January 18th, 2015
(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: email@example.com
Ernest Hemingway’s 1926 novel The Sun Also Rises, which is available various places around the web like here, includes the following snippet of dialogue:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Many economists will recognize this as a version of an apercu offered a number of times over the years by the prominent macroeconomist Rudiger Dornbusch, who liked to say (for example, in this interview about Mexico’s economic crisis in the 1990s):
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”
What I am dubbing the Hemingway Law of Motion clearly has wide applicability. It’s when the creaking of your back porch doesn’t matter much, until the day you put a foot through the floor. It’s when the cracks and rust on the bridge don’t seem to matter, until the day the bridge goes down. It’s the concern that you can see signs that the risk of a financial crisis or a stock market run, but little action is taken until the crisis is upon us. It’s the concern that the costs and risks of climate change may look quite reasonable, until something large and perhaps irreversible happens all at once.
The Hemingway Law of Motion is simultaneously a useful reminder in some cases and a rhetorical trick in other cases. It’s a useful reminder that the world often isn’t smooth and linear. Instead, the world full of tipping points and thresholds.