As the newspaper headlines grow ever more doom laden the search is on for the ultimate cause of the current crisis. For many commentators, Seumas Milne in today’s Guardian is an example, this is the inevitable comeuppance for greedy bankers who have gambled with our mortgages and pensions. On the other hand, The Times’ Alice Thomson argues that the City has been responsible for the wealth creation of the past decade or so, and it’s both perverse and self-indulgent to be jubilant in the face of their banker’s woes.
So should we pin the blame on the avarice of the bankers? It is to be expected that City folk might be more prone to greediness than the rest of us. They are willing to work extremely long hours under great stress in a job whose only real recompense is money. We would therefore expect them to be more single minded about money than say teachers, doctors, or landscape gardeners.
But, the issues isn’t so much individual greed, but the legitimisation of greed by the City’s working culture. As regular readers will know, I tend to approach organisations and cultures through the prism of four fundamental ways of framing social relations; the egalitarian, the hierarchical, the individualistic and the fatalistic.
A key point about this approach is that in all structured social contexts these different frames co-exist. Indeed that any attempt to drive change should seek to engage with how change will appear and occur through these frames. Any strategy or culture which systematically ignores one or more of these ways of conducting social relations will ultimately be undermined.
Arguably the problem with the City culture was that personal predisposition, incentives and prevailing norms were all highly individualistic. Weak supervision and sheer complexity meant limited hierarchical control, while there appears to have a complete absence of value based or solidaristic (egalitarian) impulses. Even fatalism, which plays its part in curbing the excesses of the other frames was absent; no one in the City would ever shrug their shoulders and accept modest returns or small bonuses.
So a lesson that I take from the financial crisis is to beware organisational monocultures. They are inherently prone to dysfunction and vulnerability. By the way this would be equally true of a culture that was overly egalitarian; lacking hierarchy to offer direction and individualism to motivate such an organisation would be prone to introspection and sclerosis.
Finally, still on the financial crisis, on the one of my favourite commentators Anatole Kaletsky has today delivered a damning assessment of the US response. If he is right (and he usually is) Treasury Secretary Henry Paulson could go down in history as the man who turned a drama into a crisis.