Fischer Black was not one for conventional wisdom. He enjoyed finding a better solution to a problem that had already been solved to the satisfaction of most. If there was a problem whose solution wasn't perfect, he would toss aside that solution and find one that was.
Unfortunately this didn't quite endear himself to all his colleagues. Many of his theories were rejected at the time of their introduction, only to find acceptance later, and some are still under debate.
His greatest success, the Black-Scholes model, traveled almost instantaneously from the domain of academia to the desks of the professional world. This model, along with others he developed throughout his career, have established his prominence in the financial world as an expert across several disciplines.
Black looked at financial problems the same way he looked at video games, finding new and better ways to solve old problems. For him, merely reaching the goal wasn't enough, he wanted to find the best solution.
Perhaps the greatest lesson to be learned from Fischer Black is that what is accepted is not always true. To the chagrin of many of his colleagues, he always questioned the way things were done.
One of capitalism's most enduring traits is the importance of innovation. New and better ideas are accepted by the marketplace, sustaining further economic growth. In this regard, Black's manner of questioning everything should be not only adopted, but encouraged.
Though the American academic system rarely - if ever - encourages or rewards challenging the status quo, the innovative spirit should always be kindled if any economy hopes to thrive.
A for Bubba. Again ... I'm not sure all the length is necessary.
ReplyDeleteI would disagree that academic systems "rarely - if ever encourages or rewards challenging the status quo". At least that is not my experience in economics and finance. Instead, I would say that 1) there may be too much hierarchy - so that challenges have a better chance if you're already near the top of the heap, and 2) in academics a status quo position is usually associated with the edifice of professional accomplishment put together by real flesh and blood people who care deeply about their own viewpoint.
And ... I would absolutely delete the word "American" from the first sentence of the last paragraph. If you had to pick one academic system for its ability to question the status quo, it would be American one.