Enjoyed GB's stimulating mix of historical review and interpretation of how we manage so called financial and existential crises, meltdowns etc. His comments on how the huge complexity of mutually impacting activity and the possibility that this has, overall, a stabilising (and of course its opposite) effect is generating a lot of great research questions.

I hope david green's little re-read of a few lines from Voltaire also brightens up his dull week. It would also make things sunnier for him if he engages with some of the substantive ideas and celebrates some of the positive possibilities of economic interconnectedness. All pedantic work and no economic and intellectual play makes ----- a dull boy (as Voltaire almost said)

Melissa, Dubai, UAE

Never mind this short term stuff _ what about the peak of oil production?

stem, Ramsgate, UK

This is a convincing argument.

It rests on the improvements in financial, economic and monetary management enabled by greater knowledge, faster feedback and complex computer processing in a connected world.

It also depends on continual spread of these advantages and their new financial tools to new, expanding or developing markets.

There seems no present shortage there, with China and other places having the capacity to absorb expanded capital for some time.

Occasional events when it emerges that not all the newer financial instruments are fully understood everywhere will possibly occur (with usually predictable responses) as may a growing realisation that when the feedstock of less developed countries becomes satiated, the music may need transition to lento, through adagio unless the natural limit of any ponzi-like chain that is population growth constrained by environment and resources is to be ignored.

dr venables preller, Warminster, UK

Admiral Byng was British, not French. You also seem to have forgotten the Asian Crisis only a few years ago.

Ian, Frederick, USA MD

"The financial authorities have truly learnt the lessons of the big disasters of the past and now act quickly to stop the bleeding."

Interesting then that the Bank of Japan's application of those lessons during the downturn of the early 90s didn't work. It's all very well pumping liquidity into an economy but what if that actually hampers productivity and the real economy and causes stagnation instead? The BoJ slashed rates and took control of the banks' liquidity (as they were battered by a property and lending slump exactly like the current one) but it didn't work. 15 years later their economy is still in the deflationary doldrums. Maybe pumping liquidity into a faltering economy doesn't always work? I wouldn't be so sure that the US and UK are immune just because they have been in the past.

MB, Edinburgh,

This isn't politics, its economics. Wake up.

Global capitalism will be fine. But all those bad debts will have to be written off, and anyone invested in them will lose money. That's going to be a lot of money and a lot of people. As much as, and more people than, in '29.

After which, Global Capitalism was also fine.

George Johnson, London, England

"First, just as Voltaire noted that the French needed to shoot the occasional admiral from time to time to encourage the others..."
Poor Admiral Bing: first he fails to relieve Minorca, then he is shot, and now he becomes French! Some people just do not get a break these days...
Apart from the slight historical mishap, good article, Mr. Baker; pity those idiots in the US Congress did not think like this when they messed up the US finacial sector after the Enron mess.

Frederick Davies, Oxford, UK

It wasn't the French who shot Admirals, it was the English.

Voltaire was in exile in England at the time and was observing the English practice of "encouraging the others" with shocked fascination. Very ruthless was 18th Century England. If 18th Century France had been similarly ruthless in sacrificing blue-blooded people at the top, the incompetance that led to the crisis that led to the Revolution wouldn't have happened.

BP, Bournemouth, UK

To Jim from Kualalumpur: the invention of reading is something I would heartily recommend to you. Surprisingly, it does away with questions like yours.
Now for the six-year-olds: the author does not think it is brilliant to lend money to people who can't pay it back. On the contrary, children, he argues that modern capitalism includes fast and efficient feedback mechanisms that stop such stupid behavior.
Bye bye, kids from Kualalumpur! Have a nice day!

Ondrej, Prague, Czech Republic

It wasn't the French who shot Admiral Byng pour encourage les autres, but the British who shot him in 1757 for losing Minorca.
If Mr Baker can't even get that right, or be bothered to look it up in ten seconds on Google, what are his views and opinions worth ?
He seems very confident that there can not be really nasty downturns in the modern globalised world. Let us hope he is right.

Robert Sebag-Montefiore, Geneva, Switzerland

Voltaire noted in Candide that the English, not the French, needed to kill the occasional admiral "pour encourager les autres". He referred to the fate of Admiral John Byng, executed in 1756 for losing a naval battle against France off the coast of Minorca.

Pierre Bernardi, Paris, France

I thought that Voltaire noted that it was the English who had to shoot the occasional admiral (John Byng after the battle of Minorca) "pour encourager les autres".

C Byrne, Pinner, UK

Less hubris would be advisable - it isn't over yet.

Jay, London, UK

The Russians haven't entirely given up on mischievous commentary. Yesterday Sergey Glazyev prognosticated that within three years there would be a "crash" in the value of the dollar - for no adequately explored reason - and suggested that in future gas and oil should be paid for in roubles, so as to minimise the pain this would cause.

Of course, this recommendation may have more to do with allowing a central bank some control over any ex-presidents who might end up in charge of Gazprom next year, but the timing and the justification are still amusing...

Ian Kemmish, Biggleswade, UK

To Jim, I would say the problem is not banks lending money to people who can't pay it back but banks lending money to poor people at exorbitant rates of interest and then being suprised, that when interest rates go up, these people can't afford the increase in exploitation. If the banks weren't exploiting the underclass and were more circumspect in their own investments may this accident waiting to happen wouldn't have happened. The poor need access money at low rates of interest, to enable them to climb up the ladder and consquently become 'shareholders' in the 'mass equity'. Don't blame the poor for being screwed, blame the banks for screwing them, now you can see the just reward. It's soclialism [urgh] just common sense.

andrew wakeling, London, UK

This column is largely right - the improvement in financial technology and market efficiency is the reason why the markets - and the economy - operate very differently, and in a less volatile way than 20 years ago. However, more regulation is needed in consumer and mortgage lending - irresponsible lending and borrowing ruins lives and fraud damages the economy. In the US it is clear there has been a lot of both irresponsible lending by lenders and fraud by borrowers. We need to improve calibrate laws to prevent this happening in future. To do so will increase economic stability.

FA, London,

Baker's perennial smugness is always good for a laugh to brighten an otherwise dull week. He does need to be told that Voltaire's comment in Candide ("Dans ce pay-ci, il est bon de tuer de temps en temps un amiral pour encourager les autres") was about the English after Admiral the Hon. John Byng was executed in 1757 for failing to exercise sufficient vigour in attempting to lift the siege of Minorca.

david green, dunedin, new zealand

Thank goodness for someone who talks a bit of sense!

hmh, France,

Thank goodness for complacency! Pass the Pimms, dear!

PS Wasn't Voltaire talking about Byngham, an English Admiral? Facts, current as well as historical, are important.

blooKat, Hove, UK

what's brilliant about lending money ( sub prime loans ) to people who can't afford to pay it back ?

jim , kualalumpur, malaysia

Thanks Gerard for the brilliant article. You are among a handful of supremely intellectual, talented, and non-politically correct writers left.

Josh, Tel Aviv, Israel