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Fernando NikolicWork with me
Ideas

Glass Towers

Institutions became transparent and fragile at the same time.

Institutions used to be impressive partly because you couldn’t see inside them. A central bank, a newspaper, a record label, a ministry. You saw the building and the logo and the person on TV, and you assumed somebody in there knew what they were doing.

The internet put glass walls on all of them. Now you can read the minutes, watch the press conference live while thousands of people pick it apart, find the journalist’s old posts and read the email that leaked. A lot of what you see is ordinary human mess, people guessing and covering for each other, and that turns out to be enough. Their authority depended on distance, and the distance is gone.

So the towers are transparent and fragile at the same time, and the two feed each other. Every mistake is visible, every visible mistake costs trust, and with less trust the next mistake hits harder. I watch it happen in Bitcoin coverage all the time. When a big outlet gets a story wrong, people take it apart within hours. It’s part of why I wrote about the FT’s Bitcoin coverage.

Money is the clearest case. When everyone can see the balance sheet, the inflation target and the bailout, it gets harder to ask people to trust a currency on faith. Bitcoin works the other way round. Everything is visible, and that’s exactly why people trust it.

If you run an institution, or a company that wants to become one, I think hiding stopped working. The position that holds up behind glass is being consistent enough that people can watch you all day and still trust you.

From the library

  • Whenever technological change has divorced the old forms from the new moving forces of the economy, moral standards shift, and people begin to treat those in command of the old institutions with growing disdain. This widespread revulsion often comes into evidence well

    The Sovereign Individual: Mastering the Transition to the Information Age, James Dale Davidson

  • the collapse of morality and growing corruption among leaders of Western governments are not random developments. They are evidence that the potential of the nation-state is exhausted. Even many of its leaders no longer believe the platitudes they mouth. Nor are they believed by others.

    The Sovereign Individual: Mastering the Transition to the Information Age, James Dale Davidson

  • Isn’t currency founded on trust in the value of that currency? And doesn’t that mean that by setting inflation target rates, governments have a stated goal of eroding that trust?

    The Price of Tomorrow, Jeff Booth

Where I’ve talked about it