Daily Archives: January 3, 2011

Clueless Central Bankers <- Mandelbrot

It is beyond belief that we know so little about how people get rich or poor, about how it is they come to dwell in comfort and health or die in penury and disease.

Financial markets are the machines in which much of human welfare is decided; yet we know more about how our car engines work than about how our global financial system functions. We lurch from crisis to crisis. In a networked world, mayhem in one market spreads instantaneously to all others—and we have only the vaguest of notions how this happens, or how to regulate it.

So limited is our knowledge that we resort, not to science, but to shamans. We place control of the world’s largest economy in the hands of a few elderly men, the central bankers.

— Benoît Mandelbrot, The (Mis)Behavior of Markets (2004)

Mandelbrot was also a brilliant mathematician, the father of Fractal Geometry

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Posted by on January 3, 2011 in economic, Politics, Science


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