HEARING OF THE HOUSE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

THE FINANCIAL CRISIS AND THE ROLE OF FEDERAL REGULATORS

October 23, 2008

Henry Waxman

Let me interrupt you, because we do have a limited amount of time. But you said in your statement that you delivered, the whole intellectual edifice of modern risk management collapsed. You also said, “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself especially, are in a state of shock and disbelief,” end quote.

Now, that sounds to me like you’re saying that those who trusted the market to regulate itself, yourself included, made a serious mistake.

Well, where do you think you made a mistake, then?

Alan Greenspan

I made a mistake in presuming that the self- interest of organizations, specifically banks and others, were such (as that ?) they were best capable of protecting their own shareholders and their equity in the firms.

So the problem here is, something which looked to be a very solid edifice, and indeed a critical pillar to market competition and free markets, did break down. And I think that, as I said, shocked me. I still do not fully understand why it happened. And obviously, to the extent that I figure out where it happened and why, I will change my views. And if the facts change, I will change.

Alan Greenspan’s testimony highlights two important  facts.

1. While all living organisms pursue survival based on physical cues from their environments, humans can also be influenced by non-physical cues, like ideas and narratives.

2. Intelligent, competent, well-meaning humans can be influenced by narratives that result in disaster.

Given these facts, how can humans select ideas and narratives that lead to survival and well-being?

The selfishness narrative Greenspan appealed to has a long history.  He argues that it worked well, for shareholders.  For non-shareholders, the selfishness narrative has not led to well-being.

Centuries ago, humans began a transition from an agrarian mode of survival to an industrial mode. Two European sociologists, Karl Marx and Fredrick Engels, studied the results.  They aimed to provide a scientific analysis in their books titled Das Kapital.

Their reaction to the industrial revolution, promoted in the Communist Manifesto,  differed greatly from the selfishness narrative. But they allowed their scientific analysis to be influenced by a narrative called dialectic materialism.  For much of humanity, communism did not lead to well-being.

Around the same time period as Marx and Engels, other writers advanced a new, biological narrative.  This biological narrative, evolution, concerned not only humanity, but all living organisms.  Early attempts to apply the evolution narrative to human society did not lead to human well-being. Until recently, evolution was relegated to understanding biology. People continued to try to understand human behavior through narratives based on religion and philosophy.  The results have been “mixed.”

But the evolution narrative has been refined. It provides a remarkably accurate description of how humans and other organisms function.  Another word for “narrative” is culture. Today, humans increasingly accept that human culture is tied to biology.

Evolution is helping humans to select ideas and narratives that lead to survival and well-being.  One question that evolution is helping to answer is, “how do human narratives get created and adopted?”

Many organizations and institutions study this question. Few of them do so from an evolutionary perspective.  Culture Design Labs aims to use evolution and other scientific narratives to understand how humans create and adopt narratives.  Culture Design Labs intends to promote this understanding to aid society in developing narratives that result in long-term survival and well-being.

Extracted from: http://www.slideshare.net/joebrewer31/culture-design-lab-a-research-center-dedicated-to-the-science-of-intentional-change

Humanity needs a science of intentional cultural change. The only way for us to arrive at a thriving planetary future is through a deliberate, well-designed, collective process. Otherwise the 7.4 billion of us alive today (and our descendants) will not successfully navigate the complexities of 21st Century globalization.

The mission of the Culture Design Lab is to monitor, analyze, and design effective patterns of cultural change—using the rigor of academic research to change the trajectory of the real world in practical terms. Accomplishing this will require a collaborative network of researchers and design practitioners helping guide humanity through the paradigm shift that is needed for our collective survival.

Extracted from: https://medium.com/@joe_brewer/culture-design-labs-evolving-the-future-94455c446ff5#.5l9ldttnh

I recently asked the provocative question Can we design the future we want? to frame the need for systemic design thinking capable of guiding cultural and institutional change. The key to tackling this convergence of crises is culture?—?the ideas, social norms, values, beliefs, tools and technologies, relationship patterns, and organizational forms that constitute human cultures around the world.

Already we can begin to see a way forward. Treat culture as a complex system that can be rigorously studied and conscientiously guided using the tools of social science where they are needed most.

There is now so much abundance of knowledge in the world?—?just pick any field of study and think about how far it has advanced in the last 3o years. Sociology has become married to data science, helping us see ourselves as part of larger social systems. History now archives digital data to track patterns across great spans of time. Urban planning uses high-performance computing to simulate and model changes in ebbs and flows.

In every field (including hundreds more I could mention) we now have very sophisticated tools, advanced communities of practice, and mature institutions. This is true across the social and behavioral sciences, engineering and management, data analytics and technology, and more. What we lack is the vision for how all the pieces fit together.

