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>Get angry at banks? I've found in many fields that are as complex as finance, that when I think something in that field is stupid, unnecessary, or onerous, it

>Get angry at banks? I've found in many fields that are as complex as finance, that when I think something in that field is stupid, unnecessary, or onerous, it is I that am wrong because I simply didn't understand the why of how that thing came about. So I find it fascinating how many people/groups in history have gotten mad at banks/finance, tried to make a "better" product, gotten stung or robbed others, only to eventually re-invent many of the things safe, efficient banking requires. >I'm all for calling bullshit on hyped trends ... doesn't mean that there might not still be great opportunities to do good engineering and have huge impact The problem is that as a field gets flooded with bullshit and scams, smart money (and people) turn their talents to other areas the world can be improved, avoiding the crap.

simonbyrne 9y ago
see Chesterton's fence https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton.27s_fence https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton.27...
kbenson 9y ago
I've found this to be the case in most things, even not as complex as financial services, if you look close enough. Sometimes what you're seeing is a local maxima, where there's a rough period required to get to a better state that nobody is ready to take quite yet, and other times it's just that complexity is much more common that we like to think. The obvious example is dumb laws. Almost every dumb law has at least some good effect it imparts, which is why it was put in place. Unfortunately the problems it causes are what is usually trotted out to explain why it's dumb and should be changed or removed, giving little or no credit to the problems it actually prevents (or disincentivizes at least).
mikestew 9y ago
I've found in many fields that are as complex as finance, that when I think something in that field is stupid, unnecessary, or onerous, it is I that am wrong because I simply didn't understand the why of how that thing came about. Someone else has already brought up Chesterton's Fence, but long before I heard about the fence of Mr. Chesterton, I learned that every warning sticker on your ladder, every regulation you despise, every "Don't Do $ACTION on the $THING" sign you see has a story behind it. Because few people enjoy researching and purchasing signs and stickers so much that they'll do it unprompted. So, yeah, as you've discovered, when you hear talk about getting rid of Frank-Dodd or other dual-name regulations, ask yourself who benefits from that and why we had to write down some rules in the first place. IOW, Chesterton's Fence. :-)
- Nursie 9y ago
  I wasinformed recently that there's something similar behind most of the speed cameras in the UK - if you see one (other than on a motorway) it means that somebody died there, probably more than one somebody. There's a debate to be had about whether they are the most effective means of slowing down traffic, but it changed my view a little.
  - TeMPOraL 9y ago
    Sounds plausible, given that it's speeding that's one of the biggest cause of traffic deaths.
    - perl4ever 9y ago
      Speeding, or unexpected stops?
      - TeMPOraL 9y ago
        Unexpected stops are, by definition, leading cause of all traffic accidents. The question is, what leads to those unexpected stops.
leksak 9y ago
> So I find it fascinating how many people/groups in history have gotten mad at banks/finance, tried to make a "better" product, gotten stung or robbed others, only to eventually re-invent many of the things safe, efficient banking requires. Hehe, this reminds me of a thing X that I'm implementing because my manager doesn't like thing Y. X will have the same exact same limitations as Y and won't be as battle tested nor will a new hire be familiar with X (although they'd be familiar with Y). But hey, at least it isn't Y.
danudey 9y ago
This is true of a lot of Silicon Valley startups I've seen lately as well. They make a big show of how they can do things better, faster, more efficiently, and cheaper than existing incumbents, until the government comes in and says "Did you buy your insurance? Are you paying your employees (or treating them as employees in the first place)? Are you providing benefits? Are you certified?" Then suddenly, the SV companies say "hey, this is BS, we can't be competitive like this! If we have to do all these things then we can't be cheaper than the incumbents!" Joel Spolsky said it pretty well[0]: There’s a subtle reason that programmers always want to throw away the code and start over. The reason is that they think the old code is a mess. And here is the interesting observation: they are probably wrong. The reason that they think the old code is a mess is because of a cardinal, fundamental law of programming: it’s harder to read code than to write it. Now we've gotten to the point where people are taking entire buildings and making them short-term rentals (they're called Hotels), ride-sharing services are talking about multi-person trips to and from designated locations (it's called a bus or shuttle), and so on. Everyone wants to be Stripe or Square and reinvent and simplify things that people hate, but no one stops to think if this is an area that's complicated on purpose or if people just think they're smarter than everyone else who came before them. [0] https://www.joelonsoftware.com/2000/04/06/things-you-should-never-do-part-i/ https://www.joelonsoftware.com/2000/04/06/things-you-should-...
- hectorr1 9y ago
  Airbnb and Uber going into hotels and public transportation respectively are examples of successful companies diversifying their income. The point is that their core innovation has provided the capital and human resources to tackle higher level challenges. It had to be a substantial improvement on the original problem to get that kind of traction in the first place. The hotel experience needed improvement. So did the taxi experience. Incumbents were preventing competition through monopoly and regulatory capture. They won, and in doing so they lost their edge. Some of the regulations Airbnb and Uber skirted have good reasons. Others had good reasons, but new ideas and technologies made these reasons less important. And some were just bad and anti-competitive. The same is true in financial services. 'You shouldn't do that because it is illegal' argument is actually not an argument, it's an appeal to authority. Opening the Overton window to consider why we have the regulations we do, how we got there, and what makes sense moving forward is key to progress. And it often takes unreasonable people (eg: Kalanick) to make that happen.
hndamien 9y ago
The funny thing is that I have literally only ever been "robbed" in my life twice. (As in money that was rightfully mine blatantly stolen from me). Once was from Mt Gox who I largely suspected to be insolvent, and the other was from my bank, the largest banking institution in my country. Both clearly knew they were committing a crime, but I was really only shocked by one of these institutions.

