As we all struggle to understand the massive failures in the world of economics, increasingly we learn that even the "Big Brains" on Wall Street and in financial capitols around the world, didn't know what they were doing.
As each new revelation unwinds and each new disaster looms, the scope and complexity of the collapse is overwhelming. As might be predicted, we fall back on a tried and true method of dealing with complexity. We concentrate on teasing out one part of the problem. We fall back on picking at one thread of the cloth, of trying to master the details of one segment of the market. This becomes a sanity protecting activity that allows us think we have some control over a world gone mad.
We even have an expression for it! Down in the weeds.
The expression Down in the Weeds has been used to apologize for uncovering the nitty gritty details of highly arcane processes. It suggests that listener, or reader, could not possible have an adequate context for understanding, or really be too interested in what goes on behind the curtain. In his Sunday Column, Frank Rich examines how the failure to look at the big picture, and ask the big questions, has lead us into this particular weed patch.
But even the brilliant and always informative, Mr. Rich misses the point.
Any examination of regulatory failures by specific agencies, any review of the decisions by individual institutions, any analysis of foolish or greedy decisions by people, will not lead to a real understanding of what went wrong. More to the point, it will not prevent a repeat in 5, or 10, or 50 years.
We have to climb out of the weeds, hike up a tall hill, and take a much more profound look around at the social and financial geography.
Comforting as it may be to focus on some piece of the problem that seems manageable, and propose solutions for that piece, governments and their citizens, must confront the much more difficult task of trying to understand the underlying dynamics of the entire system if we wish to prevent a repeat.
A major component of the economic collapse is the sacred concept of growth.
Why do we value growth over stability?
Why do we ignore the pathologies that lead individuals to wars of expansion? Why do we accept their idea that larger is better, in countries, in corporations, in families, or in individual wealth?
How many times have we, collectively, stood by bathed in the imaginary value of growth, while things we did not understand were done in our name? How many wars, how many "expansions", how many thefts, how many crusades have been driven by the sacred idea of growth as the basic component of human civilization?
Grow or Die!
The idea that all things must grow, or die, is a false choice. Oh, we discuss sustainability in the realm of energy consumption, or food production, or breeding. But, that is just a another down in the weeds approach. We look at one face of the problem, and provide a solution for one aspect, in the hope that that understanding will generate a solution for the vast number of issues that we, as humans, confront. It won't work.
By refusing to stand and tackle the root cause of humanities woes, we just postpone the inevitable, and pretend that we understand something so huge, so complex, that no one knows what's really going on.
Industries do not have to grow. No one company needs to dominate the market for good and services. Economies of scale is only a rational argument if you accept the premise that local, or regional industries are not sufficient to the needs of their populations.
Jobs are not produced by "growth". Jobs are lost as local and regional institutions are consolidated and moved to central locations.
Money is withdrawn from the local economy. Investment is encouraged in businesses that are far away from the source of the funds, leading to less and less understanding by the investors as to how their money is used. Everyone wants personal economic growth, having been convinced by the pressing dynamic that Growth is Good. Dividends become hush money to divert questions and careful accounting. Managers take over, for a percentage, and claim to monitor the process.
Religious entities, seeking growth in the number of their adherents, and increases in their collection plates, promote uncontrolled growth of the population. This form of growth has pushed the ecosystem to the brink of collapse, and portends a future of extraordinary hardship for the survivors of unrestrained population growth. All these newly minted "souls" also require an income, a job, a place to live, further supporting the cries for growth.
It's not the hedge funds, or peak oil.
The root cause of the problems facing the world is a philosophy of growth that has become so deeply imbued in the consciousness of all peoples, that they find themselves Down in the Weeds, fighting to deal with a manageable segment of the disaster, unable to climb that hill and look around.
The reason the world is on the verge of collapse (even if we may figure out a way to pull back this time) is the wholehearted embrace of growth as a driving force in our social organizations. Until, and unless, we get out of the false security of the weeds, and tackle the philosophical implications of growth, we will simple delay the inevitable.