Saturday 4 July, 2020

Quote of the Day

Rich, fabulous people are the ideal billboards for luxury brands. Our nation’s best universities have adopted the same strategy. Universities are no longer nonprofits, but the highest-gross-margin luxury brands in the world. Another trait of a luxury brand is the illusion of scarcity. Over the last 30 years, the number of applicants to Stanford has tripled, while the size of the freshman class has remained static. Harvard and Stanford have become finishing school for the global wealthy.

  • Scott Galloway

Carl Reiner RIP

A giant of American comedy has died at the age of 98. He was still writing up to the day he passed away.

He was a great writer for TV — creator of the Dick Van Dyke Show which ran from 1961 to 1966 and earned him six Emmy awards. As a comedian, he was the consummate straight man. For a snatch of it, hear him with his pal Mel Brooks in a routine they developed which became The 2000 year old man.

Link

And if you have time, this is a wonderful TV interview they did in 2000:

Link


“Ghislaine, Is That You?”: Inside Ghislaine Maxwell’s Life on the Lam

This Vanity Fair report by Mark Seal on the hunt for Geoffrey Epstein’s (and Prince Andrew’s) friend — and alleged procurer — is a terrific long read.

Sample:

After Epstein’s death, Maxwell disappeared from view entirely, leaving the courts, the media, his victims, and a transfixed and horrified public focused on a single question: Where in the world was Ghislaine Maxwell? Everyone, it seemed, had a theory, each wilder than the last. She was said to be hiding deep beneath the sea in a submarine, which she was licensed to pilot. Or she was lying low in Israel, under the protection of the Mossad, the powerful intelligence agency with whom her late father supposedly tangled. Or she was in the FBI witness protection program, or ensconced in luxury in a villa in the South of France, or sunning herself naked on the coast of Spain, or holed up in a high-security doomsday bunker belonging to rich and powerful friends whose lives might implode should Maxwell ever reveal what she knows—all the dirty secrets of the dirty world that she and Epstein shared.

I expect Prince Andrew is not enjoying it, though — any more than he enjoyed Marina Hyde’s latest piece in the Guardian.


Lockdown and summer reading – 2

From Martin’s Wolf’s list

Martin Wolf is one of my favourite commentators. He’s very serious, knowledgeable and, in a word, wise. Several times a year he produces a long list of books he’s read and finds worth recommending. This is my distillation of his Summer Books list.

  • Deaths of Despair and the Future of Capitalism by Anne Case and Angus Deaton, Princeton University Press. This is about why mortality rates of middle-aged White Americans stopped falling in the 21st century and — have been rising for non-college-educated men. Wolf calls this a “seminal” book, and he’s right. I’ve been reading it. The German magazine Der Spiegel did a long interview with the authors recently which is worth reading. Here’s a slightly critical review, and a more appreciative NYT review.

  • Radical Uncertainty: Decision-Making Beyond the Numbers by John Kay and Mervyn King. The future isn’t calculable, so why do we believe that it is (or might be)? The right approach, Kay and King argue, is to accept that we don’t live in a world of calculable risk, but of radical uncertainty. Brief NYT review here.

  • Capital and Ideology by Thomas Piketty, Belknap Press. This is other big book of the year, in both senses. It’s huge — over 1000 pages; and it has an amazing historical sweep. It is, says Wolf, “an immense work of scholarship on the history of inequality”. The Boston Review published a terrific, far-ranging review. I read Piketty’s previous best-seller and am contemplating embarking on this. But on the other hand there are only 24 hours in the day, even under lockdown.

  • Uncharted: How to Map the Future Together by Margaret Heffernan, Simon & Schuster. Argues that we should wean ourselves off attempting precise ‘prediction’ and focus instead on preparedness, adaptability and robustness. This is the book that Dominic Cummings, with his delusions about ‘superforecasting’ ought to read. But I doubt that he will.


Monty’s message

My wife’s late father was in the Normandy Landings in June 1944 and she’s been going through his archive where she came on this rousing exhortation from Field-Marshal Montgomery, who — as you can see from the general tone — was clearly one of Boris Johnson’s spiritual forebears.

