Alan Greenspan found a flaw in the model. What happens when you find a flaw in yours? Do you keep going with the old model as long as you can, right up to the point at which you experience your own local equivalent of the global financial crash? Or do you somehow try to extricate yourself from the model and defect from your own point of view? This second possibility is clearly much harder than just keeping on going, but then it might also be, in the long run, less damaging.
Let’s face it, Greenspan didn’t ‘find’ a flaw – the flaw was foisted upon him by events spiralling out of his control. Had he queried himself sooner, the rest of us might have been less impacted by his last minute flaw-finding.
Churchill is supposed to have said ‘There is nothing wrong with change, if it is change in the right direction. To improve is to change; to be perfect is to have changed often.’
So how do we do it – how do we defect from our own framework of thought? I think a starting point might be to use the perspective of grid-group cultural theory to entertain the possibility that what we take to be the objective truth is often only one of several ways of understanding the situation, and that our assembling of the data and framing of the ‘problem’ is conditioned by these different ways of understanding at least as much as by the ‘facts’ of the matter. In the case of Greenspan he could have looked at his views on deregulation and said ‘how much of this is to do with what an Individualist bias (as opposed to Hierarchical, Fatalist or Egalitarian bias) would say?’
You can read more about this at A way of trying not to fool yourself and at Why did no one see it coming?
REP. HENRY WAXMAN: The question I have for you is, you had an ideology, you had a belief that free, competitive — and this is your statement — “I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We’ve tried regulation. None meaningfully worked.” That was your quote.
You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price.
Do you feel that your ideology pushed you to make decisions that you wish you had not made?
ALAN GREENSPAN: Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to — to exist, you need an ideology. The question is whether it is accurate or not.
And what I’m saying to you is, yes, I found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.
REP. HENRY WAXMAN: You found a flaw in the reality…
ALAN GREENSPAN: Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.
REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working?
ALAN GREENSPAN: That is — precisely. No, that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.