The financial system compares to Darwin’s theory of evolution because of the process of Creative Destruction. Ferguson explains that the creation of new companies or new methods of production represents an innovation that takes place from within; the new construction destroys and replaces the old one. One example that relates to this concept is the fall of Savings & Loans in the 1980s. After not being able to keep up with the inflation, deregulation, and the increase of interest rates in the 1970s, the company soon became bankrupt and disappeared. The result of this extinction was the innovative financial practice of securitization in the mortgage market. I don’t necessarily disagree with this analogy, yet at the same time I don’t consider the new financial constructions to be 100% original, but only improved species of the past. I can see that in both Saving & Loans and the subsequent mortgage market, the idea of debt securities is really the same. I see innovation as a type of revolution rather than an evolution, and this last term...
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...current president of Ecuador made a radical decision in the last few years by rejecting an agreement with NAFTA, and instead opted to increase the country’s economic relations with Asia, particularly China. I am finally able to understand the reason behind this move, since China is slowly getting back its dominant economic position in the world. Furthermore, Ecuador used to be a corrupt capitalist nation and has been recently shifting towards the socialism of the 21st century. I can see the advantages of a capitalist financial system like Ferguson mentions throughout the book, yet in my country I have also seen significant changes ever since it stopped being a capitalist nation. This is the reason why I would have liked for Ferguson to include other claims because it would have allowed me to look at the history of the financial system from a neutral perspective.
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