You can hear the gears grinding…
…as the social and institutional framework fails utterly to keep up to the fast changing financial and technological reality…only in this case (any many others around the globe,) the result isn’t just unnecessary inefficiency or foregone growth but potentially the more pressing issue of survival.
Ok, that sounds more dramatic than I wanted but still…
Perhaps it is because I just finished reading Tim Flannery’s ‘The Weather Makers’ (after having read Jared Diamond’s ‘Collapse:How Societies Choose to Fail or Survive last autumn) but I get increasingly upset when I see attitudes rooted in the 19th and 20th centuries obstruct the natural power of freely traded markets to allocate precious resources efficiently. So when I saw Josh’s post on the Australian water debate (which I have been following for sometime as a fascinating story, given my interest in weather insurance, non-traditional markets (ie water-rights in this case), and climate change) I wanted to emphatically second his views as to the dangerousness (and lunacy) of the current situation.
I’ve only ever been to Australia once. For a day. (Long story, short trip.) So I have no obvious personal connection or reason for getting frustrated at what is going on there, nonetheless I have to admit it winds me up. I guess it is because I am convinced that an aggressive and forward thinking deployment of the modern market toolkit could make a real difference in mitigating the disastrous outcomes of the changing weather patterns. No - derivative markets in water rights won’t make the rain fall or make it fall in the right place - but they can make sure that water is used in the most efficient way.
October 21st, 2007 at 7:20 pm
[…] …now that he has time to kill in airport lounges waiting for his next book tour stop? It seems that he shares some of the concerns with respect to the Super Credit Rescue Fund that I raised last week… Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities. […]