Hilary J. Allen
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profhilaryallen.bsky.social
Hilary J. Allen
@profhilaryallen.bsky.social
1.2K followers 280 following 440 posts
Law professor at the American University Washington College of Law (but all views expressed here are my own); author of Fintech Dystopia and Driverless Finance; mythbusting crypto, AI, and other fintech

Internet serial: fintechdystopia.com
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profhilaryallen.bsky.social
Or, hear me out, what if AI is just Juicero?

fintechdystopia.com/chapters/cha...
The venture capital-funded Juicero machine was perfectly capable of squeezing juice pouches after all, but proved to be worthless because humans could also squeeze the pouches with their bare hands. If humans can do things with their bare minds at least as well as, and more cheaply than, GenAI tools, then what’s the point? After all, so much of the hype around GenAI trumpets increases in “efficiency.”
November 20, 2025 at 6:25 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
Another goal is for folks in this big tent to vote for people willing to stand up to the Silicon Valley elite. I strongly suspect that the Venn diagram of Congressional Democrats who support the crypto industry and Congressional Democrats who support the abundance agenda looks a lot like a circle. The Crypto Council for Innovation’s Sheila Warren told a group chat of Democratic Party insiders that “nobody is going to get primaried because they voted for [the stablecoin law] GENIUS,” but she may have misread the electorate. We saw last chapter how the crypto industry’s standwithcrypto.com ratings have helped pervert our political process, but we can make lemonade out of lemons and support primary challenges against candidates who have strong pro-crypto rankings – which will probably stop the spread of the abundance agenda too. Silicon Valley’s money and power may seem insurmountable right now, but if we were to go back about fifty years, we would see how the tobacco industry also weaponized publicly subsidized profits to capture Congress and push their preferred narrative. Yet as Sarah Milov relates in The Cigarette: A Political History, in the end, the tobacco industry lost control of the narrative as public interest litigation and grass roots activism made smoking socially unacceptable – and anti-smoking laws followed this narrative shift.
November 20, 2025 at 5:58 PM
profhilaryallen.bsky.social
I think @mmasnick.bsky.social offers a very plausible explanation for @klonick.bsky.social's description of Google cannibalizing its own business: fealty to Christensen's theory of disruptive innovation. But that really begs a reckoning with that theory...

