61. Neglect of economic risks
Expressions such as Òmoney is only
pieces of paperÓ, or Òbank accounts are only bits in computersÓ 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 11th 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.