March 28, 2009

Zombies Too Big To Succeed?

Simon Johnson’s piece in The Atlantic, The Quiet Coup, is a bracing read. Whether you accept his policy prescriptions, the description of a parasitic oligarchy rings true.  The “gains” from “efficiently” allocating capital these 10 years seems likely to have an illusion for the macroeconomy, though a definite reality for private individuals.  Like African kleptocrats the the latter day condottieri of high finance did well, if no good.  Many historians have made the case that the enormous free trade bloc that was the early republic was instrumental in generating efficiencies of specialization and economies of scale which propelled productivity and wealth onward and upward.  One of the mysteries of modern economic history has been increased marginal returns through the catalytic effects of innovation. Perhaps we are nearing the end of an age, and should look to the libertarian decentralism which the likes of Dylan Hales champion to return the system to a balance and choke the manic growth of kleptocratic institutions?

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