Nowhere is this clearer than in the last two major systemic shocks of our lifetime: COVID & the 2007-08 financial crisis.
For decades before COVID, global supply chains were optimized around just-in-time delivery. Inventory was treated as waste. Warehouses were liabilities. Efficiency meant shaving margins until goods arrived precisely when needed—no earlier, no later.
This worked brilliantly under stable conditions. Then COVID hit.
When factories shut down in Wuhan, when ports slowed, when trucking stalled, there was no slack to draw from. Hospitals ran short of PPE not because masks were impossible to produce, but because no buffer existed. The system had assumed continuity. It had converted resilience into quarterly savings.
Optimization didn’t fail because it was careless. It failed because it assumed the future would behave politely.
Before 2008, financial markets were aggressively optimized to eliminate perceived inefficiencies. Risk was sliced, bundled, and distributed through mortgage-backed securities, CDOs, and CDS contracts. The goal was beautiful on paper: disperse risk so widely that no single failure mattered.
In practice, this removed friction—transparency, human judgment, and delay. Risk didn’t disappear; it became unreadable.
When housing prices faltered, the system could not identify where exposures actually lived. Feedback arrived only as panic. Complexity without friction erased the system’s ability to diagnose itself until collapse was already underway.
Friction—slow settlement, capital requirements, redundant oversight—would not have prevented loss. It would have prevented blindness.
Optimization Produces Speed; Friction Produces Resilience
The most optimized financial instruments before 2008 performed exceptionally well under normal conditions. Their models assumed rare events would remain rare and uncorrelated. When correlations snapped into alignment, losses multiplied everywhere at once.
The same pattern appeared during COVID. Hyper-efficient logistics moved massive volumes cheaply—until global synchronization turned a local disruption into a planetary one.
Optimized systems fail nonlinearly. They don’t bend. They break.
In both crises, decision-makers initially mistook calm dashboards for stability. Inventory metrics looked fine until shelves were empty. Credit ratings looked safe until liquidity vanished.
This mirrors how we misread cognition. Quick answers and smooth performance feel intelligent, until conditions change and deeper integration is required. Slowness, redundancy, and hesitation aren’t flaws—they’re adaptive reserves. As a teacher I must often resist mistaking low cognitive arousal for a lack of sbility.
Institutions, like brains, need time to think.
Optimization privileges the present. It treats the future as a predictable extension of current trends. Friction, by contrast, preserves optionality. It keeps doors open.
Pandemic stockpiles looked inefficient—until they weren’t. Post-2008 banking regulations reduced returns—until they prevented worse collapse.
Efficiency borrows from tomorrow to maximize profits today.
Systems that eliminate friction in the name of efficiency are borrowing stability from the future—and eventually default on the debt.
COVID revealed what happens when supply chains are optimized without slack. 2008 revealed what happens when finance is optimized without legibility.
Friction is not waste. It is foresight made physical.
The signal needs resistance. Systems need delay. And the future—inevitably—needs slack.
This worked brilliantly under stable conditions. Then COVID hit.
When factories shut down in Wuhan, when ports slowed, when trucking stalled, there was no slack to draw from. Hospitals ran short of PPE not because masks were impossible to produce, but because no buffer existed. The system had assumed continuity. It had converted resilience into quarterly savings.
Optimization didn’t fail because it was careless. It failed because it assumed the future would behave politely.
Before 2008, financial markets were aggressively optimized to eliminate perceived inefficiencies. Risk was sliced, bundled, and distributed through mortgage-backed securities, CDOs, and CDS contracts. The goal was beautiful on paper: disperse risk so widely that no single failure mattered.
In practice, this removed friction—transparency, human judgment, and delay. Risk didn’t disappear; it became unreadable.
When housing prices faltered, the system could not identify where exposures actually lived. Feedback arrived only as panic. Complexity without friction erased the system’s ability to diagnose itself until collapse was already underway.
Friction—slow settlement, capital requirements, redundant oversight—would not have prevented loss. It would have prevented blindness.
Optimization Produces Speed; Friction Produces Resilience
The most optimized financial instruments before 2008 performed exceptionally well under normal conditions. Their models assumed rare events would remain rare and uncorrelated. When correlations snapped into alignment, losses multiplied everywhere at once.
The same pattern appeared during COVID. Hyper-efficient logistics moved massive volumes cheaply—until global synchronization turned a local disruption into a planetary one.
Optimized systems fail nonlinearly. They don’t bend. They break.
In both crises, decision-makers initially mistook calm dashboards for stability. Inventory metrics looked fine until shelves were empty. Credit ratings looked safe until liquidity vanished.
This mirrors how we misread cognition. Quick answers and smooth performance feel intelligent, until conditions change and deeper integration is required. Slowness, redundancy, and hesitation aren’t flaws—they’re adaptive reserves. As a teacher I must often resist mistaking low cognitive arousal for a lack of sbility.
Institutions, like brains, need time to think.
Optimization privileges the present. It treats the future as a predictable extension of current trends. Friction, by contrast, preserves optionality. It keeps doors open.
Pandemic stockpiles looked inefficient—until they weren’t. Post-2008 banking regulations reduced returns—until they prevented worse collapse.
Efficiency borrows from tomorrow to maximize profits today.
Systems that eliminate friction in the name of efficiency are borrowing stability from the future—and eventually default on the debt.
COVID revealed what happens when supply chains are optimized without slack. 2008 revealed what happens when finance is optimized without legibility.
Friction is not waste. It is foresight made physical.
The signal needs resistance. Systems need delay. And the future—inevitably—needs slack.
