Economic Instability Quotes

How often do police accidentally shoot and kill bankers who are committing financial crimes, stealing homes, and plunging the nation into economic instability and recession?

The process by which wants are now synthesized is a potential source of economic instability. Production and therewith employment and social security are dependent on an inherently unstable process of consumer debt creation. This may one day falter.

Hunger, poverty, environmental degradation, economic instability, unemployment, chronic disease, drug addiction, and war, for example, persist in spite of the analytical ability and technical brilliance that have been directed toward eradicating them. No one deliberately creates those problems, no one wants them to persist, but they persist nonetheless. That is because they are intrinsically systems problems—undesirable behaviors characteristic of the system structures that produce them. They will yield only as we reclaim our intuition, stop casting blame, see the system as the source of its own problems, and find the courage and wisdom to restructure it.

Large numbers of under-capitalized banks were a recipe for financial instability, and panics were a regular feature of American economic life - most spectacularly in the Great Depression, when a major banking crisis was exacerbated rather than mitigated by a monetary authority that had been operational for little more than fifteen years.

The failure of the roman system to furnish decent minimal standards for the mass of people was a fundamental cause of instability, both political and economic.

The impact of all this persistent inequity on the economic (in)stability of unmarried women is profound.

The pandemic’s mandatory lockdown has set in motion an array of economic, political and global instabilities.

The issues the Panthers organized around fifty years ago are still with us. Our justice system is unjust. Police conduct in nonwhite neighborhoods generates systematic abuses. The middle class is shrinking. Our education system not only continues to fail poor children, it often propels them to prison. In addition to these continuing issues, there are new wrinkles. The spectacular rise in economic inequality—“99 percent of all new income today goes to the wealthiest 1 percent”12—has caused the barons at Davos, Switzerland, to note that the immense political power the 1 percent wield because of their control of resources is skewing society and creating instability. Scientists warn us our planet is in jeopardy due to global warming. The future is uncertain.

We should look closely on what is happening at the moment, guys with little moustaches can pop up everywhere now given this instable economic situation. A look into history shows us what that could mean.

How and why, then, did California go about the biggest prison-building project in the history of the world? In my view, prisons are partial geographical solutions to political economic crises, organized by the state, which is itself in crisis. Crisis means instability that can be fixed only through radical measures, which include developing new relationships and new or renovated institutions out of what already exists.

And the United States has not poured endless federal and state dollars into public education campaigns aimed at regulating corporate food production, subsidizing nutritious foods, or ending poverty and economic instability—top predictors of individual health, according to the US Office of Disease Prevention and Health Promotion.43 Instead, fat bodies themselves are targeted in the “war on obesity” and the “childhood obesity epidemic.

Overcrowding, which is one symptom of the population instability, continues. It continues, not because the overcrowded people remain, but because they leave. Too many of those who overcome the economic necessity to overcrowd get out, instead of improving their lot within the neighborhood. They are quickly replaced by others who currently have little economic choice. The buildings, naturally, wear out with disproportionate swiftness under these conditions.

She was theorizing on the Deep State; that enduring Turkish paranoia that the nation really was a conspiracy run by a cabal of generals, judges, industrialists and gangsters. The Taksim Square massacre of three years before, the Kahramanmaraş slaughter of Alevis a few months after, the oil crisis and the enduring economic instability, even the ubiquity of the Grey Wolves nationalist youth movement handing out their patriotic leaflets and defiling Greek Churches: all were links in an accelerating chain of events running through the fingers of the Derin Devlet. To what end? the men asked. Coup, she said, leaning forward, her fingers pursed. It was then that Georgios Ferentinou adored her. The classic profile, the strength of her jaw and fine cheekbones. The way she shook her head when the men disagreed with her, how her bobbed, curling hair swayed. The way she would not argue but set her lips and stared, as if their stupidity was a stubborn offence against nature. Her animation in argument balanced against her marvellous stillness when listening, considering, drawing up a new answer. How she paused, feeling the regard of another, then turned to Georgios and smiled. In the late summer of 1980 Georgios Ferentinou fell in love with Ariana Sinanidis by Meryem Nasi’s swimming pool. Three days later, on September 12th, Chief of General Staff Kenan Evren overthrew the government and banned all political activity.

The rage bubbling up from our impoverished and disenfranchised working class presages a looming and dangerous right-wing backlash. I spent two years traveling the country to write a book on the Christian Right called American Fascists: The Christian Right and the War on America. I visited former manufacturing towns where for many the end of the world is no longer an abstraction. They have lost hope. Fear and instability have plunged the working classes into profound personal and economic despair, and, not surprisingly, into the arms of the demagogues and charlatans of the radical Christian Right who offer a belief in magic, miracles, and the fiction of a utopian Christian nation. And unless we rapidly re-enfranchise our dispossessed workers into the economy, unless we give them hope, our democracy is doomed.

You will live in the midst of economic, political, and spiritual instability. When you see these signs---unmistakable evidences that his coming is nigh---be not troubled, but, "stand . . . in holy places, and be not moved, until the day of the Lord come" (D&C 87:8). Holy men and holy women stand in holy places, and these holy places include our temples, our chapels, our homes, and the stakes of Zion . . . "This preparation must consist of more than just casual membership in the Church. You must learn to be guided by personal revelation and the counsel of the living prophet so you will not be deceived.

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.

Mercantilists promote the view that private market activity often drives the economy into difficulties which require government to intervene and set matters back on course. They typically characterize the economy as cyclical, driven to excesses by human emotions of greed and fear, which cause “bubbles” and “crashes” and interrupt steady progress of society. Government, they say, must prevent these cycles, smooth these bubbles and crashes, so as to achieve less volatility and greater stability in economic growth. Then they persuade government to adopt policies which produce cycles, bubbles, crashes, volatility, high taxes and unemployment, and economic instability —and monstrously large, illicit gains for themselves.

