A Societal Flash Crash


I’ve long argued the 2010 flash crash in US financial markets was a kind of normal accident, the technology-enabled algorithmic withdrawal of trading market liquidity. It was something that couldn’t have happened before markets were largely tech-enabled creations, which gave them an off switch. Flash crashes are a sort of disease of modernity, and entirely predictable.

What I hadn’t realized, but perhaps should have, is that it is possible to have something similar happen at a larger scale, like at the level of an entire society. This wouldn’t have been possible fifty years ago, but it is possible today. It is a remarkable experiment living through a societal flash crash.