Elite disfunction defines our age.

Whether you call it "Brokenism," "late Soviet America," or something milder, the underlying scandal is the same.

While better minds than mine debate the best frame, I'll explore how *decentralized expertise* can help us out of our crisis.🧵

The best diagnosis I've seen for our condition is Martin Gurri's The Revolt of the Public.

I'll do my best to recap (too quickly) his must read: when institutions at the commanding heights lost their “monopoly on information” (when we got alternatives), public trust went w/ it. 2/

Fintech & autonomous finance (crypto, DeFi, & AI) policy
https://linktr.ee/jwsolowey

As Bari Weiss recently wrote, though, the trust crisis is really a "trustworthiness" crisis.

And Gurri had traced it to 9/15/08, when Lehman Brothers filed for bankruptcy. The Global Financial Crisis & slow recovery were a double disillusionment w/ experts. 3/

As Bari Weiss recently wrote, though, the trust crisis is really a "trustworthiness" crisis.

And Gurri had traced it to 9/15/08, when Lehman Brothers filed for bankruptcy. The Global Financial Crisis & slow recovery were a double disillusionment w/ experts. 3/
https://x.com/mgurri/status/1815535824307658887

Disillusionment w/ centralized authorities defines two bottom-up fintech phenomena that emerged after the Global Financial Crisis: cryptocurrency and retail investor empowerment (think GameStop).

They each have decentralization—of governance and knowledge—at their core. 4/

Crypto and "Meme Stocks" provoked in financial regulators what Gurri would call a "counter-revolution."

Crypto's been met w/ de facto bans & lawless crackdowns. Meme stock trading was met w/ paternalistic proposals: make apps less user friendly; restrict social media. 5/

Here, elitism/paternalism does not equal (!=) wisdom. 

Hostility to applied cryptography in an age of cyber threats? Really?

And meme stock trading forums like r/WallStreetBets were found to include informed due diligence, discerning readers, and beneficial recommendations. 6/

Traditional authorities are threatened by new information because of its sources, not its quality.

And they ain't seen nothing yet. Advanced AI in the hands of retail users raises the stakes. 

AI is poised to accelerate the power of distributed financial intelligence. 7/

LLMs giving financial advice present a new regulatory challenge. The classic criterion distinguishing regulated financial advice from mere information is *personalization.*

Advanced LLMs have been shown capable of personalizing advice. Don't bet on SEC shrugging & moving on. 8/

Applying investment adviser rules to distributed (including open-source) LLMs would restrict access to affordable financial expertise.

Instead of futilely fighting to preserve a monopoly on expert gatekeeping, policy should incentivize quality from decentralized sources. 9/

We need a fundamental shift in how authority understands its role. 

Step 1: admit & accept the new reality. 

Step 2: optimize w/in that reality by deploying decentralized responses—such as the common law and private bargaining—to the rise of decentralized expertise. 10/

To do otherwise is to fundamentally misconstrue the responsibility of authority in a democratic republic. 

Standing athwart public enlightenment is no answer. 

Denying the public the tools thereof is no virtue. 11/11

For more:

To do otherwise is to fundamentally misconstrue the responsibility of authority in a democratic republic. 

Standing athwart public enlightenment is no answer. 

Denying the public the tools thereof is no virtue. 11/11

For more:
https://metaverserb.substack.com/p/decentralized-expertise