35822hoha238the cycle was eventually broken in the

Q

MODERN AGE
THANKS TO PEOPLE'S
GROWING TRUST IN THE FUTURE,
AND THE RESULTING MIRACLE OF CREDIT.
Credit is the economic manifestation of trust?
Nowadays, if I want to develop a new drug but don't have enough money,
I can get a loan from a bank, or turn to private investors and venture capital funds!
When Ebola erupted in West Africa in the summer of 2014, what do you think happened
to the shares of pharmaceutical companies that were busy developing anti-Ebola drugs & vaccines?
They skyrocketed! Tekmira shares rose by 50% and BioCryst shares by 90%. In the Middle Ages the outbreak
of a plague caused people to raise their eyes towards heaven, and pray to God to forgive them for their sins!
Today when people hear of some deadly new epidemic, they reach for their mobile phones and call their
brokers? For the stock exchange, even an epidemic is a business opportunity! If enough new ventures
succeed, people's trust in the future increases, credit expands, interest rates fall, entrepreneurs can raise
money more easily and the economy grows. People consequently have even greater trust in the future,
the economy keeps growing & science progresses with it?! It sounds simple on paper. Why then did human-
kind have to wait until the modern era for economic growth to gather momentum? For thousands of years
people had little faith in future growth not because they were stupid, but because it contradicts our gut
feelings, our evolutionary heritage and the way the world works. Most natural systems exist in equilibrium,
and most survival struggles are a zero-sum game in which one can prosper only at the expense of another.
For example, each year roughly the same amount of grass grows in a given valley. The grass supports a
population of 10,000 rabbits or so, which contains enough slow, dim-witted or unlucky rabbits to provide
prey for a hundred foxes. If one fox is particularly clever and diligent, and devours more rabbits than the
average, then other foxes will likely starve. If all foxes somehow manage to catch more rabbits
simultaneously, the rabbit population will crash, and next year even more foxes will starve. Even though
there are occasional fluctuations in the rabbit market, in the long run the foxes cannot expect to hunt, say,
3% more rabbits per year than the preceding year.
04 sep 2019 - bewerkt op 09 sep 2019 - meld ongepast verhaal
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Asih, man, 79 jaar
   
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