Introspection as Moral Courage: Entrepreneurs, Leaders and Social Responsibility

Abstract

In a Vanity Fair article titled The Man Who Crashed the World,’ Michael Lewis (author of a number of books and articles on Wall Street) offers this telling paragraph: “How and why their miracle became a catastrophe, AIGFP’s traders say, is a complicated story, but it begins simply: with a change in the way decisions were made, brought about by a change in its leadership. At the end of 2001 its second CEO, Tom Savage, retired, and his former deputy, Joe Cassano, was elevated. Savage is a trained mathematician who understood the models used by AIG traders to price the risk they were running — and thus ensure that they were fairly paid for it. He enjoyed debates about both the models and the merits of AIGFP’s various trades. Cassano knew a lot less math and had much less interest in debate.” No other writing on the financial crisis struck me quite the way this did. One man — allegedly less competent, less secure, and less willing to debate “the models and the merits” of his work — led, or so imply the traders who are willing to speak to Lewis, to world financial catastrophe.