November 04, 2003

Iron Laws Of The Universe

Posted by Daniel

Given that Paul Krugman is reminding us all of Stein’s Law (“Things that can’t go on forever, don’t”), I thought I’d remind everyone of Davies’ Corolloraries:

1. Things that can’t go on forever, go on much longer than you think they will.
2. Corollorary 1 applies even after taking into account Corollorary 1.

Posted on November 4, 2003 06:01 PM UTC
Comments

Corollary n+1. Corollary 1 applies even after taking into account corollary n.

This has been verified for all finite n, and with a big enough, or at least long enough, grant I could figure out which infinite values it holds for.

Posted by Brian Weatherson · November 4, 2003 06:06 PM

A famous quip attributed to Keynes: the market can stay irrational longer than you can stay solvent. (I’d love to know if this one is true or not)

Posted by Charles Stewart · November 4, 2003 07:14 PM

Spellings, Mr. Davies. Spellings.

Posted by Chirag Kasbekar · November 4, 2003 07:15 PM

Seems like an elaboration of Hofstadter’s Rule, which states that everything takes longer than you think it will, even after you take Hofstadter’s Rule into account.

Posted by ben wolfson · November 4, 2003 07:16 PM

You should have noted this before I played roulette…

Posted by Joel B. · November 4, 2003 07:30 PM

I think you really should doff your hat to Mr Dornbusch for no. 1 (but no. 2 is your own…)

Posted by Fergal · November 4, 2003 07:31 PM

The comment (“This can’t go on much longer”) is used, to hilarious effect, in Tibor Fischer’s Under the Frog, about Communist rule in Hungary.

Posted by Doug · November 4, 2003 08:33 PM

A sadder statement of the rule was made by a co-worker I had awhile back, originally from Bosnia: “Don’t EVER say ‘Things can’t get any worse’”.

Posted by zizka · November 4, 2003 10:05 PM

Reading this almost gave me a coronorary.

Posted by Tom T. · November 5, 2003 12:38 AM

Yes, lots of people went broke shorting Internet bubble stocks in 1998 or so, because the bubble kept expanding for another year and a half and the short-sellers had to cover. Of course the thing popped eventually, but not soon enough for those who bet on it.

Posted by Joe Buck · November 5, 2003 01:53 AM

Keynes’s remark that “The market can stay irrational longer than you can stay solvent” is paralleled by (ahem) Teresa Nielsen Hayden’s observation that “The Invisible Hand is not to human scale.”

Posted by Patrick Nielsen Hayden · November 5, 2003 03:56 AM

Patrick: Teresa is your spouse? Well, whoever she is, that’s a great quote. I’ll definitely remember it and use it in the future. You should make sure it’s on a web page, or better, with proper attribution.

Posted by Keith M Ellis · November 5, 2003 08:35 AM

I prefer one of my PoliSci professor’s comments:

“We’ve discovered that The Invisible Hand often turns into The Invisible Finger.”

Posted by William · November 6, 2003 01:45 AM

Patrick and Teresa are spouse to one another. See details about their name.

Posted by Damien Warman · November 6, 2003 02:08 AM

A lot of self-help literature, futurology, and New Age spirituality makes sense as long as the bubble isn’t popped, and by and large it serves to postpone the pop.

As I understand the rule is, “This can’t go one, but no one can time the pop”. People who shorted the bubble lost money because they’re trying to time the pop, but are there anti-bubble investments which are profitable during the bubble (though less so than bubble investments), but which lose little or nothing, or even gain, afterwards?

Posted by zizka · November 6, 2003 02:31 AM

About an investment profitable through and after a bubble” insured bank accounts.

Fundamentally, you’re always otherwise balancing risk and reward, and the risk means there’s a downside.

Posted by Jonathan · November 6, 2003 08:50 PM
Followups

→ Rufus, Boston and Logic.
Excerpt: I saw Rufus Wainwright at the Avalon last night. Rufus's voice is just as adorable live as on CD (and even more adorable than on MP3) and he can be very funny in his on-stage banter. All in all very enjoyable, and if he's visiting your town soon (or a ...Read more at Thoughts Arguments and Rants
→ Drunk in charge of a mouse.
Excerpt: Bloody love the internet, me: How much data storage would be needed to store all of the words ever spoken? The answer, it turns out, is not the one most well known. Great stuff, which links to the Iron Laws...Read more at Ben Hammersley's Dangerous Precedent

This discussion has been closed. Thanks to everyone who contributed.