fintechdystopia.com/chapters/cha...
historian Jill Lepore has critiqued Christensen’s cherry-picking of case studies, his disregard for the impact of other historical forces on companies’ fortunes, and his arbitrary choices of time-frames for assessing success or failure. I might add that Christensen’s theory doesn’t reckon with the venture capital funding that disruptors can rely upon to subsidize an inferior product until they’ve put incumbents out of business. But the cultural significance of the concept of “disruptive innovation” can’t be denied, so let’s unpack it a little more. In The Innovator’s Dilemma, Christensen theorized that good companies who invest in innovations that respond to the needs of their best customers may be inadvertently sowing the seeds of their own demise. This is the eponymous dilemma that incumbent businesses face: following this kind of common-sense management style leaves them vulnerable to being outcompeted by a business that starts out exploiting a niche market for innovations that don’t work as well and aren’t as profitable, but can eventually scale up by taking advantage of technological progress to outcompete the incumbents. The first kind of innovation, innovation that improves on the core business model to make existing customers happier, Christensen calls “sustaining;” the latter is “disruptive” and relies on technologies that are “typically cheaper, simpler, smaller and, frequently, more convenient to use.” You don’t hear many people in Silicon Valley talking about sustaining innovation – it’s all disruption, disruption, disruption. Lepore describes the term “disruptive innovation” as having taken on messianic proportions, “holding out the hope of salvation against the very damnation it describes: disrupt, and you will be saved.” But as it has grown in popular usage, many of the contours and nuances of Christensen’s definition of disruptive innovation have been lost. Uber, for example, is widely held up as disruptive innovation, even though Christensen was reported as saying it didn’t fit within his theory (he viewed Uber as a sustaining innovation, because it was just replicating and improving taxi services, something that already existed). Lepore also recounts a Business Week interview in 2007 where Christensen said that the iPhone wasn’t a disruptive innovation because it was too high-end (he also said his theory predicted that the iPhone would not be a success for Apple). But a quick Google search “was the iPhone disruptive” yields the AI overview response “Yes, the iPhone is considered a notable example of disruptive innovation” (Google’s AI results are not always reliable, but if you’re trying to get a sense of what the internet thinks, it can be a pretty good approximation). It seems safe to say that the common usage of “disruptive innovation” has morphed into a more all-purpose description for “Silicon Valley technology being deployed in new domains to take market share from incumbents.” But despite this evolution, the messianic connotations that Jill Lepore identified remain: this kind of disruptive innovation is still seen as a panacea that can fix just about anything. Unfortunately, Silicon Valley disruptors often don’t know much about the domains they propose to disrupt, and so they may not understand (or even care) why a particular industry evolved a particular way, or why its pain points are what they are. Silicon Valley’s outside perspective can be helpful to a degree: outsiders are well positioned to break out of the groupthink box, to come up with new and creative ideas about how to tackle problems that incumbents have simply come to accept as their lot. But outside-the-box thinking only gets you so far when you don’t understand the basics. As one incisive journalist put it, when we’re talking about disruptors, “have we just constructed a sexy new language to talk about novices?” Acquiring unfamiliar knowledge and researching the nuances of the problem at hand is often hard and expensive work, and the first impulse for any profit-driven enterprise is to find an opportunity to exploit quickly and cheaply. After all, that’s the type of opportunity Christensen identified as ripe for exploitation by disruptors. Unfortunately, disruptive innovators haven’t always confined their ambitions to opportunities that are well-suited to a quick and dirty reboot. When we’ve reached the point that someone like Elizabeth Holmes, who had no biomedical expertise and didn’t care to listen to anyone who did, can be feted for her vision for Theranos’ disruptive blood testing innovations – well, it’s clear that innovation worship has jumped the shark. The first requirement for disruptive innovation is an enabling technology that, you know, works, b…
November 19, 2025 at 12:12 AM
profhilaryallen.bsky.social
This is the playbook a16z honed for crypto. Just watch as the AI industry funds a boatload of political ads that don't actually mention AI because they know it's unpopular.

fintechdystopia.com/chapters/cha...
Andreessen Horowitz, Coinbase, and the rest of the crypto industry wagered that if the crypto industry could get a friend in the White House, then things would change. It would also really help them out if the industry could pick up some grateful members of Congress along the way, and unseat Senators like Elizabeth Warren and Sherrod Brown who had consistently gotten in the way of the crypto industry’s legislative ambitions. And so in August 2023, Coinbase launched its “Stand With Crypto” rankings for politicians (I don’t know precisely what black magic goes into crunching these rankings – much like the NRA’s grades on gun policy, they seem to be a real-time measurement of crypto friendliness based on things like public statements and voting records). Then in 2024 came the crypto industry Super PACs, making campaign donations that were breathlessly reported as “unprecedented.” Even my jaw dropped when I heard that crypto industry Super PACs were responsible for 44% of all corporate expenditures on the 2024 election cycle. But I probably shouldn’t have been surprised. Years of zero interest rate policy helped the industry and its VC backers amass one hell of a war chest, and if tens of billions of dollars had already been ploughed into trying to make the crypto industry a thing, why not spend a few hundred million more to buy Congress’ support? That SuperPAC money wasn’t used for ads about crypto, so it appears the candidates knew that crypto wasn’t really an issue that voters cared about. Instead, it was used to support pro-crypto candidates and attack perceived anti-crypto candidates on the issues that people did care about
November 18, 2025 at 4:16 AM
profhilaryallen.bsky.social
Concur.

fintechdystopia.com/chapters/int...
While technological solutions might seem at first blush to be clean and mechanical, free of human vices and foibles, technology is more than just the components of a machine or a line of software code. Technology is inextricably intertwined with the people who develop and deploy it, and so the incentives and beliefs of the Silicon Valley elites will impact us through the technological tools they fund, develop, and deploy. To state what should be obvious but often isn’t, their incentives are typically to grow and profit no matter what, and significant harms can be inflicted on society as a result. Yet tech-based businesses tend to benefit from a veneer of neutrality: we sometimes hear slogans like “software commits no crimes” (which have a whiff of the NRA’s “guns don’t kill people” rhetoric about them).
November 16, 2025 at 8:12 PM
profhilaryallen.bsky.social
The lady doth protest too much, methinks...
The strategist emphasized that early-stage AI adoption remains a powerful multiyear theme, and that current volatility should not be confused with anything resembling the dot-com boom and bust. “This is real,” he said. "We're early innings here on AI and it's real. This is not 2000.”
November 16, 2025 at 4:34 PM
profhilaryallen.bsky.social
A techno-libertarian strain of eugenics has long been present in Silicon Valley

