Page 14 - Himalaya Labs White Paper 3 June
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Concentrated Power

            Evidence is mounting against professional gate keepers of capital and resources, such as
            banks,  VCs,  asset  managers,  and  even  rulers  of  democracies,  who  are  known  to
            mismanage  and  to  put  societal  progress  in  backward  motion  time  and  again.
            Concentrated  power  is  a  peril  to  society,  and  so  are  centralised  institutions.  Such
            institutions do serve a purpose in times when majority of the population is ignorant of
            what is in their best interests, and the decision maker is a privileged genius who can
            make better decisions for them. But, current reality is quite the opposite.

            Closed Systems

            Today, the risk models of the society are skewed in favour of the morally abhorrent and
            obnoxious. Stories abound of many millionaires who were on the brink of bankruptcy,
            and needed a bail out of hundreds of millions of dollars so that they could revive the
            business  fortunes,  and  banks  readily  lapped  up  this  logic  and  obliged.  If  banks  have
            already lent say $100 million to a business which is now on the brink of collapse, they
            would  gladly  lend  another  $100  million  to  resuscitate  it  from  bankruptcy  rather  than
            write  it  off.  However,  suppose  if  a  destitute  man  went  and  stood  at  the  doorstep  of
            banks  and  asked  for  a  micro  loan  to  survive,  he  would  have  very  little  chances  of
            success.  Faced  with  losses,  human  nature  has  been  proven  to  be  more  risk  loving
            (Tversky  &  Kahneman,  1974).  Sunk  cost  fallacy  and  other  well-researched  decision
            making myopia are well heeded by owners of capital, rather than managers of capital.
            Conflicts of interest, corruption, inability to assess risks properly, and systemic business
            and market risk all contribute to failures of the capital markets.

            This paper is not about altruism. However, we have systematically allowed an inordinate
            degree of morally reprehensible intellectual sloth to set in, in the way our economies
            operate. So much so that despite the majority of the world being characterised by large
            democracies, we as citizens are helpless to effect change even when such change seems
            mandatory. In effect, our institutions are failing, and we are unable to even notice, let
            alone  effect  any  changes,  because  we  have  begun to  operate  in  a  highly  conditioned
            world with numbed thought and learned helplessness.

            Centralised Decision Making

            The  global  credit  crisis  of  2008  set  in  motion  a  cascading  global  depression  which
            resulted in unemployment of millions, all to save and bail out a few mismanaged banks
            from the follies of their greedy mis-incentived decision makers, with tax payer money.
            The  recent  $2  billion  banking  scam  that  came  to  light  in  India  (Roy  &  Das,  2018)
            juxtaposes in stark contrast the miseries of farmers and students unable to get a loan to
            survive,  often  killing  themselves  due  to  shame  of  non-payment,  compounded  by  the
            harassment of credit collectors, while the scammers including some glorified bank CEOs
            have no qualms about absconding with tax payers money, which the banks failed in safe-
            guarding with all their well-buttressed risk management systems and robust regulatory
            oversight. We have ample evidence to conclude that we fail not because of ineffective
            risk  management  systems,  but  because  of  excessive  concentration  of  decision  making
            power within one or a few individuals. The modern civilisation is replete with chronicles

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