Friday, March 27, 2009

What I Meant to Say ...

Thinking and talking at the same time has never been my strong point. I mean, in a bar, I can talk with the best of them, as long as I keep the thought to a minimum. And I am not entirely incapable of thought, as long as I keep my tongue clamped firmly between my teeth.

But every now and again I have to combine the two and the results are rarely pretty. The RSA will make public my faltering efforts to present a case for a reformed system of expertise on their website, and may already have done so. But, for the record, this is what I meant to say:

26th March, 2009, Debate at the RSA

To what extent has the global economic crisis triggered a crisis of confidence in our previously trusted repositories of knowledge?


In the description of this debate on the RSA website one question stood out for me -

Can we continue to have confidence in the professional authority of bankers, financiers and economists, when they seem to have so grossly failed us?

The answer - as far as I am concerned is – I hope not. Not now. And not until important reforms are put in place.

And I would add most economics journalists to that list of people who have failed to give an accurate account of reality to the public. There are many honourable exceptions. I am thinking of Larry Elliott, Dan Atkinson, Will Keegan, and there are plenty of others.

But the journalistic profession as a whole did not appreciate what was happening in the seamier parts of the shadow banking system, and did not see the disaster coming.
More generally, they did not understand the flaws in the current model, and accepted that there was no alternative to debt-driven expansion.

It is important, I think, to take a little time to appreciate the extent to which the orthodoxy concerning political economy has collapsed. Speaking in October of last year, the former head of the Federal Reserve, Alan Greenspan, said that he had found what he called a ‘flaw’ in his economic philosophy:

I don't know how significant or permanent it is … I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.

Given that neo-liberalism rested on the idea that market actors were the only effective source of regulation, and given that a deregulated financial market has just exploded in an air-fuel conflagration of corruption and high-end mathematics, this admission by Greenspan is both significant and permanent. The most authoritative expert on the economy, in the reckoning of much of the media, the political establishment, and the economic elite, was wrong. Neo-liberalism wasn’t just pernicious in its effects and wrong in detail, it was wrong all the way down.

Now, as I say, to the extent that experts assured us that neo-liberal ideas were intellectually sound then these experts have forfeited any right to be taken seriously as experts in the future. Or rather, they will have to regain their status as experts by the simple expedient of not talking nonsense anymore.

And it is not true that everyone was wrong. People with prestige and power within the system tended to believe that the system was sound and even that we were living in the best of all possible worlds, in Pangloss’s immortal words. But there were exceptions among the elite. One thinks for example of George Soros, a highly successful market operator who understood intimately the defects in markets. In this country Peter Warburton and Ann Pettifor wrote presciently about the structural problems that were inherent in the neo-liberal model. There are others, and we should figure out who they were and ask them what we should do next, if we want to have serious experts advising us.

A reformed economy of expertise requires a certain amount of work from each of us. We need to look at the published output of as many writers on political economy as possible and assess what they said in light of what happened in 2007-2008. Those who were proven to be correct should command more respect and attention than those who were wrong. Expertise must be established against the historical record.

Before I continue, I want to make it clear by the way that I don’t want to focus too much on individual culpability tonight. I think it is important that we establish what experts said in the run-up to the crisis, the better to appreciate the extent to which the system of expertise in political economy as a whole broke down. Part of a serious process of reform must be a serious history of the last thirty years. Biography – combative biography even – must be part of that serious history.

That said, I think we should think for a moment about the people who were sufficiently honest and honourable to refuse to believe what was clearly untrue, who paid the professional and personal price. Those who made a career over the last generation advocating deregulation, privatization, and the wonders of the free market did so at the expense of men and women who had a more true claim to expert status than they.

But it is the systematic failings that matter. In many instances experts were recognised as experts, and rewarded as such, because they believed in the truth of the neo-liberal ideology. One thinks here of those distinguished scholars and visiting fellows at the various neo-liberal and neo-conservative think tanks. Under the circumstances, the system of rewards and punishments is more important than the behaviour of agents with it.

So, yes, the current crisis should cause a crisis of confidence in our previously trusted repositories of knowledge, to a very considerable extent. I hope it has done so in the audience.

If it hasn’t I am not sure what else it would take.


So, the system of expertise itself failed. With respect to Mr Keen, the menace of the recent past has turned out not to be the pyjama-clad keyboard commandos of the journalistic imagination. The menace that mattered was a kind of swindling use of expert status to dazzle the lay public and to marginalise dissent. It is not The Cult of the Amateur, but the cult of the expert that should trouble us. Mr Greenspan was no blog-writing dabbler, remember.

Now people who have, and enjoy, expert status like this question a lot -

What can we do to restore public trust in us?

When times are good, or crisis-free, experts like to call on the public to pull itself together and stop believing people who aren’t experts and who say nasty things about established authority –

We need a better public, a public worthy of us!

When crisis hits, the experts have another line, it’s one you hear a good deal at the moment in the newspapers -

We must try harder!

