Meanwhile, yes, you should return what you bought, wait a few days, and buy it again. I will post a major announcement to the blog when this problem is solved, so you’ll know it’s safe to buy.

Many apologies for this. You’re not the only one affected. There are some very particular heads I would very much like to see roll.

What should I do? I have got the old edition in hardcover already? Anyway I could return it to Amazon?

It surely does start well!!

Harold is my nomination for blog comment of the year.

Hear, hear.

I just met a bunch of urban planners and landscape architects who told me that the discipline of ecological economics proves that we are destroying the planet and that “we should stop using scarce resources”. What scares me is not the likely fate of the planet so much as the attitude of folks (with masters’ degrees and in many cases university teaching posts) who don’t want to read any literature that might challenge their sincerely-held beliefs!

Evolution requires two things – production of variety through mutation and natural selection . One can argue that business has both of these things. In a free market, business can proliferate in good times, and try out new ideas (memes). When times get tough, some will close, and others will persist. Those memes that are adapted to the new environments will survive, and others will die.

Evolution is blind – and often leads up blind alleys. A peacock is adapted to its environment – the huge tail gives it a selective advantage in finding a mate. Currently, the cost of producing and carrying that immense tail is outweighed by the reproductive advantages. But if times get tough, then that tail will become a liability, and peacocks will probably become extinct. But maybe some gene that goes towards producing huge feathers will have some other advantage, and will persist in a new descendent of the peacock. Perhaps it will have a deadly spear-feather like a porcupine.

Ideas are similar. Investing heavily in derivatives was a good strategy, and those that did so were succesful. Those that did not were less succesful, and could not survive. Thus the idea becomes widespread.

In todays market, it is perhaps less desirable to use these instruments in the same way. The meme for that way of business has become extinct, but some elements persist in the new businesses.

Where the parallel breaks down is that the gene is bound to its “vehicle” and can only persist by reproducing a new vehicle. An idea can live or die within the same vehicle. Therefore there is no requirement for the companies using the meme to go out out of business for the evolution of the meme to continue. It is as if the peacock could chose to not have a big tail next year.

What this means is that the competitive environment driving evolution of memes is not what many people think it is. We think that succesful businesses thrive, and propagate their good practices, whilst others fail, taking their bad ideas with them. This does happen, but is not the only mechanism for meme evolution.

If natural selection via the market had been allowed to take its course, then those banks that had been too profligate would have gone out of business, and perhaps some meme of the new financial instruments would have persisted in descendents of those banks.

What happened was that the market selection was not allowed to take its course. The environment was not the competitive business environment that we thought it was. Instead, the failed institutions were propped up. This is a bit like someone feeding the peacocks when the environment becomes unsuited to huge tails.

This does not stop evolution, just sends it down a different path. Huge tails no longer carry the cost they should during tough times. This means they can get even bigger. Once we remove “normal” selection pressure, then these useless display features become the only basis for selection.

I believe this has happened to the banks today. We now see competition not on the basis of effective business, but on who can pay the biggest bonus. This is a display feature like the peacocks tail. This is the meme that is best adapted to the current environment. It does not indicate that this is in any way the optimum meme for the rest of us.