Monty was also (like Johnson) a prime pain in the ass, and one of the most astute decisions the Allies made in planning Operation Overlord was to make Eisenhower Supreme Commander rather than him.


This blog is also available as a daily email. If you think this might suit you better, why not subscribe? One email a day, delivered to your inbox at 7am UK time. It’s free, and there’s a one-click unsubscribe if you decide that your inbox is full enough already!


Tuesday 16 June, 2020 – Bloomsday

Happy Bloomsday!

June 16, 1904 is the day in which all the action in Joyce’s great modernist novel, Ulysses, takes place. Since the 1950s the day has been celebrated by Joyce enthusiasts all over the world, usually by meetings, readings, lunches, talks, performances — all events that involve people meeting in groups, and therefore difficult or impossible in many locations today.

Hopefully, next year will be different. And 2022 will mark the centenary of the publication of the novel, so that should be fun.

But that doesn’t mean one can’t read from it today. There’s a good annotated version of the text on Wikisource if you don’t possess a copy or if the novel is new to you.


Permanent secretaries ‘not aware of any economic planning for a pandemic’

From today’s Guardian:

Two of the government’s most powerful civil servants have said they were not aware of any attempt to make economic preparations for a possible global pandemic in the years leading up to the coronavirus outbreak.

Sir Tom Scholar and Alex Chisholm, the permanent secretaries in the Treasury and the Cabinet Office respectively, confirmed that although the government simulated an international flu outbreak in 2016, Whitehall did not devise a plan for dealing with the consequences for the economy.

Instead, Scholar told MPs, civil servants devised schemes to help businesses “as they went along”. The disclosure, made before the public accounts committee, prompted its chair, Labour’s Meg Hillier, to say she was “dumbstruck”.

Scholar and Chisholm appeared before the committee on Monday to answer questions about the government’s response to the Covid-19 outbreak. The Conservative MP James Wild asked them whether they were aware of an economic plan equivalent to Exercise Cygnus, the 2016 simulation that involved 950 emergency planning officials.

Scholar, who joined the Treasury in 1992, replied: “We developed our economic response in the weeks leading up to the budget. I don’t know to what extent the Treasury was involved in that exercise.”

Referring to the schemes devised to help businesses during the pandemic, Scholar added: “We didn’t have these schemes ready and designed and ready to go. We have been designing them as we have gone along.”

Why are we not surprised? In one way, the whole Coronavirus shambles is a story of the loss of state capacity.


America’s democratic unravelling

From an essay by Daron Acemomoglu of MIT in Foreign Affairs:

Institutional collapse often resembles bankruptcy, at least the way Mike Campbell experienced it in Ernest Hemingway’s The Sun Also Rises: “gradually and then suddenly.” As James Robinson and I argue in our recent book, The Narrow Corridor, democratic institutions restrain elected leaders by enabling a delicate balance of oversight by different branches of government (legislature and the judiciary) and political action by regular people, whether in the form of voting in elections or exerting pressure via protest. But democratic institutions rest on norms—compromise, cooperation, respect for the truth—and are bolstered by an active, self-confident citizenry and a free press. When democratic values come under attack and the press and civil society are neutralized, the institutional safeguards lose their power. Under such conditions, the transgressions of those in power go unpunished or become normalized. The gradual erosion of checks and balances thus gives way to sudden institutional collapse.

By refusing to disclose his tax returns, openly pursuing policies that serve his family’s financial interests, vilifying Hispanic and Muslim Americans, propagating conspiracy theories, and relentlessly lying to the press, the president has left practically no norm of democratic governance unviolated.

The United States is currently working through the later chapters of this same authoritarian playbook, which Trump adopted early in his presidency. By dismissing concerns about Russian interference in the U.S. election, refusing to disclose his tax returns, openly pursuing policies that serve his family’s financial interests, vilifying Hispanic and Muslim Americans, propagating conspiracy theories, and relentlessly lying to the press, the president has left practically no norm of democratic governance unviolated. These actions not only weakened the institutions that are supposed to restrain the president but also further polarized the U.S. electorate, creating a constituency that unconditionally supports Trump out of fear that the Democrats will take power. Having destroyed many Americans’ trust in their country’s democratic institutions, Trump has set about destroying the institutions themselves, one oversight mechanism at a time.

