The financial crisis has been a great leveller: We now know that the priests of high finance have been as clueless as the lay people whose money they manage…
Financial crises such as the present one are not Black Swan events. They recur every now and then…
The problem is not the arrogance of the individual investment banker or trader, but the wider belief that they have the intellectual tools to predict the future with unerring precision. Both economics and finance suffer from what some have described as “physics envy”—the fond hope that social events are as predictable as physical events.
Our knowledge of the future is inherently limited and no amount of fancy mathematical modelling can overcome this fatal flaw.
Net Geners will certainly have to temper some of their expectations and take the world as it is, not as they would like it to be. But their older bosses should also be prepared to make concessions. The economy will eventually recover—and demographic trends in most rich countries will make clever young workers even more valuable. Besides, many of the things that keep Net Geners happy—such as providing more coaching to young employees or embracing cheaper online ways to communicate—are worth doing anyway. But for the moment at least, the Facebookers are under the cosh.