Much of the blame for the world recession can be laid at the door of clever mathematicians and physicists. Put off by the prospect of labouring for little pay in academia, in the last 10 years many bright young graduates in these disciplines have opted instead to work on Wall Street and in the City devising complicated financial instruments that brought them huge rewards and virtually extinguished the concept of risk, in their minds at least.
These “quants”, as they are known, constructed towering edifices of mortgage-backed securities that they then persuaded banks to purchase. Everyone got rich and the entire world financial system (including most of its analysts) and the regulators bought into the hype. When householders began defaulting on so-called sub-prime mortgages in the United States, the whole greed-driven enterprise was shown to have been a mirage.
It is against this background that the leaders of the G20 countries met and dined on organic Shetland salmon among other tasty morsels this week. The schism between France and Germany on the one hand and Britain and the United States on the other was over the need for tighter regulation of the financial system. London and Washington want to fix now, reform later. Paris and Berlin believe new rules must be introduced first.
It is all a matter of geopolitics – Britain and America need to rescue their financial systems because they are the fundamental bases of prosperity in those countries whereas France and particularly Germany are less reliant on financial speculation for GDP growth. As financial clout and power shift to the Far East, the UK and US say they have little choice. But they do. It will take years, but we could begin by making engineering, science and manufacturing attractive again. Locally, groups of evidently very able pupils from Mid Yell School scooped up all the main prizes in a bridge-designing competition last week, but depressingly none of them thought they would take the subject much further. Surely that says something about the appeal of such disciplines. Attitudes need to change, starting at the top.