Complexity and War or How Financial Firms Wreck Economies for Fun and Profit
There’s a great post up, “Human Complexity: The Strategic Game of ? and ?,” by Richard Bookstaber, former risk manager, author of the book A Demon of Our Own Design and currently an advisor to the Financial Stability Oversight Council. As insightful as it is, Bookstaber does not draw out some obvious implications, perhaps because they might not be well received by his current clients: that the current preferred profit path for the major capital markets firms is inherently destructive.
I suggest you read the post in its entirety. Bookstaber sets out to define what sort of complexity is relevant in financial markets:
Read more...The measurement of complexity in physics, engineering, and computer science falls into one of three camps: The amount of information content, the effect of non-linearity, and the connectedness of components.
Information theory takes the concept of “entropy” as a starting point…