Niall Ferguson On Whether The Financial Crisis Will Lead To America's Decline And A Glimpse Of The "Post-Pax Americana" Dark Ages
Two weeks after we presented Niall Ferguson's video lecture - "Empires On The Verge Of Chaos" to tremendous reader response and almost 30,000 views, we follow up with another must watch video presentation, this time highlighting the intellectual rigor of Ferguson, David Gergen and Mort Zuckerman. The topic once again is the Financial Crisis, and specifically how, why and whether it will lead to America's decline. Of particular note is Ferguson's spot on characterization of the primary deficiency in the so-called brains of economists, namely that they see patterns, equilibria and stable systems where there are absolutely none: i.e., in the complex (as in Lorenzian) world of economics: "Complex systems look like they are in equilibrium, but they are not: they are constantly adapting, highly decentralized, interdependent systems and this process of adaptation can continue for quite a long time. And you think to yourself when you look at it, that's in a wonderful equilibrium. That's how we think about the economy. That is how economists teach economics. They talk about it in terms of equilibrium. The bad news is that in fact we inhabit a complex system that has virtually nothing to do with the neoclassical model that you are taught in Econ 101. And that's why the economists failed to predict the financial crisis... For me American power if you generalize beyond the realm of finance through the geopolitical system is a perfect example of a highly complex system which looks like it is in equilibrium but like all the great empires of the past is quite close to the edge of chaos. And our nightmare scenario should be that something happens to us like happened to the Soviet Union... It suddenly just falls apart. And I think the trigger, the catalyst if you want to switch to chaos theory the butterfly in the tropical rainforest that flaps its wings and posits the distant thunderstorm is going to be the credibility of fiscal policy. That just seems to me like the obvious place where things can turn nasty, and they turn nasty with amazing speed."
And another highlight clip: Will the post-American world be the new Dark Ages?
Must watch hour long video for a slow holiday.
Full program by segments:
01. Introduction 05 min 08 sec
02. Financial Crisis Accelerated West to East Power Shift 07 min 50 sec
03. American Business Culture Is Healthy 06 min 44 sec
04. Threat of Rapid Decline 03 min 53 sec
05. Complexity Theory and National Strength 02 min 30 sec
06. Debt and Stimulus 03 min 22 sec
07. Innovation Only Helps by Creating Domestic Jobs 02 min 59 sec
08. Growing Education Gap 02 min 38 sec
09. A World Without a U.S. Superpower 04 min 55 sec
10. Q1: U.S. Headed Toward Capitalism or Socialism? 02 min 48 sec
11. Q2: What Happened to Budget Surplus 02 min 00 sec
12. Q3: Coping with China Graduating Thousands of Engineers 02 min 37 sec
13. Q4: How to Manage the Deficit 05 min 05 sec
14. Q5: Low Birth Rate in China 02 min 52 sec
15. Q6: Federal Reserve and Treasury Contribution to Crisis 03 min 26 sec