Benefit of The Buzz

The gulf between practice and preaching is vast enough to swallow almost anything, but I am beginning to think we have something caught in our collective throat. Despite all our claims for the higher virtues of compassion, truth, and altruism, our common culture has persisted in attaching a positive presumption to material success. Those who excel in economic competition, the tacit reasoning goes, must merit it; and therefore they deserve to be heeded. They deserve the benefit of the doubt.

This is in contrast to the cultural assumptions that dog losers in the economic race: they are lazy, they fail to plan ahead and conserve, they deserve punishment for spending beyond their means, their misfortune is self-created. Rather than meriting the benefit of the doubt, they deserve to suffer. Nearly a week ago, Paul Krugman’s “Punishing The Jobless” column on the shameful Congressional failure to extend unemployment benefits quoted Sharron Angle, the Republican senatorial candidate from Nevada:

…who has repeatedly insisted that the unemployed are deliberately choosing to stay jobless, so that they can keep collecting benefits. A sample remark: “You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job but it doesn’t pay as much. We’ve put in so much entitlement into our government that we really have spoiled our citizenry.”

Cognitive scientists call this the “just-world fallacy.” Some people have such a profound desire to believe that the world is just (perhaps as a holdover from childhood hopes), that they collect or invent reasons why certain people prosper and others suffer, rationalizing and justifying the existing order of winners and losers. Believing that people earn and deserve their fates lessens the believer’s anxiety about the possible impact of random events or forces on his or her own life. It confers the presumption of merit on the rich and the presumption of fault on the poor.

But ultimately, no presumption is immune from reality. This week’s buzz has has included some harbingers of possible change.

Friday’s New York Times carried a fascinating piece about wealthy homeowners defaulting on mortgages.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Brent T. White, a law professor at the University of Arizona, says they are also “[L]less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest.” And, although the article doesn’t say so, more entitled to please themselves without much attention to what anyone else thinks.

A day earlier, Krugman pointed out that despite a huge boost in corporate profits and stock trades, “All the buzz lately is that the Obama administration is ‘antibusiness.’ And there are widespread claims that fears about taxes, regulation and budget deficits are holding down business spending and blocking economic recovery.”

Krugman correctly blames lobbying groups like the U.S. Chamber of Commerce, profiled in the Washington Monthly. It’s the nation’s most profligate lobby, spending vast sums to scare people witless (including $800,000 a day to defeat healthcare reform):

“What we always said was the Chamber does best when there’s a Democrat in the White House, because you want businesses to be scared,” a former Chamber lobbyist said. “There’s no better time to raise money than when businesses are scared.”

Tom Donohue, the Chamber’s president, is himself portrayed as an improvident spender and talker, running up organizational deficits at least proportional to the federal deficits he denounces. His extreme stance against scientific evidence of climate change caused Apple and other major corporate members to withdraw; and some local chambers regularly distance themselves from the national organization. But while the current leadership’s tactics may be cruder than usual, it is all part of a decades-long effort to dismantle the financial regulations of the New Deal. (I wrote about it back in May, linking to some of the original strategy documents.)

In some ways, the most encouraging signs of a shift come from a corporate study of CEOs (who, like philanthropies, like to examine themselves: whether the reason is narcissism or the evergreen hope that they will thus discover the secret of success, who can say?). IBM’s just-released biennial study, entitled Capitalizing on Complexity, provides a really interesting snapshot of the way these leaders see themselves and the world. This summary is offered by IBM’s Chair:

1. The world’s private and public sector leaders believe that a rapid escalation of “complexity” is the biggest challenge confronting them. They expect it to continue — indeed, to accelerate — in the coming years.
2. They are equally clear that their enterprises today are not equipped to cope effectively with this complexity in the global environment.
3. Finally, they identify “creativity” as the single most important leadership competency for enterprises seeking a path through this complexity.

On the one hand, the report is affirming of the cultural values I’ve been espousing:

Creativity is often defined as the ability to bring into existence something new or different, but CEOs elaborated. Creativity is the basis for “disruptive innovation and continuous re-invention,” a Professional Services CEO in the United States told us. And this requires bold, breakthrough thinking. Leaders, they said, must be ready to upset the status quo even if it is successful. They must be comfortable with and committed to ongoing
experimentation.

Although the report doesn’t say so—in fact, it doesn’t offer any advice about how to learn creativity, just an imperative to do it—the skills and habits of mind that cultivate creativity are intrinsic to artistic practice, and can best be learned in that realm.

Perhaps inadvertently, the report also undermines the pervasive superstition that the future can be known and controlled:

Increasingly interconnected economies, enterprises, societies and governments have given rise to vast new opportunities. But a surprising number of CEOs told us they feel ill-prepared for today’s more complex environment. Increased connectivity has also created strong — and too often unknown — interdependencies. For this reason, the ultimate consequence of any decision has often been poorly understood.

Still, decisions must be made.

You can feel the desire to hold onto the fantasy of a knowable and controllable world in that phrase, “For this reason.” It alludes to the delusion that when things were simpler, the ultimate consequences of decisions could be fully understood. I find it fascinating that so many of us cling to this dream despite abundant evidence to the contrary: the law of unintended consequences is one of the toughest to evade, as any student of public or private hopes and realities can testify.

So contemporary superstitions still exert some force, but the overall message is that CEOs, like the rest of us poor humans, don’t know what to do, and that to face that truth, it’s best to be dextrous, flexible and improvisatory (developing skills, not blueprints, letting go of what doesn’t work); and to stay in touch, listening to and communicating with those involved in and affected by your actions.

There’s a chilling aspect to the report, too. Especially in the absence of reliable external guidance, the hope is that people will rely on an internal sense of what is right to guide their actions. After all, creativity is amoral: it takes tremendous creativity to invent new poisons, devise deceptive advertising, or defraud stockholders. What’s missing from the IBM study is what’s missing from the Chamber of Commerce’s lobbying efforts, and from the psyches of mortgage-defaulting millionaires as well as the right-wing politicians who are blocking the extension of unemployment benefits to punish the jobless: any serious consideration of the roles of compassion and social responsibility in commercial, governmental, or financial systems. Here are some of the words that don’t appear, either in IBM’s main text or its quotations from participants: ethics, ethical, moral, morality, democratic, democracy, participatory, participation, poverty, wealth, social justice, equality.

I’m familiar with the argument that claims a kind of neutrality for business: it’s a tool, like a screwdriver, with no intrinsic moral or ethical character. How you use it is up to you. Maybe so, but as they say, if all you have is a hammer, every problem looks like a nail. And if all you have is an understanding of your work in the world severed from any requirement to do the right thing, every economy looks like ours, a once-vibrant sector depleted by the self-dealing and self-serving choices of leaders, public and private.

To the extent that IBM’s report faced and admitted the dawning role of uncertainty in a realm that once claimed triumphal certainty, I applaud it. But I’m even happier about the way it supports (however inadvertently) questioning our collective wisdom in awarding economic winners a benefit of the doubt denied to those impoverished by the policies they promote.