Posts Tagged ‘Global Warming’

The Dark Side of Economic Growth

March 7, 2010

The challenge of global warming has brought us face to face with a stark reality. Economic growth is exploitative of nature and unless we make some fundamental changes we could be headed for an environmental catastrophe from which there might be no recovery.

Thinking about this issue has revived a concern that is even more problematic: Is economic growth exploitative only of nature or is it exploitative in general? In this post we will examine the historical record to seek some answers to this question.

The relationship of economic growth to nature is fairly simple. Starting with the post-industrial era (which is not much more than a quarter of a millennium old at most) economic growth has relied upon the use of fossil fuels and the rate at which greenhouse gasses have been discharged into the atmosphere, we now find, is environmentally unsustainable. (more…)

The World is Too Big to Fail But…

November 18, 2009

Who is Going to Bail it Out?

By Anjum Altaf

We have all read the stories about very big entities failing and being bailed out – these include cities like New York, countries like Mexico and Pakistan, and corporations like General Motors and Bank of America whose businesses were bigger than the economies of many countries. All of them defaulted on their debts – went bankrupt – and were bailed out by an entity that was bigger than them, the US Government alone or in concert with other developed countries.

The combination of size and of the existence of a savior, the protector of last resort, gives rise to a dilemma that is known as ‘moral hazard.’ When an entity believes its failure would damage the rest of the system and that there is someone who will not allow that to happen, then it loses the incentive to manage its risks prudently. (more…)


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