I was flattered to be invited to submit a paper and present in the Minnesota Law Review's upcoming symposium, "Government Ethics and Bailouts: Past, Present, and Future," to be held on Friday, October 15, 2010. My co-panelists are Robert Hoyt, the former general counsel of the Department of Treasury, and my friend Bill Black from UMKC Law School (with whom I've shared a panel previously and explored questions of co-optation, or as Bill and the criminologists refer to it, "neutralization). Other panels will include Paul Atkins, former SEC Commissioner, Jack Katz, former SEC secretary, Kathleen Clark (Wash. U.), Richard Painter (Minnesota), Lisa Fairfax (Maryland), Steve Davidoff (U.Conn.), and Steve Bainbridge (UCLA). Vice President Walter Mondale will give a keynote address the evening before, and SEC Commissioner Troy Paredes will speak at lunch. Usha Rodrigues is submitting a neat paper (I've had a chance to read it) but may not be able to attend due to an impending, as they say, blessed event. All in all, quite a day.
I'm on the first panel of the day, which poses the mundane and narrow (!) question "Did Capitalism Fail?" Having no confidence whatsoever that I was capable by education, training, or insight to know whether capitalism failed in the financial crisis, I employed an old law professor trick and went after the question itself. (Maybe Messrs. Hoyt and Black are more confident than I!) My contribution is entitled Capitalism Didn't Fail, But the Metaphors Got a "C", which I've now posted on SSRN. (I was mostly proud of myself for finally coming up with a title that had no colon in the middle.) I saw that Steve Bainbridge just posted his contribution, Dodd-Frank: Quack Federal Corporate Governance Round II, so I decided to dive in as well. Here's the abstract:
This is a paper for the Minnesota Law Review's October 15, 2010 symposium, "Government Ethics and Bailouts: Past, Present, and Future." The panel topic is "The Past: Did Capitalism Fail?" The paper addresses not the merits and demerits of modern global financial systems, but instead how those of us who are not financial professionals might make sense of them, particularly when they are in catastrophic mode. The thesis is that the question itself reveals the extent to which the financial crisis has not been so much about whether an economic system succeeds or fails, but the meaning human beings draw from natural and man-made catastrophes. When the world discombobulates our sense of order, our expectations of cause-and-effect, we seem either (a) to question our most fundamental assumptions about science, progress, and social order, or (b) to look for someone to blame.
The paper considers whether the verb "fail" in the question is transitive or intransitive. Is the question whether capitalism failed intransitively, as in "died," or is whether capitalism failed transitively, as in "flunked the test"? I argue that the question itself, in syntax and meaning, reveals our ambivalent relationship with telos, the extent to which order and regularity in nature and human affairs reflect purposes or ends. Relying on Steven Pinker's insights about verb usage, I tie the ambivalent syntax of the question to its equivalent ambivalent meaning in connection with the financial crisis itself. In the frame of the atelic (or intransitive) metaphor, capitalism failed in the sense of getting sick or dying, and the real problem was the perception that the professionals did not know how to cure the patient. In the frame of the telic (or transitive) metaphor, a well-engineered modern society hums along smoothly, operated and regulated by well-trained professionals. In that case, either the machine or its operators failed our expectations. I conclude by suggesting that if we understand the source of the metaphoric frames themselves, we may not solve the financial crisis, but we may be able to calm the troubled waters of our fundamental assumptions and our concomitant desire to find human or divine villains to blame.
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