That’s why the November election is so important. If Trump is defeated, then there’s a chance that American institutions will recover. If he wins then I think the game’s over.


Quarantine diary — Day 87

Link


This blog is also available as a daily email. If you think this might suit you better, why not subscribe? One email a day, delivered to your inbox at 7am UK time. It’s free, and there’s a one-click unsubscribe if your decide that your inbox is full enough already!


Friday 10 April, 2020

It might come to that yet. Some of the largest producers of wheat and rice, namely Kazakhstan and Vietnam, have suspended exports. This suggests that they may be anticipating severe disruption to their domestic supplies. The UK imports 50% of some of the foodstuffs we consume.


Sure, the lockdown saves lives that might otherwise be lost to Covid-19. But what about the avoidable deaths it might also be causing?

Fraser Nelson, the Editor of The Spectator has a startling article in today’s Daily Telegraph about the other side of social distancing and self-isolation. Here’s the core bit that struck me:

Matt Hancock, the Health Secretary, had been working with the Prime Minister on the next step: how to stop the end of lockdown being seen as a question of “lives vs money”. As a former economic adviser, Hancock is certainly mindful of the money: a £200 billion deficit could mean another decade of austerity. But other figures – infections, mortality rates and deaths – are rightly holding the national attention. Phasing out the lockdown needs to be spoken about in terms of lives vs lives. Or, crudely, whether lockdown might end up costing more lives than the virus.

Chris Whitty, the chief medical officer, has worried about this from the offset. In meetings he often stresses that a pandemic kills people directly, and indirectly. A smaller economy means a poorer society and less money for the NHS – eventually. But right now, he says, there will be parents avoiding the NHS, not vaccinating their children – so old diseases return. People who feel a lump now may not get it checked out. Cancer treatment is curtailed. Therapy is abandoned.

Work is being done to add it all up and produce a figure for “avoidable deaths” that could, in the long-term, be caused by lockdown. I’m told the early attempts have produced a figure of 150,000, far greater than those expected to die of Covid.

Nelson is pretty well-connected, so there might be something in this. And, as he points out, all of these numbers come from modelling studies, so should be treated cautiously. But, he says, estimates of lockdown victims are being shared among those in government who worry about the social damage now underway: the domestic violence, the depression, even suicides accompanying the mass bankruptcies. But since these are deaths that may, or may not, show up in national figures in a year’s time, it’s hard to weigh them up against a virus whose victims are being counted every day.

What all of this says to me is that the only reasonable way forward is gradual easing accompanied by dramatic increases in the production of N95 masks.


“War” is the wrong framing for this crisis

I’m as remiss as everyone else in thinking about the current crisis as a ‘war’ against the virus. So one resolution I’ve made today is to avoid using the metaphor in future.

Of course some of the measures now in force in the UK and elsewhere are reminiscent of ‘real’ wartime (e.g. 1939-1946). The burgeoning political talk about an “exit strategy” is likewise misleading, because it implies that, one day, victory over the virus will be achieved. In that sense it’s a bit like the so-called ‘war on terror’, which is really a war on an idea — and therefore never-ending.

There is no end to this, because the virus is a product of nature, and nature will be around long after humans have disappeared from the earth.

Besides, if the virus is an adversary, then it seems to hold most of the cards. It has reduced us to huddling in our caves, for example, while it does its own thing regardless. The human delusion of ‘taming’ nature was always hubris. Now we’re coming to terms with the inevitable nemesis.

And of course this is a tea-party compared to climate change.


