It was fascinating following the three BBC Money Programmes on the financial crisis following the collapse a year ago of Lehman Bros.
My gut instinct at the time was that the situation was gravely serious. I indeed considered for how long money could be withdrawn from bank deposits and whether the Government here would be able to maintain payment to public sector workers. Then when the system survived I began to wonder whether my initial fears represented an over-reaction.
Viewing however the re-enactment of the Lehman collapse and the great uncertainty which followed, I can now see that my fears were indeed well grounded with the international financial system literally hanging on the edge of a precipice and the very real threat of total collapse a genuine possibility.
Now a year later we are beginning to hear optimistic noises regarding the prospects of economic recovery. Today for example the IMF has forecast an overall drop in world output of just 1% for 2009 with a return to a very respectable 3% in 2010. Even here in Ireland - where the recession has been especially deep - unemployment figures have unexpectedly stabilised with one stockbroking firm predicting a 4% growth rate in 2011.
While such upbeat news is indeed welcome after the doom and gloom of the past year, I think we should remain extremely wary. In effect once the seismic events of September 2008 unfolded, the international banking system was placed on life support by governments around the world with no guarantee of survival. Now, though showing welcome signs of recovery, the patient still remains on life support. So even if the recovery continues, considerable damage has been already done to health with the possibility of all sorts of future complications arising.
I have long maintained that the fundamental weakness of the capitalist system as we know it is the manner in which an attempt is made to treat it purely in mechanistic terms thus divorcing economic events from the moral responsibility of those involved.
One manifestation of this problem is the manner in which short-term decisions based on immediate economic benefits greatly outweigh wiser longer term consideration of what is truly in the collective interest.
Thus we have seen the rapid growth of a deregulated financial system based on greed and fuelled by speculative profits.
It is generally believed that the sub-prime crisis was the direct cause of recent financial problems. However the problem is much deeper than this.
Success in the goods economy requires product offerings that may take a long time to develop. Thus a period of hard graft and initial loss often precedes the making of significant profits (where these occur).
However the financial sector offers the opportunity for vast profits in a short time frame through purely speculative trading.
Thus in order to extend these speculative opportunities more widely, financial operators - greatly assisted by light touch regulation - have in fact been busily constructing, through complex financial products, a giant pyramid scheme. They were thereby creating the illusion that risk could be largely eliminated from financial decisions.
Because financial activity has become so free of regulation, a virtual monster has been created, which through its voracious appetite, can gobble up the real economy. In other words no clear correspondence exists anymore as between the real and financial economies with the total nominal worth of financial products vastly exceeding the value of goods produced.
Thus the financial system remains extremely vulnerable to further severe crisis. For example real interest rates were already too low before the recent crisis which in many ways served as the root cause of what eventually folded. Now in an attempt to deal with the credit squeeze that unfolded in the aftermath of the crisis, central bank interest rates have been lowered further to virtually zero in the major markets. And this is a sure recipe for future trouble. Given that confidence has already been so greatly weakened, the next great crisis could have even more damaging consequences.
There is a related problem with respect to growing environmental problems on our planet. These have arisen through the manner in which short term economic concerns with profitability continually override concerns with the long run sustainability of resources. Oil reserves have now peaked though potential demand will undoubtedly increase for some time. Also climate change strongly related to Co2 emissions could among other effects have major consequences for future food production.
It could well be that a significant environmental threat - with potentially vast economic implications - will coincide with the next great financial crisis.
Perhaps then we will finally realise the fundamental weaknesses that were always inherent in our capitalist system.