Politicians and policy-makers all over the world struggle to stabilize the global financial system. But perhaps regulations and command-and-control won´t do much good. Instead, governments should take a closer look at the research on resilience - the capacity of an eco-system to cope with shock and then rebuild and renew itself. For more see here.
Herman Daly, renowned ecological economist earlier had this to say on the crises:
The current financial debacle is really not a “liquidity” crisis as it is often euphemistically called. It is a crisis of overgrowth of financial assets relative to growth of real wealth—pretty much the opposite of too little liquidity. Financial assets have grown by a large multiple of the real economy—paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. It should be no surprise that the relative value of the vastly more abundant financial assets has fallen in terms of real assets.
Seems like Holling and Daly can have a creative chat on finding a balance between regulations, incentives and management designed to improve the overall system and interventions to increase the systems' overall ability to cope with shocks.
For more on Daly's response see here.
For Holling's own reflections on his work see here.
H/T: The Oil Drum