Forced vacations are a fraud control

Patrick McKenzie (0:02)

Welcome to Complex Systems, where we discuss the technical, organizational, and human factors underpinning why the world works the way it does.

Hi, everyone. My name is Patrick McKenzie, better known as patio11 on the internet. A few weeks ago, I had the guest, Alex Elliott, on the podcast talking about some of the operational difficulties that were experienced in the back offices of financial firms. And Alex offered the following anecdote, even just exchanging calendars is hard. So I think people generally assume, oh, every exchange in the US is largely the same. That's generally true, but trading hours can be different at different US exchanges. Different countries have different holiday calendars. Some countries are more religious, some are less religious, so religious events can impact different calendars. And I was recalled this conversation when my children were asking me, why is Halloween such a big deal in the United States and it's not in Japan, except for some weird ways that it is. Is it because of a religious reason? And so there was a long explanation of All Hallows Eve, and then I thought, no, it would be really good to have an episode on this. As it turns out, I've written a Bits about Money issue about the fascinating minutiae about holiday calendars and financial systems before, and how they impact day-to-day lives, so I thought I would read it.

So this essay was originally published in Bits about Money back on February 29th, and in 2024, the American holiday calendar has not updated materially since then. I don't think off the top of my head. Financial systems take a holiday.

All systems reflect the culture they are created in, in ways great and small. The financial system and the human and computer systems which compose it have inherited norms about when work is performed from diverse societies which built and built financial systems. Your bank takes holidays. Your conception of a holiday is materially informed by when banks are closed. No system of importance can be accurately described without the context of the culture that created it. And no culture can be accurately described without the context of the systems embedded in it. Neither is chicken, neither is egg.

Cultural commentary aside, this has material consequences. The app in your pocket that moves money gets less useful during holidays and on weekends.

This sometimes occasions gnashing of teeth. Many people and businesses find it inconvenient when financial systems are down. It also seems unnecessary. Financial systems are inseparably computer systems. Most similarly important computer systems don't take holidays. Google doesn't take holidays, or doesn't seem to, from the perspective of a typical user at any rate.

Technologists describe their systems as having uptime and measure it in nines, such as we have five nines of uptime, which means that a system has 99.999% uptime or equivalently about five minutes of downtime every year. Five nines is admirable in many circumstances, and would be considered disastrously below expectations for, for example, Google search.

Nonetheless, many financial systems do have availability, which is far closer to five twos. They aren't fully open for business during holidays, weekends, or outside of business hours. It turns out that holidays, weekends, and business hours are far deeper topics than one might think. As always, while I previously worked at Stripe and am an advisor to it, it does not necessarily endorse any commentary I make. Illustrations of engineering reality made below are for color purposes and taken from general industry knowledge rather than private knowledge of particular design documents for specific systems at any firm. What is a holiday anyway?

A holiday is any day you and your counterparty mutually agree is a holiday. There is often an implicit agreement via shelling points. No serious person disputes that Christmas Day is a holiday in the United States, and accordingly no one needs to ask if Christmas Day is a holiday. But many salarymen in Japan work on Christmas Day. Of course, despite their co-workers Taro and Patrick skipping work to go to a Jewish friend's birthday party or something, Taro and Patrick are, of course, eccentric. If I can pre-answer a poindextery observation, yes, I'm aware that some people work on holidays. That is why we describe that as working on a holiday as opposed to working. The distinction often has material consequences.

For example, one of a million things dooming government payroll systems modernization projects is that they require, and universally fail to budget for, substantial bespoke work by historians to figure out which set of documents is the controlling authority with respect to what overtime rate applies to meter maids in Chicago on Good Friday. Holidays can be broadly understood. Every child knows this, facts, but they can also be contentious sites of explicit negotiation.