fintechdystopia.com/chapters/cha...
One of the founders of Silicon Valley, William Shockley, is largely spoken about in disparaging terms because, according to WIRED, “he spent the second half of his career, from the 1960s on, espousing a racist eugenics agenda, taking occasional breaks to help promote a high-IQ sperm bank.” But some variants of his ideas have been resurgent lately. Elon Musk is well known for talking about “high IQ people:” for example, in recruiting for the so-called “Department of Government Efficiency” or “DOGE” on his X platform, he advertised for “super high-IQ small-government revolutionaries” (in the end, Musk’s existing networks seem to have supplied DOGE with much of its staff, as many former interns and junior employees from X, Tesla, and Palantir joined up). Musk (the sire of at least fourteen children) also reportedly believes that the superintelligent have a special duty to reproduce. Marc Andreessen has also espoused the view that “smarter people have better outcomes in almost every domain of activity” and that our goal should be to use AI to make everyone smarter. Along these lines, transhumanists (the “T” in TESCREAL) and extropians (the “E”) seek to transcend the boundaries of being human by using technology to develop ways of radically enhancing the intelligence and other “desirable” qualities of human beings. If these values are incorporated into artificial intelligence and biotechnology tools, though, then we are letting the transhumanists and extropians decide what characteristics of humanity to enhance, and which to try to delete. As political scientist Francis Fukuyama put it, “transhumanism's advocates think they understand what constitutes a good human being, and they are happy to leave behind the limited, mortal, natural beings they see around them in favor of something better.” But the Silicon Valley elite know nothing about sociology, or anthropology.
November 15, 2025 at 1:44 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
Wall-E was intended as a cautionary tale, but it sometimes seems like our overly optimistic friends in Silicon Valley miss the subtext and react to dystopian fictions with the response “coooooool - what if we actually did that?!”
November 15, 2025 at 1:34 PM
profhilaryallen.bsky.social
I looked at the likely impacts of this psychotic break on our financial system (the working title was "End Times Finance")

www.project-syndicate.org/commentary/u...
True adherents of this movement have no interest in making nation-states work better, and they would surely see the chaos following a financial crisis as an opportunity to advance their vision. For example, the online community Praxis (with backers including Silicon Valley heavyweights Marc Andreessen, Peter Thiel, and Sam Altman) states on its website, “as local communities dissolve and Nation States stumble … we’ll watch the flippening of Digital Nations over Nation States in real time.” There is also an eschatological dimension to many Silicon Valley elites’ worldview. As the philosopher Émile Torres points out, Silicon Valley types increasingly subscribe to the belief that true AI will end the world as we know it. In this context, a global financial crisis would seem like a non-event. If you are convinced that our current way of life is ending, it makes sense that you would fixate instead on ensuring that our cyborg descendants can prosper in other galaxies.
November 14, 2025 at 10:07 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
when I came across an article in The Atlantic in November 2021 titled “America’s Gambling Addiction is Metastasizing.” The article talked about the ubiquity of gambling in the smartphone era – “once there was Las Vegas; now there’s a Las Vegas in every phone” – but it also concluded with the assertion that “the citizens of the United States have accepted their radical precariousness as a way of life. The rise of the gambling industry is just a symptom of our acceptance.” What a depressing – but probably accurate – conclusion. Even for those who wouldn’t otherwise be tempted to gamble much, financial precarity can make risky betting seem like a rational thing to do with any spare money you do have (or, more dangerously, with money you’ve borrowed and need to pay back win or lose). If you are just one medical bill away from financial ruin, then small investments in staid assets that yield moderate returns over a long-term period simply won’t cut it. This kind of precarity doesn’t just boost sports betting. It also creates an environment ripe for the launch of an app that makes it very easy to make all-or-nothing bets on stock price movements, or for the launch of an exchange where people can choose from a seemingly limitless supply of crypto assets to wager that their “number [might] go up.” This kind of baseline economic precarity can also be exploited to convince legislators, regulators, and judges to stay out of the way of such apps and exchanges, because do they reeaally want to stop a cool new tech business that just might provide someone, somewhere with a financial lifeline?
November 13, 2025 at 2:58 PM
profhilaryallen.bsky.social
Yup, we are already bailing out the AI business (and a ton of other tech businesses too). Not enforcing the law against them is a subsidy that benefits them, and exposes us to harm.

