Saturday, July 14, 2012

Brooks on elites, take 2

My earlier entry on David Brooks' New York Times opinion piece started out well enough, but soon got sidetracked onto what I acknowledge is a hobby horse of mine: I started railing against the conservative crusade against government and taxes. Brooks, however, wasn't just talking about elites in government service (and he didn't say anything about taxes): he was talking about elites everywhere in our society.
Through most of the 19th and 20th centuries, the Protestant Establishment sat atop the American power structure. A relatively small network of white Protestant men dominated the universities, the world of finance, the local country clubs and even high government service.
Though he mentioned government there and once elsewhere in his piece, he touched on "Wall Street" and "finance" five times (six, if you count the reference to "the Libor scandal"). Clearly, he had the financial services industry on his mind when he wrote this piece.

I still think the libertarian-leaning conservative elites who have done so much to sway the country's thinking in the last three decades must take a lot of blame for the rotten attitude Brooks detects among today's elites. But when Brooks claimed, "Wall Street firms, for example, now hire on the basis of youth and brains, not experience and character. Most of their problems can be traced to this", he inadvertently touched on another shortcoming of Wall Street's that he failed to mention but that I think contributed even more prominently to the industry's disgrace. Wall Street may hire the young and brainy, but what about the men in charge of those young and brainy hires? If those new hires were deficient in the virtues department, wasn't it their managers' job to inculcate those virtues?

Oh, you say, but Brooks' point was that the WASP elites had those virtues, but the new, politically correct elites don't. Yet even if you grant this contentious point, why weren't those WASP elites able to pass along those virtues to the allegedly more meritocratic youths they hired who, apparently, lacked those virtues?

Those WASPy elites were not snatched away by angels (or demons) all at once. There was a transition period, during which they and their meritocratic successors rubbed elbows. Institutional cultures do not change overnight, nor do they generally change without the acquiescence of upper management. So those legendarily virtuous WASP elites fumbled the ball when they passed it along to their meritocratic and apparently non-WASPy replacements. Or maybe the elder elites weren't quite as virtuous as Brooks thinks. Or perhaps all institutions were subjected to societal forces that no elites could have resisted, WASPy or not.

It's comforting to assume that "those people" were raised wrong, and that to fix society all you have to do is to fix "them". Yet this kind of thinking, besides being too conducive to pointless class warfare, is liable to distract one from bigger problems. For instance, if our elites lack certain virtues, isn't it at least possible it's because our society as a whole lacks them?

Or are you saying, Mr. Brooks, that becoming a member of the elite in this country inescapably leads to a loss of moral fiber?

(I'll admit that when I contemplate a Sheldon Adelson or David Koch, I wonder if that might not be true.)

In corporate America generally, including Wall Street, I think we can ascribe a great deal of reckless and sometimes criminal behavior to the emphasis on short-term profits that at some point took precedence over long-term strategic management. I've heard (sorry, no citations at hand) that on Wall Street at least, this was a consequence of formerly private, closely-held companies, often partnerships, going public. I also wonder whether shareholders' patience was greater in past decades. Perhaps, too, they didn't expect such large profits over such short intervals. Our corporate elites would have been free to focus on different priorities that redounded more to the credit of their companies and themselves.

Is it a lack of virtue that accounts for concealing huge losses in your risky investments, as JPMorgan Chase traders are alleged to have done? Or could such behavior be the foreseeable and logical result of engaging in risky behavior that goes against your best instincts, but which is required by your management chain, which in turn is under pressure from impatient shareholders?

You can always find someone else to blame, of course, and I'm not saying Brooks is wrong to hold the very prominent elites who are nominally in charge of things accountable for their actions. Yet we should be careful not to assume that their failings solely arise out of moral shortcomings peculiar to them. If we're wrong, we might shoot the elites (this seems to happen in the wake of most revolutions) but find ourselves in exactly the same fix once the dust has settled.

It's stereotypically liberal to insist that extrapersonal, social forces be considered when trying to explain people's misbehavior, just as it is stereotypically conservative to look for our faults not in our stars, but in ourselves. As a rule, I believe in the primacy of personal responsibility, and when it comes to the misdeeds of big business I'm especially in favor of frying those who were at the helm. Nevertheless, if "institutional failure has been the leitmotif of our age", as Brooks contends, it's hard for me to believe that such widespread failure is the product of the immorality of our supposed "elites". It's more plausible that there's something about how society has oriented itself — something about the priorities we've chosen and the values we've decided to esteem most — that has created perverse and unhealthful incentives, leading not just our elites, but all of us, down the wrong path.

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