Alexander Fleming, the Scottish bacteriologist who discovered penicillin, the first antibiotic, served in the military during World War I. According to Happy Accidents (2007) by Morton Meyers, soldiers in that war often died from infections in relatively minor wounds. Rather than conclude that something was wrong with their immune systems, and wonder why, Fleming — unsurprisingly for a bacteriologist — began to think we needed more substances that killed bacteria. A hundred years later, the blind spot still exists. A few years ago I noticed that a wide-ranging course on epidemiology was being taught in the UC Berkeley School of Public Health. I knew the professor. I asked him, “Will the course cover what makes the immune system weak or strong?” “No,” he said. You will look in vain for that topic in any epidemiology text. To call it a blind spot is being nice. Half the subject — the more important half — is being ignored. And Schools of Public Health favor prevention. Medical schools are worse.
In an editorial in today’s Financial Times, Nassim Nicholas Taleb and Mark Spitznagel point out that debt is inherently destabilizing because it creates less room for error. Financial professionals and economists, including those at the very top, don’t realize this:
Alan Greenspan, former Federal Reserve chairman, tried playing with the business cycle to iron out bubbles, but it eventually got completely out of control. Bubbles and fads are part of cultural life. We need to do the opposite to what Mr Greenspan did: make the economy’s structure more robust to bubbles.
Taleb and Spitznagel note that the dotcom bubble, when it burst, had only minor consequences. That’s because it was an equity bubble rather than a debt bubble. The stimulus package is just more debt: public rather than private. It doesn’t reduce the source of the problem: A too-fragile system. A great point — fascinating how rarely I hear it.
Just as Greenspan failed to understand the problem and chose the wrong lever to pull, so did Fleming and a million doctors and medical/drug researchers. They have tried to deal with a too-fragile system by killing bacteria. Bacteria, like financial bubbles and fads, are part of life. We need to make our bodies more robust to them. Fermented foods do that. By killing off bacteria inside our bodies, antibiotics do the opposite: Make us even more fragile.
I couldn’t agree more. And the blind spot with regard to our financial system is all-encompassing. Even many of the more “clear-eyed” pundits fail to see the problem, prescribing more and more policies in a misguided attempt to change reality (and force human beings to be virtuous).
Incidentally, the most obvious solution is not more control, it’s more decentralized money because only a massively decentralized system can escape the systemic risk of central control. And more decentralized money requires money to have more behind it than a promise by some debtor to pay you back (as with fiat currency or other forms of credit).
If I’m understanding you correctly the typical logic for both the ‘fixing’ the economy and health is like:
A perceived harmful thing (bacteria, less money changing hands) causes a problem in some entity (the economy and personal health).
So the problem with both Greenspan and the medical establishment’s approach is they ignore the aspect of some problems.
In both cases the problem is better read as: the entity cannot defend itself the harmful things, how to help the entity defend itself (yogurt and less debt/more businesses and innovation)?
If that’s roughly how you meant it it seems fun. It’s saying things happen all the time which can have harmful effects but those effects can or will be mitigated by keeping whatever entity (the economy, your health, culture) robust.
This makes me think of my wife bragging about how Volvo engines are built to last 5,000 – 6,000 miles per oil change instead of the usual 3,000 on most cars because they can handle a little sludge.
This seems to reflect the Shangri-la diet as well. Instead of trying to remove the so-called bad calories as most diets do, SLD makes one’s system more robust to the need for calories.
I wonder how this problem solving orientation can be applies to other areas such as personal productivity, greenhouse gases and the like.
Sorry, Eric, all cars can do 9000 miles between oil changes these days. It’s because the oil is better now, and the gasoline isn’t full of the corrosive chemicals that used to be needed to keep all that tetraethyl lead in solution. That’s also why engines last longer — besides being more precisely machined, for less wear.
The only thing that will affect greenhouse gases appreciably will be a source of power substantially cheaper than coal. (Extra points if it can produce high-pressure gases or vapor to drive existing coal plants.) Once a source cheaper than coal exists, coal will instantly become too expensive to dig up.
It’s a good question why the same sort of mistake — failure to make the system more robust — was made in two different areas. Maybe because demonization (bubbles are bad! bacteria are bad!) is easy while its opposite is hard? Or maybe because it is harder to understand what makes a system weak or strong than to notice the immediate source of the problem. That was certainly Barry Marshall’s problem: It was easier to notice that a certain bacterium was associated with ulcers and kill it than to notice that low immunity was associated with ulcers and boost it.
To some extent, I have to wonder if the mistake here is hubris: the belief that we *can* control complex systems with simple solutions.
And in the case of the financial system, there are powerful interests that benefit from a credit/debt-based monetary system: banks and bureaucrats. Just look at Goldman Sachs’ earnings today. How does a bank that quite nearly imploded nine months ago manage to blow out earnings in the worst recession in decades?
Perhaps it is because they profit off of volatility in the system. The make money when the bubble is blown and place bets to profit when the bubble ultimately bursts. And in the meantime, they have a direct line to the U.S. government to bail them out or change the rules (And by direct line, I mean they have ex-employees running the show. ::cough:: Hank Paulson).