Linas Vepstas wrote:
My objection to economic libertarianism is its lack of discussion of
"self-organized criticality". A common example of self-organized
criticality is a sand-pile at the critical point. Adding one grain
of sand can trigger an avalanche, which can be small, or maybe
(unboundedly) large. Despite avalanches, a sand-pile will maintain its
critical shape (a cone at some angle).
The concern is that a self-organized economy is almost by definition
always operating at the critical point, sloughing off excess production,
encouraging new demand, etc. Small or even medium-sized re-organizations
of the economy are good for it: it maintains the economy at its critical
shape, its free-market-optimal shape. Nothing wrong with that free-market
optimal shape, most everyone agrees.
The issue is that there's no safety net protecting against avalanches
of unbounded size. The other issue is that its not grains of sand, its
people. My bank-account and my brains can insulate me from small shocks.
I'd like to have protection against the bigger forces that can wipe me
out.
I am skeptical that economies follow the self-organized criticality
behavior.
There aren't any examples. Some would cite the Great Depression, but it
was caused by the malinvestment created by Central Banks. e.g. The
Federal Reserve System. See the Austrian Business Cycle Theory for details.
In conclusion, economics is a bad analogy with complex systems.
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