Fixing the World
I often say to people that I teach because I get so much out of it. That sounds like a lot of Hoo Haw to most people, even to me, but it may also be true. One of the things that I clearly experience from teaching is the integration of that process with y expert witness activity. One truly does feed off the other. I am a more interesting and valuable expert because I teach and my teaching stays more current and gets a wealth of great cases or examples by virtue of my expert work. Also, my expert work requires some deep diving into background on various financial arenas that invariably are the subject of some of my teaching. It all gets intertwined and the utility of it all is greatly enhanced all around while keeping me on my toes and more engaged and up-to-date than I would otherwise be…by a lot.
I don’t really tend to think in terms of cognitive deterioration as something I have to fight off. I suppose one doesn’t until one starts to drift away and then it is all too irretrievable to make much difference. But I do recognize that many experts suggest that mental agility and engagement are some of the keys to a productive and happy longevity, so it would be hard not to recognize that teaching and doing research around that are good things. Usually, the output of all that research is more esoteric than not or at least very specific to my disciplines in finance and its related business fields. But I also am now teaching ethics, specifically law, policy and ethics in business, and that opens up a much broader context that extends into everyday life all the time.
One of the things I most enjoy is seeing what I teach come into the popular media space and become a general topic of interest to everyone. Let’s face it, “everyone” is a big stretch since such a large swath of the world is simply too busy with their lives to pay much attention to current events. Even well-educated people aren’t as well-informed as I tend to expect them to be at times because what seems to me to be a big event in the world can just wash over other people and go unnoticed. Anything short of a meteor being reported to be heading towards earth on a destructive path is likely to be ignored or set aside as irrelevant to that day’s game of golf or what to have for lunch. I get it. We can’t all be interested in the same things and we can’t all be tuned in to the more complicated machinations that cable news pundits decide are newsworthy. But there are some events which truly do impact us all and are the equivalent of meteors that have o be given attention.
My friends Terry and Paula claim that they have a pact to not listen to the news during the course of the day unless something truly earthshaking breaks. My pals Mike and Melissa go about their daily activities of softball and pointillist painting and have a rule not to turn on the TV until 6pm. Meanwhile Kim and I have MSNBC on almost all day long whenever we are within earshot of it. Who is to say which is the better way to live, so to each his or her own.
Earlier this week, my finance guest lecturer, Mike Walsh, a partner in the FinTech venture capital company I helped found and am an LP and GP in was due to talk about DeFi (Decentralized Finance). By way of quick definition of that term and even though Tom Brady mentions DeFi in a commercial he did for FTX (implying that if a famous football players understands it, it must be of interest to everyone), DeFi is about eliminating intermediaries in finance like brokers, banks, and exchanges by using what are called “smart contracts” on blockchains so that things that are supposed to happen just happen and do not rely on human intervention. Some will say that shit like the failure of FTX or Lehman Brothers or the Robin Hood GameStop nonsense would not happen if we all went to DeFi. Mike Walsh started his lecture by saying that unless the students had been living under a rock, they had undoubtedly heard all about the FTX collapse this week. It was the Crypto shot heard around the world and it is still creating aftershocks that might well affect everyone. Some think Crypto is still fringe, but Tom Brady, Shaquille O’Neal and Larry David sort of prove otherwise and suggest that it went mainstream in 2022 at least. Look, computers were fringe Popular Science things until Apple and IBM pushed them forward. Smartphones are the same as wireless came into dominance. And the internet and broadband, well, did we ever NOT have them?
This whole FTX debacle combined with the natural progression of my finance course has caused me to think about DeFi is a somewhat broader context. If smart contracts and blockchain can take greed and corruption out of the hands of human intermediaries (or at least to a significant extent), are we in a better place? The old Terminator movie series might suggest not and imply that the machines will eventually be our downfall. But every day we are faced with more and more evidence that the evil side of man is never going away and is a constant threat to our society and wellbeing. Those of us with liberal leanings think Republicans are trending toward fascism and authoritarianism that will unleash to Cracken of self-interest. The conservatives think Democrats are not just libtards, but also Socialists in waiting who wand Soviet-style corruption and kleptocracy to lay on us like a wet economic blanket. Fundamentally we don’t trust one another to do what’s right and perhaps disagree on what exactly is right (all too often for self-righteous or self-serving reasons). There is no science in this estimate, but I think that 20% of the problem is agreeing on what’s right while 80% of the problem is executing faithfully on that without human corruption of one sort or another. That implies that the focus needs to be on the latter and then tweaking the former as much as we can, leaving us collectively in a better place.
An ethics student of mine from Kuwait works for the Kuwaiti Oil Company and is what I think must be a rather devout and ethically-minded Muslim. He is quite thoughtful and sent the class a diagram he found with the nine functions of government. Those are maintaining law and order, raising taxes, providing public goods, minimizing inequality, reducing market failure, macro-economic stability, national defense, regulating labor markets, and protecting the environment. This is a pretty good list though I’m sure it could be expanded. It made me think about the debate my red friends and I have almost daily about whether government helps or hurts us in our quest for the good life. Red says less or no government. Blue says the opposite. Situations like the FTX collapse are very fertile debate subjects because they fall squarely on the line of government and an attempt to avoid government (a.k.a. Regulation).
That is when it suddenly hit me. If DeFi succeeds in moving the world closer to solving the regulatory conundrum of finance, is there a similar way to do the same for all of the governmental functions? Would we benefit from dehumanizing or making autonomous the running of government? We are all going to think about autonomous Tesla cars in this example and that will scare us to say no (especially watching the mad genius of Elon Musk at work on destroying Twitter). But wait, if we could put in place agreed AI protocols to do some or many of the governmental functions listed above and removed the human error component, might it not prove to eliminate the biggest corruption and greed aspects that plague us? The devil is in the detail of course, but my 80/20 presumption would suggest that it might well be worth it to try. There you have it. I’ve officially fixed the world and it isn’t even 9am yet.