“Many creative writers keep journals; the sociologist’s need for systematic reflection demands it.” -C. Wright Mills

The ComURB listserve has initiated a debate about the responsibility for the “reverse redlining” that led to poor and minority neighborhoods being targeted for subprime loans…even when lenders would have qualified for standard loans. My contribution follows:

If we want to ascribe responsibility to individuals, to institutions, or to individuals in institutions, it seems to me that we have to consider information and awareness of that information.

In the so-called “reverse redlining” case, everyone seems to agree that there is a problem of informational asymmetry: the bankers and mortgage brokers (generally) understood their products much better than their consumers. The suggestion that consumers also need to shoulder individual responsibility suggests that they must acquire enough information about mortgages and banking to restore symmetry.

So far, so good. Capitalism is based on the principle of caveat emptor (for the worse, in my view). However, I would suggest that life has become far too complex for any buyer to make a fully educated decision in every aspect of her or his life. Even the most intelligent are incapable of the task. This is why we have developed a system of expertise. A la Giddens, we place our trust (generally!) in doctors, educators, pilots, etc. in order to save ourselves the Herculean task of learning all of these trades. And we pay them a premium for the service. As a consequence we turn to the state and the experts’ moral rectitude to police the abuse of the asymmetric relationships we enter into with them.

So I’d suggest that many or most individuals who took out subprime loans simply followed this generalized trust in expert systems and that “individual responsibility” lies with those informed individuals who lacked moral compass and abused that trust.

Of course, all this begs the question of which areas of life society has determined and will determine that consumers are responsible for attaining a sufficient level of expertise. Home ownership? Medicine? The Chinese baby-formula industry? Politics? Morality?