07/07/2011 12:27 BST | Updated 05/09/2011 06:12 BST

Rebekah Brooks: The Queen of Willful Blindness

After every institutional debacle, the arguments are the same: it was just a few bad apples. Nobody at the top is to blame. Rogue employees just went off piste.

That argument was wrong in Abu Ghraib, in Enron, WorldCom, Countrywide, HBOS and it's wrong today at News International. The phone hacking scandal isn't the unfortunate byproduct of a few naughty freelancers. It is a the result (as Tessa Jowell has said) of systemic, cultural corruption which it behoved everyone to ignore. It is a classic case of wilful blindness.

When big organisations fail morally, the path is always the same:

1. Huge pressure to deliver results. In the newspaper industry, this has been intense as print media has undergone global decline. So everyone knows they have to go further, push the envelope a little wider, just to maintain sales.

2. No one explicitly orders illegal activity. Instead, those who have pushed the envelope are rewarded. No questions are asked about their achievements. What may have begun as a minor infraction becomes bigger and bolder - and no one ever intervenes. Taking tiny steps in the wrong direction, everyone soon loses their sense of where the boundaries lie. Everyone in the workforce absorbs this message and imitates in order to succeed.

3. Because everyone is doing it, no one feels any longer that they are doing anything wrong.

4. Although most of the workforce is fully aware of how bad things are, few have the courage to speak up. Some have lost track of where right and wrong begin and finish. Others just conform and don't want to be the bearers of bad news. Psychologists call this bystander behaviour and its rule is simple: the more people observe something bad, the less likely it is that anyone will intervene.

5. Senior management insists it had no idea what was going on and everyone thinks they're lying because knowledge is so widely diffused.

Ignorance, though, is no excuse. Under the law, the doctrine of wilful blindness says that if there is information you could have known and should have known, but somehow failed to know, then you are still deemed responsible. It was cited by Judge Simeon Lake in the trial of Enron executives Jeffrey Skilling and Kenneth Lay. They could have known and should have known what was going on in their company; that they didn't was their fault. The law of willful blindness should send shivers down the spines of News International's executives - if they have any spines left.

The concept fits Rebekah Brooks like a glove. After all, if you don't ask how your reporters manage to gain information no one else has, then you are choosing to remain blind.

It's exactly the same as the case of Enron's illegal manipulation of energy prices in California: no one cared how the traders were making such gigantic profits, only that they delivered. This is also how the gross mis-selling of PPI occurred and the selling of sub-prime mortgages to totally inappropriate buyers. Everyone knows; no one intervenes. The monetization of morality makes that okay: if the profits are big enough, no one will ask how they were achieved.

Rebekah Brooks has to go - but the blindness goes well beyond her. She delivered great numbers to News International; they didn't ask how either. Apparently no one asked why the police received money from Murdoch's company - a dodgy arrangement if ever there was one. Nor has anyone (until now) asked why the Press Complaints Commission acted like the proverbial sleeping dog. And of course both governments, heavily dependent on the support of Murdoch's newspapers, have not dared to question the way the company operates.

What's especially demoralizing is to see both David Cameron and Ed Milliband so mealy-mouthed in their condemnations. Theirs is wilful blindness on an epic scale, a grand collusion of ignorance from which everyone emerges with disgrace.