Shaffer on the Arrogance of Greenspan
Excerpt from the The Arrogance of Greenspan by Butler Shaffer:
The failure to understand the uncertainties inherent in all complex systems is what allowed Rudy Giuliani to make a fool of himself in responding to Ron Paul’s explanations of “blowback” (or, the “unintended consequences” of human action). In boldly declaring that he had never heard of such a theory, Giuliani admitted to his lack of awareness of this fatal flaw in all political systems.
Alan Greenspan appears to be equally ignorant of the limitations complexity imposes upon those who presume to direct it. There is probably no realm of human behavior that is more subject to variation and inconstancy than the economic activity through which billions of people spontaneously interact with one another in unpredictable ways. No one who understands the dynamics of both the marketplace and chaotic systems, would have the hubris to think that he or she could manage economic life toward any generally accepted ends. The study of chaos informs us of the impossibility of marshaling and measuring all of the factors that play upon events in our lives. When we act without complete knowledge – as it is our fate to do – there will always be some error in our calculations that will continue to influence future events. If, for example, the residents of other countries resent the impact that American foreign policies have had on their lives, the United States’ continued pursuit of such policies may cause these objections to be iterated back into the set of facts to which future policies will be offered. As American policies continue to disregard such resentment – as, for example, when Madeleine Albright contemptuously declared that the deaths of 500,000 Iraqi children was a “price” she was willing to pay for Clinton-era boycotts – the reiteration of such factors may escalate into the turbulence of so-called “terrorist” attacks whose causation continues to befuddle the likes of Rudy Giuliani.
The same analysis holds true for Alan Greenspan’s causal contributions to the economic turbulence in which the American economy now finds itself. . . .
The question that continues to intrigue me, however, is why the rest of us are willing to accept such people as authorities over us? There was something pathetic in watching millions of otherwise intelligent men and women awaiting the pronouncements of Alan Greenspan as to whether they will enjoy a bright or dreary future. . . .