Laissez-Faire or Intervention: A Reflection on Maintaining System Sustainability.

Recent literatures about complex systems indicate that the economy self-organizes under control mechanisms. By applying the theory of control mechanism to capitalism, this paper analyzes why the ongoing world financial crisis is a credit crisis and the epistemological root of credit crisis-information asymmetry. Furthermore, this paper argues that neo-liberalism economic system and the defective credit management system, which lead to the deficient government supervision and consistent lack of effective government supervision, caused the world financial crisis. This paper also argues that rescue measures taken by many countries cannot resolve the financial crisis fundamentally. Some measures are proposed at the end of this paper to strengthen the negative feedbacks, aiming at defusing or avoiding crises fundamentally. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]