fintechdystopia.com/chapters/cha...
When there are robust and flexible laws like these on the books, advocating for new AI-specific financial laws can undermine efforts to apply existing laws, ceding industry an unregulated vacuum in which to experiment. While it’s true that laws really do need changing sometimes – they can become outdated or superfluous – let’s think about who currently has the biggest megaphone to broadcast narratives about existing laws being outdated and superfluous. Is it the people protected by those laws, or the people who stand to benefit financially by getting rid of them? If new technology-specific laws are indeed enacted to replace the old laws, they may very well end up being half-measures that offer the public fewer protections than the status quo ante. Silicon Valley will lobby heavily against including real protections in these new laws, and even technology-specific laws that start out strong will quickly become obsolete and easy to arbitrage as the underlying technology evolves. The absence of strong legal protections will, of course, make it easier for AI to make money – which, as we saw in Chapter 5, is something that many AI businesses are currently struggling to do. But that underlines a point we’ve made again and again in this book – that legal innovation, rather than technological innovation, is often the driving force behind Silicon Valley businesses. While the law is often seen as something that lags behind new technologies, the reality is that technological development and laws shape each other in an ongoing dance. Silicon Valley businesses are influenced by existing laws, by how their lawyers interpret those laws, and by how those laws are or aren’t enforced. When laws that protect the public are enforced against tech businesses, then that sends a signal to similar businesses that they should minimize their harms and fit within the four corners of those laws. If such laws aren’t enforced, though, then that works as a green light for tech businesses to move fast and break things. That green light is a kind of subsidy, one that gives tech-based businesses a competitive edge over the industries they’re trying to disrupt (which do have to comply with existing laws). These “green light subsidies” can prop up technologies and business models that might have little to recommend them on a level legal playing field. Silicon Valley has often pushed hard for green light subsidies, hyping their technological innovations as so exceptional that they deserve, well, exceptions from fusty existing laws. After all, the techbros (and their lawyers) argue, old laws couldn’t possibly have contemplated such earth-shattering technological developments. This is the playbook deployed by so many of the fintech businesses we saw in Chapters 2 and 3, manufacturing uncertainty about how the laws on the books apply by appealing to stories of “automation” and “disintermediation.” If regulators are ready and willing to do Silicon Valley’s bidding, they will simply swallow these stories whole and parrot them as they dismantle protections for the public. But even more public-minded regulators may be wowed by these stories, and put in place waivers or exemptions or “regulatory sandboxes” that are intentionally designed to accommodate tech-based businesses and help them thrive.
November 12, 2025 at 11:18 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
The NEOM city being built in Saudi Arabia, for example, sounds very abundance-y in its aspirations to be a futuristic tech hub that is a beacon for job creation and sustainability. NEOM’s website even includes Silicon Valley’s favorite cliché: “we want to create a legacy that makes the world a better place.” But Saudi Arabia is one of the most water-stressed nations on earth and concerns have been raised that AI data centers may result in regional water scarcity. More than 21,000 workers (primarily from India, Bangladesh, and Nepal) are reported to have died working on NEOM and related projects in Saudi Arabia since 2017, with more than 20,000 indigenous people reported to have been forcibly displaced to make room for the development. Sandeep Vaheesan notes in his review of Klein and Thompson’s Abundance book that “instead of calling for steeper progressive taxation and anti-monopoly policies that would rein in the power of the affluent, Klein and Thompson focus single-mindedly on red tape.” Is NEOM the kind of “utopia” we have to look forward to in the United States if Silicon Valley is liberated from the red tape of democratic accountability and allowed to build unchecked? If so, things could get ugly. Writing about a period spanning both the industrial revolution and the fascism of the 1930s, Karl Polanyi described the social instability that arose when the excesses of capitalism were unchecked by laws designed to smooth and moderate the impact of market and technological developments.
November 12, 2025 at 2:31 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
As I thought about this inevitability narrative, like Carrie Bradshaw, I couldn’t help but wonder: if technological progress were really so inevitable, should it really matter how lawmakers and regulators treat it? Marietje Schaake, formerly a Member of the European Parliament, tells a story about a dinner she once attended with top Silicon Valley figures. She describes how she was cornered and asked “did Europeans realize their tendency to overregulate was the reason why no equivalent of Silicon Valley existed there?” But isn’t that ultimately an admission that technological progress can be channeled and even stopped? The Silicon Valley folk treated this as an obvious failing on Europe’s part, but what if, to quote the movie War Games, “the only winning move is not to play”? What if Europe has in fact won by using law to hold some tech businesses back, protecting its citizens and letting other countries be the guinea pigs, ensuring that the worst of Silicon Valley’s pathologies haven’t taken root there? As technology scholars Greta Byrum and Ruha Benjamin have observed, sometimes the best outcomes (in terms of benefit for the broader public) are achieved with non-technological approaches and solutions. Has Europe won by using the law to preserve space for them?
November 10, 2025 at 4:32 PM
profhilaryallen.bsky.social
On one of his many podcasts, Andreessen spoke of the special skills, the je ne sais quoi, that go into being a venture capitalist. He said that “it is possible that that is quite literally timeless. And when the AIs are doing everything else, like that may be one of the last remaining fields that people are still doing.” So Andreessen thinks that his job can’t be done by AI – his critically important job of spinning stories to convince your boss that your job can be done by AI, or that your boss can at least start making your life worse today because the AI will be able to do your job in a few years. As tech journalist Brian Merchant emphasizes, “generative AI has been uniquely powerful in equipping [bosses] with a narrative with which to…justify degrading, disempowering, or destroying vulnerable jobs.” Sigh.
November 8, 2025 at 2:24 AM
profhilaryallen.bsky.social
Kim Kardashian needs to read Fintech Dystopia:

fintechdystopia.com/chapters/cha...
It's possible, though, that bespoke legal services from humans will also end up going down the AI toilet if those human lawyers rely too heavily on GenAI tools – I guess that’s one way of leveling the playing field. Even when human lawyers edit AI output, it will be harder for them to find mistakes in something they didn’t produce than it would be to not make mistakes in something they wrote themselves. Back in the day when I was a practicing lawyer, I worked with a partner who liked to say with a twinkle in his eye, “we stick it to them in the contract definitions!”, knowing that the lawyers we were negotiating with would most likely miss any traps we laid there. But now it will be our own AI sticking it to us in our own contract definitions – and our research memos, and our legal briefs. And sadly, there are lawyers out there who don’t even edit the AI output. There have been plenty of stories about judges upbraiding lawyers for including entirely made-up case citations in their briefs. The lawyers’ excuse? “The AI put them there” (and most judges have found that excuse about as convincing as the Canadian Civil Resolution Tribunal found Air Canada’s excuse). Even when judges aren’t yelling at them, it’s not clear that relying on lower quality AI-generated work will be profitable for lawyers in the long run. AI tools are expensive to create and run, and if the funding currently subsidizing the use of those tools goes poof, paying junior lawyers to do the low-level tasks may very well be the more cost-effective way to go – especially because low-level tasks are how the junior lawyers learn to be senior lawyers.
November 6, 2025 at 12:01 AM
profhilaryallen.bsky.social
Silicon Valley is primarily in the narrative business.

fintechdystopia.com/chapters/cha...
Right now, the idea that AI is inevitable is pervasive and pernicious. I can’t tell you how many friends I’ve discussed AI problems with, only to have them shrug and say “yeah, that’s terrible, but it’s happening and there’s no stopping it.” But this book has made clear that technology does not spring forth, fully formed, from the technology gods. Technology is built and deployed by humans for their own purposes (usually to make money), and what those humans build and how they deploy it are affected by existing laws and how those laws are enforced. Strong enforcement of existing laws can constrain those humans – and new laws can too – if lawmakers, regulators, and courts have the will to reject the inevitability narrative.
November 4, 2025 at 6:36 PM
profhilaryallen.bsky.social
Real solutions are obvious; it's just that the people in charge don't like them so they like to pretend that tech can fix the problem.
In addition to dispensing with superficial tech fixes, we’ll also have to dispense with other politically useful fictions like the notion that economic wellbeing can be improved simply by lending more money to cash-strapped people. Because as Professor Abbye Atkinson points out, we treat “borrowing money as a social good and owing money as a personal failure.” If people have no other option, then of course they will borrow, even at exorbitant rates and on predatory terms. Real solutions will focus on what is driving this need for credit. And it’s not really all that complicated. In her book The Land of Too Much, sociologist Monica Prasad finds that countries that encourage people to rely on credit to address their needs tend to spend less on welfare. That is something we can reverse – with more public support, people won’t need to rely so much on credit. Congress will have to get involved to make this happen, and step one is mandating a minimum wage and ensuring social security benefits that people can actually live on. Step two is improving the public safety net.
October 29, 2025 at 1:28 AM
profhilaryallen.bsky.social
I feel the same way about fintech.

fintechdystopia.com/chapters/cha...
No fintech claim makes me angrier (or gets more airtime) than its promise to “democratize finance.” This promise of democratized borrowing and investment opportunities is sometimes served up with a side order of revenge: “switch to our products, and you can stick it to Wall Street!” But more often than not, fintech companies are working with Wall Street rather than disrupting it, and the financial inclusion on offer can range from ineffectual to downright predatory. Many fintech customers already have access to more traditional financial services: by switching, they often forfeit consumer protections without realizing it. For those who have been newly recruited into investing and borrowing through fintech, their inclusion is often more accurately described as “predatory inclusion” or “democratizing exploitation.” If fintech’s version of financial inclusion is helping people to wager money they can’t afford to lose, and borrow money they can’t afford to pay back, then that’s a pretty grim vision for the future.
October 29, 2025 at 1:28 AM
profhilaryallen.bsky.social
I think part of it is that stories of tech innovation and its "trickle down" public benefits are seen as better than financial innovation. But also some people just buy these stories because of greed/goldfish memories/Emperor's New Clothes syndrome.

fintechdystopia.com
Writing about Andreessen’s success in 1996, Time Magazine opined that Silicon Valley would “reward the people capitalism is supposed to reward – dynamic entrepreneurs, not rapacious monopolists or financial card-sharks.” The zeitgeist was shifting from Wall Street to Silicon Valley at that time, and venture capital was seen as a more noble calling than the “greed is good” finance practiced in New York at the time There are a lot of different reasons why bosses and everyone else get sucked in by unrealistic and uninspiring tech promises. Dreams of profits certainly come into play – hardly a day goes by that I’m not reminded of Upton Sinclair’s quote “it is difficult to get a man to understand something when his salary depends on his not understanding it.” But when dealing with complex technology, another important factor is the “bullshit asymmetry principle.” It’s also referred to as Brandolini’s Law, because it was coined on Twitter by Italian computer programmer Alberto Brandolini, but I think “bullshit asymmetry principle” is more fun to say and so I will stick with it. The principle stipulates that “the amount of energy needed to refute bullshit is an order of magnitude bigger than to produce it.” We all can and should listen to our inner skeptic when we hear too-good-to-be-true promises from the tech industry – or if we hear them promise something and our reaction is “huh, why would I want that?” – but to systematically debunk those promises often requires a great deal of expertise.
October 28, 2025 at 12:25 AM
profhilaryallen.bsky.social
So I wrote my book Driverless Finance in 2020, and it was published at the beginning of 2022. driverlessfinancebook.com

I wrote a prologue about where I thought we were heading if regulators didn't intervene. Here's the bit about banks accepting crypto as collateral.

