Two of the world’s most eminent central bankers, but now retired, Alan Greenspan and Mervyn King, both say that another financial collapse, equivalent to — or worse than — the 2008 collapse is now inevitable.
Although both of them have different ways of describing the faults of the present financial system, they are both agreed that the main reason for the incessant — and increasingly serious — economic breakdowns is that man’s emotions intervene too much. To highly simplify their recent books on the matter, Greenspan thinks that we are too much given to euphoria and then swinging to panic too abruptly, while King believes that we don’t trust — or communicate with — one another enough.
When these two experts are conjoined with hundreds of thousands of other economists all around the world who also don’t know what to do for the best, then maybe someone quite outside the field of economics might do the trick. Why not Richard Feynman, one of the four greatest scientists of the last century — the others being Planck, Einstein and Dirac? After all, it was he who had to show thousands of NASA engineers, rocket scientists and managers just what was the cause of the Challenger disaster.
However, what Feynman has also shown at the most fundamental level that’s possible — namely quantum electrodynamics — is that all systems proceed to a point of equilibrium by means of least effort. If systems don’t get there swiftly and smoothly, it means that are frictions along the way — spanners in the works, as it were.
What Richard Feynman might have been telling us today — unknowingly, of course, from 40 years ago — is that the present world trading impasse is due to emotional spanners in our highly rational works
“Emotional spanners — what are they? The same things that Greenspan and King are attempting to describe. “Highly rational works” — what are they? Man’s scientific ability to make discoveries and to invent new fascinating enjoyments.
As it happens, the world economic system is now so flat that the faults that Greenspan and King describe are hardly given any opportunity to wreck things much further. Maybe we are closer to equilibrium than we think and need only another 200 years for (a) student economists to be taught some basic facts about human instincts and consequent emotions; (b) the present world over-population to reduce to a sensible level.