The worst of the banking emergency appears to be over and the stock market may recover its losses but we have yet to see the long term effect on social norms of the credit crunch.
Emile Durkheim – one of the founding fathers of sociology – is famous, among other ideas, for developing the concept of anomie. Academics still debate exactly what the term connotes, but broadly it is a state of dislocation between the individual and society resulting from a failure of social expectations and norms. Durkheim himself said that conditions of boom and bust create anomie by attenuating the links between personal effort, social order, status and reward.
The credit crunch will generate a wave of anomie. For the public being reminded about city bonuses, and seeing even now generous payoffs for the architects of the recent disasters, underlines the break down of any relationship between merit and reward. The volte face of Governments on not only on state intervention but also the way the state has suddenly discovered a bottomless pit of extra money has undermined whatever lingering faith the public had in the protestations of their elected representatives. Finally, the failure of any expert to sound the alarm bell (hardly a single refereed article in any respected economic journal predicted the global contagion) will have ramifications for many other areas where the layman relies on the insights of experts. CERN’s large hadron collider hasn’t managed a full speed smash yet, but in the build up to the machine being turned on we were told not to worry about wacky predictions of the end of the world. After all, every expert said the technology was safe. But how is Joanna Public to distinguish this expert consensus from the complacency of the decision makers, academics and journalists who observed our walk to the edge of the financial abyss? More seriously, who now will trust what anyone in authority says about climate change?
In periods of anomie rates of murder, suicide and depression go up. People withdraw from society disoriented by the failure of its norms and systems, or they become susceptible to demagogues offering a simple explanation for the breakdown of the old order.
This is why it is such a problem that so few people in authority are willing to take responsibility for what is happening. It is not that apologies from millionaire bankers or superannuated regulators are worth a spoonful of spit in themselves, but the people need to believe that there is an explanation for all this. If the reaction of those retreating to their mansions in Gerrards Cross is simply to shrug their shoulders and murmur ‘shit happens’ they can hardly then complain when the hoi palloi not only treat the ruling class as undeserving parasites but also view their own place in life as a matter of crude fate. Once again we are reminded that censorious phrases like ‘rights and responsibilities’ or a ‘a hand up not a hand out’ are meant to apply only to the great unwashed.
The social elite is not a homogenous whole but it can look that way from the wrong end of the telescope. Unless we see some serious reflection, soul searching and humility from the rich and the powerful the longest lasting effect of the credit crunch may be to stretch the tattered fabric of social trust and respect to tearing point.