JPMorgen’s recent loss of two billion dollars embarrassed a bank that has been vigorously claiming that rules to restrict trading are not needed.  But it also casts doubt on a settled conviction in the financial industry that risk can be managed.

“Even at a bank as ostensibly well-run as JPMorgan, the incentives still exist for giant, risky bets to be made that can go very wrong,” wrote Joe Nocera, a business reporter for The New York Times.  It’s significant that he used the adjective “risky,” suggesting that risk is a condition to be explored not a thing, ”risk,” to be understood.  Any bet has some degree of risk, and requires constant vigilance and self-scrutiny to assess when that condition may arise.  (See, “When Will They Learn?”)

Some of the more objective factors that make for risky bets can be quantified.  Previous performance of comparable investments can be tracked.  Volatile markets can be measured.  But there is also an irreducible element of subjectivity in making such judgments, and to be vigilant about subjective error requires, among other things, a kind of skepticism about one’s motives.  If you want something a lot, you will want to believe that it is possible to get it, and that desire will inevitably skew your judgment.

And competition and pride may well be driving you to want it, as well as ambition and the craving for self-esteem and status.

In general, banks are not that good at scrutinizing their motives, reflecting does not come naturally to them.  We learned that during the credit crisis of 2008, when they got caught up in the mania of the credit bubble.  That’s why rules are essential.

Returning from the Trojan War, the Greek hero Odysseus knew that he would be sailing near the treacherous rocks where the fabled Sirens sang.  Eager to hear the beautiful and seductive songs that had lured countless ships to their destruction, he had his sailors lash him to the mast with instructions not to untie him, no matter how much he thrashed about or cajoled them.  He filled their ears with wax so they would not be tempted themselves, and so they would not hear the pleas and threats he knew he would resort to in order to get closer to the alluring music.  They obeyed the rule he imposed, he got to hear the Siren’s songs – and they all survived.

“Wily Odysseus,” as he was known, was smart enough to know the limits of his own judgment, smart enough to know when he himself could not be trusted to follow it.  Jamie Dimon, the CEO of JPMorgan has been cajoling, wheedling and pushing to remove the rules that would have prevented their two billion dollar loss.  He doesn’t seem to have changed his mind.

We don’t need to go back 3,000 years to find compelling examples of good judgment.  But our history does not offer many examples of leaders who willingly embrace their own limits.

One slight gesture towards economic reform in the U.S. has been the provision that shareholders can vote on executive pay, and, last week, Citigroup shareholders rejected its CEO, Vikram Pandit’s 14.9 million package.

That’s news!  Since WW II, owners of corporate stocks have been the largely invisible partners in our economic system.  Before that, the exchange of shares was the province of those dealmakers and bankers who used their power to gain control of markets.  Most Americans distrusted Wall Street, with the exception of the frenzy of investment that drove up prices before Black Friday, the 1929 crash the preceded the Great Depression.  That experience, if anything, reinforced the skepticism and mistrust of the average investor.

With the advent of Investor Capitalism about 40 years ago, when vast numbers of ordinary citizens become invested in stocks, shareholders began to approach the market to park their savings and discretionary funds, to build their nest eggs, to acquire the down payment on a house, to prepare for retirement and their children’s education.  Their aim was and still is, by and large, to get a better return, not to influence corporate policy.  Shareholders were still technically the owners or our corporations, but, without significant holdings, they have been largely passive and invisible.   They became mere investors, looking for the best deal.

Hedge funds have used their concentrated power of ownership to gain financial concessions from corporations.  A few pension funds, pressured by their beneficiaries, have sought to exercise their social conscience in divesting themselves of stocks in companies that pollute the environment or exploit workers.  But for the most part, such activism has been infrequent and limited.  People still largely want to make money from their stock holdings.

But now that investors have been reminded that their shares give them a stake in management, we may be on the cusp of change.

A financial correspondent for The New York Times recently received the following message from an irate reader about the vote of Citigroup shareholders:  “I’m about to vote my proxies and I’m going to vote against everything they want. . . . They all get too much money.”  She called it, a “shareholder revolt.”  (See, “Is Citi Just the Beginning?”)

And this morning’s ­Times noted that investors seem to be deserting the stock market.  A senior VP at Ameritrade, commenting on the fact that their trades are down 16%, attributed the decline to wariness following the 2008 debacle. (See, “Stock Trading Is Still Falling After ’08 Crisis.”)  This echoes the skepticism that followed the crash of ’29, now heightened by insider trading scandals and high-speed computer trading programs.  The small investor has less and less a chance to profit in this environment.

The “Occupy” and “Tea Party” movements have exposed the depth of resentment about our financial system.  The rights that go along with investor ownership stand a chance, now, of giving investors a new way to vent their frustration.  The sleeping giant of small investors may be aroused, and that may give our financial markets a jolt.

Two radically different solutions to a common problem are being proposed in Europe and America – or so it seems.  All our economies are in trouble:  massive indebtedness and credit shortages, on the one hand, while housing, employment, and growth are stalled.  In America the answer is, by and large, stimulus.  In Europe it’s austerity.  How to make sense of this?

To be sure, this is an oversimplification, but the difference in emphasis is striking.  While in the U.S. some far out Republicans oppose government programs in the name of “free markets,” and make political capital about deficits, there is a rough consensus in the U.S. that the economy needs stimulation.  On the other hand, as The New York Times noted disapprovingly:  “Europe’s leaders, masters of denial, are still insisting on destructive austerity.” (See, “The Global Economy at Risk.”)

But maybe the problems just seem the same.  They look like economic problems on the surface, but maybe they are really radically different political problems.

Europe is struggling with unification.  A common market and currency have obscured profound cultural and political differences forced to the surface by the Great Recession.  It was a nice idea to bring together Germany and Greece, for example.  The great German poets Goethe and Schiller worshipped ancient Greek culture, and you can see the influence of the Athenian acropolis all over Berlin.  But what do they actually have in common?  Do they understand or care about each other?  Do they even need each other?

The idea of “Europe” consolidated the influence of the Enlightenment, but that did not prevent two world wars from decimating the continent.  Now again, different ideas of government, different attitudes towards corruption, different habits of work are proving difficult to reconcile.

Austerity is being promoted as a means of creating a shared base line of fiscal prudence and social policy, a potential common denominator for a real European community.  If there is no common culture at a deeper level of shared assumptions and habits, can one be created as a solution to this crisis?

America, on the other hand, is being torn apart by an emerging new class system, fueled by dramatic income inequality.  Corporate pay is reaching shocking levels, even in the face of indifferent corporate performances, and shareholders are beginning to rebel.  Employment is still anemic.   The middle class is beginning to feel that the deck is stacked, that America is no longer the land of opportunity.  As a result, the political problem is to shore up the economy without worsening the gap between the rich and the poor.  Can it be done?

Hostility to the welfare state has left the poor exposed, with few safety nets left to cut.  Austerity here would be yet another way of illustrating the indifference of the rich.  In the current election campaign, Obama is promoting the “Buffet rule” to ensure that those making more than a million dollars a year pay increased taxes, while Romney, labeled as “wealthy,” is struggling to overcome the perception that he is out of touch.

Bound together globally, Europe and America both struggle to revive their economies, but do we really have anything to say to each other?  Our different answers may be because we are actually asking different questions.

“There must be a reason the laptop is singled out” at airport security, wrote Matt Richtel , a technology reporter for The New York Times.  But in trying to find our what that reason might be, he ran into a bewildering array of evasions and obfuscations.

A spokesman for the T.S.A. couldn’t explain it because he “didn’t want to betray any secrets.”  No help there, but Richtel went on to explore possible explanations.  Could battery compartments be used to hide homemade bombs?  Yet, he reasoned, some netbooks and ultrabooks have similar compartments, and they don’t require separate screening.

Maybe, though, the circuitry of a laptop could be replaced with a device to jam an airplane’s controls.  Yet that could be done just as easily with phones or game players, which also do not have to be separately screened.

A blog site for the T.S.A. offered this explanation for having travelers remove laptop from their carryon bags:  “screeners can get a better look at them and see more easily into the rest of the bag.”  But usually screeners do not actually look into the bags, so that “explanation” explains nothing.

