Nerds on Wall Street: Math, Machines, and Wired Markets

Chapter 13. Structural Ideas for the Economic Rescue

Fractional Homes and New Banks

Mom used to say, "If you don't have something nice to say, don't say anything at all." I clearly ignored that advice in the previous chapter, with the "mad as hell" opening and analogies to an exploding meth lab run by the neighbors. This chapter is more polite and more positive. It is about two ideas that can help us out of the mess we are in. Both have a systems analysis flavor, and both are from MIT graduates, who have the predilection and training to think this way.

The two ideas discussed here, fractional home ownership and a new American bank initiative, each have a great systems analysis soul—removing unnecessary complexity and negative feedback loops and creating positive feedback via incentive structures to make them work. One of the best examples of a structural approach to societal problems occurred in Germany in the 1970s. Some German rivers had become so polluted with factory waste that they would catch fire. Some were paved over and declared industrial sewers. Plants were simply required to take in their water just downstream from where they pumped out their waste. The garbage became their problem instead of everyone else's. River fires became a thing of the past, and the concrete covers were removed.