Ignorance, unfounded faith and perversity equal trouble

Following on from my post yesterday, I've continued to think on this topic. So much to think about!

The Guardian in the UK has compiled a list ("Twenty-five people at the heart of the meltdown ...") of people to....well.....blame for the crash. All the big names are there and the role of each is summarised in more or less detail depending on their part in the big picture.

In each case belief appears have have played a significant role in the way each behaved. The article explains that even 'The Maestro' himself, former US Federal Reserve Chair, Alan Greenspan, now admits he acted on beliefs he now considers to have been incorrect.Many of the people listed in the article (like George W Bush) would have had no real idea themselves as to what economic or financial policy regime would have been best. They were almost certainly acting on the advice of others, many of whom are on the list. But acting beyond one's competence can't be an excuse when you are ultimately reponsible for the outcomes. If anything, this highlights there is too little diversity of opinion close to the where the big decisions are made, and the people who make the final decision on these matters don't actually KNOW.....they have merely been persuaded.The difference between the two is huge.

But how did they all get it so wrong for so long? US investor, Warren Buffet was warning of possible disaster 6 years ago, as was Nobel Prize winning economist, Paul Krugman in 2003's "The Great Unravelling".

Leon Gettler, writing in Melbourne's "The Age" at the end of October, cited "The Perverse Organisation and Its Deadly Sins" by RMIT academic Susan Long as providing some insight into why things were able to go so wrong: perversity.

Long argues that:

"... organisations and corporations can create perverse systems, of which there are several forms. "

"First, there is the state of primary narcissism, where certain interests are pursued at the expense of the general good, and others are turned into objects to serve certain ends."

"Second, there is a system where the awful truth is acknowledged and, at the same time, denied, echoing Freud's view that there is a part of the personality that sees things realistically and another that is locked into a delusion."

"Third, accomplices need to be seduced and set in place. These relationships need to be instrumental, turned into transactions. And perversion, she says, begets perversion. Which means collusion and turning a blind eye permeate the system."

On the RMIT page about her book, Long also says:

“To look at the formation of perverse practice, structure and culture within organisations is also to look at that development in society more broadly.”

So there it is. Perversity on this huge, globe-spanning scale isn't isolated or exceptional. It's most likely to be a reflection of the wider society. In that context, the ignorance of each of us about so much that we SHOULD know become very relevant. From climate change, to peak oil, to the way our own municipalities and countries are run, large parts of the population don't know (and don't want to). It's all part of the wider context in which the financial systems of the world become a slow motion train wreck right before the eyes of everyone.....and most weren't even paying attention and even most of the experts claim to have not seen it coming.

...and they really didn't. That IS perverse.