Basically, it's a case study related to philosophy and business. I have attached the files so you can get the better idea of what case study is about. basically we have to choose a philosopher and con
1Whitehead ’sprocess philosophy is grounded in an ontology of internal relations
(Whitehead 1938, 45). The doctrine of internal relations is best defined as the view that
the identity or being of an entity is influenced by its relationships to other entities (Ibid.,
18). In this worldview, the interconnections between things are conceived of as
inner connections in the sense that they are integrated into, or become part of, the
character of the related things. In other words, what things are is determined by the
network of their relationships with all other things. As Capra and Jakobsen note, this
means that Whitehead views both society and nature as made-up of interwoven processes
and activities (Capra and Jakobsen 2017, 4).
Whitehead was therefore critical of the dominant methodology of the natural
sciences because ittends to isolate the object of investigation by severing itfrom its
essential connections to its environment (Whitehead 1954, 136). This methodology
ignores that the relations, which have been excluded from ‘analysis ’,might determine the
object being studied--- an “analytical divorce from the total environment ”(Ibid., 142).
The natural sciences are thus susceptible to committing what Whitehead dubbed a
“fallacy of misplaced concreteness ”--- that is, of mistaking athought “abstraction ”with
the concreteness of lived reality (Cobb and Daly 1994, 27). Any theoretical model based
on abstractions, especially gross abstractions which lead to afallacy of misplaced
concreteness, possess limited explanatory power .Such alimited methodological approach
can lead to disastrously mistaken conclusions, especially when we are not aware of those
limitations.
In Science and the Modern World ,Whitehead extended his critique of the
methodology of the natural sciences into alarger critique of the theory and practice of
economics. He contends that, after Adam Smith, the discipline of economics underwent a
process of specialization that led to the compartmentalization of economic theorizing
(Whitehead 1954, 189). This “situation has its dangers, ”he warned modernity, because it 2
produces “minds in agroove ”(Ibid., 191). Modeled on the basis of classical physics,
economics reproduced all of its methodological shortcomings (Ibid., 185). This led both
economists and entrepreneurs into anarrow mindset in which they seem capable of only
seeing “this set of circumstances or that set; but not both sets together ”(Ibid., 193).
As Cobb and Daly note, this critique of the “physics ”-like methodology of economic
thinking presents an even more significant challenge to the theory and practice of
economics in our day than itdid in Whitehead ’s(Cobb and Daly 1994, 32). Economics is
asocial science concerned with studying the interaction of human beings with one
another and with the resources of nature. Its methodology should reflect this sociological
fact. However, its importation of an alien methodology from the natural sciences has
been disastrous for the development of the discipline over the last two centuries. Ithas
“riveted on men acertain set of abstractions ”and led them to “neglect everything else ”
(Whitehead 1954, 183).
This approach has its “built-in limitations and dangers ”(Cobb and Daly 1994, 37).
By ignoring the ‘organic ’interconnections of the economy, and the interactions of the
economy with the larger socio-natural world, economics is liable to “committing afallacy
of misplaced concreteness ”(Ibid., 34). Ithas created “minds in agroove ”(Whitehead
1954, 191). The “eviscerating analysis ”of the modern economist does not display a
“sensitiveness to all the facts ”(Ibid., 182). Their methodology has excluded from
consideration all non -economic forms of value--- e.g., the value of beauty, our moral
values, the value of the environment, etc. (Ibid., 181).
Whitehead thus presaged that economic ‘progress ’might cause an inestimable
amount of harm to the minds of individuals, to the moral fabric of society, and to the
delicate tapestry of relations in our ecosystems. His critique of the theory and practice of
economics is relevant to the understanding our time, and itis an approach which can be
meaningfully applied to the critical analysis of moral issues in business today. 3
To be sure, our economy is much different than Whitehead ’s. However, the changes
which have taken place in those intervening years have only confirmed some of his
gloomiest predictions. The global marketplace has become increasingly mathematized.
