It is time to recognize that financial markets are inherently unstable. Imposing market discipline means imposing instability, and how much instability can society take? ... To put it bluntly, the choice confronting us is whether we will regulate global financial markets internationally or leave it to each individual state to protect its interests as best it can. The latter course will surely lead to the breakdown of the gigantic circulatory system, which goes under the name of global capitalism.
About this quote
- What does it mean?
- Financial markets are inherently unstable and need international regulation to prevent systemic breakdown.
- In plain terms
- Markets are unstable and need global rules to avoid collapsing.
- What can you take from it?
- International cooperation is necessary to stabilize global finance.
Where it applies
Putting it to work
Questions to consider
- Should markets be self-regulated or government-controlled?
- How much instability is acceptable?
Another view
International regulation faces significant political hurdles and sovereignty issues.
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The global crisis is caused by pathologies inherent in the global financial system itself.
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