The philosophy of Pragmatism encourages us to ask three fundamental questions about any governance situation: What is problematic? What values are at stake? And what is possible? Attentive to the problematic nature of governance, Pragmatists are vitally interested in the problem-solving strategies adopted by individuals and groups. This emphasis on problem-solving is sometimes read as a narrow instrumentalism, but a wider reading confirms Pragmatism’s deep humanistic concern about the source and fate of values. Public deliberation is regarded as fundamental for airing values, and deliberative democratic inquiry is viewed as an essential governance strategy for questioning, refining, and advancing them. Always alive to possibilities for creative action and learning, Pragmatism emphasizes the potential of experimentation to improve governance outcomes.

The philosophy of Pragmatism offers a powerful and distinctive model of practical rationality. Classical Pragmatists sought to break down dualisms associated with inherited philosophical traditions by adopting a strong orientation towards action. They took the perspective of people acting in situ, living their lives, making sense of the world, and confronting challenges. This led them to emphasize the practical nature of rationality, with a focus on experience and problem-solving, an emphasis on process and social interaction, and a view of beliefs as subject to ongoing experimentation. A concern with uncertainty is baked into classical Pragmatism because it starts with the view that all knowledge is fallible and subject to continuous revision. Deliberation is also a central aspect of Pragmatism’s model of practical rationality because it takes the place of the optimization in rational choice theory. The Pragmatist model of practical rationality is also distinctive in seeing human action as both habitual and creative.

This chapter examines a wider body of literature on decision making and meaning making under conditions of uncertainty. It begins by examining the concept of uncertainty. A Pragmatist reading of uncertainty is a problematic situation that triggers doubt or blocks actions. However, uncertainty is typically not a monolithic experience. Uncertainty has many different sources and decision makers are not typically uncertain about everything all at once. The chapter investigates how the decision makers draw on experience to make decisions under uncertainty, notably by using heuristics and case-based reasoning and how they use sensemaking and “probe and learn” approaches to deal with uncertainty. With respect to meaning making, the risk communication literature suggests that leaders should convey uncertainties to the public but emphasizes that context matters when communicating with different audiences.

Building on four main building blocks of a Pragmatist theory of crisis management - anti-dualism, fallibilism, experimentalism and deliberation - this chapter develops a model of Pragmatist political crisis management, further elaborating it by contrasting it with principle-guided political crisis management. A principle is defined as a fixed belief (or set of beliefs) that is closed to new experiences or arguments and that leaves little space for doubt. Principle-guided political crisis management relies on these fixed beliefs when making decisions or making meaning in the face of uncertainty, while Pragmatist political crisis management regards belief as fallible and subject to on-going revision through experimentation and deliberation. The chapter draws out the empirical expectations that Pragmatist and principle-guided approaches have for crisis decision making and meaning making in order to guide research in subsequent chapters.

This chapter provides a brief overview of the US financial crisis of 2008 in order to set the stage for subsequent analysis. The chapter first demonstrates that the US financial crisis of 2008 actually meets the definition of crisis as set out in Chapter 1. It then introduces the key strategic-level decision makers involved during the crisis and presents an overview of the timeline of the key episodes of decision making and meaning making that we fill focus on in later chapters - namely, the rescue of the investment bank Bear Stearns, the collapse of the investment bank Lehman Brothers, and the rescue of the insurance company AIG. The chapter concludes with a discussion of the sources we use in our analysis of political crisis management in these episodes.

This chapter provides a systematic analysis of the Bear Stearns case in terms of decision making and meaning making. Our analysis begins with a brief explanation of the main ideological principle from which Bush and Paulson departed: the doctrine of moral hazard. However, we find the main strategic crisis leaders in this case - including President George W. Bush and Treasury Secretary Henry Paulson, who were the most predisposed to uphold this doctrine - modeled Pragmatist political crisis management behavior in this phase of the crisis. With respect to decision making, their crisis leadership exhibited anti-dualism, fallibilism, experimentation and deliberation; with respect to meaning making, they exhibited anti-dualism and fallibilism, but not experimentation or deliberation.

This chapter analyses the government decision making and meaning related to the collapse of the investment bank Lehman Brothers in September 2008. We investigate the Lehman Brothers case for evidence of Pragmatist and principle-guided political crisis management. We find that strategic crisis leaders adopted a more principle-guided form of political crisis management in this case than they did in the Bear Stearns case. This is especially true when it comes to the two Pragmatist dimensions of anti-dualism and fallibilism that are largely absent in the Lehman example. While focusing on the Lehman case, we also contrast it with two other important decisions made only days later: the rescue of the insurance company AIG and the rescue of the money market mutual funds. These two decisions again illustrate a more Pragmatist form of political crisis management.