Most people bestow tremendous power onto those human beings we consider evil, who cause of threaten harm to others, even though we know they are acting from their own pain or fear. Would ignoring evil disarm it? Don’t dismiss the idea. As we have declared War on Terror, a War on Drugs, a War on Poverty, a War on Crime, the problems only seem to have gotten bigger. We cling tthe notion of evil as detrimental, unpredictable force in our world and refuse any suggestion that it is not real. We argue for our fear about terrorism or climate change or economic instability, heatedly trying to prove that things are only getting worse. And in doing so, we reinforce the principle that what we focus on grows. We create our experience by where we place our attention. What we resist, persists.

The fire burned on under the cauldron of our culture, and the next doubling of our population would only take 1200 years (0-1200 CE). There would be 400 million humans at the end of it, 98% belonging to our culture, East and West. War, plague, famine, political corruption, unrest, crime and economic instability were fixtures of our culture life and would remain so. I am not collecting signals of human evil. These are all reactions to overcrowding- too many people competing for too few resources, eating rotten food, drinking fouled water, watching their families starve, etc. The ordinary people of the Western empires were ready when the first great salvationist religion of the West arrived on its doorstep. It was easy for them to envision humankind as innately flawed and envision themselves in need of salvation.

The creative destruction that would be wrought by the process of industrialization would erode the leaders’ trading profits and take resources and labor away from their lands. The aristocracies would be economic losers from industrialization. More important, they would also be political losers, as the process of industrialization would undoubtedly create instability and political challenges to their monopoly of political power.

Either way, I suspect that it’s less effective to aim at the Gini index as a deeply buried root cause of many social ills than to zero in on solutions to each problem: investment in research and infrastructure to escape economic stagnation, regulation of the finance sector to reduce instability, broader access to education and job training to facilitate economic mobility, electoral transparency and finance reform to eliminate illicit influence, and so on.

The point is that price stability is only one of the indicators of economic stability. In fact, for most people, it is not even the most important indicator. The most destabilizing events in most people’s lives are things like losing a job (or having it radically redefined) or having their houses repossessed in a financial crisis, and not rising prices, unless they are of a hyperinflationary magnitude (hand on heart, can you really tell the difference between a 4 per cent inflation and a 2 per cent one?). This is why taming inflation has not quite brought to most people the sense of stability that the anti-inflationary warriors had said it would. Now, the coexistence of price stability (that is, low inflation) and the increase in non-price forms of economic instability, such as more frequent banking crises and greater job insecurity, is not a coincidence. All of them are the results of the same free-market policy package.

It is useful to classify the economic and ecological disruptions that make up this “new normal” of instability into two groups: shocks and slides. Shocks present themselves as acute moments of disruption. These are, for example, market crashes, huge disasters and uprisings. Slides, on the other hand, are incremental by nature. They can be catastrophic, but they are not experienced as acute. Sea level rise is a slide. Rising unemployment is a slide. The rising costs of food & energy are a slide.

the largest groups of people who migrate to the U.S.A.—voluntarily, forcibly, unknowingly, like them—do so because of what the U.S. government has done to their countries. How a trade agreement, like the North American Free Trade Agreement, drove millions of Mexicans out of jobs and led parents to cross borders and climb up walls so they could feed their kids. How six decades of interventionist policies by both Republicans and Democrats brought economic and political instability and sowed violence in El Salvador, Guatemala, and Honduras.

What about self-denial, then? If you had a God, you'd have a reason for self-denial." "But industrial civilization is only possible when there's no self-denial. Self-indulgence up to the very limits imposed by hygiene and economics. Otherwise the wheels stop turning." "You'd have a reason for chastity!" said the Savage, blushing a little as he spoke the words. "But chastity means passion, chastity means neurasthenia. And passion and neurasthenia mean instability. And instability means the end of civilization. You can't have a lasting civilization without plenty of pleasant vices.

We have to make a consideration: emotional states are deeply influenced by external events, and here lies the problem. Since the external events are unstable, namely, that they are in perpetual change - a situation that Buddhist tradition defines as “impermanence” - they are very difficult to be managed, and this bring people to panic. This difficulty to experience a reality in which nothing is permanent, that all is in constant motion- change, belongs to the human incapacity to accept the discontinuity of an occurrence of events that are always unpredictable and new. Impermanence is a principle that is a natural thing, but, in relation to the social and interhuman fields, this becomes a problem: especially in the last ten years, we can witness scenarios where instability, turbulence and uncertainty, frantically increase and continue to increase. Instability and change are perceivable everywhere - from the personal interaction between people to economic instability: in poor words, we don’t know what the future will bring to us and we feel a continuous pressure. People feel a need for safety and stability, but this is an impossible thing in the conditions in which society finds itself, and here lies one of the main reasons why tensions, anxiety, and panic have became common situations.

The Versailles Treaty agreed in the aftermath of the war unsuccessfully tried to patch up the pre-war economic order while punishing the Germans with large reparation payments. It led to serial financial and economic instability—and also to World War II. By contrast, the more radical revamp of the global economic order after World War II at the Bretton Woods conference ushered in a long period of growth and prosperity. The crucial question is whether the response to this crisis is a new Versailles or a new Bretton Woods.

What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived. Second, the ability of those who dominate extractive institutions to benefit greatly at the expense of the rest of society implies that political power under extractive institutions is highly coveted, making many groups and individuals fight to obtain it. As a consequence, there will be powerful forces pushing societies under extractive institutions toward political instability.

