The story of the crash (and what to do about it)

[Keith Hart]

Frank Rich has another wonderful article in the NYT, Obama, Lehman and 'The Dragon Tattoo' with his usual plethora of intriguing links. There has been a lot of talk about whether Stieg Larsson's novel is misogynist, but Rich points out that there is no doubt about how much he hated bankers and he wonders if this has anything to do with the extraordinary success of the Millennium Trilogy. (I just read the third, The Girl Who Kicked The Hornet's Nest, and it is by far the best, brilliant plotting, but not a lot on finance). His point is that popular fiction may reveal more about what people really think than the politicians and conventional media articulate. He links this observation to the story of Lehman Brothers which is gradually coming out and has been featured in Michael Lewis's No 1 non-fiction bestseller, The Big Short. Rich draws from all this a prediction that a war is coming soon over the rules for banking and who imposes them. What matters is to identify the sides in this war and decide which one you are on. Obama, sitting gingerly in the middle, will be knocked off his perch unless he comes down squarely on the side of justice.

This analysis reminds me so much of the man who taught me more than any other, the Caribbean writer and revolutionary, C.L.R. James, whose American Civilization (1993) Anna Grimshaw and I edited for publication (it was written in 1950 and has gone out of print). He argued that the struggle for civilization was between ordinary people seeking more democracy in their own lives and the bureaucratic powers who would deny them more control. This class conlflict gains freest expression in popular culture, but it also points to political upheavals.

Since we seem to be having difficulty sustaining discussion at a high level of abstraction, I wondered if anyone would like to join in an exploration of how popular fiction and non-fiction (including movies, plays and journalism) throw light on the economic crisis we are living through by building up a narrative of what is happening that may or may not have political consequences. Perhaps you could add sources that have struck you as being particularly insightful. I will mention one that turned me on.

William Poundstone's Fortune's Formula: The untold story of the scientific betting system that beat the casinos and Wall Street (2006) is an amazing narrative over the last half-century bringing together Claude Shannon (the inventor of information theory), The Mob, Rudy Giuliani, Paul Samuelson, the guy who invented junk bonds and a cast of thousands. The basic question is can you beat the market or not? The economists say not, but you can if you have inside information. It all starts with a corrupt telegraph operator. Read on...

[John McCreery]

I will just add two useful references, Richard A. Posner (2009) A Failure of Capitalism and Donald Mackenzie (2009)Material Markets. Both are more academic than popular, but the first is interesting for being by a judge and legal scholar with a conservative reputation and the second for being a study of the technologies that have made computer-driven market manipulations possible.

[Michelle]

If you want to discuss a media event that has impacted the economies of the world: How about An Inconvenient Truth -

It kicked off a global reaction to by/sell carbon credits, develop political and economic programs to comply with the suppositions made by Mr. Gore. It has impacted all the way to the Nobel Prize committee and all of this based on questionable science affecting economic decisions by politicians and people alike. It was so mainstream that people at all levels of society discuss it openly as if it were all the most important discovery of a generation. Businesses have popped up all over the world to fulfill the dream of the program outlined. The insecurity of the western economic climate allowed this movie and subsequent road show to gain ground and legitimacy.

[Keith Hart]

Thanks, John and Michelle. I don't want to rule out any line of discussion. Each of you has raised the question of the relationship of academic or scientific expertise to stories in mass circulation. The book I mentioned tells a story that embraces experts, crooks and every shade in between, but it can't be said to have shaped popular consciousness, as revealed by the sheer volume of sales. I guess what intrigued me from the Rich column was how he tried to spin a thread linking a monster novel, the Lehman failure and Obama's political predicament. The idea that what people buy in the way of popular culture tells you something about them that you would not find out directly from the academics and the media is what interests me most. But please keep them coming and see if some other threads emerge.

[John McCreery]

Hi, Keith. Haven't read The Big Short yet, which makes it hard to comment. I did, however, read Lewis' earlier book Liar's Poker and thoroughly enjoyed it. Thinking about both Lewis and Frank Rich I wonder how you see the relationship between "mass circulation" and "popular culture." I ask because, to me, both Lewis and Rich target what Robertson Davies calls the clerisy; the old term "middle-brow audience" comes to mind. It's important to remember that selling a million books in a population now over 300 million means that you have reached less than 1% of those aged 25 or older (197,794,576, according to the U.S. Census Bureau). Include those aged 15-24 and the reach of the book in question declines to below 0.5%.

[Keith Hart]

There is a large grey area here, but I would not confuse a NYT columnist with mass popular culture. In case of the latter, I would always be drawn to the monster hits rather than run of the mill successes. The question is why would so many punters go for this and not all the other possibilities before them? Rich asked this about the Millennium Trilogy which is truly a global monster hit and wondered if it had anything to do with the economic crisis. You could ask the same question about Avatar, not just why so many people wanted to see it, but why the best-selling movie of all time happened under these economic circumstances?

