Interestingly, he starts with another natural disaster that caused an examination of that era's prevailing faith:
First came the earthquake, then the tsunami and the fires, and then, over time, a critical decline in belief in a benevolent God.
The Great Lisbon Earthquake of 1755 killed about a fifth of the city’s 200,000 residents and leveled 85 percent of its buildings, including almost every major church — on a church holiday, when they were packed with parishioners. It also shook 18th-century philosophers to the core. “Candide,” Voltaire’s comic polemic against the belief that all was for the best in this best of all possible worlds, was written in the quake’s aftermath, as Voltaire was abandoning any notion of godly oversight of the world’s affairs. The young Immanuel Kant was sufficiently upset to research and write one of the first books ever on the causes of quakes, before he turned to his life’s work of creating ethical codes that functioned in both the presence and absence of God.
Today, the quake, tsunami and, most particularly, the potential of a nuclear catastrophe in Japan should weaken at least one of our own deeply rooted faiths — in our own infallibility.
What all these wizards did not factor in was that these were all just as much human and social systems as they were mathematical. Behind the equations were human and social assumptions, rooted in such human and social impulses as greed, denial and hubris.
What the systemic failures on Wall Street, in the Gulf of Mexico and in Japan should teach us is that the need for active, disinterested governmental regulation is rooted not in any radical impulse, as the American right continually contends, but in a sober, conservative assessment of the human capacity for mistake and self-delusion, not to mention avarice and chicanery. We can underestimate the risks of a particular undertaking, even when we think we have guarded against them. We fall prey to our own sense of infallibility, often as a way to rationalize what is otherwise a risky endeavor. When those risks go bad, the consequences often fall on those who didn’t take those risks themselves.
The market may in time punish bad actors, which is the ostensible safeguard that libertarians prefer to regulation. Yet as the people sealed inside their homes in the vicinity of Japan’s malfunctioning nuclear plant could tell us, untold numbers of innocents may pay a much higher price, more quickly, than the executives and shareholders of offending companies.