Credit Crises & Ideology

Ideology is one of the toughest concepts to grasp in public affairs.  We generally prefer the more basic term 'group think'.  Corporations, institutions, bureaucracies and governments certainly have 'group-think' but do they have ideology?  Since only individuals can really have thoughts, ideology, when you come down to it, is just what happens when an organised body of thinking persons starts closing off their options in order to maintain some organisational coherence.  To effect action in the world, groups of people have to start communicating in short-hand.  Bit by bit, the short hand becomes ideology and the querying of assumptions or even the asking of questions come to seem as, at best, irrelevant (certainly to the ambitious) and, at worst, treacherous.

Those enmeshed in an ideology find it hard to think in any other terms. Yet whole systems of thought have come and gone when they no longer worked for the people who espoused them.  How does this happen?  The philosopher Thomas Kuhn introduced the idea of the paradigm in analysing how science works.  A paradigm shift in the sciences happens when all the facts no longer compute with an older paradigm. A new paradigm or theory has to be constructed that fits with the new facts. The scientist then adopts the new paradigm until new facts force yet another shift - often against the screams and protests of conservative or sceptical thinkers.  Such shifts are often, by their very nature, generational.

In public affairs, we may have neglected too often the fact that we and our clients are also enmeshed in paradigms and ideologies. An assumption of stability may be what we require just to carry on as we do.  If you read the Economist regularly or the editorials in the Financial Times, you see ideology in action - a set of coherent ideas, in this case liberal, that feels itself triumphant, intellectually unassailable, permanent because it is 'true'.  In fact, it is not necessarily 'true' at all.  It may be contingent and only exist because it 'works' in that particular context, in that place and at that time.  IRNA and Tehran Times, of course, also represent an ideology that is triumphant, considers itself spiritually unassailable ... and 'works' in that context, in that place and at that time.

If faith-based views of existence, extreme nationalisms and Marxisms have been thrown out in the West, liberal ideologues interpret this to mean that international liberalism is the point to which all history has been reaching out for fulfilment - this is Fukuyama's ill-timed thesis of 1992.  Such liberals are the faithful heirs of the theory of Divine Providence, of the Enlightenment, of the 'invisible hand' and of the Whig view of history

Do we accept all this because it is, in fact, all true or because it is comfortable?  Because it suits us and it works for us now rather than because it is essential to a right understanding of the human condition as a whole?  Is our dominant ideology not as vulnerable to new facts on the ground and to paradigm shift as any other ideology?  As advisers on public affairs, should we not be actively watching out for the emergence of other models that might come to be adopted by the wider community because they will 'work' better under new conditions?  And advising our clients on how to adapt to survive before the next crisis comes?

There are two clear rules in any political paradigm shift - first, that such shifts are very swift and take most people by surprise and, second, that historians can usually find the causes after the fact and can then make them appear to be 'inevitable' or certainly very probable in retrospect.  For most businesses and private individuals, there seems little profit in trying to second guess the big trends in the political market - most continue to buy and sell on small market movements and then get surprised by the 1929-type quakes.  But the clever money is always looking at the big trends and making them work for it, allowing creative destruction to work its wicked way on others while it looks to the future - 'sell coal, iron and shipbuilding, buy electricity, plastic and automobiles'.

Despite the current creative destruction taking place in the credit markets, which was likened by the German Bundesbank President today to an old-fashioned run on the banks, the clever ones had already seen the sub prime crisis coming.  They organised early and silently to prey on the weak links in the capitalist chain.  Radical liberal ideology may speak of 'moral hazard' but people who may be made homeless en masse (if it ever gets to that) are not going to be interested in any coherent ideology that does not work for them in their unfortunate condition - new facts will demand new theory. 

Much as the Bolsheviks were pre-organised to exploit the misery of Tsarist Russia, someone may, at this very minute, be preparing to exploit any one of a number of sullen discontents whose depths are barely noticed by metropolitan commentators in the Western liberal media.  We'll see what happens in due course - but you can be sure that history never stops.   Nor does human ingenuity in creating new and perfectly 'workable' intellectual models designed for new political purposes.