Greek debt crisis - it's all mathematics to me

THE OLD days are back. Ignorance, greed, nationalism, blind faith, vengeance. The symptoms are, just like most evil syndromes, diverse. Moody's or Loonies or Righteous & Skint or one of those rating agencies is downgrading Britain's AAA credit score. Nearly 50 per cent of young people in Greece are unemployed. The German Foreign Minister Guido Westerweller is telling Der Spiegel that Germany "shows a tendency to boast, which disturbs me".

It's all about mathematics.

It wasn't always. For a while, we had the Tories, who believed in class, monarchy, the military virtues, the Church of England, heirarchy and good manners. And we had Labour, who believed in fairness, justice, kindness and liberty. (And the Liberals, who had reservations, not particularly about anything; just reservations, in general.)

But one by one, both sides' beliefs faded away until, for reasons of political expediency (Labour) and intellectual poverty (Conservative), both sides subscribed to just one article of faith: Credo in unum forum: "I believe in one market."

The market was all-powerful. It was, over the long run, rational. Economists were the ones who knew everything, and traders were the ones who made that everything happen.

The result was an odd combination of moral thrift and mad abandon, as though one had got Margaret Thatcher pickled and let her loose in a casino.

We all know what happened. Even though, oddly, we already knew it would happen, because in a casino the House always wins.

And most of us know that the reason the House always wins is "simple mathematics". But if the mathematics is that simple, how come pretty well none of us can explain it? And how come we haven't been able to carry this idea of "simple mathematics" into everyday life?

Perhaps we're just not, as a species, very good at it, which is maybe why only about four per cent of students do Further Maths at A-level. (I did. Forgotten most of it, alas, but can still sort of read it, like a long-unused foreign tongue).

To most of us, what mathematics is just doesn't fit with how our minds work. Most of us ask one question in life: "How?" How do I get X into bed, how do I put food on the table, how do I get to Swindon, how do I get to be Prime Minister?

Some of us ask "Why?" Why do I want to get to Swindon? Why do I want to be Prime Minister?

A few of us ask "If...?" ("If we cook the books so that we can borrow all this money but then can't pay it back...")

But hardly any of us ask "And so?" Which is what mathematicians do for a living. From before the days of Pythagoras, they have been saying "If" and "And so?" and by doing so with scrupulous logic and care at every step, they have built a model of the world of such detail and precision that ordinary language simply cannot describe it.

And ordinary people can't understand it, no more than our mediaeval forebears could understand church Latin. But we are dependent on mathematics as much as they depended on God and the whims of the oligarchy.

If we were paying attention, we might know, as Ian Stewart explains in his lucid and delightful new book Seventeen Equations that Changed the World, that there are two sorts of equations.

One sort, like Pythagoras's theorem, presents an eternal truth. The other sort defines a relationship between known things and unknown things, which we can then solve to find the right values in our individual case (that's the maths that your satnav is, essentially, doing). But that's as far as most of us go.

The world of Hilbert space, of tensor calculus (which has a special place in my heart because it marks the boundary of my understanding), of Euler's Formula, the Navier-Stokes equation, of Schrödinger's quantum equation, and of the Black-Scholes equation is crucial to our lives: to our cellphones, our computers and medicines and cameras and politics and agriculture and even our property and our maps (triangulation depending, in the end, on Pythagoras).

It is, for most of us, an act of faith, and reading something like Seventeen Equations is a bit like getting your hands on a vernacular translation of the bible: suddenly, you have a vague glimpse of what they're talking about.

We need it. Particularly in that last case, the Black-Scholes equation, which describes how financial derivatives change over time. Sound familiar?

The banks didn't understand it either. So they hired mathematicians, who did understand it but weren't making the decisions, and who did try to explain but the bankers weren't listening.

I'd be surprised if the ratings agencies - or the people in them who make the decisions - were listening either. As William Goldman said about Hollywood and the film industry, "Nobody knows anything". Except in Hollywood, it doesn't matter.

We're back to faith, greed and ignorance. The Ian Stewarts of this world are out there offering to open the door a crack. It would be stupid not to peer in, especially as what's inside is both thrilling and beautiful.

Seventeen Equations that Changed the World by Ian Stewart, Profile Books. ISBN 978-1846685316 ·