GibburtConsequences, and who is still willing to face them
Amsterdam, summertime. Aided by a healthy dose of magic mushrooms, some 20-odd years old tourist decides that the fact that he has never flown before has been a consequence of right wing government propaganda rather than of his personal skill in unaided flight. Now his eyes are open and he is more than ready to cast off the shackles of his misinformed past. A confident leap out of the 3rd story window and he is nothing more than a newspaper article.
Middle of nowhere, The Netherlands. A 60 years old retiree decides that the interest rate he has been receiving on his savings thus far has, in fact, always been too low. A new player in the market, Icesave, has shown that interest rates can easily be significantly higher than the rates offered by the established banks. The more than 5% risk free interest offered by the new bank is so attractive that our retiree moves all his savings to this new provider. A few months later that money is simply gone.
Because of actions like those of our tourist friend mentioned above, the Dutch government outlawed the trade in and possession of these magic mushrooms. Remarkable, however, is that usually in these types of incidents, instructions on the safe use of these substances are ignored, if read at all, and participants tend to be more than a little under the influence of additional substances like alcohol and/or marihuana.
In the now notorious Icesave incident, many savers initially lost their money, but many were reimbursed later. That these reimbursements came predominantly out of the pockets of the tax payer who never received any of these high interest rates seemed to matter little. What is interesting here is that a surprisingly big portion of the savers was completely unaware of either the background of the bank they were entrusting their money with or the extent to which the government would guarantee their money in case something went wrong.
These examples are just two of what could have been a very long list of recent incidents where the common denominators seem to be sheer stupidity and an unwavering trust in somebody else’s ability to clean up (anybody seen ‘Into the Wild’?). What happened to looking before you leap (pun intended)? What happened to at least putting some effort in applying basic common sense before making certain potentially harmful decisions? And if we choose not to look, what happened to bravely suffering through the consequences of our own actions? Or do we all expect that somewhere there will be someone to remove all the little things that we might accidently put in our mouth and to make sure that we go to bed in time?
Now for clarity’s sake: nothing I have written here today is meant to discount the responsibility of representatives of authority like legislators or senior bank executives. They have their roles to play as much as we have ours. What I do want to say, however, is that if we continue this trend of transferring the responsibility of acting like competent adults elsewhere, our society will slowly change into one big Kindergarten. And that will mean that sooner or later we will be governed by the kids with the coolest bikes.
You identify a broad social trend of “transferring responsibility of acting like competent adults”. I’m not sure I can follow you on that. I don’t think there’s ever been much enthusiasm for “bravely suffering through the consequences of our own actions” and there’s always been much demand for the protective hand of the state, certainly for as long as I have been politically aware. The question to what extent people should be made to endure the consequences of their own folly, and to which extent they should be protected from their own stupidity is an old one, and it’s far more complex and ambiguous than you make it out to be in this piece.
Welcome to Gibburt, by the way.
I will go ahead and disagree with both you (Robert) and Ralf, as – I suppose – was to be expected. You raise the point that it seems people seek (albeit that word suggests too much effort on their part, alternatively: demand) more protection from consequences. I think more protection is sought, but not compared to degree of risk in daily life. Aside from this kind of news popping up more often, there are also so many more choices to be made by your average Joe (or Jane). Especially in the example of your Icesave retiree, it stands to quite some debate how well informed he could have been. The much recognized authority of the Dutch National Bank (as well as many other national banks from countries all over Europe) gave Icesave an A status. How much more can you expect from the average Joe to dig up on a financial institute? You may argue that “people were saying it was less trustworthy than established institutes,” but (aside from the fact that such arguments go against the core ideas of capitalism; how else does new competition arise?) people will actually say a lot of hooey, like “marihuana is a gateway drug to heroine,” or “the gay rights movement wants to convert everyone, in order to eradicate the human race.”
At some point, the notion of choice fatigue should pop up in this (blog challenge, anyone?). Seeing as I often have difficulty finding out what company or which people are ultimately behind a brand, digging through layers of (partial) ownership, one could also argue that, before appealing to individual responsibility, companies’ right to obfuscate brand and product relations should be limited.
Finally, I simply can not imagine your 20-year-old tourist not “bravely suffering through the consequences” of his actions.
Welcome to Gibburt
Gents,
Thank you both for your comments and please allow me to respond.
@Ralf
You are, of course, right that the debate regarding the distribution of responsibilities between state and individual is an old (although not unimportant) one. My intention here, however, was not so much to join this debate but more to state that, provided we want our society to be a democratic one, there is a minimum level of personal responsibility for all of us that we cannot (and maybe should not want to) transfer.
@ Philip
Although I completely agree with you that in our current society choice fatigue is a very realistic phenomenon, I cannot accept however the extent to which you allow it to diminish the minimum level of effort required by competent adults in making those very important decisions.
To come back to the Icesave example, at the time the bank became active on the Dutch market, the first 20,000 eur was guaranteed by the Icelandic government and the second 20.000 eur was guaranteed by the Dutch government. This means that anything above 40,000 eur was unsecured. In the light of the above the question becomes then: Should anybody who moved a significant part of his savings to this bank have known those numbers and if he did and choose to do it regardless, should he still be reimbursed?
There is, to my knowledge, no bank where one’s savings would be guaranteed to a far higer amount than those 40,000 Euros. In the UK, for example, the Financial Services Authority only guarantees £50,000 per customer (£35,000 before 2008).
On choice fatigue, I’d like to recommend this excellent talk: http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html
First of all hello! Robert mentioned this blog to me, so here I am
Very interesting article, I remember that when those examples you mentioned were in the news, I was really pissed off and angry, exactly because of the point you make here: accountability is sacrified, and even sanctioned!
Actually, in the Icesave example, it was quite easy to check whether this specific bank was subject to the guarantee system of the Dutch Central Bank, and it wasn’t! They might have had an A status or 5 stars, but if you had brought your money to them, the Dutch Central Bank didn’t guarantee you’d see a penny of it back in case of bankruptcy.
But let’s get back to the real matter at hand, the question of responsibility. In modern complex society it can be very hard to foresee the results of ones actions. One just cannot be an expert in everything, the world is constantly in flux, and it’s sometimes hard to keep up and have an eye for everything that can influence your actions.
On the other hand, there is so much information available, combined with a healty dose of suspicion, it shouldn’t be too hard to get reliable information that helps us decide.
The problem is, that this only works for individuals that make their decisions bases on reason. In the mentioned examples, this was not the case. The girl that thought she could fly, was having psychological problems before she used the drugs. The pensionado acted out of greed.
The tragedy is, that some politicians use these cases to make laws, and apply them to people that do know how to act with reason, and in the process justify that we act without responsibility.
What we, and those politicians, should never forget, is that without responsibility, there can be no liberty. If you take away the former, you remove the latter.
Or, to quote John Locke: “I have no reason to suppose, that he, who would take away my Liberty, would not when he had me in his Power, take away every thing else”.
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