In my opinion, the greatest challenge for policy makers is to engineer a capitalist economic system that raises productivity and living standards without worsening inequities and instabilities.

the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. But capitalism is also a source of wealth and opportunity gaps that are unfair, can be counterproductive, are highly cyclical, and can be destabilizing. In my opinion, the greatest challenge for policy makers is to engineer a capitalist economic system that raises productivity and living standards without worsening inequities and instabilities.

[C]apitalism is not a natural and inevitable consequence of human nature, or of the age-old social tendency to 'truck, barter, and exchange' It is a late and localized product of very specific historical conditions. The expansionary drive of capitalism, reaching a point of virtual universality today, is not the consequence of its conformity to human nature or to some transhistorical law, or of some racial or cultural superiority of 'the West', but the product of its own historically specific internal laws of motion, its unique capacity as well as its unique need for constant self-expansion. Those laws of motion required vast social transformations and upheavals to set them in train. They required a transformation in the human metabolism with nature, in the provision of life's basic necessities. Second, capitalism has, from the beginning, been a deeply contradictory force. The very least that can be said is that the capitalist system's unique capacity, and need, for self-sustaining growth has never been incompatible with regular stagnation and economic downturns. On the contrary, the very same logic that drives the system forward makes it inevitably susceptible to economic instabilities, which require constant 'extra-economic' interventions, if not to control them then at least to compensate for their destructive effects.

Slavery still exists, and it is now in the form of the United Nations International Monetary Fund instead of the East India Company. Although the IMF supports the achievement of macroeconomic stability and poverty reduction in developing countries, the conditions the IMF imposes differ from its context; and cause more instability and poverty in developed countries. Factually, the IMF focuses on its particular interests, not on its monopolistic and awkward conditions that turn into civilized slavery and a biting economic burden on the public and their republic. These realities mirror the UN-IMF.

The story of middle-class ascendancy is all about individual hard work. And no one wants to lose any of the hard-won benefits of that work, which helps explain the popularity of the Personal Responsibility Crusade amongst boomers and their parents. Members of the middle class were so freaked out by seeping economic instability that they started pulling the ladder up behind them.

every elite would, all else being equal, like to encourage as much growth as possible in order to have more to extract. Extractive institutions that have achieved at least a minimal degree of political centralization are often able to generate some amount of growth. What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived. Second, the ability of those who dominate extractive institutions to benefit greatly at the expense of the rest of society implies that political power under extractive institutions is highly coveted, making many groups and individuals fight to obtain it. As a consequence, there will be powerful forces pushing societies under extractive institutions toward political instability.

HISTORY OF NIGERIA Nigeria is Africa’s most populous country and the world’s eighth largest oil producer, but its success has been undermined in recent decades by ethnic and religious conflict, political instability, rampant official corruption, and an ailing economy. Toyin Falola, a leading historian intimately acquainted with the region, and Matthew Heaton, who has worked extensively on African science and culture, combine their expertise to explain the context to Nigeria’s recent troubles, through an exploration of its pre-colonial and colonial past and its journey from independence to statehood. By examining key themes such as colonialism, religion, slavery, nationalism, and the economy, the authors show how Nigeria’s history has been swayed by the vicissitudes of the world around it, and how Nigerians have adapted to meet these challenges. This book offers a unique portrayal of a resilient people living in a country with immense, but unrealized, potential. TOYIN FALOLA is the Frances Higginbotham Nalle Centennial Professor in History at the University of Texas at Austin. His books include The Power of African Cultures (2003), Economic Reforms and Modernization in Nigeria, 1945–1965 (2004), and A Mouth Sweeter than Salt: An African Memoir (2004). MATTHEW M. HEATON is a Patrice Lumumba Fellow at the University of Texas at Austin. He has co-edited multiple volumes on health and illness in Africa with Toyin Falola, including HIV/AIDS, Illness and African Well-Being (2007) and Health Knowledge and Belief Systems in Africa (2007). A HISTORY OF NIGERIA

With the natural caution of a scientist venturing outside his field, Dr. Cannon concluded his study of 'The Wisdom of the Body' with the suggestion that the model of the living organism might be applied with advantage to the larger human community. Since technologies and economic systems are themselves products of life, it is not strange that, to the degree that they work effectively at all, they have incorporated many organic devices not in line with their own abstract ideological or institutional premises. But because brain physiology, dream exploration, and linguistic analysis were all outside his are of high competence Dr. Cannon never faced the central problem that arose, at a very early point, I suspect, once the enlargement of man's neural functions enabled him to escape the automatism of his reflexes and hormones. how under those conditions to prevent the brain from succumbing to its own disorderly hyperactivity, once liberated from the bodily functions and environmental contacts and social pressures necessary for its existence? The need to recognize this special source of instability coming from the extraordinary powers of the mind, and to take measures for overcoming it, is not the least lesson to be drawn from man's historic development. In so far as automatic systems become more lifelike as well as more powerful, they carry with them the threat of increasing human irrationality at higher levels. To follow an organic model, then, not only the system as a whole must be kept in view, but each individual part must be in a state of alertness, ready to intervene at any point in the process and take over.

The present age seems likely—through both acute events like 9/11 and chronic cultural and economic instability—to continue to intensify people’s appetite for absolutes. And the explanations that we hold on to can do permanent harm, compounding the problem.

