions on a crude form of pattern recognition that I find hard to articulate. Thankfully today, following a strange and eccentric path, I came across two talks by Carlota Perez, which in a clear, articulate and detailed argument makes me think that my pattern recognition may not be so irrational after all.

Leaving aside my views, which are based on profound ignorance anyway, I do urge you to set aside some quiet time to watch these two videos. These may be some of the clearest explanations of what is happening now that you will come across. Really, really important stuff:

Interview by R. Farnsworth of CISCO Exec. Thought Leadership

Lecture at IBM Leadership Forum, Rome 2006

And when you've looked at those you can download the Powerpoint of her 11th Annual Marie Jahoda Lecture, October 2007 as an aid to quiet reflection on what you have seen in the videos.

Posted by richard at August 3, 2008 1:55 PM