simonbyrne 9y ago

see Chesterton's fence https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton.27s_fence https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton.27...

kbenson 9y ago

I've found this to be the case in most things, even not as complex as financial services, if you look close enough. Sometimes what you're seeing is a local maxima, where there's a rough period required to get to a better state that nobody is ready to take quite yet, and other times it's just that complexity is much more common that we like to think. The obvious example is dumb laws. Almost every dumb law has at least some good effect it imparts, which is why it was put in place. Unfortunately the problems it causes are what is usually trotted out to explain why it's dumb and should be changed or removed, giving little or no credit to the problems it actually prevents (or disincentivizes at least).

mikestew 9y ago

I've found in many fields that are as complex as finance, that when I think something in that field is stupid, unnecessary, or onerous, it is I that am wrong because I simply didn't understand the why of how that thing came about. Someone else has already brought up Chesterton's Fence, but long before I heard about the fence of Mr. Chesterton, I learned that every warning sticker on your ladder, every regulation you despise, every "Don't Do $ACTION on the $THING" sign you see has a story behind it. Because few people enjoy researching and purchasing signs and stickers so much that they'll do it unprompted. So, yeah, as you've discovered, when you hear talk about getting rid of Frank-Dodd or other dual-name regulations, ask yourself who benefits from that and why we had to write down some rules in the first place. IOW, Chesterton's Fence. :-)

Nursie 9y ago
I wasinformed recently that there's something similar behind most of the speed cameras in the UK - if you see one (other than on a motorway) it means that somebody died there, probably more than one somebody. There's a debate to be had about whether they are the most effective means of slowing down traffic, but it changed my view a little.
- TeMPOraL 9y ago
  Sounds plausible, given that it's speeding that's one of the biggest cause of traffic deaths.
  - perl4ever 9y ago
    Speeding, or unexpected stops?
    - TeMPOraL 9y ago
      Unexpected stops are, by definition, leading cause of all traffic accidents. The question is, what leads to those unexpected stops.

leksak 9y ago

> So I find it fascinating how many people/groups in history have gotten mad at banks/finance, tried to make a "better" product, gotten stung or robbed others, only to eventually re-invent many of the things safe, efficient banking requires. Hehe, this reminds me of a thing X that I'm implementing because my manager doesn't like thing Y. X will have the same exact same limitations as Y and won't be as battle tested nor will a new hire be familiar with X (although they'd be familiar with Y). But hey, at least it isn't Y.

danudey 9y ago

This is true of a lot of Silicon Valley startups I've seen lately as well. They make a big show of how they can do things better, faster, more efficiently, and cheaper than existing incumbents, until the government comes in and says "Did you buy your insurance? Are you paying your employees (or treating them as employees in the first place)? Are you providing benefits? Are you certified?" Then suddenly, the SV companies say "hey, this is BS, we can't be competitive like this! If we have to do all these things then we can't be cheaper than the incumbents!" Joel Spolsky said it pretty well[0]: There’s a subtle reason that programmers always want to throw away the code and start over. The reason is that they think the old code is a mess. And here is the interesting observation: they are probably wrong. The reason that they think the old code is a mess is because of a cardinal, fundamental law of programming: it’s harder to read code than to write it. Now we've gotten to the point where people are taking entire buildings and making them short-term rentals (they're called Hotels), ride-sharing services are talking about multi-person trips to and from designated locations (it's called a bus or shuttle), and so on. Everyone wants to be Stripe or Square and reinvent and simplify things that people hate, but no one stops to think if this is an area that's complicated on purpose or if people just think they're smarter than everyone else who came before them. [0] https://www.joelonsoftware.com/2000/04/06/things-you-should-never-do-part-i/ https://www.joelonsoftware.com/2000/04/06/things-you-should-...

hectorr1 9y ago
Airbnb and Uber going into hotels and public transportation respectively are examples of successful companies diversifying their income. The point is that their core innovation has provided the capital and human resources to tackle higher level challenges. It had to be a substantial improvement on the original problem to get that kind of traction in the first place. The hotel experience needed improvement. So did the taxi experience. Incumbents were preventing competition through monopoly and regulatory capture. They won, and in doing so they lost their edge. Some of the regulations Airbnb and Uber skirted have good reasons. Others had good reasons, but new ideas and technologies made these reasons less important. And some were just bad and anti-competitive. The same is true in financial services. 'You shouldn't do that because it is illegal' argument is actually not an argument, it's an appeal to authority. Opening the Overton window to consider why we have the regulations we do, how we got there, and what makes sense moving forward is key to progress. And it often takes unreasonable people (eg: Kalanick) to make that happen.

hndamien 9y ago

The funny thing is that I have literally only ever been "robbed" in my life twice. (As in money that was rightfully mine blatantly stolen from me). Once was from Mt Gox who I largely suspected to be insolvent, and the other was from my bank, the largest banking institution in my country. Both clearly knew they were committing a crime, but I was really only shocked by one of these institutions.