Wednesday, October 19, 2011

Do not bail out the bums

There is a great post in DNA newspaper of 19 Oct 11. It is ' Yellowstone effect; Let's put our hands together and welcome crisis' by Chandni Burman. Read the full article. Is very instructive.
The article emphasizes - do not fight small fires. They are nature's way of eliminating rubbish and creating stability in systems. When you interfere with this system of natural selection, you may temporarily be able to put off fires but soon the whole system would blow up in your face.
The context is about should we bail out those financial institutions around the world ( mostly in Europe ) that seem to be doing badly, or should we let them die? More than the specifics, the philosophy propounded in the article is a great one.
The example given in the DNA lost goes like this.
In California, they strictly follow a 'zero-tolerance' approach towards forest fires. The moment even a small fire is sighted, someone rushes in to put it out. The result is that for long periods, there are no fire losses. On the contrary, neighbouring Baja California ( Mexico, I think ) has no such policy. So, every now and then, there are fire hazards and losses. But what is interesting is what matters in these two Californias, in the long run. In Baja California, there never is a really bad fire incident. In California, however, there are occasional major catastrophic fires, though few and far between.
The reason is that fires are an indispensable component of the natural dynamics that keep forests in that shape. Suppression of the periodic small fires drives the forests in an unnatural unstable state .... with high density of inflammable material (twigs, bark, leaves etc) strewn around ..... a single lightening strike or cigarette can make it explode in a mass fire.
Avoiding small problems creates greater systemic problems.
So, give disaster a chance. Don't bail out the bums.

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