The expert monopoly

The expert monopoly

As the bailout crisis talks continue, and the common people wait to find out what particular flavor of long hard road awaits them, one might wonder if there’s any way that we the people could have foreseen this coming. The answer is yes, and the key incident to remember is: Nicholas Leeson and Barings Bank.

You may remember Mr. Leeson: he was the young trader who undertook risky deals that went bad and the resulting losses destroyed Barings, an investment bank that was over two centuries old. The incident shook the markets, but the focus at the time quickly shifted to controlling individual traders, away from the obvious lesson about the shaky fundamentals of investment banking itself, and the incident seems to have been forgotten entirely when Republicans Phil Gramm and James Leach championed the Gramm-Leach-Bliley Act, which undid the Glass-Steagall Act’s protections that had been in place since the Depression.

Thinking about Leeson reminds me in turn of Frank Corder, the man who stole a light plane on September 11, 1994, and crashed it into the White House. It does not take an expert to extrapolate from this event the events on the same day seven years later. But as we all now know any such lesson was not learned – not by U.S. security experts, anyway.

Once you begin to see the kind of myopia that afflicts experts, you can start to see it in all sorts of places. And it validates two idea behind the World Without Oil game: one, that a common citizen can see some approaching futures more plainly than experts can; and two, that a sufficiently large group of everyday citizens can outperform experts in certain challenges, especially those of imagination. The key is creating a seriously playful motivation to bring the citizens together, and a seriously playful space where they can collaborate. Should some tiny fraction of the money looming to be spent on the credit crisis go toward crowdsourcing views about what the next crisis will be? I think we should get that game started right away. Image by Mike Licht, Notionscapital.com via Flickr.

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