By Dean Zatkowsky

Here's my variation on an old economics lesson: For experimental purposes, three men are locked in a basement with only half a loaf of bread and a pint of water. One man is given a copy of Adam Smith's The Wealth of Nations. Another man gets a copy of Karl Marx's Das Kapital. The third man receives a Glock 9mm semi -automatic pistol and fifteen rounds of Remington Golden Saber brass-jacketed hollow point ammunition. After two weeks, researchers enter the basement and learn everything there is to know about economics.

I mention this because I am still reeling over Alan Greenspan's congressional testimony last October, when the former Fed Chairman confessed that he was shocked, shocked to learn that the self-interest of lending institutions is not always aligned with the interests of stakeholders. According to the New York Times, "Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending." This epiphany came to the same man who warned against investors' "irrational exuberance" in 1996. Fool me once...

Those who trumpet the rational efficiency of markets conveniently forget that markets are merely conduits for human activities. And even if humans are driven solely by self-interest, that does not mean we always know where our best interests lie.

I view economics less as a mathematical discipline and more as anthropology. Economics describes human behavior vis a vis the exchange of value. Build all the mathematical models you want; people will find a way to break them. And the exceptions will produce outsized effects, over and over again. Just ask Mr. Greenspan. Am I over-simplifying this important topic? I don't think so. I think I respect the incomprehensible complexity of the subject.  We can study the economy, but we cannot control it.

In the past few months, we've seen many plans to fix the economy, but after seeing $350 billion pumped into banks without loosening the credit market, I feel quite confident that each of these plans is a crapshoot. We have to roll the dice, but we ought to recognize that the outcome is unknowable.

By the way, did you assume that the man with the gun was the sole survivor of the basement experiment? That's the economic assumption, but not the only possibility. Elasticity suggests that the value of bread rises with one's hunger, and eventually exceeds the value of another's life. But maybe there's more to life than economics. How elastic are your values?