Push Hands

There is a parallel concept between my understanding of traffic flow and economic trends. Let me explain.

Both the traffic on a freeway and the economy of a nation are nonlinear dynamic systems; they are composed of players who follow rules based on what the other players are doing. The feedback among players' actions produces some literally chaotic results, making the long-term behavior of the system difficult or impossible to predict (at least when it is possible to do something about it, meaning that I can predict that traffic will be backed up on I-35 southbound between 51st and Riverside today at 4:30 pm, but I could not have predicted that when the road was being built).

The two systems often behave in an undesirable way - the traffic flow by jamming and the economy by recessing. Both periods of undesirable behavior arise non-linearly; a tiny problem becomes big, through feedback. A driver taps his brakes to avoid a squirrel, causing the car behind him to brake instead of switching lanes, so that he now has to slow down even more to let a slow driver go by, and in sufficiently dense traffic the braking cascades backwards. In the economy, one little company gets the bright idea that housing prices will skyrocket so they decide to lend money to just anybody who will buy a home with it; other companies want in on the deal and follow suit, and soon you have, well, 2007.

Now, no system on Earth works perfectly. Google that shit. You can't stop minor fluctuations from the norm from occurring. The problem (a.k.a. beauty) of nonlinear systems is that tiny fluctuations can have amazing consequences. So yes, slow drivers should be punished for driving in the passing lane, and yes, foolish entrepreneurs should be punished for gaming the system, but those measures really amount to attempts to trying to smoothen out fluctuations, which will be there anyway. More effective measures would be to linearize the system itself, damping or eliminating the effects of the natural fluctuations.

I see both systems as nonlinear beasts that go into bad periods, and the way the systems are set up, the bad periods are unavoidable. What is needed in both systems is a new element that is there specifically to counteract the feedback loops that bring about the downturns.

For traffic, I think the best solution is to seed the highways with drivers who do the DEW. A traffic jam develops because in laminar traffic flow, if one driver slows down, the drivers behind him will have to slow down, and a jam ensues. If enough drivers (and the true efficacy of the method will depend on what portion it takes; I admit I have no idea) diligently drive in a way that runs counter to the natural feedback loops of traffic, they might be able to maintain laminar flow. That is, the drivers must move faster than normal traffic during a slowdown, and slower than normal traffic when normal traffic speeds up (which is accomplished by opening and closing space ahead of the driver).

For the economy, I think Keynes had it about right. The natural, unadulterated market will have nonlinear ebbs and flows. In the long run they may balance out, but I believe Keynes is credited with noting that in the long run we are all dead. Meaning that if a recession lasts thirty years, it is dandy that it's followed by a long boom, but what of those would-have-been careers, down the toilet? The feedback loops of the economy are many, but an illustrative one is earning and spending money by workers. The less a worker makes, the less he spends, and the less he spends, the less businesses profit, so the less he makes. What an economy needs is a new element, outside the natural market, to spend wildly when players in the economy are saving, and to save when the economy is otherwise booming. Sort of like a national piggy bank. This new element will naturally smoothen the ebbs and flows of the market, much as DEWers smoothen traffic flow.