What do you think has been important about the innovation of people's ability to insure against risk in the marketplace? Whether it's through just something as simple as an insurance contract or by other means? >> Well, the history of risk management goes back thousands of years. I would say that the history of risk management is, the technology that we have has been very slow to develop over the centuries. And that encourages me to think that it has a lot more to develop yet, a lot more to develop yet. I think that there's an inherent conservationism and mistrust of new financial arrangements. In the sense that, I'm not coming to this party unless the in-people coming to it also. And so things are very slow to develop. I don't know if I'm answering your question. It is a belief of mine that financial innovation is a pillar of our civilization. That it's not just shifting papers around and getting people to sign documents that trick them into signing away something. It's a sequence of inventions that incentivize people, provide capital for enterprises. Create organizations that last through time that separate themselves from the objectives of the individuals who comprise the corporation. And get people focused on some common good that will be produced. >> Do you think it's safe to say that historically, financial innovation has occurred on the upside? Looking to capture new markets and new ways of earning returns, versus on the, kind of the downside risk management side of the ledger. >> Well, when we say risk management, it seems to imply a focus on the downside. But it's on the upside as well, because people accept the downside risk because there's something on the plus side that is enticing and is exciting. So this is an interesting point, people seem to like gambles that involve a small amount of money lost with high probability. And a large money gained with low probability. So if that's what people like, we have to try to turn the natural risks which might be balanced equally into loss and gain into something more appealing. So that's one thing that limited liability did. People like lottery tickets. I paid $2 today, and I have the chance of winning $10 million. For some reason, the chance is minuscule. It's virtually zero, but somehow people like that. So that's a discovery of our human nature. Why they like that is a puzzle but we just know that people like that. It's because people savor the small probability. I have this lottery ticket I bought this morning. I could be worth $10 million at the end of the day when they announce the number. That just makes your day bright. And then, when you don't win, you still feel well, it was just $2, so what. So what limited liability does is it creates that for corporate, that same sense for investing in stock. You bought 100 shares, so maybe that's $3,000. That's a little bit more than a lottery ticket. But hey, I could be a multimillionaire if I bought the right company. It's like a lottery ticket. So people flock to these things. And they're actually, they're disappointed almost always. But they're not disappointed because we end up with a more vital business sector where things are created. So we have to try to reframe things. That's what part of financial innovation is. Reframe risk so that they're appealing. And we want to also, for good social purpose to be risks that need to be taken. So that they benefit the economy.
