• High Contrast
• Large Text
• Mobile

In my blog yesterday, I am mentioned that I had just finished reading Michael Thompson’s book, Organising and Disorganising. I wrote to Michael today to say how much we are looking forward to hosting him here in December and asking him to write a piece for the Journal.

Cheekily, I not only suggested a topic but offered my own thesis – I hope he doesn’t take umbrage. As regular readers of my blog will know (we must have lunch soon, Mum) the analysis of Michael’s book is based upon what he calls cultural theory. In essence, he argues there are four fundamental ways of viewing and conducting social relations. They are:

· Hierarchical – in which change is seen to come from the top through authority, expertise and traditional rules.

· Individualistic – change is seen to flow from the pursuit by each person of their own self-interest.

· Egalitarian – in which change is seen to develop bottom-up through group membership, shared values and solidarity.

· Fatalistic – in which change is seen to be illusory or random.

In fact, in the book, Michael creates a fifth category but you will have to buy the book to discover what it is ….

This theory has so many strengths, it is difficult to know where to start. In particular, I like the fact that Michael rejects the notion that human development has an end point in favour of the view that change always results through the ‘clumsy’ interaction of ways of thinking and behaving. Another insight is the understanding, when one or more of these views, is excluded the outcome is at best sub-optimal, at worst catastrophic. And it is this that I asked Michael to reflect upon, asking him to think about what cultural theory has to say about the banking crisis.

My thesis, shallow though it might be, is that the crisis reflects what happens when those who dwell within and preach a monolithic culture are given too much power. All that mattered in the City was individualism; there was no egalitarian belief in a wider social or moral purpose for banking, nor was there any effective hierarchy as the rules didn’t work, those notionally in charge were on a merry-go-round they could not get off (even if they wanted to) and no-one even really understood how the system worked.

Finally – and crucially – there no fatalism, which cultural theorists see as playing an important role in social order and change. Every banker believed he had an unlimited capacity to generate wealth and increase his earnings. To have a major area of activity so dominated by a single framing of human relations is rare. To then give those in that area the power to determine the well-being of billions of citizens is – as we have now come to understand – a disastrous error.

To the accompaniment of the sound of stable doors being loudly bolted, we are now seeing national leaders trying to reassert the importance of hierarchy in the form of strengthened global governance. We have already seen a growth in alternative lifestyles and in people seeing climate change as a powerful rationale for new forms of egalitarianism. Economic recession also provides the right circumstances to induce a long wave of fatalism. So we are poised at a very interesting moment.

I have sent the email to Michael just today and will report back whether he takes up the offer and on what he thinks of my thesis.

Sorry if this blog is a bit repetitive but for me cultural theory is like hearing a good joke – you want to keep sharing it. And to make up for being so boring here is a joke I made up last week (yes, yes, I really did make it up myself)

Where did Emile Zola go to relax?

His j’accuzzi

It is I’m afraid a shocking insight into the RSA that when I told a member of the project team this joke she asked

‘Emile Zola, didn’t he used to play for Chelsea?’

• Matthew from Triarchy Press - 30 Oct 2008 3:24pm

  I should declare my interest at the outset: I'm involved in publishing the book [http://triarchypress.co.uk/pages/book16.htm] and the way of thinking it provokes has changed my view of the world in profound ways. I agree that it has good potential as a tool to understand the banking crisis (I also suggested Michael might write something on it buy hey, there's room for lots of writing in this world :-) and I've had a stab at it on our blog [http://triarchypress.blogspot.com/2008/10/organising-and-disorganising-and.html]. But there's a spoiler: I do reveal the 5th way of life. Only you will need to buy the book to understand it.

• Matthew from Triarchy Press - 30 Oct 2008 1:57pm

  I should declare my interest at the outset: I'm involved in publishing the book [http://triarchypress.co.uk/pages/book16.htm] and the way of thinking it provokes has changed my view of the world in profound ways. I agree that it has good potential as a tool to understand the banking crisis (I also suggested Michael might write something on it buy hey, there's room for lots of writing in this world :-) and I've had a stab at it on our blog [http://triarchypress.blogspot.com/2008/10/organising-and-disorganising-and.html]. But there's a spoiler: I do reveal the 5th way of life. Only you will need to buy the book to understand it.

