I've almost completely ignored the AIG flap, especially the recent brouhaha about executive pay. It seemed to me to be just another meaningless opportunity to air biases and old grudges by all participants - political jockeying and tactical skirmishing in service of various enduring strategies. They want to fight and any excuse will serve to justify a dust up. Boring.

But, Timothy has found a way to winkle something of value from the dross.

I think the more social or economic power you have as an individual, the more culpable you are for how you use it. (Consider this the Spider-Man theory of society.) Because I know I have this bias, I also agree that it’s important to look at the institutional, systematic and habitual worlds around the powerful. I’ve long argued that this is one of the problems with cultural studies, cultural anthropology and social history. Those fields often act as if the social and institutional contexts of power are already well-understood or known simply because the powerful often represent themselves so forcefully through documents, texts and other expressive culture. If you’re interested in the ethnography of everyday life in a small farming village in southern Africa, you should be just as interested in forging an ethnographic understanding of neoliberal development experts in Washington DC or in the upper reaches of postcolonial bureaucracies, and in both cases, treat the subject as something that you don’t know about in advance of doing ethnographic work. . .

However, to flip this around, I find it disconcerting when commenters argue that we have to sensitively appreciate the systematic and institutional pressures operating within the world of someone like Jake DeSantis and then proceed to argue that underwater mortgages are very simply understood as the collective stupidity of greedy or ignorant people for which they are entirely culpable.

Conservative and libertarian writers often sneer that liberals are too obsessed with social explanations for behavior that privilege underlying or structural preconditions, but I haven’t noticed that they’re any less inclined to those explanations when they’re well-suited to their ideological priors.

This affirms my take that the kerfuffle was a stage to act out the same tired old morality plays that are always touring society, but I like the idea of viewing all the various communities as foreign, mysterious, and in need of study to understand behaviors and interpret arguments. It's one thing to judge actions from your perspective but also understand that things look different from the other side. If you wish to gain some objective understanding it is necessary to consider your priors as well as those of other disputants. Easier said than done of course.

And, more generally. . .

I really do think that some people get ahead in the world because of talent, insight, drive, skill and so on. And if I can be really simplistic for a moment, I think in an ideal world that’s the way it should be. But clearly also there are people earning a great deal who are in that situation because of dumb luck or pedigree or because their industry has locked in structural advantages that overflow their coffers with so much cash that they can’t help but dole it out in buckets to every employee. Or because they’ve effectively stolen those earnings from other people through legal, institutional, economic or social chicanery.

I’m not saying that there should be some great redistributionist crusade until we’ve limited wealth to the “deserving rich”. All complex social systems generate parasitic as well as constructive niches. I am saying that we shouldn’t just trust that everyone who is earning $750,000 after taxes did work or contributed expertise that has that actual value to a free-market economy. You could call that the Catholic branch of libertarian or free-market thought: not only prove that you are indeed doing good (value-creating) deeds in the world, but be anxiously humble and vaguely guilt-ridden about whether your proof is adequate to that challenge, be concerned about your sins and shortcomings. This is why a lot of the talk about “going Galt” and other extreme Randian flavors of libertarianism seems so utterly silly to me: the people who talk that way come off as so utterly certain of their own membership in the elect, their own superiority. If they’re not rich yet, they’re sure that’s because society or government is keeping them down.

It is generally true that those who prosper have valuable abilities. There are exceptions, luck matters, though that doesn't change the truth of the general assertion. However, valuable ability doesn't guarantee prosperity. If your abilities are not in demand then they will not earn rewards and luck - bad luck in this case - matters as well.

This is why the possibility of talent going Galt must be taken seriously. The fact that some of them are deluded and have no valuable abilities the withholding of which would diminish society isn't relevant since many others do have real ability. Think of it as a strike by professional athletes. Sure, there are replacement players who can show up, suit up and take their hits - the game can go on - but there are lasting consequences. Liken it to past incidents where some nation's Olympic squad met disaster - a plane wreck etc, - and dropped that nation out of contention for a generation.

There's a bizarre symmetry in this possibility with the antics of the boomers who tuned in, turned and, and dropped out . . . until they grew up and became lawyers and stock brokers. They mainly harmed themselves since there were many more who did the jobs that they eschewed, but it seems like it would have been some amount better if that talent had not been squandered for a time. There's no way to really know or test theories since we can't rewind the experiment and repeat it with different parameters.

What seems more important, more lasting, is the historical narrative. An idea mooted in Sam Shrugged is that society can be soured by events in ways that last for decades. This is an aspect of the theme loosley connecting some recent posts that "the only institution that really counts is trust", and that "human beings are spectacularly good at destroying trust-generating institutions." Smith again:

in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

That's what concerns me. The men of system, wise in their own conceits, fail to grasp the implications of their monomanias and so sow disorder.