Supercapitalism has triumphed as power has shifted to consumers and investors. They now have more choice than ever before, and can switch ever more easily to better deals. And competition among companies to lure and keep them continues to intensify. This means better and cheaper products, and higher returns. Yet as supercapitalism has triumphed, its negative social consequences have also loomed larger. These include widening inequality as most gains from economic growth go to the very top, reduced job security, instability of or loss of community, environmental degradation, violations of human rights abroad, and a plethora of products and services pandering to our basest desires. These consequences are larger in the United States than in other advanced economies because America has moved deeper into supercapitalism. Other economies, following closely behind, have begun to experience many of the same things. Democracy is the appropriate vehicle for responding to such social consequences. That’s where citizen values are supposed to be expressed, where choices are supposed to be made between what we want for ourselves as consumers and investors, and what we want to achieve together. But the same competition that has fueled supercapitalism has spilled over into the political process. Large companies have hired platoons of lobbyists, lawyers, experts, and public relations specialists, and devoted more and more money to electoral campaigns. The result has been to drown out voices and values of citizens. As all of this has transpired, the old institutions through which citizen values had been expressed in the Not Quite Golden Age—industry-wide labor unions, local citizen-based groups, “corporate statesmen” responding to all stakeholders, and regulatory agencies—have been largely blown away by the gusts of supercapitalism. Instead of guarding democracy against the disturbing side effects of supercapitalism, many reformers have set their sights on changing the behavior of particular companies—extolling them for being socially virtuous or attacking them for being socially irresponsible. The result has been some marginal changes in corporate behavior. But the larger consequence has been to divert the public’s attention from fixing democracy. 1

I am describing the outlook that I see as most likely, but based on many years of making economic projections, I can assure you that any specific projection I write down will turn out to be wrong, perhaps markedly so.” —JANET YELLEN

Markets are reasonably efficient institutions for allocating society’s scarce economic resources and lead to high productivity and average living standards. Efficiency, however, does not guarantee fairness (or “justice”) in the allocation of incomes. Fairness requires the government to redistribute income among the citizenry, especially from the richest members of the society to the poorest and most vulnerable members. Markets systematically underprovide certain “public goods,” such as infrastructure, environmental regulation, education, and scientific research, whose adequate supply depends on the government. The market economy is prone to financial instability, which can be alleviated through active government policies, including financial regulation and well-directed monetary and fiscal policies. Samuelson

What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived. Second, the ability of those who dominate extractive institutions to benefit greatly at the expense of the rest of society implies that political power under extractive institutions is highly coveted, making many groups and individuals fight to obtain it. As a consequence, there will be powerful forces pushing societies under extractive institutions toward political instability. The

Between state building and economic growth Having a state is a basic precondition for intensive economic growth. The economist Paul Collier has demonstrated the converse of this proposition, namely, that state breakdown, civil war, and interstate conflict have very negative consequences for growth.20 A great deal of Africa’s poverty in the late twentieth century was related to the fact that states there were very weak and subject to constant breakdown and instability. Beyond the establishment of a state that can provide for basic order, greater administrative capacity is also strongly correlated with economic growth. This is particularly true at low absolute levels of per capita GDP (less than $1,000); while it remains important at higher levels of income, the impact may not be proportionate. There is also a large literature linking good governance to economic growth, though the definition of “good governance” is not well established and, depending on the author, sometimes includes all three components of political development.21 While the correlation between a strong, coherent state and economic growth is well established, the direction of causality is not always clear. The economist Jeffrey Sachs has maintained that good governance is endogenous: it is the product of economic growth rather than a cause of it.22 There is a good logic to this: government costs money. One of the reasons why there is so much corruption in poor countries is that they cannot afford to pay their civil servants adequate salaries to feed their families, so they are inclined to take bribes. Per capita spending on all government services, from armies and roads to schools and police on the street, was about $17,000 in the United States in 2008 but only $19 in Afghanistan.23 It is therefore not a surprise that the Afghan state is much weaker than the American one, or that large flows of aid money generate corruption.

Among ideas, legitimacy, and all of the other dimensions of development Ideas concerning legitimacy develop according to their own logic, but they are also shaped by economic, political, and social development. The history of the twentieth century would have looked quite different without the writings of an obscure scribbler in the British Library, Karl Marx, who systematized a critique of early capitalism. Similarly, communism collapsed in 1989 largely because few people any longer believed in the foundational ideas of Marxism-Leninism. Conversely, developments in economics and politics affect the kinds of ideas that people regard as legitimate. The Rights of Man seemed more plausible to French people because of the changes that had taken place in France’s class structure and the rising expectations of the new middle classes in the later eighteenth century. The spectacular financial crises and economic setbacks of 1929–1931 undermined the legitimacy of certain capitalist institutions and led the way to the legitimization of greater state control over the economy. The subsequent growth of large welfare states, and the economic stagnation and inflation that they appeared to encourage, laid the groundwork for the conservative Reagan-Thatcher revolutions of the 1980s. Similarly, the failure of socialism to deliver on its promises of modernization and equality led to its being discredited in the minds of many who lived under communism. Economic growth can also create legitimacy for the governments that succeed in fostering it. Many fast-developing countries in East Asia, such as Singapore and Malaysia, have maintained popular support despite their lack of liberal democracy for this reason. Conversely, the reversal of economic growth through economic crisis or mismanagement can be destabilizing, as it was for the dictatorship in Indonesia after the financial crisis of 1997–1998.33 Legitimacy also rests on the distribution of the benefits of growth. Growth that goes to a small oligarchy at the top of the society without being broadly shared often mobilizes social groups against the political system. This is what happened in Mexico under the dictatorship of Porfirio Díaz, who ruled the country from 1876 to 1880 and again from 1884 to 1911. National income grew rapidly in this period, but property rights existed only for a wealthy elite, which set the stage for the Mexican Revolution of 1911 and a long period of civil war and instability as underprivileged groups fought for their share of national income. In more recent times, the legitimacy of democratic systems in Venezuela and Bolivia has been challenged by populist leaders whose political base is poor and otherwise marginalized groups.34

