The fallacy here is assuming that because it does all of those positive things, it must therefore holistically be optimal.
Like a software system, it's extremely naive to think that complexity is a sign that a system is rotten.
Why would such an assumption be naive?
It doesn't seem naive to me at all. I was reading a 1994 paper that I posted recently called "A Uniform Name Service for Spring's UNIX Environment" which made me think how simplified a modern Unix could be if it adopted the name service primacy described therein from its onset.
It is just as naive to assume that all complexity is intrinsic and not incidental or the result of inadequate abstractions.
Yes. For instance, before invention of vector notation, many laws of physics were extremely complex. Before Copernicus system, describing the movements of planets was very complex too.
While not hundred percent sure, it is highly possible that finance complexity will magically disappear once we get a proper model for money transactions. I certainly hope so, because a better model means more means to solve economic issues.
Right now economists are like the physicians in the time of Molière, they understand nothing and have only two cures: bloodletting and lavement (change interest rate and remove taxes)
His system still used circular orbits and epicycles. The only real difference was that he put the sun in the middle instead of the Earth. In fact, it required more epicycles / gave more imprecise results.
The real improvement came when circles were replaced with ellipses by Kepler.
That wasn't entirely accurate, either, but replacing the ideal circles with the law of Gravitation (Newton) fixed that.
Economists have many more than just two cures -- which is why some of them keep harping on regulations and overly protective labour laws in Greece (and the rest of the Mediterranean swamp), their very expensive pension system, and the huge size of their public sector. Krugman doesn't, which is why I have absolutely no respect for him.
Ok, maybe it was Kepler, but the argument still holds: something that we believe is extremely complex could very much become much simpler and obvious in the future. This would require changing the place of the "center". Maybe it mean that money is not what we believe it is, or that banks should not be big companies but some fluid, or that wealth is not really transmitted during a transaction, or whatever. Finance is dangerously complex and may not have to be like that. Every timesomeone explains stock options to me I understand for ten minutes and then forget is definition. This means the model didn't stick, for me at least. (Good mathematical models are very sticky, told once about it one well never forget) So it's a mess and it's worth trying something else.
This is why we should have more software architects and systems engineers working in politics. They know how to deal with problems at multiple levels of abstraction, and they know how to keep complexity down.
Like a software system, it's extremely naive to think that complexity is a sign that a system is rotten.
Why would such an assumption be naive?
It doesn't seem naive to me at all. I was reading a 1994 paper that I posted recently called "A Uniform Name Service for Spring's UNIX Environment" which made me think how simplified a modern Unix could be if it adopted the name service primacy described therein from its onset.
It is just as naive to assume that all complexity is intrinsic and not incidental or the result of inadequate abstractions.