(This is Part 23 of a series. Go back to Part 22.)
Those of us tuned in to the world of finance will recall the East Asian Financial Crisis of 1997-1998. The so-called "Asian Tiger" countries of Singapore, Hong Kong, Taiwan and South Korea, as well as other countries in the region such as Thailand and Indonesia, all came close to a financial meltdown.
Bad bank loans throughout the region had built up to the point where this "bubble" had to burst, and in 1997 did so, resulting in devastating economic shocks throughout the region. (Indeed, it was only prevented from spreading to the rest of the world by the able and timely intervention of U.S. President Bill Clinton and his Treasury Secretary Robert Rubin.)
However, there is now increasing agreement among analysts that, however cataclysmic it was at the time, the East Asian Financial Crisis was also the best thing that could have happened to the region. In Thunder from the East, authors Kristof and WuDunn put it this way:
"It entailed a terrible human cost, but it is also helping to destroy much of the cronyism, protectionism and government regulation that had burdened Asian business. The crisis helped launch a political, social and economic revolution that is still incomplete but that ultimately will reshape Asia as greatly as the fall of the Berlin wall reshaped Europe."
Here we see one more example of how catastrophic events can lead to beneficial effects. But it's much more than that. It's that the one must lead to the other because of the nature of existence.
Let's take another example: A severe catastrophe to planetary life was the death of the dinosaurs from the effects of a large meteor hitting the earth about 65 million BC. In the resulting empty ecological space, the mammals were able to develop and flourish, which lead ultimately to the development of primates and human beings—us! But for the death of the dinosaurs, we wouldn't be here.
Another example: Several million years ago a severe and very prolonged draught hit the continent of Africa. Until then, our proto-primate ancestors had been arboreans (tree dwellers) for tens of millions of years, because the jungles of Africa were so thick that we could spend an entire lifetime in the trees, protected from predators.
When the jungles thinned out from the draught, as a survival mechanism our ancestors stepped down onto the ground. There, lacking claws for defense, we stood upright in part to see predators over the tall grass of the savannahs. Our standing on two legs, in turn, freed up our hands and led to the development of tool-making societies. Again, we see a catastrophe—the draught and the loss of our ancient arboreal home—turning into something beneficial.
Countless other examples could be given. Indeed, if we look closely enough, we'll see that all "negatives" ultimately lead to "positives." Another way of putting this is that all processes in the universe are part of self-corrective networks, as discussed earlier in this series.
Let's look at the same phenomenon from another angle: There is an old saying among market traders that, "The cure for higher prices is higher prices; the cure for lower prices is lower prices." What does it mean?
Consider when the price of something goes higher. Higher prices attract more producers and productions of that thing, which leads to increased supply and thus to lower prices. Conversely, lower prices attract fewer producers and production of that something, which leads to decreased supply and thus to higher prices.
We see thus that financial markets are also self-regulating. They would have to be, since markets are self-arising networks (created ongoingly by the market participants) and thus inherently self-regulating.
Indeed, all self-arising networks in nature—which includes everything—are self-regulating, that is, all processes in existence are self-regulating. Negatives lead to positives. Positives lead to negatives. The one reality is a self-reflecting mirror to itself everywhere.
(This is the end of Part 23. Go to Part 24.)
—jim sloman, 2.19.03 for 6.22.03
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