The Math is Different at the Top (Part II)

2 posts / 0 new
Last post
ashvinp's picture
Status: Gold Member (Offline)
Joined: Jan 20 2010
Posts: 412
The Math is Different at the Top (Part II)

Financial Threats to Power


This is part 2 of a series. Part 1, "The Math is Different at the Top", briefly discussed a simple paradigm that has governed human societies since at least the Industrial Revolution - the one which dictates that most major economic policies implemented throughout the world have benefited ever fewer and more centralized institutions of power. This straightforward logic accelerated greatly after World War II and the explosion of debt-dollar finance in the 1970s (elimination of gold standard), but was taken to its ridiculous extreme after the onset of the global financial crisis in 2007-08.

We were repeatedly told that major financial institutions were in "deep trouble" after the American sub-prime housing meltdown, yet these very institutions reported all-time record revenues and corresponding bonuses in 2009-2010, just one year after the global economy was on the brink of collapse. Meanwhile, wealth inequality in terms of incomes, financial worth and net worth has never been greater in the developed world. Regardless of whether this phenomenal transfer of wealth was a premeditated, coordinated effort by global financial elites, or a more "natural" result of financial evolution in a capitalist system, it is undeniable that the practical effects are the same - the rich get richer and more powerful while the poor get poorer and more desperate.

It is the latter fact that potentially poses a serious threat to the financial elites and their existing structures of power, as perhaps evidenced by the popular revolts throughout Africa and the Middle East, and to a lesser extent, the EU periphery and South Asia. This article will explore specific developments of the ongoing financial crisis from the perspective of financial elites, and their goals of maintaining the global structures of power that provide order. The financial crisis reflects a systemic, structural instability that may reverse the global trend towards increased socioeconomic complexity, which has always fed into and off of the concentration of wealth and power.

Complexity as a function of finance, therefore, is perhaps measured best by levels of global wealth inequality, and as mentioned before, these levels are still getting worse (more unequal). However, there comes a tipping point at which an overly-complex system begins to consume itself, as the peripheral networks and central hubs become less stable and less attached to the overall structure of the system. In this sense, the more damaging a crisis is to the ability of populations around the world to maintain their relative share of the global wealth pie, meager as it may be, the more difficult it will be for existing financial elites to maintain global complexity, order and control.

Full piece at TAE -

debu's picture
Status: Silver Member (Online)
Joined: Aug 17 2009
Posts: 222

Thank you for this work.  It is fantastic.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments