Sunday, July 31, 2005

The Problem (or why I changed perspective)

An internet acquaintance, and warrior for the cause of honest money, asked me, upon reading of my new blog, where I was going with it as the theme seemed so different from my earlier musings. In a sense the change of perspective was a long time coming, but there was a particular event that put all the pieces in place.

Earlier this year I listened in to a conversation my wife was having with a friend. It was a fairly typical conversation between two mothers with young children, sharing their joys and gripes with the world. My ears pricked up when I heard the friend start complaining about the high prices of food, fuel (this was in February so heating oil was on people's minds), gas, medical care, etc. In previous conversations over dinner I had expressed my economic views, perhaps too strongly, as will be seen later, so I took the complaints as my cue to enter.

To my surprise, as I entered the room, my wife's friend, after exchanging pleasantries, asked me if I still thought the economy was going to deteriorate. At first I didn't know how to respond, "hadn't they just been discussing the deterioration?," I thought to myself. Perhaps she means to ask if I think the current situation is going to get worse, was the next thought. I told her that my views hadn't changed which brought a bemused look to her face. "Look at the stock market and read the paper, " she responded, " can't you see that the economy is doing well?" I left with a parting, "perhaps you are right," and went to my office to think.

This woman had run a successful bakery in the Bronx and is married to an attorney who works for NY State, by which I mean to suggest that she would easily pass a vocabulary test which included the term "economy". Yet, she failed to connect the phenomena which concerned her with the term in our conversation. Perhaps, I thought, I had expressed my economic views too strongly which can lead people to refute the message as a defensive gesture or perhaps she fears a "weak economy" and thus will torture the language to hide that possibility from her conscious mind.

The more I thought about the exchange, the more my world view started to shift and the more I realized that economics was not the problem, human awareness and faith, or the lack thereof, was. As Bertrand Russell put it in his Analysis of Mind, one expresses understanding of the phrase, "there is a car coming" not by defining the terms or using it correctly in a paragraph, but by stopping and looking up to see if you need to get out of the way. Defining and using terms and phrases correctly merely denotes that one might understand what to do IF they were willing to see them as true. The problem then is not that there isn't sufficient information, or persuasive arguments concerning the, in my view, coming demise of American economic hegemony, the problem is that sometimes people won't lend credence to the view, even when faced with proof an undecided reasonable person would likely accept.

Whenever I start thinking about "the truth" the wisdom of William James is sure to pop into my mind within moments. Here it is again, I thought, more supporting evidence that, as per James' Pragmatism; "truth" is a quality people ascribe to certain propositions because it seems "good", a sense which can be engendered by the simple desire to "go with the flow", and once considered true for an extended length of time gains a hold in the mind making rejection more and more difficult, but fortunately, not impossible. This is to distinguish between what any individual might consider to be true (by which I mean act as if it were true, even though on some level, perhaps late at night when one is alone with their thoughts, one might be "aware" of the truth, it doesn't serve as a basis for action) and what is, in fact, true, or as the Neoplatonists might put it, part of the Nous or divine mind. In other words, a person can firmly believe something to be true when it is not and worse, might on some level believe something to be true but act as if it wasn't ( or vice versa). Plato put forward his metaphor of the cave and Christian Theology refers to the notion of God revealing things to man, both conceptions touching on the crux of this post, i.e. how people ascribe truth to a view.

Certain ideas are tough to shake, such as the notion, once the zenith of empire has passed, of cultural superiority. That quip from Aristotle, "the gods too are fond of a joke," comes to mind when I think of how deleterious it is for the people in a culture to think it superior (thus not needing to be changed) and how advantageous for the people in a culture to be skeptical of its superiority (thus worthy of being changed). The problem isn't economic, it is psychological. Pavlov is ringing the bell but not providing food and some of us are still salivating.

Stated explicitly, my arrogant dreams of awakening sleeping minds to the coming danger has given way to a more humble desire to blog a bit for like minds. Cultures rise and fall to their own rhythms which need not be the driving force for individuals, if one can think amidst the din of the many. I can't out-shout the din, and I don't think I need to. Change will come when the time is ripe. Meanwhile I'm just going to whisper to the few. while I enjoy the ride.


(2^P)-1 said...

re: The more I thought about the exchange, the more my world view started to shift and the more I realized that economics was not the problem, human awareness and faith, or the lack thereof, was.

I may be knocking on a similar door... but with an attitude admittedly less gracious...

I recently began this blog as a present to my wife on my 49th birthday - as she tires of my rants...

jeff poppenhagen said...

Just finished reading "Big Bang" which details the development of said theory of the cosmological creation of the universe. What struck me in reading it is how long it takes for a paradigm shift to be accepted even in the hard sciences. Those with a vested interest in the old paradigm are very reluctant to let go. The author's point is that in physics it is often not until the old guard has literally died off that the newer, better and more complete thesis takes hold.

Even as a social scieces type of guy it had never really occured to me just how entrenched incorrect beliefs and models can become and difficult to change. It is now becoming more obvious to me that this is what we are facing in the world of economics and finance.

Nevertheless, predicting when the "tipping point" will arrive is impossible and I see no alternative but to sit and wait it out. The world of paper assets is too irrational for me to contemplate any longer. Claims on output are now growing 3x faster than output....a concept that I can explain to my 9 year old. She, of course, has the advantage of not being weighed down with the baggage of old, out-of-date statist economic theory. Maybe Bush should look to appoint someone under the age of twelve as the next Fed chairman.

Dude said...

Jeff, on the off chance that you haven't, you might enjoy reading Kuhn's Structure of Scientific Revolutions as that takes a broader historical view of the same process.

I'm with you on the prediction issue. How long can Wile E. Coyote hang in mid-air before he falls? As long as he doesn't look down.