I don't usually have much time for the wealthiest journalist in America Thomas Friedman. His ideas are of the slippery-minded Malcolm Gladwell sort, that neat-sounding neatly portrayed paradigm (buzzword free with purchase) that proves itself false under the slightest questioning, yet manages to suck in millions of well-meaning readers who never question. His column today is not of this sort, however, and actually glances past a vital truth:
My friend Rob Watson, the head of EcoTech International, has a saying about Mother Nature that goes like this: “Mother Nature is just chemistry, biology and physics. That’s all she is.” And because of that, says Rob, you cannot spin Mother Nature. You cannot bribe Mother Nature. You cannot sweet talk her, and you cannot ignore her. She’s going to do with the climate whatever chemistry, biology and physics dictate. And Mother Nature always bats last, and she always bats a thousand.The vital truth lies in the parallel between Nature and Market; it's merely glancing that truth in Friedman's telling in part because of the personification (the baseball metaphor is not only silly, it's meaningless: what is "batting a thousand" for nature or the markets? Puzzle ye eternally, o credulous reader!), but also because of the word "balance."
There is a parallel with markets. At their core, markets are propelled by fear and greed. They’re just the balance at any given moment of those two impulses. Over the long run, you cannot spin the market. You cannot sweet talk it into going up or beg it not to go down. It’s going to do whatever it’s going to do — whichever way greed and fear tug it. And the market always bats last and it always bats a thousand.
Nature does not "balance": Nature is at war. Spiders spin webs, lions hunt zebra, dogs eat ducks, cats eat songbirds, hawks eat cute fluffy bunnies, humans eat everything, and bacteria eat it all, and us, when we're done. Nature rewards winners and punishes losers: nature is unfair. The monkey born stronger gets more food, and gets stronger yet; then it becomes a bully, and steals food away from others; eventually it becomes alpha monkey and can take food from whomever it pleases, not to mention smash in the skulls of baby monkeys that aren't his personal spawn so he can replace them with his own little army of food-stealing beasts. The opposite happens to the ones born weak: the words "nasty, brutish, and short," come to mind. What appears to some as "balance" is actually tension: gridlock. When the wolves have plenty of deer to eat, more pups grow up strong wolves. They eat and eat until there aren't enough deer to sustain them. Then they starve and starve. When the deer have plenty of vegetation to eat, more fawns grow into big strong deer. They eat and eat until there isn't enough vegetation to sustain them. Then they starve and starve. This isn't "balance": this is an unregulated, competitive natural system. And the comparison to a market is a good one: an unregulated or poorly regulated market acts just like nature: it's full of pain for lack of planning.
People feel bad for the poor deer and wolves -- we don't like to see them starve! -- so we take matters into our hands and shoot some of them, we "cull the herd." We try to create a balance, something humans are capable of conceiving of and trying to create, though nature, having no intelligence behind it, is not. Just as the market, having no intelligence behind it, is not. So how can humans create a balance in a market? Well, we could go back to that deer/wolf metaphor and open hunting season. Just don't shoot your investment-bank-CEO from a plane. It's not sporting.