S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.11(3) (Fall 1998)
Speculation in the Financial System as a Dissipative Structure
- Ahn, HyeonHyo
- Issue Date
- Seoul Journal of Economics, Vol.11 No.3, pp. 295-320
- This paper is trying to understand the financial speculation through concepts from the non-equilibrium thermodynamics (NET for short). However in order to get a more concrete understanding of the phenomenon, I attempt to put together the Post Keynesian theory on expectations and Marxian perspective on production process into non-equilibrium thermodynamics. By using NET I argue that financial speculation must be understood as a dynamics occurring inside the financial structure. Therefore Neoclassical perspectives which are Just stressing the equilibrium tendency in the economic structure can not succeed in explaining the usual phenomena of financial speculation, financial panic, financial crisis, etc. In order to see the actual processes of emergence or desolation of social conventions which determine the status of financial structure, we need to understand the two-dimension of expectations, so-called 'mimetic expectations' and 'extrapolative expectations'. Those concepts on the expectations can be derived from Keynes. Furthermore, NET demands to understand the relationships between the inner process and the exterior. In this paper the production process of capitalism is considered as the exterior of financial structure as a self-organizing dissipative structure. I argue that the Marxian conception of the antagonism in the production process can be useful in understanding the constraints that the financial structure has.