In 2005 I wrote a letter to the Financial Times describing the unsustainable nature of the financial instruments (derivatives) then being sold as insurance to protect investors from losses in other assets, failure of institutions and other untoward events. The complexity of these instruments and the magical nature of their acceptance by investors led me to an examination of modern economic practice from an anthropological perspective.

     In 2012 the world remains in an economic crisis with its financial industry in disarray. While US bank assets in 2010 amounted to some 8.6 trillion euros, European Union banks held assets of more than 42.9 trillion euros (Wolf, 2012). US banking assets were about 80% of GDP while EU banking assets were greater than 350% in 2010. As American appears to move toward recovery, Europe appears ever more fragile and the world economy is slowing down according to an IMF report and the Brookings Institution-Financial Times tracking index (Giles, 2012; IMF, 2012).

   The flight from risk that derivatives represent is an ancient component of vertebrate life and is embedded in the caching of many animals. Other aspects of modern economics are residues of the history of human survival in simple exploitation of resources. The problem with the financial foundations of modern capitalism is that they are rooted in trends of social ideology that have come to be a structural component of economic and political entities since the development of economic systems in the late Neolithic.

    We have been a genus, that of Homo, for about 2.5 million years, and a species, that of sapiens, for perhaps as much as 200,000 years, but over either period, the type of means by which we made a living was hunting and gathering. This strategy required continuous mobility and cooperation between band members. The nature of our current survival strategy, that of complex society only began about 10,000 years ago in the earliest sedentary communities. So one might say that our current life style is new, adapting and tenuous. I described the central aspects of this ideology in my 2004 book, Sustainability, Human Ecology and the Collapse of Complex Societies, published by the Edwin Mellen Press. The purpose of this present book is to clarify the mechanisms by which this ideology has come to permeate most all religious as well as political belief systems and create conditions for financial booms, busts and economic hardship.

     I have just completed a new book applying an anthropological perspective to the credit crisis.  Everyone should know about banking and the means of credit creation.  The process by which liquidity in our economy, and the global economic system, works and is affected by banks and central banks is crucial now.There is an economic underpinning to inequality that I am sure you are aware.  My new book  is titled, The Anthropology of the Credit Crisis: Magical Thinking,Irrationality and the Role of Inequality.    I think an anthropological view of the crisis is in order and you might find it of interest.  I have placed the crisis in the context of a cross cultural perspective on economic behavior and a historical one of complex social life as grounded in the current crisis.  It is published by MTC Productions and is available from Amazon Kindle Store as an ebook for $9 and in print form from Amazon for $18.

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