If you haven’t read it already, be sure to have a look at William Byers’ post on Powell’s Book blog. Here’s a sneak peak:
When the financial crisis hit a couple of years back, we mostly blamed it on the greed of bankers and the lack of safeguards in the world’s financial system. No doubt these were and remain significant problems. However, what many people failed to notice, but which various astute observers pointed out, is that the crisis grew out of a culture that was rampant in financial circles at the time. You could call this the revenge of the nerds, the nerds being those “quants,” people with doctorates in math and physics who have taken up residence on Wall Street in recent times. They bring with them a culture of quantification and precision that they carry over from the mathematical and physical sciences and which they then apply to economic and financial situations. The complex mathematical models that they use may be brilliant, but the better they are the greater their potential is to misrepresent the actual human situation that they are looking at. Because they give people like CEOs and politicians the idea that everything is understood and under control, these models often have the perverse effect of making the problem worse — taking us from a problem that is a local blip to one that is a global catastrophe.
William Byers is professor emeritus of mathematics and statistics at Concordia University in Montreal. He is the author of How Mathematicians Think: Using Ambiguity, Contradiction, and Paradox to Create Mathematics and his latest, The Blind Spot: Science and the Crisis of Uncertainty.