The speed of trading and stock-buying has been intensified in recent years by
computerization and the use of complex algorithms (Yee 2017, New York Times ).The
tendency to reduce the social science of economics to anatural science, to exclude forms
of interaction and isolate objects for analysis, to ignore all sorts of non-economic values,
etc.--- these are tendencies which have continued to dominate economic thinking.The
hyperspecialization of economics has also led to the adoption of aseries of problematic
assumptions, viz., that humans are utility-calculating machines operating exclusively on
the basis of self-interestedness and possessing all relevant information about the
conditions of the marketplace (Bowie 2012, 32). This seems to be grounded in ashallow
and one-sided conception of human nature. Such amethodological approach also ignores
Aristotelian “final causes, ”namely, of aims and purposes which go beyond mere profit
maximization schemes (Cobb and Daly 1994, 28). Instead of emphasizing greater
interdisciplinarity, as other social sciences have, the continued specialization of
economics as afield of study has only entrapped economic thinking within adeeper
“groove. ”
Alan Greenspan ’sbehaviour in the lead up to the sub-prime mortgage crisis is an
exemplification of this sort of one-sidedness in economic thinking, i.e., of minds stuck in
arut and unable to grasp the innerconnections between things. An article by Treanor and
Clarke published in The Guardian covered Greenspan ’stestimony before the Senate in
the wake of the economic disaster of 2008. Greenspan ’sthinking clearly operates on the
basis of those neoclassical assumptions mentioned in the above. He assumes that human
beings are wholly “self-interested ”actors, and that the economic competition between
such self-interested parties automatically produces the best social outcome (Treanor and 4
Clarke 2008, The Guardian ).Under his helmsmanship as Chairman of the Federal
Reserve, he instituted aseries of sweeping changes which deregulated the banking
industry and the mortgage markets under both Democratic and Republican
administrations (Ibid.). As apractitioner of the Chicago School of economics, he
endorsed the repeal of Depression-era legislation which had stabilized the banking sector
in America for three quarters of acentury (Ibid.). These laws had prevented banks from
engaging in certain speculative investments and practices, and had limited the amount of
risky debt which they could hold and trade (Ibid.).
Greenspan ’sassumptions about human nature, society, and economics informed his
behaviour during his Chairmanship (Ibid.). The process of deregulation around
Mortgage-Backed Securities and Credit Default Swaps arguably contributed to the
financial disaster, as he himself admitted in his testimony to the Senate (Ibid.). The
neoclassical assumptions built into his economic theory prevented him from foreseeing
the coming collapse of the economy, and, once the recession was under way, did not
enable him to recognize the growing scope and severity of the disaster until itwas too late
(Ibid.). In his testimony, he admitted that his “ideology ”contained certain “assumptions ”
about unregulated markets (specifically, in the subprime mortgage sector) which he
“mistake[nly] ”accepted (Ibid.). There were “flaws in the [theoretical] model ”he had
accepted since his days as an Economics student (Ibid.). The theory seemed to be
“working exceptionally well ”--- that is, until itfailed miserably (Ibid.).
From the perspective of process philosophy, Greenspan might be said to have
ignored the delicately balanced relationship between investing and banking that had been
established since the Great Depression. He ignored how the removal and repeal of
banking legislation might influence the behaviour of individual actors in the economy. He
ignored how his management of an increasingly deregulated mortgage market would
significantly alter the interactions between home-buyers, banks, investment firms, and 5
insurance companies. In other words, he ignored the internal relations that make-up an
economy. An economy is much more like an organism ,than amechanism (Cobb and
Daly 1994, 33; Capra and Jakobsen 2017, 8). Because the economy is internally-related,
any radical reorganizing of its structure ought to be contemplated with sobriety and
extensively tested before implementation. But Greenspan ’ssweeping reforms of the
economy never registered the impact they would have on the network of interconnections
in the global economy.
