In 2008, the editorial board of The Economist described the series of events leading to government bailouts of major American financial institutions as “genuinely democratic” in nature. By using the term “democratic,” the editorial board sought to convey that the financial meltdown that almost brought the American economy to its knees was not caused entirely by the actions of a few “villainous” elites. Rather, the crisis resulted from a series of poor decisions made by numerous individuals, including “hundreds of thousands of homeowners who bit off a little more mortgage than they could chew.” In concluding that the worst financial crisis since the Great Depression was caused by the combined interactions of multiple individuals and institutions, The Economist’s editorial board was surely correct. At the same time, this conclusion does not offer a great deal of moral clarity. Efforts to hold agents accountable for events like the Great Recession are subject to what Dennis Thompson has called “the problem of many hands.” When everybody is responsible for an outcome, it often seems as though nobody is truly accountable. If all Americans are responsible for the Great Recession, then there is no reason for anybody to feel particularly ashamed of their behavior, or to put an end to practices such as predatory lending, which contributed to the financial crisis, and continue to bury people who take out loans to buy cars or attend school in mountains of debt. There is also no reason why anybody should feel especially compelled to address the long-term consequences. Some of the workers who lost their jobs during the economic crisis have been out of a job for so long that they no longer seem attractive to employers, and many people who lost their homes are now struggling to pay soaring rents. Who exactly is responsible for addressing these problems?
Holding all participants accountable for harms caused by processes in which they participate also risks obscuring different degrees of culpability. Numerous actors participated in the chain of events that triggered the financial crisis—including borrowers who defaulted on their mortgages, bankers who made risky loans that they subsequently sold to unsuspecting investors, financial agents who lied about borrowers’ qualifications on loan applications, regulators who failed to supervise dicey financial transactions, political leaders who deregulated the banking industry, and voters who put them into office or supported them. Describing the subprime mortgage crisis as a shared responsibility ignores the reality that some of these actions were more blameworthy than others, as well as the fact that some people suffered more than others. Though The Economist is correct that both homeowners and bankers share responsibility for the subprime mortgage crises, this fact frequently functions to obscure the extent to which the former have suffered far more in the long run than the latter. It likewise obscures the reality that African Americans and people with less education have suffered disproportionately from long-term unemployment in the wake of the financial crises. Moreover, not all of the behaviors that contributed to the crisis were blameworthy. People who lied on mortgage applications or who knowingly rated residential mortgage-backed securities filled with risky loans as safe investments are surely deserving of blame. At the same time, expecting homeowners to understand the risks of adjustable rate mortgages is unrealistic given that many of the people selling the mortgages failed to understand the risks. In a nation that exalts homeownership and directly incentivizes it, it is difficult to be too hard on individuals for striving to achieve one of the most important components of the “American dream” and for assuming that the banks’ approval of their mortgage applications meant that they would be able to meet their financial commitments. When discussing problems such as the financial crisis that are the result of many hands, it may be tempting to abandon the concept of responsibility altogether. This temptation should be resisted. To be sure, there is little point in trying to identify and either punish or shame all of the people whose poor decisions contributed to the financial crisis. While criminal or particularly reckless behavior is certainly deserving of punishment, assessing the extent to which millions of mortgage brokers, homeowners, developers, lenders, and investment bankers behaved in a blameworthy manner and determining an appropriate punishment would be a massive and futile undertaking. Going forward, however, a much greater sense of responsibility on the part of citizens is needed to address the lingering effects of the Great Recession, and to ensure that dodgy behaviors do not once again bring the economy to the brink of collapse. From structural racism to climate change to declining opportunities for social mobility, many of the most pressing challenges facing twenty-first century societies are caused by the combined interactions of many individuals. It’s hard to imagine how these problems will be addressed without a much greater sense of responsibility on the part of citizens. Furthermore, in the absence of a sense of shared responsibility, it is all too easy to hold victims of unjust processes accountable for their own misfortunes. Those who view food stamp recipients as idle free riders often fail to recognize that their own actions sustain an economic system that does not provide employment, let alone a living wage, to everybody who is willing to work. When it comes to outcomes that result from many hands, responsibility is a concept that is difficult to apply but impossible to live without. The existence of problems that are caused by the combined interactions of multiple individuals and institutions is not, however, exclusive to an age of globalization and hyperconnectivity. Indeed, American reformers and activists like Henry David Thoreau, Jane Addams, Martin Luther King Jr., and Audre Lorde have long held their fellow citizens accountable for harms caused by many hands, including chattel slavery, sweatshop labor, and white supremacy. Like the Wall Street Journal editorial board, these reformers regarded many hands problems as democratic in the sense that they are not perpetuated entirely by elites. They also, however, encourage us to consider other connections between democracy and many hands problems. First, they demonstrate that we cannot live up to our democratic ideals, unless we take some responsibility for harms in which we are embedded. Second, they suggest that democratic ideals require us to resolve many hands problems in a particular manner; democrats cannot sanction solutions devised entirely by elites. Finally, these reformers call attention to ways in which democracy intensifies many hands problems. Democratic institutions dramatically increase the number of people who are implicated in political decisions. Meanwhile, faith in majority opinion and affection for majoritarian institutions can make it difficult for democratic citizens to recognize the extent to which they are implicated in harm. The fact that democrats cannot sanction paternalistic endeavors in which elites solve problems on others’ behalf also complicates efforts to address many hands problems. It is unfair to expect innocent victims of unjust processes—such as the construction worker who lost her job during the financial crisis, or the residents of impoverished island nations whose survival is threatened by global warming—to take responsibility for problems that they did not cause. And yet, adult victims of injustice must take responsibility for reforming the processes that harmed them in order to avoid paternalistic outcomes that are inconsistent with democratic ideals. (excerpted from Introduction)