Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Perez is a must read. In it Dr. Perez, speaking from 2002, gives us a wonderful history of five technological revolutions that followed a similar pattern of bang, bust and, hopefully, renewal.
So during this period, financial capital generates a powerful magnet to attract investment into the new areas, hence accelerating the hold of the paradigm on what becomes the 'new economy'.In Perez's account finance is necessary for technological progress because otherwise there would not be enough money available to the fledgling industry. And so at the beginning of each technology period, the industrial revolution, steam and railways, steel, electricity and heavy engineering, oil, automobile and mass production, and information and telecommunications, finance leads a big bang into a new paradigm. Then, unfortunately, the big bang leads to an unregulated casino that eventually bubbles and pops.
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In a world of capital gains, real estate bubbles and foreign adventures with money, all notion of the real value of anything is lost. Uncontrollable asset inflation sets in while debt mounts at a reckless rhythm; much of it to enter the casino.
Below I explain why even this account might be too slanted in favor of finance and why Romney stands for the end of progress as we have known it for almost 250 years.