Groups may show no limits to what actions they are capable of committing, but the laws of nature do have limits. Limits are set by nature and not by man. If we construct a building that has several stories, we must have the appropriate amount of support so it does not collapse. Support is needed to prevent a structure from collapsing on its own weight. Support required because of gravity which cannot be changed by man. The limits of structures are not up to us but the natural forces in which we live.
Expectations have natural supports. An individual person acting on their own never test these supports, but groups commonly bounce off of them.
In The Great Depression, the limit of greed was met by an equal limit of poverty. When group members are pushed towards these natural limits, they cannot imagine a world any different. The Great Depression shows us that if we hit one natural limit we will hit the opposite limit.
Imagine bouncing a ball in a small room with enough force to hit the ceiling. Naturally the ball will hit the ground after bouncing off the ceiling, but more than likely it will not have enough force to complete the cycle again and eventually settle on the ground. Groups exert the force and nature confines their actions. What goes up must go down, and in expectations the down typically matches the up.
After an extreme event, caused by a powerful group, the impacts are felt in some cases for generations. The Great Depressions impacted a generation on taking risk. It was not until the early 1980’s that the Dow Jones Industrial Average exploded from its otherwise slow and steady growth. This steady slow movement is the effect of the ball, abnormal action, settling after such a strong force was applied to it. Eventually, when the effects of the abnormal event are forgotten, a new group will form and attempt to “bounce the ball” of risk again resulting in history repeating itself.
Most natural limits are obvious. The truth behind the saying “hind sight is twenty-twenty “reflects this. Members of a group that approach these natural limits are aware of them, but under the spell of the group, choose to ignore them. History remembers these people under this spell as delusional.
Money has some obvious natural limits. If a nation has a $1,000,000,000,000 credit limit and they have $999,999,999,999 of outstanding credit, if they borrowed one more dollar they would be at their natural limit. Members of groups driven by greed may understand these limits, but refuses to believe them. They will continue to invest in the face of this obvious natural limit. The larger and stronger the group, the bigger the impact they can have. History is filled with events like these even though the natural limits have always existed. A dollar borrowed is a dollar borrowed, beware of creative financing. Interest rates can only go to zero before prices must come down to meet demand, this is a common cause of deflation.
Natural limits can change with the discovery of new innovations. Unfortunately these changes are gradual and groups outpace the expansion of limits through innovation. For example the masterminds behind the building of pyramids may have wanted to construct a 1,000 foot high pyramid, but the knowledge of construction had not evolved to that point. But without the construction of these pyramids a 1,000 foot building may not be possible today. Pushing the natural limits can also lead to the expansion of the limits they are testing. Great success is always credited to great failure.
Groups are the only entities capable of meeting these natural limits. As long as there has been currency and credit, groups have pushed their limits. The ocean has a floor and we cannot breathe in space, these are our natural limits as human beings.