May 8, 2008

More on George Soros: Struggling to Reimagine Economics

George Soros was predicting recession when Bernacke and Paulson were comatose. Today, in an interview with Diane Rehm, he discussed some prognostications about financial markets. He is a shrewd investor who sees the dollar being replaced by commodities and other currencies as a standard of exchange. Because we Americans consume more than we produce, our marketplace preeminence will inexorably decline and have to be shared with other countries who produce more than they consume. Regarding investments, he sees continued rough times for American investors and advises us to keep cash reserves on hand. The market analyses and predictions make the interview worth hearing by themselves. The interview is even more interesting for his thoughts about the metaphors and ideologies that shape economics and finance. Soros is struggling to move investors and politicians away from the economic fundamentalism which makes it impossible for us to competently analyze our economic behavior. That's the good part. Sadly, the philosophy he articulates might not really represent a radical break with the past. Much of it is reminiscent of cybernetics and interactionist sociology from the early and mid-20th century. It is as though he knows something is terribly wrong with economics but he cannot see how to ground the dismal science in its true home, biology. Good listen! (About 60 minutes. Downloadable)

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