Quarantine reading: Emily Wilson

The TLS has a nice compendium of what its various writers and reviewers are reading under lockdown. I was struck by this passage from Emily Wilson’s notes:

In my minimal work time, I am engaged in my translation of the Iliad. I’m now in the throes of Book 5, in which Diomedes confronts the gods on the battlefield. The idea of theomachy – in which a mortal human being grapples with immortal, unkillable, superhuman forces – takes on a new resonance now that far-shooting Apollo, god of plague, has afflicted our world with Covid-19. I began working on this translation at a time when the theme of sudden premature violent death, afflicting vast numbers of the population and bringing down prosperous cities and cultures, seemed relatively distant from my lived reality. Now, I feel haunted in new ways by the poem’s awareness that people can die far from home, far from their loved ones; that wealthy, beautiful, successful cities can be totally destroyed; that the squabbles of a privileged few can cost numberless people their lives, as well as their culture’s prosperity. It isn’t escapism, but there is a kind of comfort in the sense of being in an imaginary poetic landscape that feels so heartbreaking, so human and so truthful.

ps: Her translation of the Odyssey is terrific.


Why learning from other people’s mistakes is a useful skill

Lovely post by Alex Tabarrok.

People get good at something when they have repeated attempts and rapid feedback. People can get pretty good at putting a basketball through a hoop. But for other decisions we only get one shot. One reason South Korea, Hong Kong and Taiwan have been much better at handling coronavirus is that within recent memory they had the SARS and H1N1 flu pandemics to build experience. The US and Europe were less hit by these earlier pandemics and responded less well. We don’t get many attempts to respond to once-in-a-lifetime events.

Even as coronavirus swept through China and Italy, many people dismissed the threat by thinking that we were somehow different. We weren’t. Even within the United States some people think that New York is different. It’s not. Most people learn, if they learn at all, from their own experiences, not from the experiences of others–even others like them. Learning from your own mistakes and experiences is a good skill. Many people make the same mistakes over and over again. But learning from other people’s mistakes or experiences is a great skill of immense power. It’s rare. Cultivate it.


The Zoombot arrives

It’s possible to have too much of a good thing. Already people working from home have discovered that they have too many Zoom meetings. The bad habits of organizations — especially their addiction to meetings — is being replicated online. I know people who have been online all week and have decided to have nothing to do with screens over this holiday weekend.

But help is at hand. Popular Mechanics reports that Matt Reed, a technologist at redpepper, a marketing design firm in Nashville, has created an AI-powered “Zoombot” that can sit in on video calls for you.

It all began when he noticed someone on Twitter (jokingly) complaining they don’t have time to go outside anymore because they’re always on Zoom calls.

“I was thinking, ‘How can I get someone out of this? What if you need to take a bathroom break, or you want to take a walk during a one-hour conference call? I wanted to find a funny take. We try not to take ourselves too seriously [at redpepper] but we still like to show what’s possible.”

For now, the project is tongue-in-cheek; Reed’s doppelgänger is a little slow to respond, doesn’t really blink, and uses a robotic voice similar to voice assistants like Siri or Alexa. But the code’s up on Github, so it’ll get smarter quickly. Stay tuned.

It’s the kind of thing that restores one’s faith in humanity.


Quarantine diary — Day 20

Link


Monday 16 March, 2020

Quarantine reading

If (as seems possible) some of us are going to be confined to barracks for a substantial period, it would make sense to lay in a stock of useful reading material. There’s always the final volume of Hillary Mantel’s Cromwell trilogy, of course. But for non-fiction addicts here’s a list of some books that, in one way or another, shed light on our current crisis. It’s worth remembering that (a) we’ve been here before, and (b) that pandemics hold up a mirror to human nature — and to society.

Albert Camus, The Plague
Published in 1947, this modern classic tells the story of a plague sweeping the French Algerian city of Oran. It asks a number of questions relating to the nature of destiny and the human condition. The characters in the book, ranging from doctors to holidaymakers to fugitives, all show the effects the plague has on a populace. Though set in the 1940s, the book is believed to be based on the cholera epidemic that killed a large percentage of Oran’s population in 1849 following French colonisation.

I was struck by a Guardian essay about the book by my Observer colleague, Ed Vulliamy, in 2015 during the Ebola epidemic in West Africa. “Most of us read The Plague as teenagers”, he wrote,

and we should all read it again. And again: for not only are all humankind’s responses to death represented in it, but now – with the advent of Ebola – the book works on the literal as well as metaphorical level.

