Capital Institute: Finance for the Anthropocene

“The first step is to recognize we are lost,” write Peter Victor and Tim Jackson in the finance chapter of the Capital Institute June 2012 working paper, “Economics, Finance, Governance, and Ethics for the Anthropocene.”

Our economy has become a financial system disconnected from the human virtues and oblivious to our scientific understanding. …

To understand finance properly, we must deconstruct it into understandable parts, and then we can consider it holistically through a system lens. Finance impacts the real economy directly through its four primary economic functions: 1) the credit creation process and the conversion of savings into investment (capital allocation); 2) resource allocation via finance analytics; 3) economic risk management; and 4) provision of market liquidity, payment, settlement, and safekeeping for financial transactions.

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