When I was a kid, I was obsessed with swords. I grew up on Lord of the Rings and Star Wars and those epic sword fights. When I started to learn about swords in the real world, I saw a picture like this one and it blew me away.
Did you know that swords could do that? As it turns out, not only CAN they do that, but they NEED to be able to do that. If a sword can’t do that, then it is much more likely to be damaged in battle.
When the average non-bladesmith looks at a sword bending to that angle, they may very reasonably believe that the sword is being damaged or, worse, about to break. And if that non-bladesmith has genuine concern for the sword and its wielder, they could start pushing for the sword to be strengthened, stiffened, hardened.
Some things, as we all know, are better strong, stiff, and hard. Bricks. Forks. Cocktails. Blades, though, are not.
Like the green rod which bends in the wind being stronger than the mighty oak which breaks in the storm, a tempered spring steel sword will bend and return to true where a stiff iron sword will shatter.
The economy is like a sword. The less you allow it to bend, the more catastrophic the break. It is what Nassim Taleb calls “antifragile,” it grows stronger under stress and weaker without it.
Like a human body, the economy is composed of many constituent parts. And like a human body, each of those constituent parts will die out over time and be replaced with stronger, healthier versions. It is difficult to accept, and understandably so, given that, in the economy, our jobs, our companies, and even our industries are what must die out over time to be replaced with stronger, healthier versions.
Individuals will lose their jobs, companies will go bankrupt, industries will die, towns will be abandoned, families will become destitute, even if the economy is operating perfectly. But the more companies we allow to go bankrupt, the more individuals we allow to lose their jobs, the more industries we allow to die natural deaths, the more robust the economy will be, the more jobs will be available for the individuals who lose theirs, the more options destitute families will have to bounce back, and the cheaper everything we need will be.
And conversely, the more companies are bailed out, the more workers are protected, the more failing industries are propped up with regulations and tariffs, the weaker the economy will be, the fewer jobs will be available, the more permanent destitution will feel, and the more expensive our goods will be.
In the crucible of history, evolution favors the superior method for achieving an aim. Evolution has established unequivocally that flexible tempered spring steel swords are superior to stiff iron. And equally unequivocally, evolution has established that flexible free market economies are superior to the stiffly regulated.
