How to solve the euro crisis
In his investment letter this week, Tim Price points to a book by David Deutsch (The Beginning of Infinity). Deutsch makes the obvious point that as humankind progresses, problems of all sorts are inevitable. But he goes on to say that “since the human ability to transform nature is limited only by the laws of physics, none of the endless stream of problems will ever constitute an impassable barrier. So a complementary and equally important truth about people and the physical world is that problems are solvable.”
By this he means they can be sorted with the “right knowledge”. It is not, of course, “that we can possess knowledge just by wishing for it; but it is in principle accessible to us.” Deutsch is a computational physicist. So he isn’t referring to finance in any way. But, as Tim says, “just because the scale of his landscape is cosmic” rather than financial or economic doesn’t mean that problems involving the latter can’t be identified, observed, studied and resolved in a similarly rational way.
Lord Wolfson, Next’s chief executive, clearly agrees. Last October he identified the core problem with the eurozone – that it can’t possibly survive – and threw it out to the rest of us to be studied and solved. He asked: “If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?”
• Read the full editor’s letter here: How to solve the euro crisis.