As FOW’s Awards highlight, innovation is one of the most powerful and distinctive of human characteristics. As the Copenhagen summit approaches, the world must have confidence in that power, stop hiding from climate change, and dare to go out and solve the problem. Derivative markets will have a part to play.
Modern financial markets are one field in which the human
capacity to innovate is displayed in a way that would have
astonished our forebears.
As the last two years have reminded us, innovation can cause
damage as well as progress. That idea ought to be obvious to
everyone who has heard of nuclear weapons – but
somehow, in different fields from time to time, it keeps
Technical advances pose new moral challenges, and if we fail
to make the right choices, we are likely to find new tools
causing nasty surprises.
Yet what should not be doubted is the sheer capacity of
humans to innovate – a power that has been increased
by modern social structures like democracy, the market economy,
literacy, education and mass communication.
FOW’s Awards for Innovation 2009, which we
highlight in this issue, are a testament to the resourcefulness
and creativity of people in general, and of the futures and
options markets in particular.
These markets are blessed with a sound legal and regulatory
structure that, in the main, has channelled innovation in
healthy and productive directions.
The astonishing changes unleashed by the internet in the
past 20 years are another demonstration of human technical
power – as President Obama put it, "Yes, we can."
But as any clearsighted person knows, the talk about the
internet causing a wave of people power in the political sphere
is baloney – or rather spam.
There was plenty of political upheaval before the internet,
and there has not in fact been much since it.
Problems of human interaction are not solved as easily as
technical problems – in fact, they are much harder and
usually take a long time.
Think how long it took for the Industrial Revolution to
produce what we would now call a decent standard of living for
most people in Europe – or how, despite all our
technical wizardry, we still cannot manage to give everyone
enough to eat.
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