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The financial crisis that started in 2008 is explained in terms of a series of normalisations, which pooled together prime and subprime mortgages, assets and debts, private and public debt. Such practices spread risk to the financial system as a whole and drastically reduced the information available. As a consequence, capital accumulation was achieved independently of whether the added value was real or virtual. The financial crisis illustrates the limits of normal science, that is, the dramatic simplification of the perception of the external world associated with the adoption of narratives referring to a single scale and a single dimension. Reduced diversity in the input of information combined with the inherent instability of financial markets results in the systemic presence of high uncertainty. In this situation, technical knowledge does not have the means to deal with, or control, the crisis and thus cannot guide decision making. The limits of technical knowledge can be observed in the worsening of the crisis, which is affecting the whole economic sector and leading to increasing unemployment and political delegitimation throughout Europe. This paper suggests an alternative interpretation of the financial crisis based on the insights offered by hierarchy theory. A multi-scale approach is used in order to identify the changing function of the financial sector at different scales of analysis and the transmission mechanisms through which rent-seeking practices at the individual level result in systemic instability at the societal level.

The present course of assessing debt sustainability – toward further econometric sophistication – risks being more harmful than helpful. To develop support for this claim, this paper first recounts what economic theory says about sovereign debt, and then continues by analysing the methodology and approach that the assessment of debt sustainability rests on today. Building on these accounts, this paper argues that debt sustainability should be lifted away from the narrow econometric seat where it is now found and, instead, should be placed in between problem debt on the one side and economic and social human rights on the other. The paper concludes by proposing an orderly framework promoting equal rights of debtor and creditor nations in debt negotiations. Importantly, it is up to the indebted nation to decide on the sustainability of its sovereign debt, not the creditors.