Nov. 10, 2010 (Archdruid Report) -- Recent headlines, it seems to me, put an interesting slant on the much-ballyhooed claim that we live in an information society. I’m thinking here especially of the slow-motion train wreck of the U.S. banking system now under way, courtesy of the very same system of slicing and packaging real estate debt that was praised to the skies as a brilliant financial innovation a few short years ago.
Now of course, as John Kenneth Galbraith pointed out long before the phrase “mortgage-backed securities” found its way onto any up-to-date list of popular oxymorons, innovation in the world of finance almost always refers to the rediscovery of one of a handful of very bad ideas that resulted in economic disaster every other time they’ve been used, and can be counted on to do the same thing this time, too. Still, there’s another dimension to the current mess, which is that a large fraction of the trouble that’s sent stock prices of a dozen large banks into a crash dive is the result of simple sloppiness in information handling.
The laws governing mortgages in the United States sensibly require a paper trail showing all transfers of the right to collect from the mortgage, and they also require the people who process foreclosure paperwork to at least glance through the stacks of papers they’re signing. In millions of cases in America alone, these very simple steps weren’t done, the relevant information wasn’t kept or wasn’t read, and an economy that’s still staggering from the body blow it received from the implosion of the housing bubble has just taken another hit.
You might think that an information society would do better than that, but this is par for the course these days. In the modern industrial world, most of the time, the only phases of information’s life cycle that get more than cursory attention are its production and distribution, and then only in terms of raw quantities -- the sort of measure that doesn’t differentiate between cures for cancer and Lady Gaga’s latest round of failed attempts to make herself look interesting. Those who insist that producing ever larger volumes of information will somehow lead us to Utopia tend to pass over the fate of all that information once it comes sluicing out the business end of our society’s information factories, and they tend to pay even less attention, if that’s possible, to the origins and destiny of the information that isn’t produced in digital form by the busy labor of human beings.