Richtel commented that “a security expert who asked that he not be identified . . . said that the laptop rule is about appearances, giving people a sense that something is being done to protect them.  ‘Security theater,’ he called it.” (See, “The Mystery of the Flying Laptop.”)

Bruce Schneier, the security chief for British Telecom and a long-time security expert on the psychology of security, agrees:  “It’s all nonsense.”  There just is no reason that has to do with actual security.

So, then, what are the irrational reasons?

One is to be found in the old adage, ‘better safe than sorry.’  Excessive caution feels reassuring and prudent.  Along those lines, undoing a safety rule can feel dangerous.  What if the rule is repealed, so this worried thinking goes, but then someone does actually figure out a way to slip a bomb into a laptop?

No doubt this is how rules and regulations proliferate.  If something goes wrong, our tendency is to create new laws and procedures to correct the old ones.  Rarely will a reform movement lead to a rethinking of all the rules.

True enough, but I think the stronger reason is that incentives to make life pleasanter are weak.  To be sure, eliminating unnecessary procedures would improve life for countless thousands of travelers not to mention baggage screeners.  But whoever got rewarded for making life easier?  We’d rather feel safe.

We don’t expect things to be simplified and made easier.  We care more about security and safety.  Driven largely by anxiety and fear, we recoil not just from the physical threat of bombs but also from the risk of being blamed for what goes wrong.  We don’t want to feel guilty.  We don’t want to be singled out.

So we dutifully line up and submit to safety procedures, regardless of how arbitrary and nonsensical they may be.  That is, until, armed with the safety of numbers, the crowd rebels.

A new book, Why Nations Fail, argues that the wealth of a country is most closely correlated with the degree to which the average person can profit from his or her own initiative and effort.

In other words, claim the authors, Daron Acemoglu and James Robinson, it’s not about culture or climate or technological backwardness or, even, natural resources, as many economists since Adam Smith have argued.  It is about people having the opportunity to profit from their own work.

Adam Davidson, who writes “It’s the Economy” column for The New York Times Sunday Magazine, noted:  “According to Acemoglu’s thesis, when a nation’s institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help.”   He added his own telling example of Haitian mango farmers.  “Each farmer had no more than one or two mango trees, even though their land lay along a river that could irrigate their fields and support hundreds of trees . . . .  But these farmers also knew that nobody in their village had clear title to the land they farmed. If they suddenly grew a few hundred mango trees, it was likely that a well-connected member of the elite would show up and claim their land and its spoils. What was the point?”  (See, “Why Some Countries Go Bust.”)

Why Nations Fail is closely reasoned and persuasive.  You might think it would also come across as common sense in an age where the logic of markets has triumphed over centralized planning and collectivism.  It’s the same logic that drives entrepreneurs, inventors, local businesses, micro-lenders, and merchant in the souks and bazaars around the world.  What might have kept us from seeing this point before?

No doubt the power of entrenched interests, the land-owners in Haiti, for example, the ones who have the power to take over a good thing when they see it, or to prevent a competitor from thriving.  Or “special interests” that get legislation passed on their behalf.  Or simply the forces of too much money, overwhelming competition, corrupt government, unequal protection under the law, and so on.

According to Acemoglu, the Tea Party and Occupy movements show that many Americans still believe that that the political process can make a difference.  “But, he quickly pointed out, what if Americans find their protests have no impact? What if the United States becomes a truly extractive nation, with violent repression of protest or — in some ways, worse — the grudging acquiescence of the beaten-down masses?”

Acemoglu is pessimistic.  According to The Times, the book’s “sections on ancient Rome and medieval Venice are particularly compelling, because they show how fairly open and prosperous societies can revert to closed and impoverished autocracies. It’s hard to read these sections without thinking about the present-day United States, where economic inequality has grown substantially over the past few decades. Is the 1 percent emerging as a wealth-stripping, poverty-inducing elite?”

If people believe they have the opportunity to prosper, they will work to succeed.  But if the opportunity isn’t really there, even if they try, they will fail — and stay poor.