This is where the Cultural Evolution Society comes in. We have been carefully mapping out the grand challenges for cultural evolution among more than 1500 founding members of this fledgling society?—?people who engage in education and research initiatives at more than 400 universities in 54 countries. With seed funding from the John Templeton Foundation, we are preparing to launch its first conference in 2017, along with an ambitious agenda to synthesize the biological and social sciences with the humanities so these grand challenges can be tackled in the turbulent decades ahead.

This is where Culture Design Labs come into the picture.

The emerging field of culture design brings together the many scientific disciplines relevant to establishing an integrative science of social change. Imagine when every community that seeks to guide its own development is able to set up field sites for cultural evolution research. Bringing together researchers with change practitioners?—?orchestrated and funded by philanthropic institutions and government agencies that provide financial support for applied research and social programs?—?these field sites will gather data on the cultural patterns driving the evolutionary change process. This knowledge will be essential for practitioners as they guide the change process in their communities.

A few concepts may help you visualize what the Culture Design Labs can do:

• Cultural “traits” that undergo selection. Every social niche has environmental factors that select for the spread of some ideas and practices, while creating barriers or resistance for others. Learning to analyze these traits will enable communities to become wise managers of their own evolutionary change process.
• System “logics” seen by pattern analysis. Create an economy around the patterns of growth at all costsand you’ll see it begin to behave like a cancer that threatens its host. Every story has structure. So too with cultural systems. It is simply a matter of learning how to read them.
• Forget theories of change, create scientific models instead! Few change practitioners treat social change with methodological rigor. They don’t study past behaviors to develop theoretical models about future change. Nor do they formulate questions and gather data to test their understandings. Great strides can be made by simply behaving like scientists.

Extracted from: a FB conversation with Joe Brewer

Joe, I am preparing a post for P2P Foundation blog. Question I would like to address – how does culture design accommodate the peer model?

Nathan, that is a great question. I will answer at two levels. The first is the level of research, where culture design enables us to study the fitness criteria and cultural dynamics of peer models to observe how they function and improve them.

The second is about the nature of human social networks, where we can promote p2p models as natural, emergent network structures in human social systems. This level is about describing and characterizing how human social systems really function. We can characterize system features like dynamism, agility, creativity, responsiveness, resilience, fragility, diversity, and so forth.

Photo by Esthr

Photo by Esthr

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Perhaps it was a killer app, or 3D print design. Maybe you heard a complaint repeatedly and imagined a service to solve the problem. Or you had a vision of a song, a film, or a book.

Your friends liked your idea. A few of them assured you your idea would make you rich. Others volunteered to help you make your idea a reality.

So, you investigated.  What would it take to convert your idea into a fortune? You could

• set up an account on Fivrr,
• create a shop on Apple or Google Play,
• negotiate crypto-exchanges on Tor
• pitch at SXSW

But these venues all have the same weakness.  And that weakness is money. You’re either trying to raise money, or exchange for money.

What if you could trade your idea for other forms of value?  What if could exchange your idea for:

• products you use, or
• services you need, or
• access to groups you aspire to, or
• expert advice, or
• places to stay
• social validation?

What if your idea, or talent, or service, or product could make you wealthy without “money”?

That is the value proposition of Community Exchange system.

Extracted from: https://www.community-exchange.org/home/

Extracted from: https://www.community-exchange.org/home/how-it-works/

How It Works

The Community Exchange System (CES) is a web service that provides the tools for communities to set up and manage exchange and trade in their areas without using money. It also provides communities with a network that permits them to trade with other communities, wherever they are in the world.

The main object of the CES is to facilitate trade and exchange by providing a range of non-monetary exchange methods. This helps to build community by connecting people and providing a local support network.

By ‘trade’ we mean the normal activities of providing goods and services by ‘givers’, ‘producers’, ‘sellers’ or ‘providers’, and the receiving of these by ‘buyers’, ‘customers’, ‘clients’, ‘patients’, ‘consumers’, ‘receivers’, etc.

The CES serves two basic functions:

• it is an online exchange system that facilitates exchange in a number of different ways
• it is an online ‘marketplace’ where users advertise their skills, offerings and requirements

Photo by thetaxhaven

Photo by brizzle born and bred

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“Marketing guru Philip Kotler wrote that “the costumer will judge the offering by three basic elements: product features and quality, services mix and quality, and price. All three elements must be meshed into a competitively attractive offering.” It might sound obscene to some that I strongly believe there is much that the Left could take from this sort of advice.”

People push through in order to get into the room and reserve their seat. There is a buzz of euphoric expectation blending with rapid chatter in Castellano. This is the start of a Podemos meeting but it could have been a rock gig for all we know. When panel speakers finish their opening remarks ardent applause follows, people whoop and whistle in wondered appreciation. Credit, I suppose, has to be given mostly to the organisation at the core of it all.

