Yes, the docu could really have made hell turn loose if they
scrutinised the policy of the world’s largest SWF (sovereign
wealth fund), but I guess this was not their mission....
While talking about this, this immense fund must really be tempting
"honey" to the major political and financial “bears”. I would be
very surprised if they have not spent considerable efforts trying to
control and direct its policy. No wonder it is so difficult to get
contrary info printed…. ;-)
And yes, the problem with the docu is that Carlota’s
techno-determinism becomes its reference frame - instead of having
as power-politics as a frame: locally, nationally and
So instead of being a political call for action the docu tends to
become a paralysing techno-financial systems analysis – only
pointing at “greed”, and even worse, ”the system”, as the sinners.
Similarly: On Friday the docu was discussed here on a TV2 weekly
economics program, and the editor of the weekly ‘Kapital’, was
disappointed that it not point its fingers at the political
decisions that led up to the crisis – both on municipal, national
and international levels.
I also missed a discussion of the economic philosophy that was
behind the madness (and this is not more complex than the many
financial intricacies the docu dealt with):
After all politicians do listen to economic advisors… As far as I
can remember, the only criticism of economics as a subject was
Erik’s reference to real versus financial investments (?).
But the matter goes far deeper of course, and I apologise for being
repetitive, but IMHO I must again draw attention to e.g. F. List’s
criticism of A. Smith’s materialistic “monetarism” (theory of
exchange values - as opposed to his own theory of productive powers)
– and this is a discussion with deep philosophical, religious and
historical aspects, e.g. regarding the image of Man and Society.
So, I must unfortunately conclude that the docu directed its guns in
the wrong direction and shot with blanks.
Still, it is very well worth seeing!
On 02.03.2012 13:10, Michael Hudson wrote:
The Norwegian "Bubble" film
Upon reflection, I don’t like the basic sense of
proportion of “Blowing Bubbles” film. The problem is
Carlotta’s vulgar materialism.
Based on her and Prof. Freeman’s studies of the
S-curve life cycle of markets becoming saturated for new
technology (refrigerators, computers, etc.) and then
tapering off, she claims that bubbles are inevitable,
presumably as part of Schumpeterian Creative Destruction.
It is all technology and markets.
If this is the case, where is the room for
policy to make things better and avert bubbles. In my
analysis, bubbles are financial. Minsky described the
financial cycle as moving through three stages of increasing
debt pyramiding, ending in the Ponzi phase. Given the
exponential growth of debt/savings – in excess of the “real”
economy’s surplus and ability to pay – this IS inevitable.
Like you, I wish that the policy focus of the
Norwegian film had been on the single most relevant
Norwegian decision to be made: what to do with the Oil
Fund’s immense financial surplus. Should it be spent on the
“real” economy, as China is doing with its long-term
planning? Or should it be “financialized,” put in the U.S.
stock, bond and derivatives market, like the unfortunate
city of Vic that lost its immense payment from pre-selling
electricity for a decade.
There IS a solution: The government could impose
a Resource Rent tax, and capture the payments that Wall
Street expected to get.
And for the Oil Fund, it could be spent in the
ways we’ve discussed: investing in higher education, high
technology, and what India and China are doing. And in
better infrastructure. This is rejected. THAT could have
been the focus of the film. Why make it in Norway at all, if
the question is not posed, “If there will be bubbles, how
should Norway preserve its immense oil fund?”
If Geoff were managing it, what would HE do?