What If We Let Pilots Run Banking?

Trevor Pinch, coauthor of Living in a Material World: Economic Sociology and Technology Studies asks an interesting question in the wake of the crash of Flight 1549 - what if we let pilots run banking? 

There is an old joke about European national stereotypes getting switched by a befuddled Brussels bureaucrat planning a new Europe. Beforehand the Germans ran machines, the Italians love, the French food, the Brits the bureaucracy, and the Swiss multilingual proficiency. After the switch, the Germans ended up with bureaucracy, the Italians got to run the machines, the Brits food, the French multilingual education, and the Swiss were put in charge of love – a zero sum loss!

Seeing those thankful, shivering Bank of America executives on the wings of Flight 1549 in the Hudson reminded us that we all put our lives in the hands of other professions. The pilots saved the bankers and the other passengers on the stricken US Airways jetliner, but can the bankers save the pilots and the rest of us?  Now no one in their right mind would let a banker anywhere near the controls of an Airbus A320, but what if the pilots got to run banking?

Air travel used to be one of the least-safe forms of travel – anyone remember the Comet? In a fifty year period this form of transport has been transformed into one of the safest known to mankind. How did this happen? Part of the change came from better technology, such as more reliable engines, better materials, and the like, and part came from better training for pilots and air-traffic controllers. But the key transformations were a new approach to making complex technologies reliable, and changes in regulation. And here there may be lessons for the banking sector.

The improvement in aircraft reliability came from the fledging new field of reliability engineering. This was first developed by Werner von Braun in the context of Second World War V2 rockets.  Rocketry was notoriously unreliable and part of von Braun’s genius was to introduce ways around the problem of repeated failure  Most of these techniques are taken for granted today: redundancy of components (if one fails, have a back up), introduce change conservatively (in the aircraft industry every new component has to be tested on a preexisting working technology - no massive change is allowed such as introducing a whole new technology such as with the space shuttle), and lastly, test, test, and test again.

And the aircraft industry tests for “black swans”, what Nassim Taleb calls those extremely unlikely events. One such “black swan” for air safety is engine failure from bird injection (in this case the suspected black swans were actually high flying Canadian geese!) At an FAA test facility several freshly killed chickens (live birds are hard to use) are fired at giant aero engines to see how they perform under different conditions. In other words the industry looks for the outliers and prepares for the worst case scenario. Studies have been made of what is ingested into aircraft engines: the list includes rodents, deer, turtles, oppossums and even alligators! .The pilots train for engine failure so if the black swan occurs they are prepared for that unlikely event. We still need to rely on human skill and a little bit of luck – nothing will prevent accidents entirely, but you want the odds on your side.