The political scientist John Ikenberry lauds the liberal international order America has built.11 The global order is today durable and stable thanks to the many multilateral mechanisms America helped build and continues to support: institutions such as the UN, the World Bank, and NATO that have fostered security and development, or the EU and NAFTA, which have promoted prosperity and lured the likes of Mexico and Turkey to embrace capitalism and democracy.12 America has lost some of its own authority to international institutions it created and sustained. But that is a good thing. It means that the liberal international order has legs; it will last longer and continue to define the world order around values and practices that will foster peace, freedom, and prosperity. As Ikenberry notes, “The underlying foundations of the liberal international order will survive and thrive” without America’s guiding hand.13 In the Middle East, though, where simmering instability threatens global security and prosperity, America has done very little institution building of the kind Ikenberry writes about. There is no equivalent to ASEAN or APEC (the Asia Pacific Economic Council), or rival to the SCO, which is backed by China, Russia, and Iran. Perhaps America should help create those kinds of institutions, which could foster order but also make the region’s security and prosperity less dependent on the exercise of American authority. Only then should America think about pivoting somewhere else.

Extractive institutions that have achieved at least a minimal degree of political centralization are often able to generate some amount of growth. What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived. Second, the ability of those who dominate extractive institutions to benefit greatly at the expense of the rest of society implies that political power under extractive institutions is highly coveted, making many groups and individuals fight to obtain it. As a consequence, there will be powerful forces pushing societies under extractive institutions toward political instability. The

The Fed's economic models, and economic forecasting models in general, do a poor job of incorporating the economic effects of financial instability, in part because financial crisis are (fortunately) rare enough that relevant data are scarce.

So don’t believe the current narratives about Haiti’s instability being the result of poor governance or corruption. Haiti is poor because it was forced to pay 90 million francs, the contemporary equivalent of $21 billion as of 2020, including billions in interest to the City Bank of New York. You probably know the bank by its current name: Citibank. Of course, Citibank isn’t the sole culprit. One corporation alone couldn’t condemn a country to two centuries of poverty in opposition to the richest and most powerful nations in the world. The white world was not just complicit in the economic destruction of Haiti, they piled on. Despite repaying the independence debt in 1947, Haiti still owed billions to other countries

Today, the Internal Atomic Energy Agency has all but confirmed that Iran is seeking nuclear weapons, notwithstanding Iran’s protests to the contrary. But it is difficult to stop Iran because Iran has the economic clout to destabilize world economies by turning off oil exports. Its threat to do so has stopped the world from meaningful action. Only if Iran overplays its hand, will the fear of possible global economic pain from the ensuing instability, force the international community to meaningfully act.

Why would the United States risk its entire standing as a force for peace and stability, its so-called ‘soft power’? Why would the U.S. risk creating instability in the entire oil-producing world, perhaps even the risk of a new oil price shock and a global economic depression, in order to strike Iraq? The official Washington answer was that Saddam Hussein had an arsenal of weapons of mass destruction and that he had ties to Al Qaida terrorists. Was that sufficient to explain the clear obsession of George W. Bush, Cheney, Donald Rumsfeld, Paul Wolfowitz and others in Washington for a new Iraq war? Many were not convinced. Their skepticism was confirmed, but only after 130,000 American troops had been firmly entrenched in Iraq.

Some analysts have renamed the welfare state, which obtained basically from about 1945 until in the 1970s, the garrison state. State legitimacy now depends on protection from these threats by targeting of dangerous others. I’ll say more about this in two weeks, but just to repeat what I indicated last week, the idea that the globalized form of capitalism means that decisions about the economic security and welfare of citizens are no longer within the hands necessarily of nation-state governors. To preserve their legitimacy as governors, they need to find a new basis for legitimation. Some people are arguing, and I would agree with much of this, that this is the new basis. The protection from dangerous others. We have endless enemies. Foreign communism morphed into terrorism. We now have a tremendous fear of immigrants and refugees. Witness the recent ban orders, the deportations, the detentions, the demonization of others. We have domestic enemies, people of color, the young, the old, LGBTQ communities, the differently abled, and along with that the militarization of the police and the criminalization of protest, which we’ll talk about in the last couple of weeks. Where is all of this headed? The Pentagon has a very bleak view of the future (see “Megacities: Urban Future, the Emerging Complexity: A Pentagon Video”), which views urban areas (both foreign and domestic) as basically breeding grounds for instability, unrest, and chaos. To think about the kind of underlying view of humanity this way I think comes naturally in some sense out of this very long history of militarization. That is, if you think of yourself as military, then everybody outside is an enemy. This is also what becomes part of the problem of militarizing the police. As the police become increasingly militaristic, the people that they supposedly protect and serve begin to look more and more like the non-police, like the enemy. This is, I think, an extremely dangerous kind of trend that we’re seeing. The forecast that this is the way in which the military will sort of reproduce itself by now being able to respond to these kinds of future threats where the mass of humanity is either an enemy or is in a witting or unwitting cloak for enemies. It’s extremely dangerous. One we should think very carefully about, but this is the Pentagon’s view largely of what that future looks like, and it is, in fact, urban, militarized, and dangerous.

