When the Queen of England recently asked economists why they failed to predict the credit crunch they responded with a three page letter. One newspaper and a popular money blog asked readers to reply in three sentences, according to Freakonomics.
How would you explain the crisis to the Queen?
Black Swan author and 2008 IdeaFestival speaker, Nicholas Nassim Taleb, maintains that gamechanging events, which he calls "Black Swans," are fundamentally unpredictable. And he's been highly critical of anyone who would claim otherwise.
But today the physics arXiv blog at Technology Review points out one bit of research that disagrees with that assessment. If they can be modeled and plotted, there's some hope that these outliers, dubbed "Dragon Kings," can be accounted for by careful look at the feedback events that created them. Hindsight is better than nothing, of course, and perhaps the Queen might ultimately get her explanation, but identifying events - at the time - that will tip a rapidly evolving system into crisis is still much more hope than science. The timelines are too long, the variables too many.
Count me among the skeptics.
Thankfully we do not have to be captive to the past. For a more hopeful take on circumstance, Wired Senior writer and business journalist Daniel Roth will use specific examples at the IdeaFestival this year to explore how an economic downturn can provide an opening for innovators willing to create the future.
I hope to see you there. All-access, day pass and Individual tickets are on sale now.