Sunday, June 23, 2013

You would be surprised

In a news report published today about allegations concerning the sexual abuse of boys in Jewish schools, a New York-based ultra-Orthodox rabbi – formerly based in Sydney – was quoted as making some remarks which illustrate the extent to which religious groups and sects can create and maintain their own realities and remain virtually untouched by modern ways of thinking.

I don't want to quote any passages here, and I do wonder about the appropriateness of Fairfax Media making these comments public. (They were taken from "a legally recorded telephone conversation heard by Fairfax Media and provided to N[ew] S[outh] W[ales] detectives ...")

But I just couldn't resist highlighting the strangeness (and, frankly, the comicality) of the context of the rabbi's use of the expression 'you would be surprised'. The implicit suggestion is that the rabbi's naïve interlocutor has not been vouchsafed true and accurate knowledge of the extent to which ordinary people (including children!) are actively driven by their carnal natures – such matters, presumably, as routinely come to the attention of holy men in the course of their religious duties.

I feel sorry for the old guy, actually, who seems to have managed to remain completely outside the modern world which most of us inhabit.

And, though I remain critical of current social and legal trends, the rabbi's remarks make me appreciate that, in the end, I am a part of, and committed to, that world. Modernity, for all its flaws and mixed blessings, is to be cherished.

And, in my opinion, it's not entirely a bad thing that the privileges given to religious communities – arguably hard-earned by previous generations of devout Christians and Jews and now being exploited by extremist Islamic groups and other cults – are increasingly being called into question.

Thursday, June 20, 2013

Nobody is to blame

Some time ago I wrote a short piece, prompted by my reading of some novels by Patricia Highsmith, on the way new technologies have in recent years eroded our sense of place. Highsmith not only had a remarkable insight into human psychology – and psychopathy – but also a strong sense of the ambience of particular geographic locations.

Despite the advent of new and culturally disruptive technologies during the middle years of the 20th century, the sense of place had not yet been significantly eroded, and the communication technologies of that time – letters, telegrams, long-distance operator-assisted telephone calls, and newspapers (though not so much radio and TV) – feature prominently in Highsmith's stories. In fact, they often serve to underscore the sense of her (often solitary) characters being in a particular location.

Though it has been an important feature of human consciousness from the beginning, I would argue that this strong sense of being in a particular place is, due to the advent of new digital technologies, as well as other factors related to the increased ease and affordability of travel, simply no longer possible. The new technologies have undermined it – and something has been lost.

In a nutshell, communication and travel between distant places has become so easy that the uniqueness of place has been fatally undermined.

It might be objected that I am overreacting to current changes. But I don't think so. We have passed a threshold of sorts. I am talking about a confluence of factors. And something very profound and significant has occurred.

A related issue is the way digital devices are currently affecting how young brains develop. The effects are evident everywhere, but I won't bang on about it as, for example, Susan Greenfield has been inclined to do. It's a losing battle. Nothing can be done, and all the nasty neurological details will, no doubt, come gradually to light.

So I can't help thinking with some nostalgia of times past.

Of a very long, difficult but magical journey I made as a small child with my mother and two siblings on a series of turboprop aircraft. Of letters. Of newspapers as they used to be. Of the heady experience of being in a great city or a fabled or exotic place.

These things are no longer possible in the way they once were. But, as Tom Stoppard said not so long ago, speaking of similar matters: "Nobody is to blame. It is progress in operation."

Monday, June 17, 2013

Decisions, decisions

I was going to post this piece (about why conservatism, like all political –isms, is fatally flawed) here.

But since it is so boringly non-partisan – and even science-oriented in a vaguely reflective rather than an evidential sort of way – I opted to post it on the other blog.

Tuesday, June 4, 2013

Jim Rogers on the looming crisis

I don't know how to take Jim Rogers. Though a graduate of Yale and Oxford, he has no advanced degree, but that shouldn't necessarily count against him as an interpreter of the economic and financial scene.

Since economists routinely disagree about even the most basic issues, there is scope for others who have some expertise in finance and related areas to make their contributions. And, arguably, pragmatic freelance investors – whose only concern is to get things right (primarily for their own portfolios but also for reputational reasons) – have an important role to play in the public debate.

And Rogers has no doubt been a phenomenally successful investor. This means something, even if you put it down to mere luck and commonsense.

His ideas are worth looking at not because they are interesting but because they have an 'emperor's new clothes' quality – and (who knows?) he may just be right.

