A Capital Idea Part 16: Conspiracy by Consensus
Today's topic regards not so much an actual conspiracy, as a de facto one that applies to what one might call "average everyday millionaires." Next time, I will discuss what may be an actual conspiracy involving certain weathy families in the United States, but for now, I will discuss cognitive laziness and sheeplike behavior which create a troubling status quo which is difficult to fix.
The root of the problem may be in so-called "free-market capitalism" once again, or as I call it, "lazy unfair capitalism." Social and Health Psychologist Shelley Taylor has called people "cognitive misers" based on research regarding peoples' use of cognitive effort or lack thereof. That is, people tend to do the least amount of thinking that they need to get by. Heuristics (cognitive shortcuts) are relied upon as much as possible, even when it results in predictable errors. Actually, a Cognitive Psychologist named Kahnemann won the Nobel Prize in Economics a few years ago by showing that people use heuristics when investing in the stock market. Over reliance on older, established ways of doing things has also frrequently been demonstrated in Psychology research. There are a number of related terms used by Psychologists such as top-down processing, functional fixedness, or confirmation bias -- all of which lead to errors in thinking.
Thus, it comes as no surprise to find that the dominant economic system used in the United States, if not the world now, involves not active involvement in the regulation, but rather, as little regulation as possible. The rationale for deregulation or a lack of economic regulation is that somehow, the economy is supposed to take care of itself. The "free-market" will find an optimal equilibrium according to the apologists for our current economic woes, and everyone will be paid what he or she is "worth." According to the social Darwinists who believe this, it is only natural that a few economic elite will capture most of the world's resources to create their own personal playground of the world's economy. The rest of the population is to remain in relative poverty feeding on economic handouts given them by the rich, or perhaps even starving to death unless taken pity upon by some wealthy person. Of course, members of the economic elite will not say this publicly, and many conservatives do not believe this, preferring instead to believe that somehow, the "free-market" will eventually make everyone wealthy, except for laggards and freeloaders who refuse to work. Never mind that we are all born as freeloaders.
How convenient it is that the people who run the system believe that the system will run itself! That frees them to concentrate on making money, and using that money to create more money, rather than worry about regulating each other! While the ideas presented this essay are certainly not novel, its major point is that the most convenient possible conspiracy by consensus has developed, in which those who run the machinery of the economy tend to view it as some sort of infallible, perpetual motion machine which will continue to run to the benefit of humanity ad infinitum without maintenance. After all, these people created this "machine" and as leaders of the world economy, they must really "know" what they are doing, just as BP's executives must have thought until their big oil pipe broke and they didn't know how to fix it, and still don't. I realize that I may be engaging in a bit of hyperbole here, and not all of the United States' and certainly not all of the world's, economic elite prescribe to the unregulated free-market ideology, but this certainly is the direction that the world, led by the United States, has been going over the past few decades.
If a person happens to run a lucrative business and enjoys considerable wealth, why not "go with the flow." After all, if it's not broken, why fix it? Of course, the belief that the system is not broken is a result of being one of its prime beneficiaries. For generations of people living in poverty, the system has never worked. But being out of the power loop, the majority of us have only very limited power to change the system, by perhaps electing politicians who want to change the system, and by complaining and insisting upon change. Meanwhile, those with the money to do so, work to shape the public's attitude so that they will not elect such politicians, and manipulate the system so that if such politicians are elected, it will be difficult for them to enact change. We are seeing this process play out in Washington politics now. Thus, the conspiracy by consensus and the inertia it creates, continues for the time being, but that may change soon. Once people, even wealthy ones, realize en masse that an unregulated economic system will inevitably lead to disaster, the consensus will break down, and real reform will be possible. I believe that we are currently in the process of seeing the public begin to reject the "free market" economic model. Once the economically average citizen rejects the "free market" model, and once its inadequacies become apparent to even the wealthy, they will eventually be forced to accept economic regulation.