• Richard - 29 Oct 2008 11:42am

  Also, I worry that there is too much focus on human motivations in analysis of the banking crisis. The real prize is understanding the defects of the system which gave rise to an individualistic monoculture. You have not made the suggestion, but to regulate directly for pluralism would surely prove as (in)effective as regulating for prudence through capital requirements. Rather than regulating against bonuses to prevent short-termism, let some banks proceed with their folly and let the market provide the evolutionary pressure. We don't want a system where banks don't fail, but one where banks can fail (often because of social monocultures) without threatening the whole system. The problem today seems to be that banks have intertwined their fates through securitisation, 'credit default obligations,' etc - or rather that they have thereby obscured their own fates, even from themselves, and so have stopped lending to each other through mutual distrust. This is not my area of expertise, and I more or less defer to John Kay on these matters [http://www.johnkay.com/recent/] - incidentally an economist who surely deserves to make your recent 'I told you so' list. /// I do wonder if our attitude towards the markets should change in the way our attitude to forest fires did - from one of viewing all fires as bad to one where we understand the role of fire in the ecosystem. In the absence of regular fires, plants might evolve for rapid growth and prudent plants might be outperformed (or taken over in aggressive aquisitions by other plants...). Anyway, I think the metaphor is powerful enough that I don't need to spell it out. If the analogy holds, perhaps this crisis would have been averted if the Fed had periodically and randomly thrown up interest rates and watched the imprudent burn. The question is, what system of incentives is necessary to maintain a healthy mix of individualism, heirarchism, egalitarianism and fatalism? /// (P.S.> as I suspected, a google search reveals others have had similar thoughts.. eg. http://denisbider.blogspot.com/2008/09/forest-fires-and-risky.html)

• Richard O - 29 Oct 2008 11:39am

  This all sounds intriguing, and if nothing else you can tell Michael that you have sold at least one more of his books... but (admittedly from a position of relative ignorance) I remain unpersuaded as to the special explanative power of cultural theory, particular as applied to the banking crisis. Are you not just using cultural theory as a shorthand (not such a shorthand, by the time you have explained the theory) to give an account of the crisis which has already had wide circulation..? That is: that the individuals concerned became too motivated by self-interest/greed (individualism), without being held in check by bosses or external authorities (heirarchist), without being held back by fear or a belief that things would ever change for the worse (fatalism), and without a commitment to adding social value through their work or a concern for the losers in zero-sum market trading (egalitarianism) (the free market is pretty inimical to egalitarianism, so in both my and your accounts trying to imagine how it might have been included sounds a bit of a fudge...) /// To make this point of cultural theory more generally: what is it really describing?. 'Four ways of viewing and conducting social relations'?... 'Attitudes to change'?... 'attitudes to risk'[http://en.wikipedia.org/wiki/Cultural_Theory_of_risk]?... Are the four perspectives not actually reducible to four flavours of human motivation (self-interest, authority, solidarity/empathy, despair/apathy)? Little surprise then that we can explain human folly (including the banking crisis) in terms of human motivations. /// What does cultural theory add to our understanding? Perhaps it helps us to consider the effects of an aggregate of similar individual motivations... but is this anything new? Perhaps it provides a comprehensive explanation of how a single motivation/perspective predominating in a culture will ultimately be detrimental... but presumably the detriment will be very different in each kind of monoculture? Perhaps its value is in the realm of 'neural reflexivity'- if bank bosses had been au fait in cultural theory would the crisis have been averted?

• Matt Cain - 29 Oct 2008 9:39am

  I'm unconvinced that "there was no egalitarian belief in a wider social or moral purpose for banking". What about Ark's £26m fundraising dinner in 2007? Or UBS' commitment to classical music and education around the City and Hackney?

If you already have an account please sign in below, or sign up for an account.

If you cannot login, or have forgotten your password, please go to our Password Reset page to change your password.

If you have any other queries regarding your account please email fellowship@rsa.org.uk.