His economic assumptions are not doctrinaire, in the sense that they appear to have been arrived at independently. They just happen (as Rogers has himself observed) to correspond with some of the main tenets of the Austrian school.

He emphasizes the relevance of morality to the markets, but not in a naïve or objectionable way, it seems to me.

So here are some extracts from a recent interview in which he talked (amongst other things) about morality and the markets and the coming crisis (as he sees it) for the US, Europe and Japan.

Félix Moreno: [You have written that] the US [is the] largest debtor in the history of the world.

Jim Rogers: That’s not an indictment, that’s a fact. If you consider it a negative fact, it’s an indictment. It happens to be a fact that it is the largest debtor nation in the history of the world. The debt is going through the roof, you know with all the shady rates. I do criticise it. I don’t like it. I’m an American citizen. I’m an American taxpayer, so I hate what’s happening with the debt situation in America. No nation in history has gotten itself into this situation and got out without a crisis. So I guess it is an indictment.

FM: Do you expect the US politicians to do something about the debt? To balance the budget any time soon?

JR: No, not at all. Not either the present politicians or future politicians. The situation is so dire that it would be almost impossible to balance the budget and pay down the debt without an enormous amount of pain. Now suppose that somebody could win an election on that platform – well within six months or a year or two, he would either be assassinated or give up because the people would say “wait a minute, we didn’t know it was this much pain. This is not what we had in mind” and he would be thrown out and his policies reversed. No it’s not going to happen until there’s a crisis or a semi crisis. That’s the lesson of history. Nobody gets out of this situation until there’s a crisis.

FM: What would you say to those that see the current situation as perfectly sustainable, especially in reference to the money printing, quantitative easing, etc.

JR: I would suggest that they get out a couple of simple history books and see if there has ever been a way out. For what it’s worth, there has not been and there won’t be. I suggest that they look it up. They don’t have to listen to people like me, look it up.

FM: Do you think that Bernanke and the Fed have an exit plan from QE and zero-rates?

JR: Mr Bernanke’s exit plan apparently is that he is going to leave his job. He doesn’t want to stick around for the hangover. He doesn’t want to be around for the consequences of what he’s doing. I don’t know if there’s an exit plan. If and when they stop it’s going to cause lots of ramifications in the market and lots of, perhaps even chaos, but certainly turmoil and upset. The only exit plan that he’s talked about is to let it all mature. That sounds wonderful, but it’s not very practical.

FM: It seems that the whole “let’s get out before it crashes” worked well for Alan Greenspan.

JR: Well, Alan Greenspan did get out before it collapsed, more or less, but if nothing else, history has figured out that he is a charlatan who didn’t know what he was doing in the first place.

FM: So you don’t think that they have an exit plan. Does that mean that you are in the inflation camp? Do you think that the crisis is going to come from high inflation like in the ‘70s and ‘80s, or are you in the deflation camp? That it will come through bankruptcies, banking collapses and debt defaults?

JR: Throughout history when you print staggering amounts of money, it has always led to inflation. Now, you can have an inflationary boom, an inflationary feel-good period, but usually the politicians just keep printing. No politician is going to run on a platform, or could get elected on a platform of “we are going to have pain”, so they are going to continue to print money. You know as Mr Bernanke is doing, the BoJ, the Bank of England, the ECB. They all say the same thing. They are all doing the same thing. So they are going to continue to print money. Eventually of course what always happens is that inflation gets higher and higher and then the bubble pops and you have deflation and harder times. But between here and there is a long way, because they are not going to stop printing money. That’s all they know how to do. It’s the wrong thing, but it’s all they know to do.

FM: ...[Y]ou give examples of banking crises where there were no bailouts. What is your opinion on the bailouts?

JR: It’s not supposed to work that way. You are not supposed to take money away from the competent people and give it to the incompetent so that the incompetent can compete with the competent people with their own money. That’s not the way capitalism is supposed to work. That’s not the way morality is supposed to work. I know politicians don’t care about morality. It’s not going to work. You see what happened in Japan. Japan has had two lost decades. Their stock market is down by 70-75% from where it was 23 years ago. This system has never worked.

In the 1920s America had this problem and America balanced the budget and raised interest rates... They had a terrible 18 months, but then they had the most exciting economic decade in American history. Scandinavia did the same thing in the early ‘90s. When the Japanese were refusing to let people fail, the Scandinavians let people fail. They had a terrible two or three years, but since then Scandinavia has been an extremely strong and exciting part of the world. This way (the bailout way) doesn’t work, and there are no examples of something like this having ever worked. It’s not going to work this time either.

