Newspaper articles paint the markets in metaphors like “difficult climate” and “harsh landscape” –but these clichéd phrases have a kernel of truth. Thinking about markets as natural environments reveals that selective forces are at work. But it also predicts when they work. In the natural world, as the story of Darwin’s finches tells us, selection acts in times of crisis: drought, famine, and disease. For our markets, that time is now.
(Aside: I confess that relating the economic crisis to Darwin is a symptom of an academic bad habit: namely, mapping every phenomenon onto the intellectual giant of one’s field. Somewhere there is a psychologist blogging about Freud and the economy).
