A chance to discard the old

Every threat is also almost always an opportunity. Nowhere could this be more relevant than in current conditions. The global economy is in the doldrums and experts worldwide have been proposing stimulus package after ineffective stimulus package to jumpstart the stalling economic machines of the world. What if we're following an incorrect approach in the first place? What if were are simplistically trying to treat the symptom instead of treating the disease? 

The current economic crisis is the result of impaired financial assets, which were overvalued due to complex speculations by greedy and obtuse bankers. Now we are happily trying to correct the problem by bailing out these bankers. What we are NOT doing is trying to understand what they were doing. They were, in a very rudimentary sense, betting on the cash flows from risky financial instruments. But money or wealth should be based on an underlying commodity or product or service. What if these underlying entities themselves are not sound? Maybe we should rethink the origins of our wealth. 

If you come to think of it, the current global economy is constituted, mostly, by old world wealth - fossil fuels, obsolete manufacturing and aging technology. The only relatively new source of wealth in the economy is the internet firms which have truly innovated to create wealth. Maybe we should focus our efforts on creating new wealth instead of trying to fix the old sources of wealth. Maybe the General Motors and Fords of the world ought to be allowed to fail in order to make way for new firms and new sources of wealth which are based on new ideas which are relevant to our times. It will be a more painful and drawn out recovery. But we wont have an encore of the current crisis for a long time to come. 

All major periods of wealth creation in our history have been based on real innovation and new thinking. Be it the industrial revolution, the space race or the internet. New technology leads the way for wealth creation as a natural progression. Any other way of tinkering with wealth is simply playing with the controls without fixing the circuitry. Maybe we need another revolution in technology which is driven by new ideas - green energy, affordable public healthcare, for that matter any new idea with the potential to transform the economy by driving out the obsolete. 

World leaders are myopic by compulsion. They have vote banks to anwer to. But academics are independent. What has surprised me over the last few months as this crisis has unfolded is that every Ivy League B-School professor has simply gone on record to speculate on the duration of the crisis and the origins of it. No one has proposed a concrete plan for recovery based on anything which is different from a rehashing of the old-world thinking. 

Now, I believe is our big chance to discard the old. If change has come, then let it come big. Let us go the distance and fix things once and for all instead of prescribing lame measures. Let us alter the patient's lifestyle instead of supporting his failing heart with yet another bypass surgery. I don't think crises of such magnitude deserve to be tackled with half measures. I hope someone is listening.