Lessons from financial crises: paradigm failure and the future of financial regulation

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Lessons from financial crises: paradigm failure and the future of financial regulation

11 Dec 2009

George Soros heads this panel discussion on how to emerge from the financial crisis, building upon ideas put forward in a week-long series of lectures at the Central European University in Budapest in October 2009. The first part of the video is an audio recording of one of Soros’s earlier lectures, in which he discusses the relationship between thinking and reality. He describes his early academic career studying under Karl Popper and the huge influence this had on forming his own opinions and career. Soros also explains the principals of fallibility and reflexivity and their material consequences.

The panel then discuss Soros’ ideas in relation to their own fields. First, Roger Goodman describes the essence of social sciences – the study of the person and the construction of society. He looks at common understandings of Japanese culture and how these shed light on personhood and interrelationships.

David Soskice believes that broad and integrated analysis of events is lacking from the social science academic domain, a problem the financial crisis exposed.

Paul Beaudry explains the inevitability of the boom and bust cycle. He describes what he believes are constrained notions of financial stability and macro-stability before explaining the role of the individual in maintaining or disrupting them.

Anatole Kaletsky discusses market fundamentalism, and the various roles of economic capitalism.

George Soros ends by explaining in more detail the concepts of reflexivity and manipulative cognitive functions. He describes how world conceptions and cognitive feedback can actively influence the external world, and thus financial trends. He then turns to the 'super bubble' and explains how this is controlled by markets and authorities both working under misconceptions. Soros finishes by discussing the international global market, stressing the need for increased regulation and bilateral trust.

This video was kindly provided by The 21st Century School.