"Virtually every aspect of conventional economic theory is intellectually unsound; virtually every economic policy recommendation is just as likely to do harm as it is to lead to the general good. Far from holding the intellectual high ground, economics rests on foundations of quicksand. If economics were truly a science, then the dominant school of thought in economics would long ago have disappeared from view (Steve Keen, 2001, p. 4)."
In the full flood of the current credit/financial crisis there appears to be no shortage of people and organisations to blame short-sellers in the market, profligate home-owners in the USA who signed up for mortgages that they could not afford, Fannie Mae, Freddy Mac, the executives of investment banks and their million-dollar bonuses, hedge funds, the Fed, etc. Whilst the desire to find a culpable victim is perfectly understandable, it is also obvious that there is no "silver bullet" causal mechanism for this rapidly developing systemic failure. This article looks at the political and cultural determinants of the current crisis, using three intertwined themes:
(1) the development of financial derivatives themselves;
(2) the subversion of risk analysis by globalising capitalism; and