Maths and the City

Published in The Guardian
Thursday June 12, 2008

Ian Stewart asserts that his university’s mathematics students “earn more money, on average, than those studying any other degree subject” and that “their ability to handle technical ideas is highly prized, and rewarded” (Letters, June 7). His assumption, shared by most other contributors to the current debate about maths teaching, is that this reward differential can be projected on to the nation as a whole, with the conclusion that if we were to have more well-paid mathematicians we would all be much richer.

We should distinguish between two rewards – to the mathematicians, and to the rest of us. The mathematically trained “rocket scientists” in the City and Wall Street have been engaged in a financial arms race. They have been extravagantly rewarded for devising the clever financial “instruments” that are so clever that no one, themselves included, understands them.

Almost 20 years ago, in Does God Play Dice? – The Mathematics of Chaos, Ian Stewart observed: “because we are part of the universe, our effort to predict it may interfere with what it was going to do. This kind of problem gets very hairy and I don’t want to pursue what may well be an infinite regress: I don’t know how a computer would function if its constituent atoms were affected by the results of its own computations.”

The bubble of bad debt now distributed globally presents precisely the problem that Stewart does not wish to pursue. The rocket scientists are still absurdly well rewarded for playing war games with other rocket scientists – with other people’s money. But they are the constituent atoms in Stewart’s infinite regress. They have all become day traders trying to second-guess each other over the next move up or down of whatever it is they are betting on.

The current bubble may prove to be the biggest ever. But maths courses, as Simon Jenkins has observed, don’t do history.

For more on the subject of numbers and rocket science see – Risk Management: it’s not rocket science – it’s more complicated

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