Why $#!* Goes Bad Unexpectedly

“Why is surprise the permanent condition of the U.S. political and economic elite?”

The answer, he argues, is that the elites won’t see them coming rather than that they can’t. Part of the problem is the consequence of their own damping. By attempting to centrally manage systems according to some predetermined scheme they actually store up volatility rather than dispersing it. By kicking the can down the road they eventually condemn themselves to bumping into a giant pile of cans when they run out of road.

Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite.

I like this theory; it pretty much reflects my beliefs that one of the great faults of government management of the economy, energy policy, social programs etc. is that it all ends up causing large scale, and usually undesirable unanticipated consequences. Not understanding the role of volatility in the feed backs which keep such systems running stable over the long run, suppression of the volatility hides forces of change until a threshold is passed, and the change occurs in a sudden and catastrophic manner, and the needed changes are forced to occur in unnecessarily painful episodes.

Originally spotted at Insty's.