Of course, this barrage of blame is not surprising, and certainly not new. Ever since the financial crisis hit we've been looking for that person whose greed, stupidity, laziness, spinelessness or what have you brought us into this financial morass. Alan Greenspan, Bernie Madoff, the SEC, the Bush Administration, the American consumer--all have been designated potential culprits of moral and intellectual failure. But can we get beyond this way of tracing responsibility for the crisis and, equally important, why should we? I'll provisionally answer "yes" to the first question and say that we need to get beyond this narrative of blame because as long as we remain fixated on the failures of individuals we will never address the broader structural and institutional forces that channel individual behavior down particular paths. In other words, you can throw Bernie Madoff in jail, but if that's all you do then you're just waiting for the next Bernie Madoff to steal Steven Spielberg's money.
This idea that our own behavior may, in fact, be powerfully limited by our social environment is, of course, my bread-and-butter as a sociologist, but highly at odds with a culture that holds up the righteous individual and the responsibility that they take for their own actions. So, to make this point, I'm going to turn to the sociologist's favorite teaching tool: dead German intellectuals.
The person that I am referring to is Max Weber. Weber sits among the upper echelon of founding sociologists, in part for works such as his The Protestant Ethic and the Spirit of Capitalism, which he wrote between 1904 and 1905. Weber was deeply interested in the relationship between religious and economic life and the way in which religious ethics became secular practice.
As the title suggests, Weber was looking at the Protestant faith (and its various sects) and trying to understand why rational profit-seeking, the kind we would associate with modern capitalism, seems to take hold most strongly in Protestant as opposed to Catholic areas. Subscribers to the "it's all about the individual" view of the world would stop here and say that it must be because Protestants were just greedy, or maybe just better at doing business, but Weber tells a much more interesting, deeply sociological story.
He starts by noting a curious feature of the Protestant faith: pre-destination. If you are a Catholic, ascending into heaven is a pretty straight-forward thing to do: lead a good life, turn the other cheek a couple of times, and beg forgiveness of your sins on your death bed. For Catholics, heaven is never too full and anyone (well, any Catholic) can enter. For Protestants, however, the story is quite different. According to Protestant theology everyone is born with their fate in the after life pre-determined for them: no amount of praying, no amount of cheek-turning, will decide where you spend your eternal hereafter. Not only that, but no matter what you do, you can never know if you are pre-destined for heaven or hell.
As you can imagine, this doctrine is highly problematic, both for the individuals that subscribe to it, and to the religious leaders that are trying to hold a religion together. For the followers, this is very stressful; for the leaders, it's difficult to get people to follow your edicts if doing so has no consequence in the afterlife. Thus, as Weber shows, Protestant faiths evolved and diverged in terms of how they deal with the problem of pre-destination. A common solution was to tweak the doctrine so that, while it was still believed that one could never know for sure what their fate was, they could receive "clues" as to their probable fate. One such clue was success in your life on earth, the idea being that if you were successful (read, materially successful) on earth, chances are you were one of God's chosen ones.
Now you can imagine where this is going: the "clue" of success becomes a self-fulfilling prophecy. Weber argues that Protestants begin to organize their life around maximizing their material success, all for the cause of reassuring themselves that, yes, indeed they were pre-destined for heaven. Thus, the Protestant ethic of pre-destination is transformed into a capitalist spirit of the rational calculation of profit and loss.
Now, so far this is already pretty compelling stuff, but then Weber takes the argument even further. As the spirit of capitalism spreads, it becomes removed from its original Protestant theological foundations, and sweeps across secular society. This happens because competitive market pressures compel even non-believers to adopt Protestant profit-maximizing practices. Imagine, if you will, a Catholic grain farmer. This farmer pursues traditional farming practice and makes enough money selling his grain at market to support his, no doubt large, family. Now, imagine one day this farmer goes to market, and there is another farmer there also selling grain. This other farmer, though, has a lot more grain to sell, and can sell it a lot more cheaply. How can this be? Well, this second farmer is a Protestant farmer, one who has been anxiously searching for signs of God's graces and poring all of his energy into transforming his farm into a lean, mean, grain-churning machine.
So now, here's the punchline: the Catholic farmer, if he wants to be able to keep supporting his family, needs to get on home and transform his farm because otherwise no one will buy his grain. This farmer doesn't even believe that his eternal hereafter is predetermined--he's been counting on his humility, poverty, and last-minute sin forgiveness to get him the good seats--but he is compelled by social circumstance, the fact that the economy is more and more becoming a competitive marketplace, to transform his behavior.
Ultimately, Weber argues, the spirit of capitalism becomes fully divorced from its Protestant roots and emerges as an "iron cage" that binds us all: because markets are competitive, and because we depend upon markets for our livelihoods, we must find a way to be competitive in those markets--regardless of what we think about them. The iron cage binds believer and non-believer alike.
So, back to the here-and-now of our current financial woes. Clearly, we don't want to absolve individuals from the choices that they made--we are not robots following some sort of social programming. But, as Weber's classic suggests, social structures can powerfully shape the way that we confront the choices that we have to make. Bankers are not going to make "responsible" lending choices if all of their competitors are turning in record profits by giving sub-prime home loans to people that can't afford them. Chuck Prince, former CEO of Citigroup, famously described this dynamic by saying "when the music is playing, you've got to get up and dance." Most people jumped on this comment as indicative of the debauchery of the financial sector. I read it as saying that if you want the bankers to stop dancing, change the music.
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