A friend, Ollie, pointed me to some interesting comments made by a reader on slashdot comparing this failure to what took place with the mortgage bubble.
Note that this is the same type of failure as what happened in the mortgage bubble. Realtors and buyers and auditors were not actually determining the real value of the houses they were trading, but were merely checking to see what everyone else thought the value was. Most of the players (at least those with the most control) had an incentive to inflate the value. So the result was a spiral of home prices that rose far beyond the true value.
Now that the market has corrected and prices are closer to the actual value, all parties are crying foul and saying they don't want to have to "mark to market" or face foreclosure or bankruptcy for their inability to correctly determine the true value of their investments.
The increasingly ubiquitous network connectedness of people and the collapse of topdown structures of authority and credibility are related. The failures of leadership in government, media, journal and business (esp in the financial sector) have been visible abandonments of the responsibility of maintaining those social functions. Rules can only be cheated and violated so much before any game or agreed upon structure for interaction collapses into chaos. We've moved beyond cynicism to a widely recognized acceptance that there is no social or moral authority that structures and governs our lives. Everything is in play and up for grabs. There are no accepted legal and ethical certainties, only victories won with lobbyists, lawyers and handlers in the courts of law and public opinion.
The metaphor of laws as timeless principals written in stone seems so quaint and antiquated in this digital age where knowledge and data are constantly revised and the outcome for any situation or event comes from the unpredictable group dynamic generated by the power the individuals involved.
Look at rise in 'Lord of the Flies" tribal primitivism in the last decade. Reality shows that pit contestants against one another or are "last man standing" popularity contests. The obsessive drive to poll, judge and evaluate all things: what's in? who's hot? where are they now? The recent "Grading of the President" features on CNN is a good example. Look at how much consensus mechanics drive daily experiences and how much time and attention is given to "taking the pulse" and surveying opinion.
I am starting to wonder whether we might be getting too connected? Overexposed to the constant presence of the words, sounds and images of other people? Could adjustment issues be arising from this interconnectedness? A collective hypersensitivity that is resulting in anxieties over status, social heirarchy and pecking order?
The famous experiments by Dr. Calhoun on population density showed that the stress of overcrowding leads to violence, behavioral disturbances and even cannibalism in rat populations. Are we experiencing the psychic equivalent?
I'm not alone in my conjectures. Marshal Mcluhan's predictions on social behavior in the global village present a similar perspective.
Participation = Destruction (1 Billion Internet Users, The Tyranny of the Masses and the Death of Digital Culture)
Creative Surplus & Virtual Unemployment (Participation = Destruction)