FM: Some argue that a current example are the eastern European countries: Estonia, Lithuania, etc, who made big cuts within one year of the crisis and are now growing faster than the rest of Europe.

JR: There’s no question. You can look at other places: Iceland, Ireland – you know, the places that did take some pain have certainly done better than the places that denied reality.

FM: From the Spanish perspective, it’s certainly not better to have a lost decade or two by trying to postpone all the big budget-balancing hard work.

JR: You can postpone it all you want, but the problems just mount. There is no country in Europe that’s going to have lower debt this year than last year, or lower debt the next year than this year. Every one of them will run up the debt, instead of decreasing the debt.

FM: Do you expect the Euro to lose the currency wars? Which will fall down the cliff first? The yen, the euro or the dollar?

JR: It depends on what standard of measure you are talking about. The Japanese claim that they are going to print “unlimited” amounts of money. That’s their word, not mine. Unlimited amounts of money. I would expect the yen to go the furthest the fastest. But America has also said “wait guys, we’ll print a lot of money too” – though they didn’t say “unlimited”. And the British said “we should do it”. So I don’t really know. It’s a very good question, which one to own. I don’t own the yen, because “unlimited” is a pretty hefty amount of money. I grapple with this every day, which currencies to own. Believe it or not I was even contemplating putting money into the ruble – only because it seemed less flawed at the moment than these others.

FM: You seem to have had a change of heart recently regarding Russia.

JR: In recent months I have seen that Mr Putin and people in the Kremlin have changed their attitude. It will take a while for all this to sink in. They said for many years that they welcomed foreigners and capital, but they were lying. They shot you, they put you in jail, and they confiscated your wealth. But now Mr Putin seems to understand that he has to play by international rules, he cannot go on putting people in jail and taking their money. If he wants to play on the world stage he has to treat international capital, and domestic capital, in a proper way. You can ask me in 10 years if I got it right or not...

Sunday, June 2, 2013

The meaning of conservatism

The word 'conservatism', like most abstract nouns of its kind, has a very fluid meaning. Even when used as a specifically political designation, its meaning is context-dependent and impossible to pin down. Nonetheless, it can be fascinating to observe the shifting coalitions and alliances which form around this particular concept.

Inevitably there is a tendency for self-described conservatives, or members of any ideological grouping in fact, to identify their own particular views with what they conceive to be the true tradition or the purest conception of the ideology in question.

Claes G. Ryn, who turns seventy this week, is such a one.

I came across the writings of this Swedish-born thinker only recently. Though deeply versed in – and committed to – European intellectual culture, Ryn teaches in America and has a strong and critical interest in the recent history of American conservatism.

This essay, for instance, is both a survey and a scathing critique of American conservatism. In it Ryn is particularly harsh on that strand of post-World War 2 conservative thought which culminated in the neoconservatism which so profoundly influenced the policies of the George W. Bush administration. He quite rightly identifies the neocons' lack of historical understanding as a major flaw in their thinking.

Libertarianism, another key strand in American conservative thought, is criticized on similar grounds.

It is to his credit that Ryn tries always to do justice to the historical perspective, rejecting an ahistorical, Platonistic view based on universal abstractions.

He particularly emphasizes the importance of morality, and also the importance of an imagination formed by cultural, intellectual and artistic traditions. Which, again, is fine and quite defensible.

But his attachment to European philosophy – and Hegel and Croce in particular – will put off more than a few Americans (and not just Americans!).

Crucially, his interest in these thinkers signals not just the elite intellectualism of the old world, but also a commitment to idealism and to the primacy of mind and spirit.

Though Ryn is critical of the often intellectually complacent and ostentatious appeals to religious belief on the part of American conservatives, he is himself clearly driven by what are essentially religious convictions.

And it's here that I must part company with him, as I am simply not convinced of the existence of transcendent truths or values – moral, intellectual or aesthetic.

I have written before about the anomalous nature of non-religious conservatism and, yet again, we see conservatism being defined in broadly religious terms.

But what do you do when you have just about all the basic conservative instincts or intuitions (I am in sympathy with much of what Ryn is saying) but just can't accept religion or philosophical idealism?

I can call myself a non-religious or secular conservative, of course. But the trouble is, most conservatives will not see me as being a real conservative – and I am just conservative enough to agree with them.