At the bottom, the crisis boils down to the archaic debt problem. Biblical and other sources warn of dangers of debt burden. Perhaps we underestimate the scale of Babilon era experiences with runaway debt. Promised economic freedom becomes debt slavery.
Michael Hudson is tracking the modern debt epic attentively:
The IMF Collects Debts on Behalf of the World's Largest Banks
Last month the G-20 authorized the International Monetary Fund to increase its loan resources to $1 trillion. It's not hard to see why. Weakening currencies in the post-Soviet states threaten to raise default rates on foreign-currency mortgages as collapse of the Baltic real estate bubble drags down Swedish banks, while the Hungarian property plunge threatens Austrian banks. It seems reasonable to infer that creditor-nation banks hope to be bailed out. The IMF is expected to lend the Baltic, central European and other debtor-country governments money to pay them. These hapless debtor economies are then to follow IMF "conditionalities" to squeeze enough money out of their populations to pay foreign creditors - and repay the Fund by imposing yet more onerous taxes on their labor and industry, making them even more high-cost and therefore pushing them even further into trade and credit dependency.... For fifty years the IMF has organized such payouts to creditor nations. Loans are made to debtor-country governments to "promote exchange-rate and price stability." In practice this means pouring tens of billions of dollars into currency markets to make bad gambles against raiders....
(But not all debtors are equal. What should countries like China do with their Central Bank reserves, or why should work for American consumers for no joy?)
Biblical and other sources warn of dangers of debt burden.
Compounding debt is not a problem per se. The toxic problem has arisen when debt is combined with exclusive private ownership in the commons of land, and this now extends to Jake's point to private ownership of the means of production, which is increasingly in the form of Knowledge.
My take is that our principal problem has been in the nature of the enterprise models or legal and financial structures we use, and the fact that they do not "scale" well.
I think that big and pervasive unions may be as toxic in their effects on the economy and society as big and pervasive corporates, or a big and pervasive State. The problem lies in the very nature of organisations as institutions.
There are new structures becoming increasingly common in use, and which are complementary to existing structures. In my view these are capable of spreading virally and organically in a networked and non-hierarchical way through the use of partnership-based frameworks.
The change I see happening is evolutionary, not revolutionary. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Unfortunately what we have now is a situation where the big and pervasive corporates use the big and pervasive state to implement violence on demand. Big and pervasive unions offer some checks and balances to that.
But unless organisations are limited by state sanction to a certain small size, any system will create organisations which attempt to dominate and grow beyond their niches.
The history of the political machines in the US makes interesting reading. They were usually run by individuals who managed their contacts and allegiances in person - but who managed to become de facto rulers of entire cities, able to define policy and legislation and promote or frustrate interest groups in line with their personal interests.
