It may seem a bit far-fetched to try to diagnose the current banking crisis in terms of Andrew Keen's "cult of the amateur;" but this is a "rehearsal" space. Hypotheses need to be rehearsed before they are ready to be defended through more scrupulous techniques of argumentation. Nevertheless, since so much of what I have written is about the consequences of living in "the world the Internet has made;" I feel a certain need to consider whether or not a crisis that we are all likely to end up paying for is one of those consequences.
Consider the attempt to analyze the situation in the latest issue of The Economist:
This debacle holds lessons for the way Britain regulates its banks. As Mr [Mervyn] King [Governor of the Bank of England] pointed out, defending his performance in front of a House of Commons committee on September 20th, the law prevents the Bank either from staging a covert rescue operation or from engineering a swift takeover; and flaws in the protection of depositors mean that, once an overt rescue operation is under way, depositors will flee. Mr King defended the separation of powers between the Treasury, the Bank and the FSA, but he was wrong to. It has exacerbated the system's flaws: nobody was in charge of the operation.
I have to wonder whether this paragraph has Charles Dickens spinning in his grave or dancing in heaven. Is it not just the latest incarnation of the “nobody’s fault” syndrome that dominated the logic behind the circumstances of Little Dorrit? The only difference seems to be that, thanks to globalization, the syndrome now presents itself through transnational dynamics.
Still, this raises a question of causality. Are we just talking about what happens when the principles of globalization encounter an economic "perfect storm;" or is it relevant to bring the Internet into the scene of this particular narrative? Let me try to make my case through a recent catastrophe that had nothing to do with economics. Back when Kathy Sierra was receiving her death threats, I interpreted the circumstances as an argument that we had to get beyond the “amateur” thinking about governance in cyberspace that was flooding the blogosphere. What happened was that my effort to try to start a conversation about governance provoked a counter-reaction to focus on the problem of "getting identity right." In retrospect, I now see this as revealing a need for a more important conversation that never took place: One of the key factors that determines identity is responsibility; and (surprise!) this is also one of the key factors that needs to be addressed in any system of governance, whether we are talking about countries or banks (or, for that matter, setting the agenda for the YearlyKos Convention). Now in confused of calcutta, which had championed the need to focus on identity, we find a reaction to the Economist analysis that basically bemoans the “state where it is no longer possible to lead or ‘govern’” because it is beset by “whole armies of intermediaries.”
This is an irony that cuts to the core of our current condition: Conversations about governance are easily dismissed as irrelevant when death threats are looming; but, if we are all in danger of losing our money, that is another matter! Nevertheless, the Dickensian logic that I invoked as my point of departure focuses less on how many intermediaries there may be in a social system and more on the extent to which that system is defined by who is responsible for what; and this is where we begin to venture onto the turf of that world the Internet has made. This is a world in which responsibility is assigned to the abstractions of businesses processes, rather than to the individuals who actually implement those processes. The individuals are, thus, amateurs. Theirs is not the amateurism of citizen journalism, which is one of Keen's favorite targets; and but is amateurism nevertheless. Furthermore, it is an amateurism that has insinuated the workplaces of both public and private sectors; and, thanks to the Internet, the consequences of that amateurism are now propagated through those aforementioned transnational dynamics, the same dynamics that Keen examined in analyzing the role of the Internet as an information source. In other words the scope of amateurism is actually far broader than Keen had anticipated!
Is this, then, the ultimate argument that, at least in times of crisis, crowds are more likely to be mad than wise, simply because their "regular social practices" do not encourage, let alone cultivate, wisdom? This would be an extreme position, particularly in light of James Coleman's more disciplined efforts to analyze the "micro-to-macro problem." Nevertheless, Coleman's answer to the question of whether crowds are mad or wise is basically, "It depends;" and I think that one conclusion we can draw is that one of the factors on which the answer to that question depends is that matter of "regular social practices." If these are practices that ignore such social values as responsibility and reflection, then my hypothesis is that madness is the more likely outcome!