THEORY OF GAMES AND ECONOMIC MISBEHAVIOR // Die Spiel Theorie und die wirtschaftswissenschaftlichen Verhaltensauffälligkeiten

Charles II had the right idea. He trusted (and endowed) the small group of oddballs who were forming the Royal Society, and put a stop on the Exchequer. If he had rescued the bankers, and ignored William Petty's band of Natural Philosophers, where would we be now?

THEORY OF GAMES AND ECONOMIC MISBEHAVIOR    [7.27.09]
By George Dyson
An Edge Original Essay

Is the economy really as bad as it seems? Is the bad economy as real as we think? Expanding upon last year's essay Economic Dis-Equilibrium, George Dyson takes another look back at how we got into the state we're in — and how to find our way out. Essay

— JB 

GEORGE DYSON, a historian among futurists, is the author of Baidarka; Project Orion; and Darwin Among the Machines.
George Dyson's Edge Bio page
George Dyson on Edge: Turing's Cathedral; The Universal Library; Economic Dis-Equilibrium;Darwin Among The Machines; Or, The Origins Of [Artificial] Life

His explication about what happend last years is brilliant, only a few lines of it:

“The unlimited replication of information is generally a public good (however strongly music publishers, software developers, and other pockets of resistance disagree). The problem starts, as the current crisis demonstrates, when unregulated replication is applied to money itself. Highly complex computer-generated financial instruments (known as derivatives) are being produced, not from natural factors of production or other goods, but purely from other financial instruments.”

Source: 
EDGE    = http://www.edge.org/