The New Financial Order: Risk in the 21st Century (Book Review)
By The Cato Journal
- Release Date: 2003-09-22
- Genre: Politics & Current Events
Description
Robert J. Shiller Princeton and Oxford: Princeton University Press, 2003, 366 pp. The New Financial Order presents a vision of a radically new world of greatly enhanced risk sharing and much greater economic security for us all. It confronts the problem of how to deal with the risks we face, or how to reduce economic insecurity. These risks, large and small, are the downside of capitalism's ongoing process of "creative destruction." They have hampered economic progress throughout history, and have been the source of countless foregone opportunities and untold misery. This book proposes a new framework to handle these risks, and so protect people against them. As such, it will encourage more positive risk-taking behavior, better development and use of individual skills, and greater personal fulfillment. As Shiller notes, he wishes to "democratize" finance and "'bring the [risk-management] advantages enjoyed by the clients of Wall Street to the customers of Wal-Mart" (p. 1). Implementing this vision involves a huge extension of risk-trading activity, and the establishment of a global infrastructure to measure and manage the risks involved.
