This is a very interesting paper particularly in its analysis of the effects of the financialisation of economies. I agree with its critique of using analogies and the methodology from physics for economics. However, I am equally sceptical about the application of analogies and methodologies from the biological sciences.
Economic and social systems in general differ from the physical and biological sciences in many respects and particularly the following. (a) Each individual in the economic system acts purposely. (b) There is reflexivity: we act on the basis of information on a specific context; but our actions affect and change the context. (c) Under condition of capitalist production the interests of various classes do not coincide.
The latter point means that there are conflicts over the distribution of the economic surplus. The functioning – or malfunctioning – of the economic system is best understood by considering the Distribution (D) side of the economy alongside the Aggregate Demand (AD) and the Aggregate Supply (AS) sides. These three sides of the economy interact with each other. Changes in D affect AS and AD. The balance between them key to understanding the financialisation of economic systems and its effects in the last 30+ years.
The aftermath of WWII brought huge opportunities for investment in the real sector of the economy. Good rates of return could be earned by creating private sector productive capacity for products – from cars to washing machines – people wanted and could afford to buy because of growing employment and incomes. From the 1970s onwards the need for investment in the real sector has not diminished but they are no longer – or less so – in consumer products; they are mainly in social and economic infrastructures from transportation to education to healthcare to environmental. These are the types of investment less attractive to private investors; moreover some may clash with existing vested interests such as those of the oil industry.
As opportunities for very profitable investment declined, investor looked for ways of creating other means for extracting surplus. Financialization and privatization programmes can be seen as part of this overall strategy. The neoliberal ideology provided…well the ideological context to the support of the distribution of surplus in favour of rent seekers. The process led to the inequalities well evidenced in the article.
The State aided the process via privatization programmes, deregulation of financial markets, labour market legislation leading to loss of bargaining power by the working class. The consequences are in front of us: as I write in a rich country like Britain the discourse is about how long ‘food banks’ are likely to be with us and how we can teach the lower classes to cook meals with cheap food. As someone mentioned in a TV programme, the problem for many users of food banks is that they may have no food to cook or kitchens in which to cook it.

However, to say that neoliberalism wants to reduce the size of the State is again misleading. There is plenty of State intervention and government expenditure when the rich and powerful need it: see the bailing out of banks. What neoliberalism wants is a reduction of benefits for the poor while keeping open and active the option of benefits for the rich.
However, the contradictions are also with us. A system in which the D side of the economy leads to such inequalities is one in which AD is low and AS suffers: we see it in Greece, in Italy and elsewhere where the countries are plagues by neoliberal austerity policies.

The Nobel Prize winner Robert Lucas wrote in 2004 that: ‘Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution.’ I beg to disagree: I believe that a focus on the D side of the economy is essential for understanding its functioning.

Reference
Lucas, E. R. (2004) “The Industrial Revolution: Past and Future”, 2003 Annual Report Essay, The Federal Reserve Bank of Mineapolis, Mayo 2004 acceded at
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3333