A great deal has been said and written about how the present economic crisis has (or should have) undermined the validity of orthodox economic methods. Part of the purpose of the Uneconomics debate has been to develop this challenge, as demonstrated by Phillip Mirowski’s polemical contribution. But less has been said about how this crisis represents an overwhelming endorsement for the emergence of more culturally-conscious forms of economic and political analysis.
Can you really hope to understand why bankers would risk their entire banks, without also understanding something of the destructive exuberance of finance culture since the 1980s? When core pillars of financial governance, such as ‘shareholder value’ and central bank inflation-targeting, start to backfire, surely it is important to understand how certain numerical indicators come to attain symbolic authority in the first place. What is going on when regulators and credit-raters place their faith in statistical risk models?
Dealing with these issues requires an anthropological sensibility, which is attuned to questions of symbolic representation and organizational norms. So much of the financial crisis comes down to a single problem, of allowing models of reality to be mistaken for reality itself. The paradoxical result was that the quest for transparency began to generate its own opacity. Accounting reports obscured the messiness of organisations. Simple credit ratings hid the intrinsic complexity of the firms, mortgages and products that were being evaluated.