Who’s to blame?
October 11th, 2008 Posted in Natural Computation, PoliticsI was wondering today about the global financial meltdown. Everyone seems to be crying out for someone to blame. Most of the time, people blame those who are more successful than them, so it’s the city bosses with huge salaries who are the ones who caused all this, in their eyes. But, of course, that’s a massive oversimplification. In fact, everyone is to blame to a certain degree.
The problems started when American mortgage lenders started lending money to people who couldn’t afford it. Those people stupidly accepted the loans because, in most cases, they had been let down by their education system which had failed to teach them how to understand money. The education system let them down because their local governments and school boards incorrectly decided on what was worth teaching (the same school boards who think that creationism is a valid science subject; I can only imagine in horror what their students learn in economics.) School boards failed because national government never understood the correct priorities for teaching their students. And the national government didn’t understand that because the sociologists, education researchers and economists didn’t make their case known well enough (or, perhaps, didn’t know it themselves).
On the other end of the scale, the banks were to blame for buying those same bad mortgages from mortgage lenders, and then every bank employee who traded in mortgage-backed securities and ssimilar financial instruments afterwards had his or her own part in the whole debacle, from the lowliest junior analyst right up to the highest-paid traders and board members.
You see, that’s the point when you have a system as complex as this – there really isn’t anyone to blame. I’ve noticed this so often in politics – the blame culture. There has to be a human face to every single cockup. Well, the general public could do a lot worse than read up about emergent behaviour. This is a field of computational intelligence, within the area of natural computation. Even with a large number of very simplistic agents followwing very simple rules, some incredibly advanced behaviour can result. Just look at termite mounts and bee hives – incredible structures formed by very many simple organisms. And which one of them was responsible for causing the outcome? Well, the question should seem daft. Who is responsible for regulating market prices? Anyone who has read the work of Adam Smith (or pretty much any market economist since him) will also realise that the emergent behaviour of a complex system is a product not of any one individual, but of the system.
Now, one could argue that the system could be changed and thus the behaviour altered. That’s another debate – whether or not there could be second-order blame in that sense. Could we design a market which is robust to such craziness? Well, I fear the answer is ‘no’.
