The synchronous lateral excitation of markets (or pseudo-wobbles) | FT Alphaville

The synchronous lateral excitation of markets (or pseudo-wobbles)

John Cassidy, writing in the latest edition of the New Yorker, tells the story of London’s Millennium Bridge in a long, slow-burn introduction to a longer and (by now) very familiar discussion of what went wrong in the Great Crunch.

The Millennium Bridge, of course, proved alarmingly unstable after it was opened by the Queen in June 2000. It was quickly dubbed the “wobbly bridge” after pedestrians noticed it swaying – and the structure had to be closed while the architect Sir Norman Foster and the engineering firm Arup figured out what to do.

Cassidy notes that the investigating engineers identified a process called “synchronous lateral excitation” that was at the root of the problems, and they came up with a mathematical formula to describe it.

Basically, a positive-feedback loop amongst the users of the bridge was supposedly to blame:

When a person walks, lifting and dropping each foot in turn, he or she produces a slight sideways force. If hundreds of people are walking in a confined space, and some happen to walk in step, they can generate enough lateral momentum to move a footbridge—just a little. Once the footway starts swaying, however subtly, more and more pedestrians adjust their gait to get comfortable, stepping to and fro in synch. As a positive-feedback loop develops between the bridge’s swing and the pedestrians’ stride, the sideways forces can increase dramatically and the bridge can lurch violently.  

Cassidy goes on to describe how similar feedback loops fueled excesses and “rational irrationality” in the financial markets.  He wants a serious tightening of regulation – the financial equivalent of the huge shock absorbers used to stabilise the Millennium Bridge – including, it seems, direct governmental restrictions on Wall Street pay.

Which is all very well. But aren’t there other, analogous lessons here? For example, do architects and bankers share certain unattractive character traits?

Sir Norman and Arup, remember, seemed very ready to blame the people walking on their bridge rather than the inadequacies of the structure itself.

Remember also that the Millennium Bridge was delivered late.  It was designed by a partnership that has enjoyed a near-monopoly on new flagship structures around the world. It promised to revolutionise the theory of bridge building – yet it failed and had to be propped up. Those responsible for the failure seemed to prosper regardless, while most of the associated cost fell to the taxpayer.

And the ordinary public were simply fobbed off with pseudo crap like “synchronous lateral excitation.”

Related formula and graph: