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[...] DFW's writing reflects an attitude that is lovely: a touching, and for the most part well-founded, belief that you can explain anything with words if you work hard enough and show your readers sufficient respect. [...]
As an explanation for milder allergic reactions--and, having proselytized DFW's writing to many friends over the years, I've seen a few--some readers posit (often vaguely and fretfully) that there is some archness or smart-assery in DFW's literary style. This, to me anyway, is an unsupportable conclusion, given the obvious love that DFW brings to what he's writing about, and his explicitly stated opposition to irony-as-lifestyle in his essay E Unibus Pluram. Why do people see it when it's not there? It's something to do with the fact that his conspicuous verbal talent and wordplay create a nagging sense among some readers that there's a joke here that they're not getting or that they are somehow being made fools of by an agile knave. Which DFW was not.
[...]
So in reading Everything and More, cleverness or verbal pyrotechnics or archness are not the emotional tone that comes through to me, but a kind of open-soulness and desire to connect that were touching before, and heartbreaking after, David Foster Wallace succumbed, at the age of 46 to a cruel and incurable disease. Because of this we will not have the opportunity to enjoy and profit from many other explanations that it was in his power to supply on diverse topics, lofty and mundane, and so we must content ourselves with what he did leave behind--an impossibility given the pleasure and the insight he gave us in Everything and More, and his obvious ability to have provided much more, had fortune treated him with as much consideration as he did his readers.
something that i'd like to capture in my from-first-principles posts!
also, the "in his power" could be a sly reference to his undergraduate thesis in philosophy :D
The blunt truth, however, is that the implicit intergenerational cooperation that represents the best outcome is supported by trust, not money. If the younger generation decides not to support the elder, the existence of tokens will make no difference. And if the older generation has invested in, say, housing, they too could renege on the implicit intergenerational transfer by 'consuming' the value of their housing capital by selling it to foreigners or a minority of the wealthy, leaving the young unable to afford to buy the housing stock. [...]
on a thought experiment in which the younger generation saves in the form of "tokens" and uses that in its retirement
[...] Money is not principally a means of buying 'stuff' but a way of coping with an uncertain future. We do not know which new goods and services will exist in the future, nor what their relative prices will be. There is no auction mechanism today that will allow us to discover that. Maintaining a reserve of purcashing power denominated in a monetary unit reduces the risk from placing one's eggs in the basket containing only contracts that can be written today. [...]
Banks, too, faced a prisoner's dilemma. If, before the crisis, they had exited the riskier types of lending, stopped buying complex derivative instruments and reduced their leverage they would, in the short term, have earned lower profits than their competitors. The chief executive would likely have lost his job, and other staff defected to banks willing to take risks and pay higher bonuses, well before the wisdom of the new strategy had become evident. Even understanding the risks, it was safer to follow the crowd. [...]
great example of systemic factors winning out over individual preferences
[...] There was a view that being very clever was a justification for making money out of people who were less clever. This attitude encouraged the arrogance of the traders who rigged and fixed prices in what were thought to be competitive markets. [...]
Financial engineering allows banks and shadow banks to manufacture additional assets almost without limit. This has had two consequences. First, the new instruments created are traded largely among big financial institutions and so the financial system has become enormously more interconnected. [...] Second, although many of these positions even out when the financial system is seen as a whole, gross balance sheets are not restricted by the scale of the real economy [...]
[...] There are three reasons to believe that, before the crisis, the banking sector as a whole became too large. [...] The belief that when in trouble banks will be bailed out by the state because they are too important to fail leads to an implicit subsidy, which means a larger banking system than is justified by the underlying economics.
Second, many of the examples of high personal renumeration, especially in the form of bonuses, in the financial sector reflect not high productivity but what economists call rent-seeking behaviour. In other words, the renumeration is far higher than is necessary to persuade people to work in the industry. [...] Many of the transactions in complex financial instruments are zero-sum--a clever trader makes money out of a less clever one. Such activity diverts talent from professions where the social returns are high, such as teaching, to those, such as finance, where the private return exceeds, often substantially, the social return.
Third, financial capital is attracted into the industry by the appearance that there are high profits to be made. [...] a common way of exploiting normal accounting conventions for derivative and other complex transactions was to report as current income the present value of expected future cash flows, even though they had not yet been received. [...]
What does it mean to be rational in a world of radical uncertainty? Once we are liberated from the view that there is a single optimising solution, rules of thumb--technically known as heuristics--are better seen as rational ways to cope with an unknowable future. A heuristic is a decision rule that deliberately ignores information. It does so not just because humans are not computers, but because it is rational to ignore information when we do not understand how the world works. [...] Heuristics are not deviations from the true optimal solution but essential parts of a toolkit to cope with the unknown.
Everyone on the island felt let down. The cult of finance had led to the contraction of a successful fishing industry. Too many talented people had been sucked into trading which, with the benefit of hindsight, was little more than a zero-sum activity generating little or not output. How could so many people have been taken in by the new world of finance?
a cute little parable about a fishing island in which everyone gets drawn into finance (betting on the fishing industry) and thus no one is left to actually fish
thought: is financialisation inevitable, because of the feedback loop? is it like a recessive gene that offers no fitness advantages and thus will eventually be selected out randomly if you wait long enough?
Eighteenth-century thinkers, such as David Hume and Adam Smith, understood the relationship between the amount of money in circulation and the prices at which goods and services were bought and sold: 'if we consider any kingdom by itself, it is evident, that the greater or less plenty of money is of no consequence, since the prices of commodities are always proportioned to the plenty of money'. In the long run, more money means higher prices. The quantity theory of money, later refined and popularised by the American economists Irving Fisher and Milton Friedman, had been born.
ignoring the trends among individual products + irrational factors but I guess yeah