A computer can basically do four things: Load a value from memory, store a value into memory, add two numbers together, branch to another list of instructions if a number is 0.
So, if you understand those operations, you understand everything about computing, right?
The problem with the financial world wasn't that they built on incomprehensible primitives. The problem was the incomprehensible structures they built with them. Just like programmers and programs. A basic understanding of the primitives is necessary but not sufficient in either case. And the programmers have an advantage that all the source code they are running is in one place; to understand the financial system technically would require access to the whole, which you can not have.
(If you want to quibble with that list of primitives: Fine, just pretend I used your list instead. It won't change my point.)
Nice one. For me the big takeaway from all of this has definitely been that when things get too complex, all sorts of things that we rely on for the system to function properly stop working.
In particular, the hiding of risk removes a lot of the correcting mechanisms from the system.
Nassim Nicholas Taleb's argument that we should ban complex financial instruments and keep things very simple and close to those primitives makes a lot of sense to me.
Whether it's in anyway practical or not, I have no idea.
So, if you understand those operations, you understand everything about computing, right?
The problem with the financial world wasn't that they built on incomprehensible primitives. The problem was the incomprehensible structures they built with them. Just like programmers and programs. A basic understanding of the primitives is necessary but not sufficient in either case. And the programmers have an advantage that all the source code they are running is in one place; to understand the financial system technically would require access to the whole, which you can not have.
(If you want to quibble with that list of primitives: Fine, just pretend I used your list instead. It won't change my point.)