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Capitalism has a "natural business cycle" because it is based on the same binge-and-crash structure as drug addiction.  

The Fates are kind.
by Gaianne on Wed Mar 21st, 2007 at 02:06:57 AM EST
[ Parent ]
Economies have a natural business cycle because of delayed feedback.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Wed Mar 21st, 2007 at 02:29:05 AM EST
[ Parent ]
Also, incomplete.  

(Umm.  Oh, yes:  Drug binges have delayed feedback, too.)  

The driving force is undamped POSITIVE feedback.  

If the 19th century was learning about the destabilizing effect of positive feed back, the 20th was about how external (political) attempts to apply appropriate negative feed back can be successful, but are readily subverted.  

So that the system, as a whole, is again unstable.  

Living systems seem to deal with this problem by increasing their complexity, and the extra layers of feedback yield increased resiliency.  

Capitalist political economies move the opposite way--toward simplified structures.  Capitalism does to the human environment what it does to the physical environment--desertifies it.  

The Fates are kind.

by Gaianne on Wed Mar 21st, 2007 at 03:47:39 AM EST
[ Parent ]
Okay, let's say that the economic system is unstable [positive feedback by definition] against growth of new modes of economic activity and that delayed feedback and imperfect information lead to overshoot and collapse oscillations of the size of economic sectors instead of logistic growth/contraction.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Wed Mar 21st, 2007 at 06:02:08 AM EST
[ Parent ]

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