18. The Political Left/Right Cycle. Capitalists (i.e., those of the right) and socialists (i.e., those of the left) don’t just have different self-interests—they have different deep-seated ideological beliefs that they are willing to fight for. The typical perspective of the rightist/capitalist is that self-sufficiency, hard work, productivity, limited government interference, allowing people to keep what they make, and individual choice are morally good and good for society. They also believe that the private sector works better than the public sector, that capitalism works best for most people, and that self-made billionaires are the biggest contributors to society. Capitalists are typically driven crazy by financial supports for people who lack productivity and profitability. To them, making money = being productive = getting what one deserves. They don’t pay much attention to whether the economic machine is producing opportunity and prosperity for most people. They can also overlook the fact that their form of profit making is suboptimal when it comes to achieving the goals of most people. For example, in a purely capitalist system, the provision of excellent public education—which is clearly a leading cause of higher productivity and greater wealth across a society—is not a high priority. The typical perspective of the leftist/socialist is that helping each other, having the government support people, and sharing wealth and opportunity are morally good and good for society. They believe that the private sector is by and large run by capitalists who are greedy, while common workers, such as teachers, firefighters, and laborers, contribute more to society. Socialists and communists tend to focus on dividing the pie well and typically aren’t very good at increasing its size. They favor more government intervention, believing those in government will be fairer than capitalists, who are simply trying to exploit people to make more money. I’ve had exposure to all kinds of economic systems all over the world and have seen why the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. But capitalism is also a source of wealth and opportunity gaps that are unfair, can be counterproductive, are highly cyclical, and can be destabilizing. In my opinion, the greatest challenge for policy makers is to engineer a capitalist economic system that raises productivity and living standards without worsening inequities and instabilities. 21.

The United States will deal with it as it always does, with its citizens going through a decade of intense political rage at each other, accompanied by an economic crisis and a social one: the old against the young, and the problem of innovation leading to instability. Finally, the political process will create a solution, with a failing president who worships the old cycle, followed by one who will claim credit for presiding over the new cycle and its solutions.

Doughnut Economics sets out an optimistic vision of humanity’s common future: a global economy that creates a thriving balance thanks to its distributive and regenerative design. Such an aspiration may seem foolish, even naive, given the intertwined crises of climate change, violent conflict, forced migration, widening inequalities, rising xenophobia and endemic financial instability that we face.

The Political Instability Task Force (the one I later joined) came up with dozens of social, economic, and political variables—thirty-eight, to be precise, including poverty, ethnic diversity, population size, inequality, and corruption—and put them into a predictive model. To everyone’s surprise, they found that the best predictor of instability was not, as they might have guessed, income inequality or poverty. It was a nation’s polity index score, with the anocracy zone being the place of greatest danger. Anocracies, particularly those with more democratic than autocratic features—what the task force called “partial democracies”—were twice as likely as autocracies to experience political instability or civil war, and three times as likely as democracies.25 All the things that experts thought should matter in the outbreak of civil war somehow didn’t. It wasn’t the poorest countries that were at the highest risk of conflict, or the most unequal, or the most ethnically or religiously heterogeneous, or even the most repressive. It was living in a partial democracy that made citizens more likely to pick up a gun and begin to fight. Saddam Hussein never

I think there quite probably is one God, but he manifests himself in different ways to different men. In pre-modern times he manifested himself as the being that's described in these books. Now he manifests himself as an absence; as though he weren't there at all. Call it the fault of civilization. God isn't compatible with machinery and scientific medicine and universal happiness. That's why I have to keep these books locked up in the safe. One believes things because one has been conditioned to believe them. Finding bad reasons for what one believes for other bad reasons – that's philosophy. People believe in God because they've been conditioned to believe in God. It is natural to believe in God when you're alone, but people never are alone now. We make them hate solitude; and we arrange their lives so that it's almost impossible for them to have it. There isn't any need for a civilized man to bear anything that's seriously unpleasant. And as for doing things – It would upset the whole social order if men started doing things on their own. Industrial civilization is only possible when there's no self-denial. Self-indulgence up to very limits imposed by hygiene and economics. Passion and neurasthenia mean instability. Instability means the end of civilization. You can't have a lasting civilization without plenty of pleasant vices. Civilization has absolutely no need of nobility or heroism. These things are symptoms of political inefficiency. In a properly organized society nobody has any oppurtunities for being noble or heroic.

This was clearly worrisome for the future of the Kingdom of Hawaiʻi, and it caused King Kamehameha III great distress. With the instability of political and military powers in the Hawaiian archipelago, he consulted his foreign advisors and missionaries on what he should do to protect the kingdom’s sovereignty and ensure Hawaiian control of the land. Clearly, foreign powers wanted Hawaiʻi’s system of land tenure to transition to one of private ownership for their own benefit, as they were familiar with such a system and wanted to obtain secure land titles. They further promoted such changes by pointing out that it would be a great help in steering the islands toward economic prosperity and encourage hard work. Predictably, large numbers of Hawaiian natives were deeply suspicious of the proposed changes and continually petitioned King Kamehameha III to reconsider his position on the matter. The local chiefs and residents were hesitant to compete with foreigners, as the change to the land tenure system would be confusing and difficult. Regardless, the Land Commission and King Kamehameha III proceeded with the Mahele process. The Great Mahele

In the end, the annexation goal was spurred on by falling sugar prices and the rising belief that the United States must control Hawaiʻi against other foreign interests and to protect the West Coast of the contiguous United States of America. There was also a perceived air of economic instability and the potential for an economic depression to beset the islands. This spurred Americans like Lorrin Thurston and Minister John L. Stevens to zealously promote and push the idea of annexation abroad, leading to many US politicians to buy into the idea. Stevens asked the US State Department to send additional naval forces to protect American interests and asked Washington to station a warship in Honolulu indefinitely to secure the islands. This was the beginning of a rapid increase in American military might in Hawaiʻi.

