I’ve always believed that the best general philosophical null hypothesis is that nobody knows anything. This week’s Economist has a lovely tongue-in-cheek editorial about bank bosses which confirms the wisdom of my position.

Certainly, bank bosses displayed the hubris of all big corporate baddies: paying themselves loads, making nutty expense claims try an $87,000 rug and, in one case, playing bridge in Detroit as their firm collapsed. Compared with Kenneth Lay of Enron or Bernie Ebbers of WorldCom, however, they were amateurs. Most were useless rather than venal.

Far from expertly manipulating their firms’ books, many could not understand them. Citigroup’s boss reportedly learned of its $43 billion of toxic assets only in September 2007 he was told losses were unlikely. UBS’s own post mortem found that “at no stage” did managers have a decent assessment of its subprime exposure. Merrill Lynch signalled a $5 billion write-down in October 2007, only to increase it to $8 billion a mere 19 days later. Even when they had decent numbers, executives struggled to manage their mutinous staff. One ex-boss says his job was “less management, more crowd control”. Meanwhile shareholders pushed bosses to take risks. The vast majority backed RBS’s suicidal takeover of ABN AMRO.

The paper notes that, faced with the catastrophe, corporate-governance gurus are “scraping around, like scholars of jurisprudence in a state of nature”, and suggests some common-sense measures instead:

What firms need is a culture of excellence—but that is like saying all football teams should be like Manchester United. Perhaps the clearest lesson is that big banks are as close as businesses can get to being unmanageable. Bank of America’s assets are now ten times those of Exxon Mobil, America’s most valuable firm. A balance-sheet of $2.3 trillion is beyond the ken of mere mortals. Even firms staffed only by all-knowing deities—such as Goldman Sachs—look like giant black boxes to outsiders. If the new bank bosses want to be in charge, they must shrink and simplify their firms. That way, next time round, they really can be blamed for everything.