Parables of the crisis, once more
Back in the days when the B+I Line sailed from Holyhead to Dun Laoghaire, the ferry crew occasionally used to go on strike. This was inconvenient from a financial point of view, and became steadily more difficult to organise during the 1980s, as various Thatcher-era union laws were brought in. But a tactic that was also used was the "work to rule".
Basically, when a work to rule was declared, the ferry crew would go through every single rule in the company rulebook and ensure that it was obeyed with meticulous precision. Since this was a ferry company, with a rulebook six inches thick, it meant that about two ferries sailed a day. Until the industrial dispute was settled, at which point everyone went back to normal, cutting the corners that it was always tacitly agreed that you'd cut.
Basically, since about half way through last year, the global financial system has been on a work to rule.
When I was in the civil service union we went on a work-to-rule three times.
ReplyDeleteIt was the same work-to-rule though.
Ha ha ha ha ha ha ha.
On a less amusing note, is there a grimmer estate in the UK than the one on the edge of Holyhead when you're walking toward the hills?
ReplyDeleteI think nothing has ever made me feel so old as realising that it's necessary to explain what a "Work to rule" is
ReplyDeleteDidn't Lord Denning in a case involving ASLEF decide that working to rule - that is, working in accordance with the terms of your contract - was actually a breach of the employment contract: that is, a breach of the implied duty that the parties to the contract co-operate to advance the interests of the enterprise?
ReplyDeleteI find this makes an interesting point about contract law, but, like Chris, I have to explain to my students what a 'work-to-rule' campaign is.
Would it be accurate (and tactful) to point out that, up to about halfway through last year, the global financial system was sailing with the bow doors still open?
ReplyDelete(At the thought that I may have to explain that reference, I too feel old.)
My one and only memory of the Holyhead to Dun Laoghaire crossing was of total seasickness (and some old sea dog hosing down my vomit from the deck as we came in to swerve of shore and bend of bay). And it (the nausea) lasted for days afterward. So are we about to analogise between the GFC and a night time crossing of the Irish Sea? In which case I'm with you
ReplyDelete"Would it be accurate (and tactful) to point out that, up to about halfway through last year, the global financial system was sailing with the bow doors still open?"
ReplyDeleteQuite. It's the ten years of not working to anyone's rules that have landed us in the shit. Nine months of kow towing are compounding the problem, but are not he cause.
With all due respect, your parables aren't getting any better or any more entertaining, I must say. This one doesn't seem to make any sense whatsoever.
ReplyDeleteYour average failed IT failed project is a "work to rule" (the NHS being a rather spectacular example). Basically you design the computer system according to the official job descriptions, rather than what they actually do.
ReplyDeleteI'm still haunted by the trust parable.
ReplyDeleteWell, tough titty abb1, because I've got another one coming out soon.
ReplyDeleteGood parable. Yeah, I used to do something like that a former job.
ReplyDeleteExcuse me: it's a good parable about the global financial system - because you used to do something like that at your former job? Is that what you said?
ReplyDeleteYour average failed IT failed project is a "work to rule" (the NHS being a rather spectacular example).
ReplyDeleteOK look, "work to rule" is a form of sabotage, deliberate sabotage, that's what it is, alright?
What happens to those IT projects - maybe it's bad management or whatever, but whatever it is, it probably isn't deliberate sabotage, correct?
abb1, why don't you take a long walk on a short pier?
ReplyDeleteSee, that's called 'idiom'. 'Parable' is something else; it can be about grasshoppers and crows, but it's actually supposed to make sense.
ReplyDeleteYou're thinking of a "fable" if what you want is a clear tale aimed at illustrating a particular moral. Parables are meant to be ambiguous, allusive and susceptible to multiple interpretations because they're spiritual exercises as well as moral lessons.
ReplyDeleteDon't matter, it's an allegory that illustrates something, helps make some point.
ReplyDeleteHow does the "work to rule" union tactic illustrate what's been going on in the global financial system? I just can't imagine. Of course I may be dumb, but that's what a parable is for: to explain things to dumb people.
My question is: if the global financial system is doing a work to rule, who's management?
ReplyDeleteHarumph. I agree with abb1 here. I just don't see it. Maybe it's right, but it's in no way immediately obvious. And it's presented as something that should make that dim light bulb above my head go off. All I get is a buzz-buzz, sputter, sputter, no light. And like abb1 says, usually work to rule implies a purposeful attempt to funk things up. Do you mean that you financial people have been "going Galt" on us for the past nine months (or are you trying to kill one stupid meme with another?)? Can you elaborate this a bit for those of us with defective cartoon light bulbs?
ReplyDelete"With all due respect, your parables aren't getting any better or any more entertaining,"
ReplyDelete"Well, tough titty abb1, because I've got another one coming out soon."
Also, before you do that next one, just wanted to note that in terms of maximizing your blogginess utils, it's the bad-but-esoteric as well as the really good parables/analogies/fables/metaphors/anecdotes/pontifications that get you all the comments. It's the 'yeah that's sort of true' mediocre ones that fall flat. It's like the Laffer curve of blog parables/analogies/the other crap.
So this one's definietly maximizing something. Just keep that in mind for that next one that you promised us. It better be bad or good.
OK, let's get fucking specific then. God you people are killing me.
ReplyDeleteThe "rule" in question is "always check the financial soundness of your counterparties". Before the Lehman insolvency, it was tacitly assumed that the state stood behind major banks and senior obligations of a regulated institution were money good in all circumstances. This practice was called "moral hazard", and lots of people thought it was a bad thing.
Post Lehmans, this was no longer possible, and the major banks began to "work" to the "rule" of lending to each other based on an assessment of the credit of each individual counterparty, rather than the system as a whole. This turned out to have a few negative consequences.
The solution proposed by the world's central banks appears to be "quantitative easing", which is the rough equivalent of trying to get through a work to rule on the Holyhead docks by bringing more ships in.
Abb1: Not deliberate sabotage. More management not trusting employees (so leaving them out of the design loop deliberately - see NHS) and just building it according to "the rules", or trying to force them to do their jobs properly, by building IT systems that essentially enforce certain behaviours.
ReplyDeletethanks for spelling that out.
ReplyDeleteOk, that makes more sense. The lightbulb's glowing, though it's more like one of those eco-friendly lightbulbs. The confusion - for abb1 too I think - is that when you say "work-to-rule" I immediately think of "purposeful sabotage carried out within the bounds of the law". I don't think you're saying that that's what's going on here.
ReplyDeleteRight. Still, there must be a better analogy for "not trusting" than "work to rule" that has nothing to do with trusting or not trusting.
ReplyDeleteAlso, I think that "state stood behind major banks" is not an entirely correct framing, not the whole story.
I suspect that the maximum potential exposure of major banks is well beyond anything governments can "stand behind"; we are probably talking about many trillions of dollars here. In addition to government's implicit guarantee, what had also disappeared is trust in credit ratings provided by private entities, like Moody. Even with government providing protection, it's obvious that you still need to have an idea of your debtor's collateral. Otherwise there would've been no need for the credit ratings.
Another example of work-to-rule as sabotage: the OSS's 1944 Simple Sabotage Field Manual (see pages 29–31).
ReplyDeleteThe work to rule analogy doesn't work because this isn't the result of sabotage. What DD actually seems to be saying is that the financial system is too complex to function if the financiers actually have to figure out the true risks they are taking when they make a loan. Not sure what the proper analogy there is.
ReplyDeleteIt's taken me 15 years, but I'm beginning to think that, compared to economists, sociologists might be on to something.
ReplyDelete