Camus’s story is that of a group of men, defined by their gathering around and against the plague. In it we encounter the courage, fear and calculation that we read or hear in every story about West Africa’s efforts to curtail and confront Ebola; through its narrator, Dr Rieux, we can identify with the hundreds of Cuban doctors who went immediately to the plague’s Ground Zero, and those such as the Scottish nurse currently fighting for her life at the Royal Free Hospital in London.

Adam Kucharski, The Rules of Contagion: Why Things Spread and Why They Stop. Published earlier this year. The author is a mathematician who works at the London School of Hygiene and Tropical Medicine where he works on the mathematical analysis of infectious disease outbreaks. The book uncovers the underlying principles that drive contagion, from infectious diseases and online misinformation to gun violence and financial crises. It explains what makes things spread, why outbreaks look like they do, and how we can change what happens in future. It’s beautifully — and clearly — written (I’m reading it at the moment and can testify to that.) Funnily enough, I ordered it before COVID-19 hit the news, because I’m interested in the way that memes and conspiracy theories spread virally online. Serendipity rules OK.

Frank Snowden: Epidemics and Society: from the Black Death to the present, Yale, 2016. A real big-picture, long-view work of historical scholarship. examines the ways in which disease outbreaks have altered the societies through which they have spread — shaping politics, crushing revolutions, and entrenching racial and economic discrimination, affecting personal relationships, the work of artists and intellectuals, and the man-made and natural environments. Gigantic in scope, stretching across centuries and continents, Snowden’s account also seeks to explain the ways in which social structures have allowed diseases to flourish. “Epidemic diseases are not random events that afflict societies capriciously and without warning,” he writes. “On the contrary, every society produces its own specific vulnerabilities”. The New Yorker recently published an interview with Snowden which explores these questions. One passage in the conversation particularly stood out for me:

Epidemics are a category of disease that seem to hold up the mirror to human beings as to who we really are. That is to say, they obviously have everything to do with our relationship to our mortality, to death, to our lives. They also reflect our relationships with the environment—the built environment that we create and the natural environment that responds. They show the moral relationships that we have toward each other as people, and we’re seeing that today.

If you’re settling down for a long quarantine, this book will keep you absorbed for quite a while.

Randy Shilts, And the Band Played On: Politics, People and the AIDS Epidemic, Souvenir Press, 2011. A masterpiece of investigative reporting. Shilts covered the AIDS epidemic from 1982 for The San Francisco Chronicle, the only US newspaper willing to give its full attention to the epidemic. He traced the roots of AIDS beginning in 1976 to two events and focussing on the mysterious illness of a Danish physician working in Africa. Before the virus even had a name, it had leapt across continents and destroyed communities, while the world stood idly by. It was, after all, a disease that affected ‘only’ gay men. There are lots of echoes of the Trump Administration in Stilts’s account. Like the present President, Ronald Reagan’s budget cuts affected the programs that needed funding for the necessary research. His Administration also dismissed scientists, thereby delaying the discovery of pharmacological defences. Remind you of anyone? Other culprits include: the businesses whose decisions to keep blood banks unaccountable and bathhouses liberated helped to spread the disease; mainstream media, for its reluctance to report AIDS; and the blasé attitudes of political officials, public health authorities, and community leaders. There are heroes in this story too, of course. But somehow it’s the villains we remember. Will it be any different this time?

Daniel Defoe, A Journal of the Plague Year. Although a novel published in 1722, it’s really an early example of imaginative journalistic reportage. It’s an account of one man’s experiences of the year 1665, in which the bubonic plague struck the city of London. It’s presented as an eyewitness account of the events at the time, but Defoe was only five years old in 1665, and the book itself was published under the initials H. F. and is probably based on the journals of Defoe’s uncle, Henry Foe, who lived in London and survived the plague. It’s still a vivid read.

