Ignorance by Design and the Social Costs of Stupidity

10. IV 2016  

Seven years after the crisis, it has become clear that it is really not the crisis itself, but persistently incorrect policy response that is the main force behind both social and economic long-term damages. This is an example of the general rule (best articulated by Barry Schwartz) according to which false ideas create circumstances that make them true. Unlike bad material products, which go away if proven inferior, bad ideas don’t go away if people believe they are true. They tend to construct institutions and ways of living that are consistent with these ideas. Current state of economy is a clear illustration of this rule. We have seen this phenomenon many times through history, almost exclusively in isolated totalitarian societies.  But, how could this type of total defiance of reality be maintained in countries with a formally free press and highly educated population, remains one of the biggest puzzles of this young century.

David Graeber offers an illustration of the mechanism that accounts how cognitive dissonance takes over and becomes a governing force in our lives. Politicians, journalists, lobbyists, CEOs and corporate bureaucrats rarely talk to anyone except each other. They constitute a distinct intellectual universe. Within this universe, economic policies are designed primarily for political marketability; economic science exists largely to provide impressive diagrams and equations to sell them with. Phrases designed in think tanks and focus groups (e.g. free market, wealth creators, personal responsibility, shared sacrifice) are repeated like incantations until it all seems like such unthinking common sense that no one even asks what the resulting picture has to do with social reality. The bubble logic can be maintained only by certain studied ignorance of how the economy really works. in that context economics provides a scientific legitimation for status quo.

Ignorance by design is the trap any hegemonic ideology faces. It reinforces already invalidated paradigms, which makes things progressively worse. Maintaining status quo comes at higher costs and its legitimation requires heavier hand. This means reduced tolerance for dissent and gradual inhibition of opposition with loss of information that it provides, which leads political leadership essentially blind to whatever is happening in their back yard. As discontent grows and legitimation becomes more expensive, capitalism could begin to move against democracy. This means that there could be a growing need for adjustment of either democracy or capitalism. The end-game? The moment when status quo is no longer affordable.

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