Let's look at "innovation" in consumer banking:
-Debit and credit cards physically show numbers that give full access to the accounts 40 years after modern public key cryptography was invented
-A very modest improvement to this system, known as PIN and chip, came to the U.S. recently after years in Europe and Asia; the Wall Street Journal has called this very basic change a "nightmare" more than a year into implementation, doubling average transaction times to 13 seconds (!!) in an informal test. Only 28 percent of merchants supported the technology.
-Checks physically show numbers that give full access to accounts
-The standard consumer "friendly" way of moving money electronically, ACH, involves banks FTP-ing massive text files to one another, batch processing them overnight, and clearing transactions in 24 hours or more.
-There is no used standard for peer to peer consumer electronic transfer
-Massive data breaches by banks have become incredibly common
-The response to endemic fraud is to revoke cards and mail new ones and/or to repair and monitor credit on an ad hoc basis
That is backwards compatibility, not lack of innovation. You have (some) cryptography on the chip.
> Checks physically show numbers
That, again, is backwards compatibility.
> ACH, involves banks FTP-ing massive text files
Yes, that sucks.
> no used standard for peer to peer
Wire transfer?
> Massive data breaches by banks
Massive data breaches by everyone, this is not a bank problem - this is an industry-wide problem.
> response to endemic fraud is to revoke cards
What is your point here? Would you prefer to revoke a certificate instead? But we already established that pesky concept of backwards compatibility and real world.
Chip and PIN is a private initiative. I don't know why it took off in Europe/Asia and not in the USA, but it has little to do with the state.
Can they? We saw a decade ago multiple countries having to each provide over 500 billion USD to such private firms to stop them from going bankrupt… that doesn't seem like a "massive history proving" they can manage private banking.
In any event, I detect the unmistakable tendency of many in the American Left to view the Nordic countries as something approaching utopia[0].
[0] https://www.washingtonpost.com/opinions/stop-the-scandimania...
No they aren't.
Think about how slow adoption of "secure" methods of transaction are in the US and them having made fraud our problem and not their problem.
Goldman Sachs, Wells Fargo, HSBC, LIBOR for christ sake. If anything the private sector has proven that they will do their best to fleece main street to line their pockets.
That some states are anti-innovation does not entail that all states, or even most states, are anti-innovation. Government dysfunction is a self-fulfilling prophecy, in that, a pervasive cultural belief that government is dysfunctional leads to a dysfunctional government, and the converse is also true.
Which isn't to say this is a good idea anyway, but your counterpoint isn't all that strong.
Does this idea apply to small countries? It's possible that democratic pressure, by people who know what's available in Denmark etc. just across the border, would mean the country could end up getting credit cards, and then paypass, not much later than elsewhere. But nationalising the equivalent sector of the US banking system in 1950 would, as you say, leave everyone writing checks forever.
For the same reason, communism worked much better at catch-up industrialisation (just steal the blueprints for a steel mill, and build it) than for subsequent consumer products (where you need to experiment and feel the way).
I'm not sure where you got that from. Whats on the cards is to create a central bank based system of payments. I'm personally not in favour of having to pay a fee to VISA every time I make a payment. I would envisage that this would work along side existing payments system.
"trusted to manage financial transactions despite the massive history proving they can" in peacetime yes. Beside that its a common good not under democratic control. Sweden as a state has small but very real risk of being invaded. There is a lot of work in Sweden at the moment to remilitarise the country. For example mandatory conscription has been introduced.
"For example, if only the state was allowed to process financial transactions, we never would have gotten credit/debit cards" - debatable conjecture. Still no one is looking to get rid of payment systems that are currently in place.
"If they had nationalized after this development, we would not have NFC payments or chips in cards" - again debatable conjecture.
"The state is anti-innovation (think about how slowly government infrastructure has developed) and anti-consumer (imagine the DMV in charge of your money). " - I'm not sure how to respond to this but I'll give a try. For an American example you can take a look at NASA, It is general acknowledged that you have something like a 14$ return on every dollar spent. This: https://en.wikipedia.org/wiki/NASA_spinoff_technologies does not look like ant invention to me
"This whole notion of "the state knows everything" and "only the state cares about you" seems completely dystopian." Well in a functioning democracy the state has the potential to be serving its citizens. It works fairly well in Scandinavia, but less so in Russia or China.
I'm sorry, this is so laughably incorrect that I had to make sure I wasn't missing some obvious sarcasm markers. A history of massive, systematic failures that the state has continually needed to correct for, maybe. If only it were so simple as private = good and public = bad.
>The state is anti-innovation
Sorting algorithms are slow. Doesn't matter which one! I just know they're slow. Don't ever sort data. Ever. Sorting = slow = bad. You'll never convince me that different sorting algorithms have different characteristics and trade offs. Sorting is bad! Okay! End of story.
That would be crazy. But I can't see where the article says that, nor can I see it said in the opinion piece by the chairman of the Swedish reserve bank which the article links.
The chairman of the Swedish reserve bank makes two suggestions:
1. Modify the RIX system of settlements in the reserve bank. One suggested modification is to extend its operating hours, currently it closes at 17:00 each day. I don't think anyone would consider that a radical proposal.
2. Force banks to handle cash, i.e. if you want to be a bank, then you have to let people withdraw and deposit cash at your branches.
This second point sounds almost bizarre, a bit like demanding that you can't be a restaurant if you don't serve food. But the current situation is that the major banks in Sweden have rapidly reduced the number of branches that handle cash. Swedbank, one of the big four, has roughly 100 branches in Stockholm, the capital, but only two of them handle cash.
You can deposit small amounts of cash in ATMs, about $1000. Anything beyond that and you have to make a trip to one of the two branches that still handles cash.
This has to be satire, or else you must have been asleep for the last 10 years.
In the USA, the Fed Reserve controls ACH, so not that far different.
Perhaps the modern state but during a certain period US gov basically made the foundations for nearly all modern technology. Even Peter Thiel acknowledges this fact.
Lucky you're here!
> "The state is anti-innovation"
Not in Sweden, it isn't. Ad hominem all the way.
> "They're arguing that a monopoly of the state is better than a "monopoly" of four different companies"
There are examples in recent history that support this model: https://en.wikipedia.org/wiki/1983_Israel_bank_stock_crisis
In almost every single case the foreigners are more likely to commit crimes in a country than the native population. This is completely natural due to cultural differences and being unaware of some special laws etc. Also Swedes are significantly overrepresented in Finnish crime statistics (3-4 times more likely to commit crimes than native Finns, Americans 2-3 times).
Now let's stop pretending like we don't know what's this about. Middle-Eastern (including Turkey where I'm from) and African immigrants are clearly the biggest criminal group in almost every single crime type. Especially serious offenses like rape, murder, assault etc. 15-20 times more likely to commit serious crimes. That's what I mean and that's what the statistics and research conclusively show.
Quite irresponsible to try to compare some Finns getting parking tickets to organized crime and terrorism.
That's nationalistic flamebait, one of the worst kinds of flamebait, and it definitely breaks the site guidelines as moderators here interpret them.