Dorothy Crawford, The Invisible Enemy: A Natural History of Viruses Published in 2000, this is an overview of the viruses that have wreaked havoc in the past. She looks at the havoc viruses have caused in the past, where they have come from, and the detective work involved in uncovering them. Finally, she considers whether a new virus could potentially wipe out the human race. It’s informative and readable. James Meek wrote an informative review of it for the London Review of Books in 2001.

Richard J. Evans, Death in Hamburg – Society and Politics in the Cholera Years 1830-1910 A terrific study by a formidable historian of the way Hamburg reacted when it was hit in 1892 by cholera.

Allan M. Brandt, No Magic Bullet – a social history of venereal disease in the United States since 1880 In a way, this book has echoes of the story told in Randy Shilts’s book on AIDS. Brandt demonstrates that Americans’ concerns about venereal disease have centered around a set of social and cultural values related to sexuality, gender, ethnicity, and class. At the heart of our efforts to combat these infections, he argues, has been the tendency to view venereal disease as both a punishment for sexual misconduct and an index of social decay. This tension between medical and moral approaches has significantly impeded efforts to develop “magic bullets”–drugs that would rid us of the disease–as well as effective policies for controlling the infections’ spread.

_____________________ 

Loserthink

Scott Adams has a new book out. Note the subtitle. Blurb reads:

Even the smartest and most educated among us can slip into ‘loserthink,’ since we haven’t been exposed to the best thinking practices in every discipline. Psychologists, engineers, scientists, entrepreneurs, historians, and artists, for example, all see the world through different filters. If we don’t understand the basics of those filters, we’re likely to fall into loserthink. Some signs you’ve succumbed to loserthink include: inability to get your ego out of your decisions, thinking with words instead of reasons, failing to imagine alternative explanations, trusting your preferred news sources, and making too much of coincidences. And with the never-ending stream of urgent notifications on your phone and anger on your social media feeds, it’s easy to feel miserable, defensive, anxious, poor, and sick. But Adams offers a cure for loserthink by teaching you the most productive thinking practices from a variety of disciplines. In this book, you will learn how to… Recognise the walls of your own mental prison and break out. Understand the world in a way you have never seen it before. Be among the most perceptive and respected thinkers in every conversation. Your bubble of reality doesn’t have to be a prison. This book will show you how to break free.

Autumn books

In one of my periodic attempts to impose order on my study I rounded up all the books I have been

  • reading
  • reviewing
  • need to read for work
  • want to read for pleasure

And, having done so, wondered about my sanity.

From the top down…

How to summarise

Janet Malcolm has written a masterful review of Benjamin Moser’s authorised biography of Susan Sontag. Here’s a representative sample:

Moser’s biography, for all its pity and antipathy, conveys the extra-largeness of Sontag’s life. She knew more people, did more things, read more, went to more places (all this apart from the enormous amount of writing she produced) than most of the rest of us do. Moser’s anecdotes of the unpleasantness that she allowed herself as she grew older ring true, but recede in significance when viewed against the vast canvas of her lived experience. They are specks on it. The erudition for which she is known was part of a passion for culture that emerged, like a seedling in a crevice in a rock, during her emotionally and intellectually deprived childhood. How the seedling became the majestic flowering plant of Sontag’s maturity is an inspiring story—though perhaps also a chastening one. How many of us, who did not start out with Sontag’s disadvantages, have taken the opportunity that she pounced on to engage with the world’s best art and thought? While we watch reruns of “Law & Order,” Sontag seemingly read every great book ever written. She seemed to know that the opportunity comes only once. She had preternatural energy (sometimes enhanced by speed). She didn’t like to sleep.

Do read the whole thing. It’s worth it.

Bloomsday

Igoe_book

Today is Bloomsday — the day when Joyce enthusiasts all over the world celebrate Ulysses. In my case, I always host a Bloomsday lunch in which guests drink red Burgundy and eat Gorgonzola sandwiches. Why? Because that’s what Leopold Bloom had when he lunched in Davy Byrne’s pub, taking a break from his perambulations around Dublin.

