Monday, January 23, 2012

The Wisdom of Watching Waves

Watching waves roll in can tell you a lot about the world.

On the weekend of the 13th, I was in Hermosa Beach, on the pier, watching the waves roll in . The waves moved in smooth, almost unnoticeable, until they approach the shore, where resistance changes the wave's shape, eventually turning it into much more complex foam as it breaks. Still, the energy of the wave drive the foam to shore.

Energy plus resistance creates work and more complexity.

The waves came in in predictable patterns. Small waves gave way to lager waves and larger waves, until the largest wave of the series came, then the waves would come in smaller and smaller. After I saw the waves get bigger, I would predict that a new wave of waves was coming. But I could not predict which wave (the next? or the next?) was the first of the new series, or the last of the old. After I saw the next wave was smaller, I could predict the next wave after it would be smaller, and that they would get small for a while, but I could not predict which one was in fact the peak wave. That is, it was possible to predict the pattern, but not the nature of each wave.

As with an economy, perfect prediction was impossible, even as pattern prediction was possible.

I believe Hayek made a similar observation in regards to the economy, in fact. Nothing a little wave-watching couldn't tell you. And that's a pretty simple system.
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