The sumptuary laws of the late Middle Ages and Renaissance eras were attempts to define the social meaning of attire. These laws were a response to new social mobility and instability that came with economic prosperity.

What about self-denial, then? If you had a God, you’d have a reason for self-denial.’ ‘But industrial civilization is only possible when there’s no self-denial. Self-indulgence up to the very limits imposed by hygiene and economics. Otherwise the wheels stop turning.’ ‘You’d have a reason for chastity!’ said the Savage, blushing a little as he spoke the words. ‘But chastity means passion, chastity means neurasthenia. And passion and neurasthenia mean instability. And instability means the end of civilization.

The roots of war are to be sought in politics and history, those of earthquakes in geophysics, of forest fires in patterns of weather and in the natural ecology, and those of market crashes in the principles of finance, economics, and the psychology of human behavior. Beyond the labels “disaster” and “upheaval,” each of these events erupted from the soil of its own peculiar setting. Still, there is an intriguing similarity. In each case, it seems, the organization of the system—the web of international relations, the fabric of the forests or of the Earth’s crust, or the network of linked expectations and trading perspectives of investors—made it possible for a small shock to trigger a response out of all proportion to itself. It is as if these systems had been poised on some knife-edge of instability, merely waiting to be “set off.

Any individual exhibiting a personal instability comparable to the economic and social instability of capitalism would long ago have been required to seek professional help and to make basic changes.

The variables which were apt for management by central authorities were interest rates and taxation, which he proposed that governments should adjust in order to stimulate investment and to seek full employment. However, he said little of emergency public works, and nothing about fiscal methods of demand management. He did not recommend increasing the government’s current expenditure by running a budget deficit to meet a deficiency of demand. He gave no encouragement to profligate finance ministers. He urged that additional government expenditure should be on capital account and financed from a separate capital budget while so far as possible the regular budget should be kept in balance. He suggested that full employment might be maintained by redistribution of income. If wealth was more equitably dispersed in the population, effective demand would be stimulated and would thus help capital growth. As the scarcity of capital diminished, investors would be rewarded less. He never believed that state planning would eliminate economic instability. He saw national economies as inherently wobbling: they were susceptible to rational management, but with irrational elements.73

But while these views have also been evolving, many in the economic forecasting profession, however, have insufficiently internalized the implications for what lies ahead.

Everywhere that I have studied happiness some very simple patterns hold: a stable marriage, good health, and enough (but not too much) income are good for happiness. Unemployment, divorce, and economic instability are terrible for happiness—everywhere that happiness is studied.

since most countries undertook financial liberalisation in the 1970s and 1980s, there has been a marked increase in the frequency of banking crises (see Figure 1).10 Globally, in the period 1970 to 2007, the International Monetary Fund has recorded 124 systemic bank crises, 208 currency crises and 63 sovereign debt crises.11 For modern capitalism instability has become, not the exception, but a seemingly structural feature.

The Maya experience illustrates not only the possibility of growth under extractive institutions but also another fundamental limit to this type of growth: the political instability that emerges and ultimately leads to collapse of both society and state as different groups and people fight to become the extractors.

It has also been tempting to interpret fascism by its social composition. The sociologist Seymour Martin Lipset systematized in 1963 the widely held view that fascism is an expression of lower-middle-class resentments. In Lipset’s formulation, fascism is an “extremism of the center” based on the rage of once-independent shopkeepers, artisans, peasants, and other members of the “old” middle classes now squeezed between better organized industrial workers and big businessmen, and losing out in rapid social and economic change. Recent empirical research, however, casts doubt on the localization of fascist recruitment in any one social stratum. It shows the multiplicity of fascism’s social supports and its relative success in creating a composite movement that cut across all classes. His eyes glued on the early stages, Lipset also overlooked the establishment’s role in the fascist acquisition and exercise of power. The notorious instability of fascist membership further undermines any simple interpretation by social composition. Party rosters altered rapidly before power, as successive waves of heterogeneous malcontents responded to the parties’ changing fortunes and messages. After power, membership “bandwagoned” to include just about everyone who wanted to enjoy the fruits of fascist success—not to forget the problem of where to situate the many fascist recruits who were young, unemployed, socially uprooted, or otherwise “between classes.” No coherent social explanation of fascism can be constructed out of such fluctuating material.

Although I believe, like Bagehot, that central banks are inherently destabilising, that doesn’t mean that you cannot have financial and economic instability without a central bank. Decentralised monetary systems, if poorly regulated, can also be unstable;

Vote for a transformative leader that empowers the growth of a nation, not a figurehead that thrives on socio-economic instabilities.

Occam’s razor uses the least energy; it is the most economic solution. Nature always operates this way, and it does so because it is mathematical. If it were not mathematical, it could never do what it does and would degenerate into instability and chaos.

Even today, many poor and lower-middle-class whites feel more solidarity with Bill Gates and George W. Bush than with African-Americans or Hispanic-Americans of comparable economic status. Indeed, as many have observed, large numbers of working-class whites in the United States oppose welfare and increased government spending on social services, often voting against what might be expected to be their economic self-interest. It is widely suspected that racism (together with a thriving ideology of upward mobility) plays a role in this pattern.

Rather than a purely economic system supplying “goods and services,” capital acquired political attributes. Faced with that reality, the magic realists, in desperation, would introduce their trump card, the threat of revolution. This meant arousing the dependents, organizing their numbers, and confronting the realists with their worst nightmare—instability, uncertainty, and, worst of all, the subordination of economic to demotic power

Page 178: … it is striking to note that none of the Asian Tigers has ever had a market-dominant minority. In all the Asian Tigers, the ethnic majority—the Japanese in Japan, the Koreans in South Korea, and the Chinese in Hong Kong, Taiwan, and Singapore—is both economically and politically dominant. … Among other factors, the lack of a market-dominant minority in all these Tigers probably helps explain their economic success relative to the far poorer and less stable neighboring Southeast Asian countries of Burma, Indonesia, Malaysia, and the Philippines.

