Today marks the anniversary of the biggest business failure in USA history – the bankruptcy of the revered investment house, Lehmann Brothers. Seven years on, the economy is just now emerging from the damage and people are still scratching their heads about the silver linings to this fiasco.
Everyone who applauds the capitalist system portrays it as a meritocracy of competition where success rises on its merits and failures are removed from the system. Unfortunately, the individuals most responsible for failure are the ones most insulated from its embrace in the modern day perversion of capitalism that most Western countries operate. Stakeholders have engineered complexity and interdependence into the system so that they can plays a heads-I-win-tails-you-lose game where they are inoculated against failure. An NBC report “Too big to fail often means too big for jail” analyses…
- "’Deterring future crimes can’t be accomplished simply through fines or negotiated financial settlements – which many banks regard as the cost of doing business,’ Phil Angelides, who chaired the government commission that investigated the financial crisis…‘Senior executives need to know that if they violate the law, there will be real consequences.’ There’s no one single reason for the dearth of high-profile criminal convictions. Some prosecutors have argued that, in some cases, the crimes related to the financial meltdown of 2008 were too complex to pin on individuals. In others, they argued, the law had not kept up with the complex financial engineering that brought about the crisis.”
Complexity is often the result of running from failure. Instituting back-up to the back-ups, intricately intertwined interconnections, a superabundance of processes many of which do little except operate on other processes. All in the vain aspiration to avert any failure. Of course, the result is a modicum of short-term stability at the expense of a much deeper and broader fragility. In the end, the faulty components are hidden from view and shielded from accountability.