This is a really interesting topic.
Certainly, we need to think very carefully about where we need resilience in our systems, and where it is dangerous.
This enters the whole question of understanding ecosystems. Some people still have a notion that nature is some sort of perfect harmony, and we came along and stuffed it all up. Many scientists are now aware that the reality is nothing at all like that. Life as a whole seems to be an open system at the largest scale. At various sub scales there are various homeostatic mechanisms that have evolved to limit changes, and hold various variables within limits that allow life to function, and there are many other variables that are not so constrained.
Thus it seems more appropriate to characterise life as a process of exploration of possibility space that is constrained at various levels by the particular technologies used at those levels to support the replicating systems that we recognise as life.
When I first read Richard Dawkins’ 1976 classic “The Selfish Gene” (which I did in 1978) I was fascinated by John Maynard Smith’s work on multiple stable state equilibria, as well as the recursive nature of replicating systems (in both the genetic and mimetic realms).
Coming back more directly to the topic of this discussion, and stepping out yet another level; it seems to me time to look at not just the resilience of aspects of our economic systems, but the entire utility of money and markets.
In essence, money is a token of exchange value that is used to speed the transactions in a market. Thus monetary value has both supply and demand functions, each of which can become extremely complex and multi levelled; and at the same time, there remains an essential simplicity to the concept.
A market is a tool for arbitraging between various values, and it is founded on the principles of unequal distribution, and optimisation of the allocation of scarce resources.
But what does a market do if resources are no longer scarce?
There is so much doom and gloom talked about the end of oil, and the damage to society – but it is all nonsense, generated by thinking that is limited by, and been captured by, the idea of markets; and the valuation system of money that markets deliver.
If we are able to step back, and look at the potential of the technologies we now have at our disposal, it is easy to see that we are now capable of generating self sustaining technologies that can produce abundance of all the necessities of human life. Yet there is no economic incentive to do this, because money is a market measure, and if we destroy markets, we destroy money.
As soon as the scarcity of an item drops to zero, and there is no incentive to trade in it, then there is no monetary value in it – whatever the human value may be.
Monetary_value = Human_value * Scarcity (where Scarcity = 1 / Abundance)
Thus, it seems to me entirely probable, that it is the resilience of the entire monetary system itself that is the greatest threat to our survival, rather than the resilience of any subsystem within it.
It is continued thinking in terms of money that threatens us.
The reason that it threatens us is that money has the inbuilt scarcity function, and thus has a deep incentive towards an optimal level of scarcity at all levels.
There are not, and cannot be, any economic incentives to deliver true abundance to all.
Markets must always (over the long term, and on average) fail to deliver the needed levels of abundance to a significant fraction of participants.
Thus (if our objectives are long term security and freedom and expanding choice [within these braces added June 2013]) we need to start thinking beyond money, and beyond scarcity.
And I get that such a thing is an entirely unreasonable request to make of economists, whose professional lives are based in the concept of money.
And that is what I am asking.
I am being unreasonable.