This book is about a phenomenon—pervasive outside the West yet rarely acknowledged, indeed often viewed as taboo—that turns free market democracy into an engine of ethnic conflagration. The phenomenon I refer to is that of market-dominant minorities: ethnic minorities who, for widely varying reasons, tend under market conditions to dominate economically, often to a startling extent, the “indigenous” majorities around them. … Lebanese are a market-dominant minority in West Africa. Ibo are a market-dominant minority in Nigeria. Croats were a market-dominant minority in the former Yugoslavia. And Jews are almost certainly a market-dominant minority in post-Communist Russia

Page 33: The magnitude of the Chinese minority’s economic power was astounding. Constituting just 1 percent of Vietnam’s population, the Chinese controlled an estimated 90 percent of non-European private capital in the mid-1950s and dominated Vietnam’s retail trade, its financial, manufacturing, and transportation sectors, and all aspects of the country’s rice economy. Page 43: By 1998, Sino-Indonesians occupied a position of economic dominance wildly disproportionate to their numbers. Just 3 percent of the population, the Chinese controlled approximately 70 percent of the private economy.

What about self-denial, then? If you had a God, you'd have a reason for self-denial." "But industrial civilization is only possible when there's no self-denial. Self-indulgence up to the very limits imposed by hygiene and economics. Otherwise the wheels stop turning." "You'd have a reason for chastity!" said the Savage, blushing a little as he spoke the words. "But chastity means passion, chastity means neurasthenia. And passion and neurasthenia mean instability. And instability means the end of civilization. You can't have a lasting civilization without plenty of pleasant vices

Page 207 In the inner cities of all the major metropolitan areas across the United States, ethnic Koreans represent an increasingly glaring market-dominant minority vis-à-vis the relatively economically depressed African-American majorities around them. In New York City, Koreans, less than .1 percent of the city’s population, own 85 percent of produce stands, 70 percent of grocery stores, 80 percent of nail salons, and 60 percent of dry cleaners. In portions of downtown Los Angeles, Koreans own 40 percent of the real estate but constitute only 10 percent of the residents. Korean-American businesses in Los Angeles County number roughly 25,000, with gross sales of $4.5 billion. Nationwide, Korean entrepreneurs have in the last decade come to control 80 percent of the $2.5 billion African-American beauty business, which—“like preaching and burying people”—historically was always a “black” business and a source of pride, income, and jobs for African-Americans. “They’ve come in and taken away a market that’s not rightfully theirs,” is the common, angry view among inner-city blacks. Page 208 At a December 31, 1994, rally, Norman “Grand Dad” Reide, vice president of Al Sharpton’s National Action Network, accused Koreans of “reaping a financial harvest at the expense of black people” and recommended that “we boycott the bloodsucking Koreans.” More recently, in November 2000, African-Americans firebombed a Korean-owned grocery store in northeast Washington, D.C. The spray-painted message on the charred walls: “Burn them down, Shut them down, Black Power!

Page 3: My family is part of the Philippines’ tiny but entrepreneurial, economically powerful Chinese minority. Just 1 percent of the population, Chinese Filipinos control as much as 60 percent of the private economy, including the country’s four major airlines and almost all of the country’s banks, hotels, shopping malls, and major conglomerates. ... Since my aunt’s murder, one childhood memory keeps haunting me. I was eight, staying at my family’s splendid hacienda-style house in Manila. It was before dawn, still dark. Wide awake, I decided to get a drink from the kitchen. I must have gone down an extra flight of stairs, because I literally stumbled onto six male bodies. I had found the male servants’ quarters. My family’s houseboys, gardeners, and chauffeurs—I sometimes imagine that Nilo Abique [the chauffeur that murdered her aunt] was among those men—were sleeping on mats on a dirt floor. The place stank of sweat and urine. I was horrified. Later that day I mentioned the incident to my Aunt Leona, who laughed affectionately and explained that the servants—there were perhaps twenty living on the premises, all ethnic Filipinos—were fortunate to be working for our family. If not for their positions, they would be living among rats and open sewers without even a roof over their heads. A Filipino maid then walked in; I remember that she had a bowl of food for my aunt’s Pekingese. My aunt took the bowl but kept talking as if the maid were not there. The Filipinos, she continued—in Chinese, but plainly not caring whether the maid understood or not—were lazy and unintelligent and didn’t really want to do much else. If they didn’t like working for us, they were free to leave any time. After all, my aunt said, they were employees, not slaves.

Since bigotry traditionally flourishes in times of economic instability and unsettling social change, it’s not surprising that the Great Depression and its accompanying turmoil provided another fertile seedbed for intolerance toward Jews. “Economic hardship was taking its toll,” noted the Anti-Defamation League’s Arnold Forster. “People needed a scapegoat for their Depression miseries.

bear in mind that since our equation states that a necessary condition for cultural stability is perfect economic complementarity, it follows that lack of complementarity—a modern condition in which new objects are constantly seeking new needs, and new needs are constantly chasing after new objects—involves cultural instability.

Due to repeated conditioning, investors had come to expect central bank intervention whenever asset prices hit a notable air pocket or economic conditions faltered anew

A sobering 2016 report from the International Monetary Fund warned of instability, concluding that the global trends toward neoliberalism “have not delivered as expected.” Instead, inequality had significantly diminished “the level and the durability of growth” while increasing volatility and creating permanent vulnerability to economic crisis.45