Evolution is like a miracle worker. Innovation is the product of its spell. From the sorcery of the spider’s web with its remarkable strength and flexibility, to the mystique of the sonar system that enables dolphins and bats to navigate with such precision, science looks with envious eyes at the way nature has solved the same challenges it faces.
It is the same with the economy. Most of the great advances that have been mankind’s good fortune to experience were not planned. They came by chance, and were thrown up by the force of economic evolution.
Yet we often fall into the trap of seeing evolution as a metaphor for a straight line of unremitting progress. It is not like that all.
Sometimes the world can change only very gradually. In the case of nature, aeons; in the case of the economy, centuries. Then something can happen, and this in turn can spark off a new chain of events with unpredictable results. Just as evolution sometimes works in spurts, charged by some external shock, the evolution of wealth creation is often dependent on a form of trigger akin to a Darwinian economic shock.
We are in the process of experiencing such a shock now. But the outcome is not easy to predict. We may see a remarkable lift in the standard of living, or we could plummet into chaos as if we had been riding the greatest bubble of all, but which has burst in terrifying fashion.
How can we manipulate this Darwinian shock to our advantage? It seems we must first learn wisdom, to recognize that trends change. To recognize that, on close examination, what we thought were patterns may actually be illusions. And above all, we must learn to ditch our hubris without losing the magic of our courage.
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© Investment & Business News 2013
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