The wheel in this case being the global financial markets. It has been reported today by the IMF that (so far) governments have spent more than $10 trillion on bailing out the financial sector during the current financial crisis. To put that into figures that is $10,000,000,000,000!This begs so many questions but the two that keep nagging at me are:
1. What would have happened if government had not provided this massive capital injection?
2. Could that money have been better spent elsewhere?So, to the first question - I'm no expert on financial markets but I wonder what would happen if we started again. Wiped the slate clean (so to speak, clearly it is far from that simple) and put in place a new system based on open market principles and full transparency. Clearly it could not happen overnight but there must be a way to put in place a phased plan (over 10 years or more) that could remove the curse of the financial markets.But to the second question (you know where this is going!) - could the money be better spent. Obviously every industry sector would wish for some financial input but, recognising the principles of an open market whereby businesses should succeed or fail on their own merits, clearly few should feel entitled to any. Within each of those sectors and companies there are key principles and utilities upon which they all rely. Without these things their business could simply not be done - things like provision of water, electricity a transport infrastructure and, increasingly so, telecommunications, the Internet and broadband.If we consider what areas could bring tangible benefit to the world as we move beyond our generations towards the next century perhaps there are two that stand out: a high speed communications infrastructure and widespread use of green technologies. There is also one solution that plays in both of these areas - fibre. It brings unlimited bandwidth to allow use to really innovate with our communications and it requires significantly less power to operate thereby meeting the green targets as well.So I'm spending my Friday morning hypothesising about areas which are unlikely to change but may be it is at least some good food for thought!
Friday, 31 July 2009
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