Contemporary financial shenanigans are evidence for at least one thing – the failure of any publicly recognised computer model unequivocally to predict what has happened†. (There is, however, conceivably some well concealed model at work, a product and tool of unparalleled genius, which is orchestrating the whole thing for as-yet unfathomed purposes. Or perhaps an imaginative novelist is working on that idea.)

Meanwhile, maybe disillusioned about computer models and economics-as-a-science, a well known cleric has given his own surmise about the seeming chaos in world business and finance. The cleric is the highest in the English church, Dr Rowan Williams, Archbishop of Canterbury. He has speculated that the crisis has been the outcome of everybody’s bluff being called at the same time. This strikes me as an engagingly simple explanation, plausible without need for detail of the actual bluffs. Even so exalted a critic as a leader writer of The Financial Times has acknowledged the prelate’s words to be ‘not a bad description of what is going on’.

Possessed of far less cranial capacity than the archbishop or a computer-aided economist, I nevertheless feel a foolhardy temptation to throw in a thought of my own. If the modelling commissioned by so-called financial ‘masters of the universe’ can have been so misled, can other capable modellers have been equally confused – one might say, figuratively, ‘bluffed’ – by comparably complex phenomena? I have in mind the intricately woven problem of climate change, as allegedly caused by the likes of you and me.

Faith in ratios can be disproportionate

Simplistic academic ratios are too often flourished by the numerate (but not necessarily common-sensible) classes as evidence of universal truths that turn out to be at best partial. Among the most well known are those held by the British clergyman Thomas Malthus (1766-1884), an economist, to show that ‘unchecked’ growth in population is not sustainable: human numbers rise in a geometrical ratio whereas the means of subsistence increase arithmetically. Malthus knew about such checks as war, sickness and so on, but not about the possibility of more abundant crops that growing scientific knowledge would bring. Unqualified Malthusianism has for such reasons proved mistaken, as exploding population figures have demonstrated.

Also hidden from Malthus were hints that heavier-than-air machines might fly, and to formidable effect as population checks in the 1914-1918 ‘world war’. These biplanes and triplanes ranged from tiny dog-fighting machines to bombers. When peace came the prospect of much bigger craft for commercial purposes was pooh-poohed by some because, it was argued, the aerodynamic lifting areas of such machines can only be increased as the square of their linear dimensions, whereas their material volume and weight would go up with the cube. The Jumbos that wafted huge payloads through mid-twentieth-century skies confounded the pessimistic ratio-mongers.

Engineers are naturally not duffers at the ratio game. Power engineers are among its masters. They have, after all, contributed to ratiocination’s armoury one of its respectably ‘mathematical’ weapons, the ratio designated in our trade by the Greek letter η but better known in common usage as efficiency.

Think of employing a heat engine to convert the chemical energy of a fuel into mechanical energy, only then to reconvert that energy by means of an electrical machine into electrical energy and thereby produce electrical power for consumers. Then consider the argument that such a process must compare badly with a similar one that can dispense with the heat engine. For the efficiency of the heat engine is limited* and the engine’s participation in the generating process must correspondingly reduce overall efficiency.

It seems a rational argument. Yet diesel generators still find their uses, and fuel cells (or other electrochemical cells) have yet to do so on a comparable scale: and, wherever you look, steam or gas turbines make brave showings. Power engineers certainly know about efficiency but know also about the many other factors that affect the practical – including the economic – performance of generating plant in a variable world.

I have a feeling that economists, financial people and their like are greater suckers for easy ratios and other oversimplifying numerical criteria than are engineers, and maybe that that is why crashes tend to be more momentous when they are financial than when they are technological. But I remind myself that economics, so acutely dubbed ‘the dismal science’ by the British writer Thomas Carlyle**(1795-1881), is probably much more difficult and less scientific than engineering.