Yes, errors were made, yes there was an excess of enthusiasm, a certain lowering of critical standards. But lessons have been learned, a new mood informs our operations, we are resolved never again to repeat the mistakes of the past.
Until the next time.

We heard ‘never again’ after the Savings and Loans scandal, after the bubble and the accounting scandals at Enron, and elsewhere. We heard ‘never again’ after the fiasco that was the reporting before the invasion of Iraq.

And we are hearing it now.

I am afraid that this will not do. Exhortations to try harder are so much self-absolving humbug in the absence of serious changes to the economy of knowledge in our society, part of which will require radical reform of our most powerful repositories of authoritative information – the state, the media, the universities, and the large commercial enterprises – the institutions, in other words, that can effectively confer expert status.

Now, the current media system has repeatedly proved unequal to the task of describing reality accurately. It has failed to keep government and the large enterprises honest. At critical moments it has failed to serve the public interest. Coincidentally, its business model is also broken.

It is time to introduce a suite of reforms to ensure that it is tolerably honest from now on. Libel law must be changed to allow free political speech. The current arrangements are a scandal and a standing invitation to sycophancy and bad faith.

Expert libel lawyers hate hearing that one, by the way.

The BBC as a public service broadcaster must be democratised, and its operations put at a proper distance from an habitually shifty and unreliable state apparatus.

There are other steps we could take – commercial media that receive advertising revenue could be required to pay a levy that would fund local, national, and specialist investigative journalist bureaux, who would in turn be subject to direct control by readers, and would have guaranteed access to the mainstream, advertising subsidised media. In this way, professional journalism could be set free from concerns about advertising and focus instead on serving the public interest.

Incidentally, large enterprises should, where possible be controlled by the people who work there, and their political activities mandated by them. Too much propaganda that undermines the collective interests of most people has been organised and paid for by the very companies in which they make their living. The corporate sector has proved an unreliable guardian of the public interest, and should now therefore be reformed. Companies that wish to develop and fund experts should do so only at the initiative of the people who work in them.

It is also clear that finance is too important to be left to financiers. The private domination of investment in Britain has proved unable to deliver stable growth and should be replaced by a system in which priorities are debated publicly. The kinds of technologies that Don Tapscott talks about can play an important part in hosting these debates.


Now, I hope it should be obvious that I don’t think that this means we should do away with the idea of expertise, or anything like that.

In a complex society we can’t possibly understand every aspect of our arrangements ourselves, and we have to put our trust in experts every day. We put our trust in doctors, for example; we will need to our trust in all manner of experts in the future.

Our trust, but not our faith. And the distinction matters.

We should not be forced to choose between a rigid hierarchy of unassailable experts, passing information down to an essentially docile public on the one hand, and an online free-for-all on the other. The choice is a false one, for reason I just gave – we need and will continue to need experts, people who know things we don’t know, who have skills and experiences we don’t have.

But expertise must be earned and kept by honest means. Those who misinform the public must be denied expert status, those who speak honestly and wisely should be rewarded with it. Publicly accredited expertise depends on service to the public, not on the imprimatur of mediating institutions that can only fitfully and in qualified ways concern themselves with the public interest. Apart from the RSA, of course.

Our task is to ensure that the flows of information reaching us are accurate and relevant to the needs of a sovereign public. In my view that requires material change to the structure of institutions that we rely on for information, pre-eminently the media (as a parenthesis, I don’t think it will surprise anyone if I say that I think that universities should be protected from commercial pressure for this reason).

In the end, only such material reform – reform that addresses issues of money and status – can ensure durably reliable and well-informed comment and reporting.

We also need to be very clear about the limits of expertise. In a democracy there are finally no experts in citizenship. We are all, by dint of our being citizens, equally authoritative.

But in a democracy a sovereign people has certain responsibilities – among them we must take reasonable steps to ensure that we are well informed.

In that regard I think we are failing in our duty, and demonstrably so.

Experts must, if they are to enjoy public trust, serve a sovereign public faithfully. And the public must have effective means to ensure that their advisors remain faithful.

Until we make the requisite institutional and structural changes we are no better than a befuddled and foolish king, deceived by his courtiers, who knows little and cares less about the outrages committed in his name.

The crisis calls us to wake now from our faith in experts, and to exercise our own powers of discrimination.

Heaven help us if we do not.

Tuesday, March 24, 2009

Back to the RSA

I had completely forgotten, but I am participating in a debate on Thursday at the RSA. We are talking about the new age of uncertainty, the crisis of knowledge and the collapse of trust in authority.

In other news, Verso has started twittering and blogging and all sorts.

Thursday, March 19, 2009

Back to Comment is Free

The Guardian have just posted my contribution to the debate on the adequacy or otherwise of media coverage of the economic crisis.

I'd like to work up a more detailed look at this subject in the weeks ahead. Anyone interested in seeing what I come up with can leave a post here with their contact details or email me at And if you are aware of any examples of hopeless puffery, blatant log-rolling or fantastical optimism from journalists, economists and other opinion-formers, then I would love to hear from you.