To NPR, as we watch it all collapse
It’s high time you started asking that. Lots of people have studied it. Consider it as a recurrent “tripping point”. To look at one piece at a time it helps to “assume away” ALL the “usual suspects”.
Say you assume the earth has infinite resources, people have limitless good will and make no glaring errors of personal responsibility or arithmetic…, etc. Say people are only limited by not having limitless ability to understand and adapt to increasingly complex things.
Following standard procedure, then, investors will automatically compound their profit taking until everything gets too complicated and there are no profits to take. The reason the trap is recurrent, and every generation appears to “forget” and makes the same error over and over, is that we only fix the complications that were the tripping point blamed in the past.
Each time it’s a new “complication” that trips people up and our error is finding it “totally unexpected”. J M Keynes noticed the general problem, and the shockingly obvious solution. He was laughed at for his very useful, if disturbing, insight .
There are fine points to think over, of course, but the one certainty is that how to prevent these recurrent collapses, without permanent collapse, is to break the cycle of multiplying complications by investors choosing to spend enough. In an endless spiral of taking profit, the one exit without collapse is for people to stop their profit taking. They’d need to spend their gains rather than hoard them.
Considering that unavoidable physical cause of the system’s fragility will at least start the learning as we “peek over the edge of our teacup” to glimpse a new world.