Responsible innovation is at least partly about accountability. If we are to improve systems and processes of innovation, we need to be able to trace lines of accountability through them, to ask when, where and why things happened. Within the stories that science likes to tell about itself, the accountability tends to be clear, although frequently disingenuous. Scientist discovers X, leads to intervention Y which changes the world in Z ways. This linear model of responsibility is a by-product of hubris – the researcher’s desire for attribution and credit.
But what about areas of innovation that are less obviously sciencey? Take finance (at which point I veer dangerously off-piste in terms of my expertise, leaving a trail of apologies). We know that, as a result of various system-wide innovations, financial services slipped their regulatory collar and wrought havoc. Within the competing explanations, there is a narrative of innovation-out-of-control that demands our attention. But it is not completely clear what ‘innovation’ means in this regard. Up in Edinburgh, I heard two perspectives on this – mathematician Tim Johnson and sociologist of science Donald Mackenzie (Here is the former reviewing the latter’s book).
Neither Tim nor Donald buys the popular story of destruction that begins with a few whizz kids creating a few financial black-boxes using gaussian copulae, impenetrable swaps, flips and obligations and computerised trading. For Mackenzie, at least, the story of the credit crunch is a duller one, that begins with poor homeowners in the US unable to pay their mortgages. This is service ‘innovation’, not technical wizardry.
Tracing responsibility through this is not straightforward. It is easy to point at the whizzkids and say they were to blame for being too clever. But it seems they were a relatively unimportant part of the picture. Mackenzie and Johnson both think that ‘the lab is the market’ – this is not university research being abused in the bad wide world. The leveraging, repackaging and toxification of debt took place away from the gaze of the expert innovators. Questions of responsibility, accountability and governance therefore seem straightforwardly corporate.
Except that innovation and knowledge production do play important political roles, and here there is a suggestion of abdicated responsibility. The world of finance is also one of risk management. Mathematicians should have important roles to play in making markets and regulators aware of risks and uncertainties in increasingly complex systems. But the evidence is that there was a failure of communication. If I am reading it right, Treasury weren’t that interested and too many mathematicians retreated to a position of scientific purity rather than get stuck in. Obviously, there were plenty of Cassandras, among them mathematicians like Paul Embrechts.
Following the crash, a number of articles searching for an elegant technical explanation arrived at the work of mathematician David Li, whose Wikipedia entry now reads: “in the aftermath of the Global financial crisis of 2008–2009, to which Li’s model has been credited partly to blame, his model has been called a ‘recipe for disaster'”. Embrechts wrote to the newspapers, defending Li, claiming that, “this is akin to blaming Einstein’s E=mc² formula for the destruction wreaked by the atomic bomb.”
So I am no closer to working out the responsibility of cutting edge maths in the financial crisis. Could mathematicians have done more to ensure that their models weren’t abused, or is it not really about maths at all? And if it is not about maths, where does the responsibility lie for the rather boring but devastating innovations that caused all the trouble?