His study of economics had “riveted ”on him afixed set of thought “abstractions, ”
including assumptions about human nature and economics. These “flaw[s] ”in his
theoretical “model ”of economics went unnoticed for over 50 years. Itwas this limited
explanatory model, i.e., neoclassical economics, which contributed the financial fallout of
2008 and the foreclosing of over 10 million American homes (Treanor and Clarke 2008,
The Guardian ).Greenspan ’sradical redesigning of the mortgage markets was grounded
in the very “fallacy of misplaced concreteness ”that Whitehead had warned us about in
1954 (Cobb and Daly 1994, 35). The former Chairman ’slimited view of reality was
entrapped within aset of ideological blinders which precluded him from appreciating the
complex interwoven processes which make-up the fabric of the global economy.
Greenspan ’sactions contributed to the financial ruin of millions of Americans, and
the downfall of the global economic order. In my judgement, although he is indeed
morally culpable for his behaviour, he is not as culpable as he might otherwise be. This is
because Greenspan was unaware of the “flaw in the model. ”In this respect, he can indeed
plead ignorance. Ignorance does not relieve him of moral responsibility altogether, but it
does mitigate the level of guilt. After all, his wrongdoing was the result of aseries of
“mistake[n] ”“assumptions ”in his economic “ideology, ”an ideology that he had accepted
since his time as acollege student. He studied economics and was educated in acontext
in which those sorts of assumptions were both commonplace and went unquestioned. He 6
was merely aproduct of his times, and of our times, in which such “abstractions ”go
unnoticed and uncritically adopted--- including, and perhaps most of all, by experts in the
field of study. He was just one among many minds struck in a“groove ”and susceptible to
“committing afallacy of misplaced concreteness. ”
The theory and practice of economics today requires either radical reform, or, a
return to the more tried, tested, and true principles of the past. In either case, the academic
study of economics should encourage the broadening, not the narrowing, of young minds.
Economics Departments ought to strive for greater interdisciplinarity with other social,
rather than natural, sciences, e.g., psychology, sociology, political science, and
philosophy. Greater interdisciplinarity avoids the problems of “minds in agroove ”that
Whitehead warned us about. Indeed, amore “general ”education was integral to his
proposed solution to the crisis of modernity (Whitehead 1954, 198). Whitehead wanted
students, particularly in economics-related fields of study, to be able to see situations
holistically, instead of from aone-sided perspective (Ibid., 194). He would encourage
students majoring in Finance, Economics, and Business Management to develop a
“sensitiveness to all the facts, ”including arecognition of the intellectual, moral, and
aesthetic values of life (Ibid., 199). As he put it, the modern world needs an economist
who is “not weak in zoology, [and] weaker still in his knowledge of Elizabethan drama ”
(Ibid., 201). In other words, we should educate economists to be more well-rounded, and
less specialized, in order to ensure that the social and natural “whole ”is no longer “lost in
one of its parts ”by the “eviscerating analysis ”of economic thinking (Ibid., 184).
The broadening of the ‘economic mind ’might yield positive benefits for consumers,
workers, businesses, and ecosystems. As Capra and Jakobsen argue, being attuned to
internal relationships would improve the health of the economy, society, and nature
(Capra and Jakobsen 2017, 6). The global marketplace, our political communities, and
our environments are all organic unities whose interrelated processes and activities 7
influence one another--- for better or worse. We need to be aware not only of the
methodological issues discussed in this paper and related to the mortgage crisis, but also
the growing impact of our economies on our environments. By disturbing and damaging
the delicate and intricate balance of relations that ecosystems are composed of, we
threaten to undermine the very foundations upon which the whole edifice of nature is
built (Ibid.). The global economy and the globe itself are intimately intertwined with, and
interdependent upon, one another. The two can only be separated by agross abstraction,
for, the future fate of both humanity and nature depends upon areform in the theory and
practice of economics today. Business students need to be educated in acontext which
encourages greater interdisciplinarity and the questioning of foundational assumptions,
which stimulates the search for unorthodox solutions to age-old problems and new
dilemmas, and which rewards them for independent thinking and novel insights. We need
more economists who are not weak in Elizabethan drama.
