61. Neglect of economic risks

Expressions such as “money is only pieces of paper”, or “bank accounts are only bits in computers” can be a reflection of the widespread opinion that the economy is not so important, as, say, war or natural disasters. However, the economy is the material embodiment of the structure of most human activity. To understand the role of the economy, it is important to note that the Great Depression of 1929 arguably caused more personal misery for the United States than World War II. It's also important to look at the crash of the USSR and the resulting economic troubles, as billions of dollars worth of state assets were seized by monopolists for pennies on the dollar. This crisis occurred because of structural-economic reasons, not any external threat. The same factor can occur in large extinctions; the large sauropods were in decline prior to the arrival of the fatal asteroid, as a result of complex ecological factors and changing patterns of competition between species⁴⁰.

All disasters have an economic cost. Even small terrorist attacks can have economic effects hundreds of times larger than the initial damage itself. The September 11^th terrorist attacks did at least $100 billion in damage to the American economy⁴¹, or closer to $6 trillion if you view the Afghanistan and Iraq wars as direct responses to that one terrorist action, which they certainly appear to have been⁴². A purely economic action such as a decrease in interest rates by the Fed might lead to a tremendous amount of economic damage by causing a bubble in the real estate market. In 2001, a mere seven letters laced with anthrax was capable of causing $320 million in cleanup costs alone⁴³. On a dollar-per-pound basis, that is quite a sum.

Even small failures can lead to a huge damage and loss of stability of economy, and an economic crash would make the whole system less steady and more vulnerable to even larger catastrophes. It could lead to positive feedback that is a self-amplifying catastrophic process. During the process of economic globalization, a possibility of global systemic crisis continues to increase. It is difficult for some to believe that many of the world's most powerful nations would collapse because some large banks go bankrupt, but it is a definite possibility⁴⁴.