Is the current global financial crisis simply an economic problem? Who knows? I can't possibly know but that doesn't stop me having an opinion.
I suggest that this is not an economic problem but a philosophic problem. Underlying western cultures is a philosophy that is underpinned by trying to harness the power of collective wisdom- democracy. In reality these democracies have evolved from monarchical systems and the legacy of this past, effects the present. We do not live in true democracies but in pseudo-democracies or elected aristocracies. These systems are still evolving from monarchic to democratic. If you like the job is not done yet, this is a work in progress.
Economic systems are characterised by cycles- growth and decline (boom and bust). In addition to short term cycles there are also medium term and long term cycles. My suspicion is that this current bust is part of a medium term cycle. A cycle that started after the second world war and was characterised by the empowerment of the masses in terms of wealth and social mobility. Part of this empowerment has been the lifting of state discipline (on individuals and corporations) and the freeing of individuals to make their own decisions on moral issues and life choices. Well most people have used this power quite effectively to varying degrees.
An expression of the success of this social experiment has been how effectively these societies perform from an economic perspective. This is a tangible perspective and is a lot easier to track than say something more ambiguous like 'well being'.
Well, in my opinion we are now quite frankly buggered. The experiment is leading to some very worrying effects including what looks like some degree of system failure. I suspect that judging the success of the human experience on economic growth markers is philosophical flawed. It implies that growth is the main objective. However I don't believe that growth is central to sytems, I believe evolution is.
I think here lies the common flaw in thinking. Economic growth is part of a wider Social Evolution. It is a phase in a bigger process, not the big process itself.
I suspect that growth phase in the west is slowing down and approaching an end. One order is in collapse so that another one can grow- like a metamorphosis. The nature of things to come will be the re-distribution of resources, closing of in-equality, responsible care for the environment, a renaissance of morality, a renaissance of wider co-operation, a growth in social conditions and an improvement in the overall quality of the human experience. I think democracy is taking a leap forward. All the pieces have evolved rapidly since the 2nd world war- popular culture (including popular leaders- celebrity),the Internet, intricate communication networks, pressure groups, talking shops, an open media, independent universities, a fragmented establishment, free markets, personal independence etc etc. Now it is time for those pieces to move into position. The end result- Another step closer to an Open Society, an Intelligent Democracy.
Of course, in reality no one person knows what the hell is happening or what is going to happen- that is the whole point of collective wisdom. So if this is not what is going on there are several other options, 1) This is just a blip and soon things will carry on as they were- unfair, destructive to our environment and in decline, 2) This is the end of human evolution and we are heading towards our annihilation or 3) I don't think there are other options- either we turn this round or we are going down.