"Then finance started sucking people from all over. You'd walk around our trading floor and there were guys who were math Ph.D.s and physics Ph.D.s, and chemists, and lawyers, and doctors - there were doctors on our trading floor, who trade, you know, the health care sector. The bubble in financial assets had a derivative bubble in people. Some of these physicists should be doing physics; some of these computer scientists should be doing computer science. Doctors should be curing people! It's not a bad thing."
-'Anonymous Hedge Fund Manager', 'Conversations with HFM, December 2008 - July 2009', Fall 2008 issue of n+1 magazine.The recent economic implosion has wreaked much visible havoc, but nobody has really looked into all the invisible damage it caused, at least not until this brave (and actually quite funny - check out the article if you have the time and a dollar) Hedge Fund Manager spoke out.
Some historical perspective might be helpful. Back in the early 90s, I saw a presentation by one Larry Smarr, then the director of NCSA (National Center for Supercomputing Applications) at the University of Illinois. He had been using supercomputers to simulate black holes colliding into each other! They had to solve 10 simultaneous differential equations, and then plot really amazing pictures. Black holes! Crashing into each other! Really amazing shit!
Clearly the combination of brain and computing power at NCSA would soon unlock the mysteries of the universe. That's not what happened, though. A small group within NCSA developed an application called a browser, which made it easier to navigate the then new World Wide Web. This application was called Mosaic, and it later became Netscape Navigator, which was a pretty good name.
In no time, the dot net bubble was upon us. Our country's (and let's face it, every country's) best and brightest (and, let's face it, not particularly best or bright) dropped whatever they were doing, whether it was curing cancer or developing cheap and clean forms of energy, and flocked to web design companies and dot coms, devoting all their mental energies to making animated gifs of construction workers, coming up with the ultimate elevator pitch, or optimizing servers to allow people to buy books or CDs (remember those?) or pet food as quickly as they could. They were all, every one of them, going to be rich. Grad school was for suckers. Physics was for losers.
In a development that shocked almost nobody, the bubble burst, and everybody went back to doing whatever it was they had done before. One or two people did get rich, and lived on Carribean Islands they bought, but mostly people just had to keep working. It was OK, though, because a couple weeks later, the finance and housing bubbles were underway.
Again, thousands of brilliant people full of potential abandoned their chances to bring about radical change in the world and maybe immortality as great scientists alongside Newton or Darwin. They applied their brilliance to something maybe, in its own way, more incredible and seemingly impossible: they repackaged incredibly shitty investments as seemingly good investments. Instead of simulating heavenly bodies with supercomputers, they ran models based on a lot of wishful thinking which had actually produced some pretty cool looking equations.
So in addition to to the financial ruin and chaos, there has been a great opportunity cost of tremendous advances that would have actually benefited mankind. We can only speculate as to the extent of the damage, but we can be pretty sure we would have had the following were it not for these bubbles:
- Flying cars
- Time Travel
- Robots that do the laundry, including folding it and putting it away
- Cure for most forms of cancer
- Submarine cars
- Amphibious cars
- Submarine/amphibious/flying cars
- Life-like sex robots that make internet porn look pretty lame
- All-Terrain spider chairs that replace wheelchairs
- Moon Colonies
- Mars Colonies
- Dogs that can talk
- A machine that extracts fuel from excrement
- 3D movies that don't require glasses
- Drugs that only cause brain damage that's reversible