In The Black Swan (2006), Nassim Taleb wrote:
Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks — when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought.
To me, this sounds Jacobian. Jane Jacobs disliked calls for reduced family size (e.g., Bill McKibben) not merely because she was a third child but because she disliked reducing the diversity of family ecology. In public health, it’s called the dangers of monoculture. The Irish potato famine (which “dwells in my memory as one long night of sorrow” — William Butler) is a dietary example of Taleb’s point. When one (potato) crop failed, they all failed.
Self-experimentation is a more positive example of the broad point. Self-experimentation derives its power from two things: 1. Motivation. You are more motivated to solve your own problems than other people’s problems. 2. Diversity. The self-experimenter can do anything — change anything, measure anything. Other scientists cannot. For people with serious problems, such as depression, reduced diversity of the associated science (e.g., the science of what causes depression) is a long slow catastrophe when the associated science, because of its restricted nature, cannot find the best solutions (as I believe is the case with depression).
My animal-learning research also centers on this point. It is about what controls variation in behavior. Dave Stahlman (UCLA), Aaron Blaisdell (UCLA), and I will soon finish a paper about this. With too little variation, catastrophe is too likely, as Taleb says. So mechanisms to produce diversity have evolved. Just as the importance of diversity has been neglected by financiers, it has been neglected by research psychologists.
Great point — I think a new framework in finance and economics could be an optimization problem between the very legitimate benefits of economies of scale and the costs of homogenization and interdependence. Somewhere between the two is an ideal and determining that point should inform federal and multilateral policy. How much consolidation to allow in an industry could be based on research in that area, and considered at national and international levels. Free market benefits collapse as you approach oligopolistic and monopolistic states in most cases.
Also reminded of the benefits of collaboration and interdisciplinary research as, in this case, ecology, psychology, finance, and urban design are drawing on one another — which is a heterogeneous approach, making the post rather metaheterogeneous. A diverse post about the value of diversity.
Thanks, MT. As you suggest, my animal learning research is about how animals optimize (not just produce) diversity of action. The diversity of what they do depends on external events.
Your point about depression being a “long slow catastrophe” reminds me of a related point by Ellen Frank about the treatment of bipolar disorder:
This approach [of putting the emphasis on the prophylaxis of mania], however, left many bipolar patients to suffer protracted and debilitating (but not dramatic) depressions. We now recognize that these low-grade depressions are actually associated with more impairment than the more dramatic, impressive manias [citation], but this was not appreciated for much of the psychopharmacological drugs era.
(From Treating Bipolar Disorder, page 29)