What All Crises Have in Common

Crises are fundamentally psychological phenomena, they’re not driven by rational decision-making necessarily, they are driven by fear and somewhat driven by greed.

The panic of 1907 can tell us a lot about the crisis of 2007 to 2009, the so-called sub prime crisis.  Crises have in common a number of attributes.  The first is, they are fundamentally psychological phenomena, they’re not driven by rational decision-making necessarily, they are driven by fear and somewhat driven by greed.  This is a lesson that is perhaps underplayed in the way schools and pundits talk about the financial markets. But the truth is, they are extremely potent forces in the world of business, these psychological forces.  


What is it that drives them? Shawn Carr and I describe in our book, The Panic of 1907, a fundamental factor driving such panics is information asymmetries.  Some people know things that other people don’t.  All panics take their route in the fact that information is not well-distributed.  Most panics are founded in the wake of extraordinary booms.  Booms tend to create more complex institutions, tend to draw naïve and less sophisticated players into the markets, tend to create wild expectations about the future, all of which color the information people have the way they process it.  

And then a jarring event occurs.  Typically it’s a failed speculation that brings down a financial institution and this makes people sit up and say, “Gee, I really didn’t know much about that institution.  And if I didn’t know that institution, maybe I should be worried about the rest of them.”  And hence a run on a bank begins - on many banks.  So we discover that information is just a fundamentally important phenomenon. 

So I have argued to public policy experts and legislators that transparency is one of the most important antidotes to a crisis.  And frankly, it’s an antidote to help – to preempt a crisis.  If we can simply help the world see what is the health and wellbeing of financial institutions, if we can be assured that the institutions have plenty of capital, the safety buffer with which to absorb unexpected shocks to the system, all of these things would go a long way toward addressing the likelihood of another crisis.  

It is almost inevitable that there will be more financial crises.  We have not had a century without them and truly one of the deep lessons of 1907 and indeed the sub prime crisis is that fundamentally we ought to retain enough walking around money and rainy day money in our bank accounts of households and businesses and governments so that we too can withstand the unanticipated shocks.  

In Their Own Words is recorded in Big Think's studio.

Image courtesy of Shutterstock

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The image of an undead brain coming back to live again is the stuff of science fiction. Not just any science fiction, specifically B-grade sci fi. What instantly springs to mind is the black-and-white horrors of films like Fiend Without a Face. Bad acting. Plastic monstrosities. Visible strings. And a spinal cord that, for some reason, is also a tentacle?

But like any good science fiction, it's only a matter of time before some manner of it seeps into our reality. This week's Nature published the findings of researchers who managed to restore function to pigs' brains that were clinically dead. At least, what we once thought of as dead.

What's dead may never die, it seems

The researchers did not hail from House Greyjoy — "What is dead may never die" — but came largely from the Yale School of Medicine. They connected 32 pig brains to a system called BrainEx. BrainEx is an artificial perfusion system — that is, a system that takes over the functions normally regulated by the organ. The pigs had been killed four hours earlier at a U.S. Department of Agriculture slaughterhouse; their brains completely removed from the skulls.

BrainEx pumped an experiment solution into the brain that essentially mimic blood flow. It brought oxygen and nutrients to the tissues, giving brain cells the resources to begin many normal functions. The cells began consuming and metabolizing sugars. The brains' immune systems kicked in. Neuron samples could carry an electrical signal. Some brain cells even responded to drugs.

The researchers have managed to keep some brains alive for up to 36 hours, and currently do not know if BrainEx can have sustained the brains longer. "It is conceivable we are just preventing the inevitable, and the brain won't be able to recover," said Nenad Sestan, Yale neuroscientist and the lead researcher.

As a control, other brains received either a fake solution or no solution at all. None revived brain activity and deteriorated as normal.

The researchers hope the technology can enhance our ability to study the brain and its cellular functions. One of the main avenues of such studies would be brain disorders and diseases. This could point the way to developing new of treatments for the likes of brain injuries, Alzheimer's, Huntington's, and neurodegenerative conditions.

"This is an extraordinary and very promising breakthrough for neuroscience. It immediately offers a much better model for studying the human brain, which is extraordinarily important, given the vast amount of human suffering from diseases of the mind [and] brain," Nita Farahany, the bioethicists at the Duke University School of Law who wrote the study's commentary, told National Geographic.

An ethical gray matter

Before anyone gets an Island of Dr. Moreau vibe, it's worth noting that the brains did not approach neural activity anywhere near consciousness.

The BrainEx solution contained chemicals that prevented neurons from firing. To be extra cautious, the researchers also monitored the brains for any such activity and were prepared to administer an anesthetic should they have seen signs of consciousness.

Even so, the research signals a massive debate to come regarding medical ethics and our definition of death.

Most countries define death, clinically speaking, as the irreversible loss of brain or circulatory function. This definition was already at odds with some folk- and value-centric understandings, but where do we go if it becomes possible to reverse clinical death with artificial perfusion?

"This is wild," Jonathan Moreno, a bioethicist at the University of Pennsylvania, told the New York Times. "If ever there was an issue that merited big public deliberation on the ethics of science and medicine, this is one."

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The system is already controversial because it raises concerns about what caused the patient's death. But what happens when brain death becomes readily reversible? Stuart Younger, a bioethicist at Case Western Reserve University, told Nature that if BrainEx were to become widely available, it could shrink the pool of eligible donors.

"There's a potential conflict here between the interests of potential donors — who might not even be donors — and people who are waiting for organs," he said.

It will be a while before such experiments go anywhere near human subjects. A more immediate ethical question relates to how such experiments harm animal subjects.

Ethical review boards evaluate research protocols and can reject any that causes undue pain, suffering, or distress. Since dead animals feel no pain, suffer no trauma, they are typically approved as subjects. But how do such boards make a judgement regarding the suffering of a "cellularly active" brain? The distress of a partially alive brain?

The dilemma is unprecedented.

Setting new boundaries

Another science fiction story that comes to mind when discussing this story is, of course, Frankenstein. As Farahany told National Geographic: "It is definitely has [sic] a good science-fiction element to it, and it is restoring cellular function where we previously thought impossible. But to have Frankenstein, you need some degree of consciousness, some 'there' there. [The researchers] did not recover any form of consciousness in this study, and it is still unclear if we ever could. But we are one step closer to that possibility."

She's right. The researchers undertook their research for the betterment of humanity, and we may one day reap some unimaginable medical benefits from it. The ethical questions, however, remain as unsettling as the stories they remind us of.

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