Mike Beversluis

Saturday, October 11, 2008

Is the universe still precariously balanced in my favor?

Eric Hoffer: The True Believer

Offhand one would expect that the mere possession of power would automatically result in a cocky attitude toward the world and a receptivity to change. But it is not always so. The powerful can be as timid as the weak. What seems to count more than possession of instruments of power is faith in the future. Where power is not joined with faith in the future, it is used mainly to ward off the new and preserve the status quo. On the other hand, extravagant hope, even when not backed by actual power, is likely to generate a most reckless daring. For the hopeful can draw strength from the most ridiculous sources of power -- a slogan, a word, a button. No faith is potent unless it is also faith in the future; unless it has a millennial component. So, too, an effective doctrine: as well as being a source of power, it must also claim to be a key to the book of the future.

Those who would transform a nation or the world cannot do so by breeding and captaining discontent or by demonstrating the reasonableness and desirability of the intended changes or by coercing people into a new way of life. They must know how to kindle and fan an extravagant hope.

[..]

Both the rich and the poor, the strong and the weak, they who have achieved much or little can be afraid of the future. When the present seems so perfect that the most we can expect is its even continuation in the future, change can only mean deterioration. Hence men of outstanding achievement and those who live full, happy lives usually set their faces against drastic innovation. The conservatism of invalids and people past middle age stems, too, from fear of the future. They are on the lookout for signs of decay, and feel that any change is more likely to be for the worse than for the better. The abjectly poor also are without faith in the future. The future seems to them a booby trap buried on the road ahead. On must step gingerly. To change things is to ask for trouble.


Our bank and financial system's failure, and the moral failures of both lenders and borrowers which underpin them, are very real problems. Their correction will involve displacement and difficulty for many people.

But at the same time, I read Hoffer and agree that we are plagued by unwarranted self-doubt, and the panic and fear that swirl inchoate around us stems not from our current weakness, but from the opposite condition of our long-time dominance. That it stems from the belief that we are, or were, at the pinnacle of development and existence, and that we now face our inevitable decline.

Frankly, I don't think so at all, and despite my own (slight and vague) concern about my job, it has to be tempered by my very blessed existence. It seems perverse to live in such wealth and yet be so unhappy and worried about losing it. And if I am wrong, I feel that much of what I worry about are lilies of the field, and that if they are gone tomorrow, then I will still be okay. We'll see how that works out.

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6 Comments:

  • The houses that have been built during the housing boom certainly will not disappear, therefore they represent real wealth that does not get destroyed by the financial crisis. Unless I am very wrong.

    By Blogger John Travolta Sardus, at 13 October, 2008 10:33  

  • Yes, I think you're right. The condo that I'm renting was significantly upgraded three years ago because of the DC housing bubble, and I'm the beneficiary of that.

    I will have to look for it, but I do recall reading somewhere that bubbles generally had an upside for exactly that reason. Infrastructure doesn't get built or upgraded continuously, but in sort of halting steps based on extravagant speculation. E.g., telcom after the internet bubble.

    Weird factoid, but my apartment was previously rented by Laura Bush's scheduler. How about that?

    By Blogger Mike Beversluis, at 14 October, 2008 10:08  

  • I've just returned from vacation where I eventually managed to get my head around swaps and collateralised debt obligations, and can finally understand how perfectly intelligent people thought they had found a new wealth creator when in fact they were taking the global financial system to the brink of melt-down.

    I have also reached conclusions similar to yours. I think somehow there is a significant upside to all this. I do hope, though, that we hold onto the lillies for a while longer.

    Good blog, by the way. I enjoy the mix of sense and nonsense.

    By Anonymous Terry Sissons, at 20 October, 2008 17:15  

  • Thanks much - it's a fine balancing act.

    By Blogger Mike Beversluis, at 21 October, 2008 10:26  

  • The latest Economist pegged it.

    Distilled: capitalism seems inevitably tied to speculative bubbles. But even taking this one into account, global wealth creation over the last decade has been better than any prior period in history.

    Which beat heck out of every known alternative.

    By Blogger Hey Skipper, at 22 October, 2008 14:41  

  • I think that the thing can be analyzed in a much softer way than putting it in the frame of "capitalism vs.". In my opinion the reason why the proposition "let us regulate the financial markets" feels a bit weird is that not very many people know how the financial markets work, therefore they look like a place in which people that are involved can at worst only hurt each other. In other cases the fact that private actions can have an effect on third uninvolved parties is much more evident (for example I cannot build my own car and drive it on the public roads before it having passed some safety tests: I did not even check this fact but I bet it is true - if the car I built suddenly breaks down it could crash against the car of someone else). Maybe with the financial markets the situation is similar.

    By Blogger John Travolta Sardus, at 24 October, 2008 16:45  

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