Several times in previous postings I have suggested that the best possible remedy for a dysfunctional world economy is to leave it well alone. It will repair itself in due course. I’ve derived this from Richard Feynman’s discoveries about the Law of Least Effort in the 1970s. This also harks back to what the classical economists such as Adam Smith and Jean Baptiste Say were saying in about self-balancing economies in the 18th century.
For the first time I’m aware of, modern reinforcement has come from Prof Adrian Bejan at Duke University, acknowledged to be one of the world’s foremost experts on mechanical systems and thermodynamics. His new book The Physics of Life is saying exactly the same — all systems, if left alone, will seek or ‘flow’ to their most efficient levels of operation.
In the case of the existing world’s production and transportation systems, they have to be driven by the use of energy. It’s not likely that significantly more energy can be injected into the world economy from year to year. Unless the governments of most advanced nation-state can undertake severe austerity programmes and reduce their high national debts in the next decade or two then the world economy will clearly lead them to default, just as Second and Third World countries have to do so quite frequently.