Black holes and our looming economic problems have more in common than the obvious puns. There is at least one analogy that gives hope and insight into the current economic crisis.
Simply put, black holes are areas in space where gravitational fields are so strong that not even light can escape their pull. They arise because of the proportional relationship between mass and gravity. The gravitational field becomes so strong that it closes in on itself and nothing seems to escape its pull. Thus, more mass accumulates and collapses in on itself, ever increasing the strength of gravitational field. The forces within a black hole exert immense and almost unimaginable pressure.
While conventional scientific wisdom taught that nothing could escape the grasp of a black hole, modern studies indicate that new stars are actually born within a black hole’s gravitational field. These brilliant new stars emerge from interstellar clouds of gas being ripped apart by the black hole’s immense gravitational forces.
Immense economic forces now exert themselves on the U.S. and global economies. There is general apprehension as these forces rip and tear at the fabric of our nation. Our economy appears to be collapsing in on itself. Some even believe that the current economic tumult threatens out capitalist way of life.
No doubt there are many concerns and unknowns with the current economy. But I do not ascribe to the general gloom and doom. In fact, I think there is reason to be optimistic. Like black holes, the immense pressures of economic downturns commonly generate brilliant stars or innovations.
For example, David Silverman wrote in the Harvard Business Review of a number of companies that had their origins in the Great Depression. They include:
Interstate Bakeries (maker of Twinkies)
Pittsburgh Steelers Franchise
Products and services involving comfort, beauty, entertainment, and technology often continue to thrive during economic downturns, as do innovations in transportation, delivery, and distribution efficiencies. Examples of companies originating during other economic downturns include FedEx, General Motors, GE, Proctor & Gamble, and IBM. (Granted, some of these stars may now be at the end of their lives.).
The difficulty of black holes and economies is we cannot see everything within them and thus accurate predictions can elude the most genius of minds. Likely, we will see increased sales of junk food, dvds, inexpensive beauty products, and anything increasing efficiency. Maybe we will see a Twenty First Century “Twinkie” phenomenon. One thing I am confident of, though, is that from these immense economic pressures we will see the birth of some brilliant new innovations.