We’ve got two paradoxical trends happening at the same time. The first is what I call in my book “the cult of the social,” the idea that on the network, everything has to be social and that the more you reveal about yourself the better off you are. So if your friends could know what your musical taste is, where you live, what you’re wearing, what you’re thinking, that’s a good thing, this cult of sharing. So that’s one thing that’s going on. And the other thing is an increasingly radicalized individualism of contemporary, particularly digital, life. And these things seem to sort of coexist, which is paradoxical and it’s something that I try to make sense of in my book.
We know very little about complex financial systems and how systemic risk, as it’s called, is computed and how you would manage policies. And if you look back at the financial crisis, you can either say, as many economists do, “It all had to do with badly‐designed rules,” which may be part of the story; it’s certainly part of the story. Or it may have to do with the interaction of those rules and human nature, like mortgage broker greed, optimism… And you see it not just in individuals who now have houses and foreclosure, but at the highest levels.