Random Thoughts: 6

I have been saying this for a few years, first as comments on other blogs and recently on my blog.

The Twilight of the Elites

Quotes from the article..

In the past decade, nearly every pillar institution in American society — whether it’s General Motors, Congress, Wall Street, Major League Baseball, the Catholic Church or the mainstream media — has revealed itself to be corrupt, incompetent or both.

New Priests.. Secular Religions

At the root of these failures are the people who run these institutions, the bright and industrious minds who occupy the commanding heights of our meritocratic order. In exchange for their power, status and remuneration, they are supposed to make sure everything operates smoothly. But after a cascade of scandals and catastrophes, that implicit social contract lies in ruins, replaced by mass skepticism, contempt and disillusionment.

The emperor is naked!

In the wake of the implosion of nearly all sources of American authority, this new decade will have to be about reforming our institutions to reconstitute a more reliable and democratic form of authority. Scholarly research shows a firm correlation between strong institutions, accountable élites and highly functional economies; mistrust and corruption, meanwhile, feed each other in a vicious circle.


If our current crisis continues, we risk a long, ugly process of de-development: higher levels of corruption and tax evasion and an increasingly fractured public sphere, in which both public consensus and reform become all but impossible.

For more than 35 years, Gallup has polled Americans about levels of trust in their institutions — Congress, banks, Big Business, public schools, etc. In 2008 nearly every single institution was at an all-time low. Banks were trusted by just 32% of the populace, down from more than 50% in 2004. Newspapers were down to 24%, from slightly below 40% at the start of the decade. And Congress was the least trusted institution of all, with only 12% of Americans expressing confidence in it. The mistrust of élites extends to élites themselves.

Told ya! Zero sum behavior leads to a final orgy of self consumption.

That dynamic has played itself out throughout society. Look at CEO pay. In 1978, according to the Economic Policy Institute, the ratio of average CEO pay to average wage was about 35 to 1. By 2007 it was 275 to 1. Nell Minow, a lawyer and corporate-governance expert, has for decades waged a one-woman crusade against excessive CEO pay. She has watched as CEOs have found ways to manipulate the levers of governance and devise ingenious methods of guaranteeing themselves windfalls regardless of their company’s performance. “It’s like going to a racetrack and betting on all the horses, except you’re using someone else’s money,” Minow says. “You know one of them is going to win. As long as you’re not paying for the tickets, you’re going to come out ahead.”

The élites’ failures of the past decade should teach us that institutions of all kinds need input from below. The Federal Reserve is home to some of the finest economists and brightest minds in the country, and yet it still managed to miss an $8 trillion housing bubble and the explosion of the subprime market. If, say, the Federal Reserve Act required several seats on the board of governors to be reserved for consumer advocates — heck, even community organizers — it would have been harder to miss these twin phenomena.

They were just playing the same game..

This, one hopes, is just the beginning. All these new institutions are inspired by a desire to democratize old, big oligarchic hierarchies and devolve power downward and outward. That’s our best hope in the decade to come. For at the end of the day, it’s the job of citizens to save élites from themselves.

No.. the existence of elites is the problem, not the solution.

  1. March 16, 2010 at 11:09 pm

    The problem with the “oh-so-serious experts” is that it’s not a meritocracy, they aren’t accountable whatsoever, it’s all about who you know and not what you know. The image of the powerful corporate executive who doesn’t know how to do “copy and paste” is cliche as hell and probably a bit of an exaggeration, but there’s truth hidden there. Pundits on the TeeVee can be wrong, wrong, wrong, and still be respected because they’re the “talking heads”. You can put up YouTube videos where they contradict themselves from day to day, point out that their predictions were off by miles, and people on YouTube or the blogosphere will chuckle to themselves but the pundits won’t even know it’s going on, because there’s no consequence to them. Professors of the liberal arts can publish such contrived gibberish that their journals can be infiltrated by automated article-spinning software, but *they’re* still hailed as the experts, their opinion is sacrosanct, their word gospel.

    What we are embarking into is the Age of the Wiki. The old meta-institution of “expert” is obsolete, based on a world of severe information limits, when a phonecall across the ocean was rare and pricey. In ages past, a physician was very useful because nobody else could store all that information about medicine, but now we have the technology where anybody can look it up, and the only useful physicians are the surgeons, who are useful for their manual dexterity more than their knowledge. With modern technology there’s less and less need for legislators and judges, why should someone be paid to represent me in Washington when I can use the internet to take a virtual trip to Washington any time I want? But of course these institutions will be slow to change, fighting progress with all the power they built up over centuries.

  2. Tom
    July 30, 2010 at 4:57 am

    “For at the end of the day, it’s the job of citizens to save élites from themselves.”

    Using that logic, the government was justified in using my money (in addition to every other taxpayer’s) to bail out the failing banks (the elites).

    Even though this ariticle stumbles upon a piece of the puzzle, it still misses the big picture.

    Go figure.

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