Podemos is a Spanish anticapitalist party founded in January 2014. By beginnings of September it counted no less than 120,000 members and 20% ratings in the latest polls. It had elected five MEPs and is set to take Spain by storm at the next general election in December 2015. Its success is often described as part mystery, part formulaic “Twitter revolution” theory. And while it is true that Podemos reflects the political zeitgeist and has effectively built itself on the momentum of the 15M movement, there is much more to be said about its politics, strategy and exponential growth.

“I think we can emulate [Podemos] in the organising in the grassroots, drawing people in, speaking to the 90%, using social media when necessary”, Left Unity co-founder and revolutionary film-director Ken Loach tells me.

He adds another example of what Left Unity should be doing differently: “Using fresh language.”

But what does that mean?

It isn’t the first time I hear that we need to speak differently. During the build up to the British student movement of 2010/2011 I often had heated debates with members of the so-called “old Left” arguing for more Public Relations, more social media – on our side. It is well documented that uprisings don’t occur from a hashtag alone, but learning to communicate in progressive ways – even to co-opt some capitalist strategies of mass appeal – seems to be vital for any political organisation attempting to produce change in the twenty-first century.

“I think that what Podemos shows, and what other social movement groups like Juventud Sin Futuro or Oficina Precaria show, is that you can combine the autonomous, digital media campaigns with an active reaching-out to mass media”, says Cristina Flesher Fominaya, author of Social Movements and Globalization (Palgrave MacMillan, 2014).

And according to Cristina, the process of being publicly recognised as a legitimate organisation does not happen instantaneously.

“You know, it’s little by little. They didn’t just overnight end up on these morning talk shows. They established those media connections, their media savvy and catchy and interesting direct actions, and then they engaged.”

She agrees that much like corporations have adopted more democratic channels of communication – such as the social media platforms Twitter, Instagram and Pinterest – to promote their products, so must social movements learn how to take over and efficiently use mass media channels for their causes.

“Alternative media is absolutely crucial, don’t get me wrong, but also engaging with mainstream media and mass media and thinking very holistically about how to combine those campaigns.”

The key lies in “retro-feeding” your message through these many avenues. It’s a process through which groups must constantly try “to keep on message and keep tweaking it and subverting and contesting”, she argues.

But what does this essentially mean?

In short it means the ways of organising that the British Left has taken for granted so far are utterly necessary but useless if not linked to two other tactics:

Firstly, the mentioned multifaceted approach to putting your message across. Leafleting door to door and holding local branch meetings is necessary, but so is blogging and writing opinion pieces for your local paper (they might be a dying breed but they are still read by thousands of people in your neighbourhood).

Secondly, keeping the message simple, clear and to the point. The Podemos programme is built on six simple aims, all based on the principle of democracy. It abides to the usual “rules and regulations” of socialist organisations – standing against sexism, racism, homophobia and all other types of prejudice and exclusion – but it gives members a clear structure of argument. It is therefore easy to understand, support and regurgitate. Unlike what some crude critics argue, the point is not to unite under the lowest common denominator, but to leave very specific alignments to debate and to group scrutiny, rather than to make them be-all end-all foundations of the organisation. Where one stands on the issue of Palestine or Scottish independence is important, but it won’t be helpful if taken outside the context of the organisation’s original purpose – to be the genuine political representation of the overworked, underpaid, disaffected 99%.

Importantly too is that these messages can be improved as the organisation grows. “Keep tweaking it” – as Flesher puts it. Political organisations today (perhaps always) have to be adaptable to the demands of the majority. As long as the principles of democracy and equality are not broken, the organisation needs to know when to talk about austerity and when to talk elections. Political parties are propaganda tools as much as they are forums of expression and activity for their members. If the people on the street – the “Polish fruit-picker and the Nigerian nurse” as Owen Jones often describes them – want more from the Trades Union Congress (TUC), then the party needs to verbalise that discontent, not pander to cronyism.

Above all, perhaps what is impressive about the Podemos strategy, and which should definitely be a lesson to us all, is its ability to embrace nuance and not to give in to black and white solutions to the problems at hand. Realpolitik is after all the art of advancing your political project when possible and giving way when necessary, without ever compromising your ethos. The Podemos European elections’ strategy was the brainchild of Íñigo Errejón, the man who said that “each country has to find its tools” to “hijack democracy”. The understanding that one needs to be flexible whilst sticking to one’s core beliefs has often been amiss on the British Left.

But don’t you need mass to attract mass?

Newton’s law of universal gravitation only applies to politics to a point. It is true that social movements and political parties can snowball once they’ve gained momentum. But where that momentum comes from and how political attraction can operate despite inexistent visible mass are points that Left Unity should think about long and hard.

