Starting in 1952, two generations of economists worked to show that people are like molecules, whose behaviour can be predicted in ways that are stable over time. Science then infected everything, from how much capital banks need to protect themselves against insolvency, to the risk in credit-default swaps. But there was a flaw: the City’s faux physicists never go back far enough in their analysis, because the data on the Bloomberg terminal cover a tiny period of history. “Real scientists tend to be much more sceptical about their data and their models,” says William Janeway, an MD of the private-equity firm Warburg Pincus and a Cambridge University lecturer. “They had all of the maths, but none of the instincts of good scientists.” There is also the 4x4 effect: if you give people a safer car (read, a safer world through financial innovation), they tend to drive faster.
Especially true in education politics since the AIG connection is not exactly subtle.