Thought provoking post by Adam Richardson at Harvard Business Review on the levels of abstraction implicit in the financial system and the trust that is required from all participants for it to continue to operate.
Crisis of Faith in the Financial System
From Bernie Madoff to derivatives to the housing bubble to dubious AAA credit ratings, we continue to find new ways to encourage people to make financial leaps of faith. Have we reached a breaking point where the abstraction has gone too far, and is too complicated for 99% of people to understand what they’re signing up for, that we must backtrack to more conventional methods? And has the level of trust in private and state financial institutions sunk so low that most people now feel there is no accountability or responsibility for the promises made, or that sound decisions will be made to guarantee “circulation forever”? (Via HBR.org)