Doomed To Fail - Why Government Is Incapable Of Living Up To Our Hopes

In Doomed To Fail the author explains why, because people have individual agency, human society is a complex adaptive system (CAS). CAS have several important properties: they are highly non-linear, tending to obey power laws, and are deeply interconnected, rendering invalid classic techniques such as breaking a system down into individual components, having experts solve each component separately, and then reconstituting the whole. This method will work for systems which are complicated, but not for systems which are mathematically complex. As in the world of quantum mechanics, there is no independence between the system under observation and the people doing the observing, resulting in these systems exhibiting the property of adaptivity (a property which the financier George Soros refers to as “reflexivity” in the context of financial markets); they change over time in ways which are unpredictable, rendering invalid forecasting techniques based of the analysis of historical data.

Collectively these properties are the reason why, in respect of human affairs, the future is fundamentally unknowable. In Doomed To Fail the author explains why this results in democracy being the best form of political organization, free-market capitalism being the best form of economic organization, and why true diversity is imperative for the long-term health and wellbeing of any organization.

For almost the entire existence of humanity during our many millennia on earth, our experience has been what Thomas Hobbes referred to as, in his memorable phrase: nasty, brutish and short. All of the progress we have made has occurred during just the last few hundred years and has occurred thanks to the twin developments of liberal democracy and capitalism. It is therefore a tragedy that, in recent years, surveys of people’s satisfaction have shown a marked loss of faith in the ability of democracy and capitalism to deliver fair outcomes. Whilst I empathize with those who have been victims of the hollowing-out of the middle classes due to globalization, and who have suffered from increasing wealth disparity since the Global Financial Crisis of fifteen years ago, the author fears that the alternatives to democracy and capitalism would be far worse.

In Doomed To Fail goes on to explain the role of the central banks, and in particular The Federal Reserve Bank of The United States, in being the proximate cause of the Global Financial Crisis, and in further exacerbating its effects through misguided, although well-intentioned, monetary policy actions and through inadvertent errors in bank regulation.