This year’s lunch was special because one of the guests was an old friend, Dr Vivien Igoe, who is one of the foremost experts on Joyce’s connections with his native city. Her new book, The Real People of Joyce’s Ulysses came out last week, and throws a fascinating light on Joyce’s powers of observation and imagination.

We’ve always known that most of the hundreds of characters in Ulysses were drawn from real people, and many of them appear under their own names in the pages of the novel. But who were they, really? Now we know, thanks to an extraordinary piece of scholarship.

Michael Lewis on Lightspeed

Michael Lewis is, IMHO, one of the best long-form journalists around and his new book is well up to his usual standard. In many ways, it adheres to the classic Lewis formula: find a scandalous set-up of which most people are blissfully unaware; locate some smart guys who have detected the systemic scam and figured out a way to profit from their ingenuity; and then tell their story.

In this case, the story is basically about the speed of light – or, to be more precise, about how the time-difference (in millionths of a second) that it takes an electronic share transaction to traverse one fibre-optic connection rather than another can provide an exceedingly lucrative trading advantage to those who have the kit and the know-how to exploit it.

In the video clip he explains the nub of the idea but, as always, it’s not so much the story as the way Lewis tells it — which is why his book is a must-read for anyone who cares about this stuff.

Writing about it in Quartz, Matt Phillips quotes from another part of the TV interview

“If it wasn’t complicated, it wouldn’t be allowed to happen,” he says. ”The complexity disguises what is happening. If it’s so complicated you can’t understand it, then you can’t question it.”

“This problem”, Phillips says, “goes beyond stock markets: The US financial system is awash in unnecessary complexity. And the reasons are simple: Complexity is profitable and it keeps regulators at bay. ”The jargon of bankers and banking experts is deliberately impenetrable,” wrote economists Anat Admati and Martin Hellwig in their indispensible The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It. “This impenetrability helps them confuse policy makers and the public.”

There are some echoes of the sub-prime/CDO scandal in Lewis’s new book, in that the people who are supposed to understand how the system worked had little or no idea what was going on under their corporate noses. He recounts how the ‘good’ guys in his tale discovered this when they sought to enlighten leading figures in the financial world about flash trading:

The most sophisticated investors didn’t know what was going on in their own market. Not the big mutual funds, Fidelity and Vanguard. Not the big money-management firms like T. Rowe Price and Capital Group. Not even the most sophisticated hedge funds. The legendary investor David Einhorn, for instance, was shocked; so was Dan Loeb, another prominent hedge-fund manager.

This is an indicator of a really serious underlying problem in our networked world — the stupendous power that superior knowledge, IQ and technical understanding confers on some people. We are completely dependent on systems that are so complex that virtually nobody understands how they work — and how they can be manipulated and gamed by those who do understand them. The obvious rejoinder is “twas ever thus”, but I think that’s too complacent. What’s different now is that the level of technical expertise needed is beyond the reach or capacity of almost everyone. Which means that the elites who do ‘get’ it — and those who employ them — have colossal advantages.

LATER The book has made a BIG impact, to judge from the media coverage, and mostly the reactions have been complimentary. But there were a few contrary opinions. And Andrew Ross Sorkin, writing in the New York Times made some good points.

There is only one problem with Mr. Lewis’s tale: He reserves blame for the wrong villains. He points mostly to the hedge funds and investment banks engaged in high-frequency trading.

But Mr. Lewis seemingly glosses over the real black hats: the big stock exchanges, which are enabling — and profiting handsomely — from the extra-fast access they are providing to certain investors.

While the big Wall Street banks may have invented high-speed trading, it has gained widespread use because it has been encouraged by stock markets like the New York Stock Exchange, Nasdaq and Bats, an electronic exchange that was a pioneer in this area. These exchanges don’t just passively allow certain investors to connect to their systems. They have created systems and pricing tiers specifically for high-speed trading. They are charging higher rates for faster speeds and more data for select clients. The more you pay, the faster you trade.

That is the real problem: The exchanges have a financial incentive to create an uneven playing field.

Footnote: Readers on IoS devices may not be able to see the video clip, for reasons best known to the late Steve Jobs.