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Weihsueh Chiu's avatar

I have begun to wonder whether the economist perspective - identifying "externalities" - should be "inverted." The basic problem is the "default" perspective that markets work except when they don't, and then you have to intervene to fix it. But maybe it's more accurate for the "default" to be markets DON'T work, except when they do, and that it actually takes a lot of effort to get them to work.

Another analogy is perhaps public health versus medicine in a capitalist society -- money is made by treating disease, not by preventing it, even though from an aggregate point of view prevention is far better. Indeed, from a profit-making perspective, it's better to "churn" -- make money off excessive food/behaviors that make you unhealthy, then make more money off treating the resulting diseases.

Maybe all of these work on our tendency (individually and collectively) to be short-sighted, which is now further exacerbated algorithmically through media (social and otherwise), as well as having a lack of imagination as to importance of risks that haven't happened (e.g., 9/11), and in many cases even those that have.

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David Zager's avatar

I’ve lived with the reality of tech debt for a long time. Y2K brought daylight to a lot of it. But when I was a state employee, I learned that much of the state’s critical financial infrastructure ran on Sperry mainframes from the 1960s. IBM mainframe knowledge has waned; Sperry mainframe knowledge, let alone coding abilities, is 100 times worse. As you rightly point out, cost is a critical factor, along with “if it ain’t broke, don’t fix it.”

With the rise of Ethernet and TCP/IP, problems really took off. Where mainframe networking protocols like VTAM were very much based on identity and authentication, the new protocols were inherently anonymous. The issue became how to bolt an identity management system to an anonymous protocol. If your web page retrieves data from a database, whose identity does it use? Yours, as the requestor or the web page’s?

Bitcoin (and blockchain protocol in general) capitalize on that anonymity, and try to compensate for it with encryption puzzles. Little wonder that IBM’s investment in blockchain has reintroduced identity at the core, making it more secure, less openly available, but contrary to the initial designs.

I think you’re pointing out rightly that regulation can go only so far. When national entities and individuals from anyplace in the world can hack for profit, regulation becomes increasingly diaphanous. I don’t yet see a clear way forward out of the mess.

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