Sceptics have come forward saying that unlike countries like Greece and Spain, Britain does not currently have a political movement active on the streets. There are no occupations of public squares going on, no million-strong demonstrations. This often crystallises into what I see as a misunderstanding of Rosa Luxemburg’s Dialectic of Spontaneity and Organisation (but let us leave that for another article). Crucially, we need to recognise that whilst many of these social movements and new anticapitalist parties have come out of a fortuitous sequence of events, organisations of different forms were involved in creating them from the start.

In Spain the 15M and the Indignados movement grew out of the said “indignation” of certain layers of society with a series of oppressive laws pushed through by neoliberal knee-jerk reactions of the Spanish Socialist Party (PSOE) then in power. A cull of digital activism through the Ley Sinde, a media crackdown on strikes and workers’ protests, and the generally declining life and working conditions in the country (youth unemployment at 47% by 2011) created an explosive environment. Different activist groups started mushrooming about, some visible only online, many others on the streets too, handing out manifestos printed on A5 sheets.

According to Pablo Gerbaudo – a lecturer in Digital Culture and Society at King’s College London and author of Tweets and the Streets (Pluto Press, 2012) – the popularity of the Democracia Real Ya campaign and the momentum towards the first May 15 demonstration was seen as “an opportunity to overcome division and inertia”. Several other groups joined in the call and “200 civil society organisations, including well-established groups like the anti-globalisation group ATTAC” joined in the call for action.

Their self-description as “neither left nor right” – which Podemos echoes and which is yet another discussion to be had in another article – did not mean they were actually outside or beyond the political spectrum. Standing for democracy, equality and collective decision-making processes the Indignados movement was well to the Left of the establishment, but also permeated with left-wing activists and even organisations from the get go. Our engagement with local issues and grassroots initiatives, not by demanding to lead them, but by fight side by side with those who are part of them is essential. Much like our duty to call for action where coordinated action is needed and yet not existent. To call for united action when there are three different campaigns. And to throw our weight behind those most representative, inclusive and efficient at that.

So what needs to be done?

I am not claiming to have the answer to the perfect left-wing party in Britain – I wish I did – but I do think there are lessons to be learnt from the successes and the failures of similar projects across Europe.

I also believe that, against my better (orthodox Marxist) judgement, we need to co-opt the dexterity and shrewdness of capitalist forms of propaganda in order to make ourselves visible and heard.

Marketing guru Philip Kotler wrote that “the costumer will judge the offering by three basic elements: product features and quality, services mix and quality, and price. All three elements must be meshed into a competitively attractive offering.” It might sound obscene to some that I strongly believe there is much that the Left could take from this sort of advice.

We know that our “product” is good – it is the best, in fact. In our politics we rest the hope for a better world. A world in which there is absolute equity, equality and equilibrium. The world socialists want to build is one of greatness, not just for a selected few but for every single person in this good old world. Who could possibly not want that?

Our “price” isn’t half bad. OK, so people know that building a better world is no smooth task. People know it because creating this not so amazing version we currently have is not that easy either. But when given the option to make things better for themselves and their loved ones, people do move mountains. People have always given their lives for their children, laboured harder to feed their elderly, gone to prison for the right to vote, the right to use the same facilities, the right to stand up straight and live with dignity. It wouldn’t be now – no matter how cynical this world might seem – that people would stop being inspired by a message of progress and prosperity.

But our “service” is poor. We have interiorised our weaknesses, made to act in defence, holding on dearly to creeds and formulas like deranged alchemists. The average Joe thinks it best to stay away from the Left or to mock it for its impractical project. We – the Left – have allowed political opponents to define us by what we are not. People that demand the impossible, they said. People that want to take away from you your individual freedoms and your right to chose between an iPhone and a Nokia Lumia, they said. And now we are faced with the task to prove them wrong.

Thankfully we are not alone. We have seen that change of rhetoric happen on our very doorstep. When UKUncut came around, it positively changed the message from “people living above their possibilities” to “corporations not living up to their responsibilities”. The Occupy movement pulled a similar trick with the creation of the now ubiquitous term 99%: we cannot be made to pay for the banking crisis when what we have in our billions adds up to the same amount of what those few, clearly responsible for this mess, have in their few hundreds.

How we create that change of speech, of poise and above all of doing politics is what is now in our hands.

“It’s easier to make speeches where we denounce what is happening, the difficulty is asking the question and finding specific organisational answers”, Ken Loach pointed out to me with a smile.

But we have a growing number of people out there on the streets hungry for change. We have the examples of the rest of Europe showing us the way. We have history on our side. Nos Podemos. We Can. Let’s do it.

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