Rich's point (and mine) is that extreme examples of popular culture like this offer a chance to speculate about what moves the masses, as pundits writing for the clerisy rarely do. I recall having a bitter argument with American friends over Forrest Gump which they thought was a dreadful movie with the wrong take on the culture wars of the 60s. What interested me was to speculate on what such a large American audience might have seen in it.

The point is that the Hollywood capitalists can never predict what will sell. That is why, when a movie is a popular success, they send out remakes, Die Hard 4 and the like. The best account of this relationship between the producers and the mass audience is Fitzgerald's unfinished novel The Last Tycoon, whose protagonist, Monroe Stahr, encapsulates everything the novelist had learned about movie-making. But the James book, American Civilization, provides the best analysis. Against the likes of Adorno who claimed that our debased tastes are manipulated by capital, James held that popular culture was a sort of stand-off between the capitalists and the masses, with the latter expressing their freedom through what they choose to spend their dollars on.

His most viivid example is the case of Marlene Dietrich's pants (trousers in non-American English). No woman had ever worn them in public before (except on a stage), but in 1944 (or thereabouts) Marlene did just that in New York. Remember that at this time, the men were fighting a world war and the women worked in the factories. The effect of Marlene's symbolic act was for the mail order firms to be swamped with requests for pants like hers. The capitalists stuggled to catch up with a demand that they had not anticipated and certainly did not manipulate. Women have been wearing pants ever since.

The method that I am searching for clearly cannot be applied in a routine way to every instance of popular culture and, even when it is, it is at best a speculative way of gaining insight into the "revealed preferences " of the masses. But as I said, I was hoping for a wider discussion of the implications of my original post rather than a chance to bang on about my hobby horse.

John McCreery said:

I wonder how you see the relationship between "mass circulation" and "popular culture."

[John McCreery]

James held that popular culture was a sort of stand-off between the capitalists and the masses, with the latter expressing their freedom through what they choose to spend their dollars on.

Two questions

(1) Why a "stand-off"? Having been employed for a good many years in one of the "culture industries," I would see the relationship as more along the lines of an incestuous affair.

(2) Why is there no third-party involved? It seems to me that one of the great weaknesses of this sort of analysis overlaps with a major gap in anthropology — our lack of attention to the clerisy/middle-brow/local literati and their role as a cushion, conduit or filter between the elite and the mass.

[Keith Hart]

John McCreery said:

(1) Why a "stand-off"? Having been employed for a good many years in one of the "culture industries," I would see the relationship as more along the lines of an incestuous affair. (2) Why is there no third-party involved? It seems to me that one of the great weaknesses of this sort of analysis overlaps with a major gap in anthropology — our lack of attention to the clerisy/middle-brow/local literati and their role as a cushion, conduit or filter between the elite and the mass.

Well that was your initial point, John and this is no place to argue about the relative merits of 2- and 3-classes. James was a Marxist of course. Some Marxists make out that the masses are dupes of capital. He thought they had their own means of making a difference, but not on their own terms -- hence a "stand off". He has a particularly savage section on "the intellectuals" who either dissolve the masses into individuals (economics/psychoanalysis) or go with the power, right (fascist) or left (Stalinist). He wrote this in New York around 1950. I don't expect you to go with the headlines of this treatment, but the detailed analysis of comic strips, movie stars and the rest (Dick Tracey, Rita Hayworth) as an expression of the struggle he saw is actually rather good.

[John McCreery]

Sorry Keith. No interest whatsoever in putting down James or derailing the conversation. Since I haven't as yet read either The Girl Who Kicked the Hornet's Nest or The Big Short, I am stuck at a level of abstraction you are trying to avoid. I will now quietly disappear and lurk in hope that someone who has read the books has more to say about them.

[Keith Hart]

So anyone want to talk about the Millennium Trilogy and the economic crisis, Frank Rich, Michael Lewis or anything cool you have read recently?

[Sanjay Bajpai]

A Book named "The Fortune at the Bottom of the Pyramid" by C K Prahlad was rather well received in India some time back.It talks of eradicating poverty through profit.It is also quoted often in business circles especially in the context of CSR which makes one a little sceptical of the use it is being put to.Definitely worth a look...

[Keith Hart]

Thanks Sanjay. I'll definitely look for it. In the meantime the SEC's charge against Goldman has highlighted Lewis's The Big Short which is basically about what Paulson and Goldman were doing with that CDO.

Sanjay Bajpai said:

A Book named "The Fortune at the Bottom of the Pyramid" by C K Prahlad was rather well received in India some time back.It talks of eradicating poverty through profit.It is also quoted often in business circles especially in the context of CSR which makes one a little sceptical of the use it is being put to.Definitely worth a look...

[Nathan Dobson]

I was struck by the September cover of Private Eye, especially since the most decisive action to have come from anyone since then is the "Occupy" movement.

Was it the politicians' dithering that gave "Occupy" the space to move or has it always been building?