Swimming With the Sharks

In Swimming With the Sharks, Joris Lewindijk provides a stellar inside look at the "City", London's financial industry. His work is remarkable in that he manages to tease out the differences between matters on a human scale and what happens to the system as a whole. He focuses on "perverse incentives", a key mechanism of "assimilation" whereby ordinary people surrender their humanity to the impersonal machinery of the investment banks.

The book should be read with "The Real World of Technology", which describes the phenomenon of assimilation in an industrial society in general (not just banking).

"Swimming" is a modern classic, to be compared with "The Corporation". At its heart we see acceptance of the fallacy: money as a proxy for value.

"Swimming" presents the clearest case I know of how the "Dragon" created by the common efforts of very smart people takes on a life of its own. But the whole is so much less than the sum of its parts. The "mind" of a Bank is stunningly stupid. "Swimming" points this out by quoting the repeated rhetorical question of bankers in the industry, Why would the banks want to destroy themselves?

The answer is quite simple and it's not that different from the similar question you might ask about stupid armies. On the evolutionary time scale, they are a new life form. Their behavour in their environment is relatively untested. Physics imposes no natural upper limit to violence, so the "survival strategy" of an army (to destroy all other armies with maximum violence) will end with the destruction of all armies along with the humans that make them up and support them. In the case of banks, the blindness resulting from mistaking money for value puts them in a death spiral that sucks all the real value out of the world, leaving only money (and uncollectible debt). "Swimming" shows how close we came in 2008 to destroying the worldwide "real" economy.

"Swimming" hints at several ways that assimilation works on individuals, sapping them of any semblance of a human life. This is useful to Dragon Theory itself, since it provides the reader of a way to understand the dangers that Dragon Theory describes without getting in to descriptions of the monster created by assimilated human beings:

• Perverse incentives. Built-in rewards, short term goals, removal of accountability.
• Alienation. 
• Destruction of loyalty. Anyone can be fired on a moment's notice. Every man for himself.
• Economic pressure. Loss of a job can involve a drastic step down in lifestyle, especially impacting on hopes for children (expensive private schools etc.)
• Compartmentalization. Nobody is asking whether the system as a whole benefits anyone.
• Competitiveness. Focus on "winning" the game while forgetting that the game is harming everyone. "Dog eat dog", zero-sum situations.
• Physical exhaustion. A key element of brain washing in every context. No time or energy to ask what is happening to one's life.
• Reduction of "value" to "money", then "money" to "status". For many (not all), it's a blood sport whose reward is status.
• Excitement. The challenge is a reward in itself, even though he "problem" solved is just another way to cheat or deceive.

"Swimming" also documents what is lost when people are assimilated.

• Time. The most fundamental thing of all. Life itself.
• Health.
• Relationships.
• Self-esteem.
• Camaraderie and team spirit - the "social" aspect of "work".
• Security.
• "A life both broad and deep", no time for hobbies, interests, projects outside of the job. Life closing in around the never-ending emergencies of the job.

It is useful to compare "Swimming" to "The Corporation". "Corporation" sees the "Dragon" from the outside as a pathological "person". "Swimming" sees the "Dragon" from the inside in terms of the way it absorbs individual human beings. In both sources, it is abundantly clear that the behavior and goals of the Dragon are utterly different from the behavior and goals of the people that make it up. The people are interchangeable and expendable, made abundantly clear in "Swimming".

Finally, it should be said that "Swimming" documents the particularly nasty world of investment banking. Most of what is said can be said of corporations in general. In particular, the "person" created by a public offering of shares means that the people working in the corporation don't bear the risks that the corporation takes. In fact, senior management is perversely incentivized to maximize risk. If the risk pays off, they are handsomely rewarded. If the risk destroys the company, management can usually walk away unscathed. The goals of the corporation are narrowed solely to making a short term profit. Competition between corporations for shareholders guarantees that the scramble for profits will be ruthless and unforgiving.