Wednesday, October 15, 2008

Governmentality - Thomas Friedman

Friedman, that's Thomas not Milton, today in the New York Times was citing from a book he'd returned to recently to help him explain how the US will work through the current crises in the 'unreal' economy. Strikes me that this following passage is what Foucault meant by governmentality: techniques and rationalities by way of which the self, the household, the state are conducted.

Yes, this bubble is about us — not all of us, many Americans were way too poor to play. But it is about enough of us to say it is about America. And we will not get out of this without going back to some basics, which is why I find myself re-reading a valuable book that I wrote about once before, called, “How: Why How We Do Anything Means Everything in Business (and in Life).” Its author, Dov Seidman, is the C.E.O. of LRN, which helps companies build ethical corporate cultures.

Seidman basically argues that in our hyperconnected and transparent world, how you do things matters more than ever, because so many more people can now see how you do things, be affected by how you do things and tell others how you do things on the Internet anytime, for no cost and without restraint.

“In a connected world,” Seidman said to me, “countries, governments and companies also have character, and their character — how they do what they do, how they keep promises, how they make decisions, how things really happen inside, how they connect and collaborate, how they engender trust, how they relate to their customers, to the environment and to the communities in which they operate — is now their fate.”

We got away from these hows. We became more connected than ever in recent years, but the connections were actually very loose. That is, we went away from a world in which, if you wanted a mortgage to buy a home, you needed to show real income and a credit record into a world where a banker could sell you a mortgage and make gobs of money upfront and then offload your mortgage to a bundler who put a whole bunch together, chopped them into bonds and sold some to banks as far afield as Iceland.

The bank writing the mortgage got away from how because it was just passing you along to a bundler. And the investment bank bundling these mortgages got away from how because it didn’t know you, but it knew it was lucrative to bundle your mortgage with others. And the credit-rating agency got away from “how” because there was just so much money to be made in giving good ratings to these bonds, why delve too deeply? And the bank in Iceland got away from how because, hey, everyone else was buying the stuff and returns were great — so why not?

Of course, Friedman, in quoting Seidman, is not saying anything out of the ordinary- ethics is an old subject. But what the highlighted passage does show, I think, is that the reasons or rationalities for practices are, to turn Seidman's logic around, what saturates the practices, and that these techniques of conducting conduct are practiced across a continuum of bodies: countries, governments, corporations and selves. So, rather than the ideology of deregulation or of the creative innovations of free markets, or the rhetoric of completely new markets that will never fall to earth, Friedman is drawing attention to techniques. And it's to this level that the regulation-deregulation debate needs to shift. Not whether or not to have regulation, because as should be clear there were regulations governing, for example, sub-prime mortgages, but the how of regulations - governmentalities.

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