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I love the ’00s!

January 25, 2010

Admittedly, summing up the past decade in world historical terms is hard, but even with a generous handicap John Gray does a bad job of it. He complains that the two biggest fiascos of the last ten years–imperial overreach in Iraq and the failure to prevent worldwide economic collapse–were based on delusions: respectively, that democracy would magically take root in Iraq and that financial markets would magically regulate themselves. That’s hard to argue with, and anyone with a newspaper would admit as much. Indeed, the more honest among the responsible parties already have. The problem is that it’s basically just a statement of fact and not really an analysis of the failure. That They got things wrong is obvious; we want to know what and why precisely.

Gray does have something of an answer, but it’s pretty facile. It obscures more than it clarifies.

It is not often that large scale crises are due to intellectual error, but a single erroneous belief runs through all of the successive delusions of the past decade. With few exceptions, both right and left seem to think that history is a directional process whose end point–after many unfortunate detours–will be the worldwide duplication of people very like themselves.

This is the kind of sweeping statement that soothsayers specialize in. It rolls nicely off the tongue but the clarity it provides is only momentary and ultimately illusory. Having been riled up by a catalog of failures, we are eager to be told that there’s a single root to the manifold evil. As with fortune-tellers, the problem is not so much that the answer is demonstrably wrong as that it’s almost vacuous and in a way that’s suggests some misleading illusions.

Let’s take apart Gray’s statement bit by bit.

It is not often that large-scale crises are due to intellectual error…” Taken literally, Gray can’t be serious. Historians of the World Wars will be shocked! Show me large-scale crisis and I’ll show you intellectual error.  In fact, show me any crisis at all, and dollars-to-doughnuts I can show you intellectual error. Of course, Gray probably means just that large-scale crises are not often due to intellectual error alone. That’s true, and unfortunately for Gray it’s also true of the crises in question. In Washington, in Baghdad, and on Wall Street, there was certainly more than just intellectual error involved. Worse, Gray’s statement encourages us to focus on the intellectual errors to the exclusion of the others.

…but a single erroneous belief runs through all of the successive delusions of the past decade.” This makes it sound as if all the various delusions have the same one underlying cause–dig it out and you’ll rectify everything in one fell swoop. Literally, of course, the statement is much weaker. It just says that all the delusions incorporate a single erroneous belief. But that belief might play only minor role in bringing about the delusions, or indeed no role at all. Even if Gray succeeds in isolating a common thread among the delusions, it may not be a very interesting or important discovery.

With few exceptions, both right and left seem to think that history is a directional process whose end point–after many unfortunate detours–will be the worldwide duplication of people very like themselves.” Look, people have theories about how the world works. Those theories are often wrong, and people are often way too confident in their (usually wrong) theories. So there are two questions: “what’s wrong with the theory?” and “why are people so unduly confident in it?”. The important thing to notice is that Gray’s answer focuses entirely on the second question, the question about overconfidence, when in fact it’s the first question, the question about substantive theory, that is arguably more important. By doing so, Gray actually understates the extent of the errors involved. It’s not just that Bush, Greenspan, et al. were too confident in their own ability to discern the correct theory. They also just had the wrong theories, and even about the people who were like them!  Moreover, this was often for reasons, like incompetence and a preoccupation with bureaucratic power struggles, only tangentially related to overconfidence.

This confusion leads Gray to end on unproductively pessimistic note:

Unreality is the defining features of the ideas that have been in vogue over the past decade. The grandiose delusions with which the new century began have not been abandoned. Instead, they have been shrunk to a size at which they can still be maintained. The small world of British politics provides many examples of this tendency. Rather than acknowledge that neoliberalism has failed, politicians in all three main parties are seizing on a succession of intellectual gimmicks for solutions to the problems that the ideology has created. Gladwell’s blink, Sunstein and Thaler’s nudge, the wisdom of the crowds–these and other ephemera of the airport bookstore are being taken up, promoted and then forgotten in the floundering attempt to deal with a crisis that is only in its early stages. [my emphasis]

So politicians, it seems, are doing precisely what they should be doing: shrinking and modifying their commitment to capitalism in light of its past failures. Indeed, this seems to be the lesson Gray himself draws from the rise of Chinese capital: in the future there will be many different varieties of capitalism including distinctively non-western ones. To be charitable, the social science popularized in the airport bookstore arguably contains important lessons about what a reformed (Western) capitalism will look like. You can argue that the politicians are going about this reform all wrong, but accepting that there are other kinds of capitalism is no reason for abandoning the reform of your own.

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