Control Theory applied to finance

Readers letters

I postulated human avarice as the driving force and regulation as the damping factor

The letters of Ian Crossley and Andrew Goodman reminded me that I once wrote on that subject; when I checked back, I found it was February 2009 and even that made me a late entrant because I noted that the idea was mooted 150 years ago. That does not mean there can be anything but good in restating it but does make it depressing that conveying it to the financial world seems impossible.

My analysis of what's what was slightly different: I postulated human avarice as the driving force and regulation as the damping factor. The available amount of purchasable product might be seen as the mass and the money supply as the spring but these are minor details compared with recognising the principal. Even then we should beware of the subversive forces because two US academics become financial wizards took this idea as a platform for creation of personal fortunes and it worked well until the rules they had assumed to be rock solid proved not to be rules at all but assumptions. These two gentlemen now live in the ranks of the disgraced. Hopefully as engineers we would construct a better model aimed at the general good!