It sucks being a Cassandra.
October 24, 2025 at 2:17 PM
profhilaryallen.bsky.social
Sadly, no one listened to them, but their proposal makes a lot of sense. True investing is supposed to be for the socially useful purpose of raising capital for productive activities, where there’s a possibility of a win-win outcome for both the investor and the business using the investor’s capital. The more that “investment opportunities” resemble zero-sum gambling, the more likely it is that the big fish investors and market intermediaries will benefit at the expense of the little guys. In these kinds of situations, “democratizing” is tantamount to throwing the little fish to the sharks.
October 22, 2025 at 9:09 PM
profhilaryallen.bsky.social
The problem with embracing this kind of gambling-for-resurrection as economic policy is that for every person who benefits from the financial lifeline, many more will lose out big. As Representative Sean Casten pointed out at a Congressional hearing “There is an innate tension …between democratizing finance…and being a conduit to feed fish to sharks.” Gambling is a zero-sum game and as we all know, the house tends to win (if it doesn’t, it won’t survive). Technology doesn’t change those odds – and why would fintech firms want to? They are increasingly playing the lucrative role of the house, although they typically don’t advertise themselves as casinos. Many fintech firms instead claims to be facilitating investment – something eminently more empowering and respectable than gambling (not to mention something that is regulated very differently). To be fair, the line between investing and gambling has been blurring for decades, and the traditional financial industry bears a lot of responsibility for that. The law has also contributed to that blurring, and things could get worse if we go about regulating new kinds of “investments” in the wrong way. For example, a UK parliamentary committee raised the important concern that regulating crypto investments as a “financial service” could “create a ‘halo’ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.” Their proposed solution? Regulate crypto speculation as gambling, not investing.
October 22, 2025 at 9:09 PM
profhilaryallen.bsky.social
I have thoughts....

fintechdystopia.com/chapters/cha...
In 2021, I spent a lot of time riding Amtrak. Every time I arrived at a train station, the billboards all seemed to be promoting one of two things: crypto, or sports betting apps. I was therefore intrigued when I came across an article in The Atlantic in November 2021 titled “America’s Gambling Addiction is Metastasizing.” The article talked about the ubiquity of gambling in the smartphone era – “once there was Las Vegas; now there’s a Las Vegas in every phone” – but it also concluded with the assertion that “the citizens of the United States have accepted their radical precariousness as a way of life. The rise of the gambling industry is just a symptom of our acceptance.” What a depressing – but probably accurate – conclusion. Even for those who wouldn’t otherwise be tempted to gamble much, financial precarity can make risky betting seem like a rational thing to do with any spare money you do have (or, more dangerously, with money you’ve borrowed and need to pay back win or lose). If you are just one medical bill away from financial ruin, then small investments in staid assets that yield moderate returns over a long-term period simply won’t cut it. This kind of precarity doesn’t just boost sports betting. It also creates an environment ripe for the launch of an app that makes it very easy to make all-or-nothing bets on stock price movements, or for the launch of an exchange where people can choose from a seemingly limitless supply of crypto assets to wager that their “number [might] go up.” This kind of baseline economic precarity can also be exploited to convince legislators, regulators, and judges to stay out of the way of such apps and exchanges, because do they reeaally want to stop a cool new tech business that just might provide someone, somewhere with a financial lifeline?
October 22, 2025 at 9:09 PM
profhilaryallen.bsky.social
fintechdystopia.com/chapters/cha...
As I thought about this inevitability narrative, like Carrie Bradshaw, I couldn’t help but wonder: if technological progress were really so inevitable, should it really matter how lawmakers and regulators treat it? Marietje Schaake, formerly a Member of the European Parliament, tells a story about a dinner she once attended with top Silicon Valley figures. She describes how she was cornered and asked “did Europeans realize their tendency to overregulate was the reason why no equivalent of Silicon Valley existed there?” But isn’t that ultimately an admission that technological progress can be channeled and even stopped? The Silicon Valley folk treated this as an obvious failing on Europe’s part, but what if, to quote the movie War Games, “the only winning move is not to play”? What if Europe has in fact won by using law to hold some tech businesses back, protecting its citizens and letting other countries be the guinea pigs, ensuring that the worst of Silicon Valley’s pathologies haven’t taken root there?
October 22, 2025 at 12:37 PM
profhilaryallen.bsky.social
I was just unable to workout because the class I stream is down because of AWS. First of all, grrr. Second of all, when are we going to wake up and realize that efficiency isn't the be all and end all?

fintechdystopia.com/chapters/cha...
The supply chain breakdowns in 2020 should have clued us into an important characteristic of complex systems: one tradeoff for efficiency is fragility, and we need to start asking “when is something efficient enough? When will making it more efficient introduce fragilities that will be counterproductive in the long run?”
October 20, 2025 at 4:00 PM