Pretty mechanical really. Ho hum.

That’s certainly a pessimistic outlook, but one shared by many. In looking back on Edward Harrison’s post last week, “A populist interpretation of the latest Boom-Bust cycle,” perhaps it is the assertion of that worldview that gave me the most discomfort. Harrison cites Jared Diamond’s “The Theory of Kleptocracy” from Guns, Germs, and Steel and specifically Chapter 14, entitled “From Egalitarianism to Kleptocracy.” According to this theory of history, kleptocracy in complex socities is inevitable.

My problem with such theories of history is that they draw the bow of life so taut that they snap the string, tending very readily to a moral, social and political indifferentism, defeatism or nihilism.

This leaves me with no other option than to embrace a more optimistic theory of history, such as that posited here by Peter Turchin:

http://thesciencenetwork.org/programs/beyond-belief-candles-in-the-dark/peter-turchin

And do the doomsayers not give us only half the truth? As Turchin says, should we not also look at the successes of these societies, and not just their failures?

And what tremendous successes the Enlightenment as well as its economic paradigm, capitalism, have provided! As Richard Bernstein wrote in Dictatoriship of Virtue: “The plain and inescapable fact is that the derived Western European culture of American life produced the highest degree of prosperity in the conditions of the greatest freedom ever known on planet Earth.”

On the pessimism-optimism spectrum, when Niebuhr wrote Moral Man & Immoral Society he ranked somewhere between the moral cynics (New Atheists) and the optimistic rationalists (contemporary examples would be Turchin and the scientists David Sloan Wilson and Jonathan Haidt). He expressed severe reservatons as to whether a coalition between factory workers, small farmers and white collar workers could materialize to match the power of the oligarchs:

At any rate it is not safe to count upon the farmer as a political ally of the industrial worker, however much the logic of economic fact might seem to make him a natural ally of the proletarian. If we thus exclude the middle-class urbanite and the farmer as possible adherents of a parliamentary socialist party, we must arrive at the conclusion that the possibility of winning a parliamentary majority for evolutionary socialism is fairly remote and may be entirely out of question.~

Niebuhr’s pessimism was of course proved wrong, and the New Deal did happen. But one must recall that when Niebuhr published Moral Man & Immoral Society in 1932, the dark clouds of totaliarianism had gathered over Europe and Russia, and the future of the U.S. was all but certain.

So the United States has been in situations before similar to what it now finds itself. To assume that the triumph of the oligarchs is a certainly is therefore not a safe assumption. Democracy in the United States might just prove to be stronger than what you believe.

I have been enjoying your and Downsouths conversations in this thread. Although the marrow of the discussion seems, to me, is what can man grasp/hold on too, in order for “society_to_be cooperative”. Have not all these belief systems of our ancestors attached them selves to the wealth/toil of the common people for their benefit, especially mono-theocracy’s (children of god, in said god likeness, are gods in their minds, enabled to befoul their environment and unbelievers, judgment delayed to the afterlife and not in the hear and now), is this not the true moral hazard [?].

Would it not be better to accept that we are judged day to day (cooperative) out side small infractions. I for one, would prefer some fashion of thought where life is viewed as a never ending theory where your “land of ought” is the path to “is” and society is careful not to mix the two up till “is” can be pronounced empirical (no flat world, round world conflicts).

For all the proclaimed good, belief systems (for social order),in my interpretation of history is the most malevolent force in our history, continuously hijacked for the benefit of the few and the manipulation of the many.

skippy…belife system or superstition system umm I invoke the X factor (belief) therefore discount all evidence contrary to my beliefs.

Popper identified quite clearly that the true job of scientists is to propose what ought to be and check if it is confirmed by what is : the only gateway to the land of is is the land of ought.
I indeed believe that there are some cooperation mechanism that are the result of evolution.
However, as in many other aspects of our DNA evolved characteristics, these mechanisms are overwhelmed by the speed at which the environment is changing.
Cultural evolution mechanisms (memes as some people call them) are faster reacting and indeed proved quite efficient at adapting throughout human history. Religion is probably the most successful and powerful one. It is noteworthy that religion played an essential part in credit mechanism since the early days of humanity (for instance, in Ancient Egypt, where there was no currency, the priests were in charge of certifying weights and measures that were used for bartering real goods (loafs of bread to be exact)). It would be indeed a sufficient cause for the priest class to exist. Some (and I am part of it) may maintaining the productive cooperation is their only role, but I can understand that believers do not concur with this view
The problem now is that society changes at too fast a rhythm for established religions, leaving a dangerous moral void. If Bankers were supposed to be the new priestly class, they obviously failed in that dimension !

But, as you say, it were CEO’s who designed the bonus formula.
I am saying that even if they had to bring the firm to the cliff’s edge, in order to obtain insanely bonuses, more than anyone could ever need in his whole life, no matter to luxurious lifestyle, they apparently have been prepared to do so. They are financially secured for the rest of their lives: mission accomplished!

How else can one interpret CEO’s saying, well, we knew the party had to stop, we only did not know when, and we liked to dance while it lasted?!

carol765,

The investment banks, when they were partnerships, did not go over the cliff en masse as they have this cycle. Just go check the history of the industry.

sigh

I love the laser focus on incentives resulting from compensation schemes while completely ignoring the perverted incentives caused by government regulation and intervention.

so the writer is from the UK. That makes her statement re excessive outrage all the more disqualifying.

The behavior in the City was excessive, and has left the UK (future) taxpayers with in incredibly high tax bill. Contrast that to a broken bank building window.

So the writer has detailed knowledge of the failures of Icelandic banks, which has bankrupted the country. The Icelanders and their children and their grandchildren are facing a huge bill. Contrast that to the demand for an early general election. Wow! How excessive!