Tuesday, October 8, 2019

Investment decisions; geopolitics



In a letter to a friend I briefly outlined my current investment situation and strategy. It's important, I think, to maintain a steady and realistic perspective on the general situation in financial markets both for practical, investment-related reasons and also for understanding current affairs. Politics, economics and finance are inextricably intertwined.

It helps me to state my general position explicitly from time to time. Obvious facts can be vitally important yet they are often overlooked...

I am in a position where I am forced to bet on how the future pans out in terms of economies, interest rates and currencies. I find myself (for reasons I won’t go into) almost entirely in AUD cash. This is my starting point, for better or for worse. AUD is weak against the US dollar. So I am waiting for something to happen (stock market crash or bond yields spiking or AUD rising against USD or other assets becoming cheaper in AUD terms) so that I can make a move with some confidence that I am not being suckered by a fake market.

Nobody knows when things will blow up. But blow up they must given the absurdly high debt levels and low or negative interest rates which are causing massive malinvestment, destroying savings and pensions and destroying the faith that people once had that price signals and so on could be trusted to reflect actual economic realities.

Many companies are on credit-fueled life support: no prospect of ever turning a profit. That’s in large part why the powers that be have to keep interest rates low. If they rise the non-viable companies go bust. Many corporate bonds become worthless, etc.. And zombie companies are not a small percentage of the total these days. Banks are especially vulnerable.

The same logic applies to individuals and families with big mortgages or other debts. Rising rates will cripple them financially as residential real estate prices fall.

And, of course, governments are heavily indebted too. If rates go up, more of the budget must go to service that debt.

US authorities apparently want to weaken the dollar to stimulate exports etc.. The danger is that at some point the dollar will just suddenly start to lose purchasing power as other means of international payment come on stream.

Confidence in the system is rapidly eroding. There is a growing general realization that the current monetary and financial system is failing but it is impossible to know what exactly is going to replace it. Or when.

US policy on the Middle East (and the Far East) is driven mainly by economic and financial factors – and always has been. (Oil. The dollar.) As the petrodollar system breaks down, there are clearly increased risks of conflict between major powers.

Wednesday, October 2, 2019

A case study in noncommunication



The first move was tentative. He “just wanted to pick up on a tangential point” regarding what I had been saying. But this was merely a lead-in, a toe in the water.

Joe Smith was responding to a mildly polemical piece that I wrote recently for The Electric Agora.

“I was simply making a correction to your claim that tabula rasa was specifically an Enlightenment view,” he explained in a comment.

The offending passage was in a section in which I suggested that the current internecine battles between progressive factions might be due to “deep-seated contradictions and flaws within certain forms of progressive and radical thought.”

One of the possible sources of trouble which I listed was (as I put it) “the Enlightenment view of the mind as infinitely malleable, a tabula rasa, a blank slate.”

And I think it can be argued that such notions were in fact adopted by radicals and reformers in the 18th and 19th centuries and played an important role in the 20th century also, both in the social sciences and in political activism.

My interlocutor seemed more interested in the scholarly history of tabula rasa than in its popular manifestations or in the more general idea of malleability (which is what I was obviously focused on).

It was a bit of a surprise, then, when his scholarly intervention about a “tangential point” rapidly morphed into a full frontal attack.

“I’m afraid,” he confided in his second comment, “I just found much of your essay overall to be a somewhat vague scattershot of poorly argued ideas, and felt compelled to jump in."

Of course, this feeling of compulsion which led him to “jump in” had nothing whatsoever to do with the fact that I had been hewing to a political line which was not to his liking.

“I guess the problem I’m having,” he ventured, “is understanding the points you are trying to make in your essay. I tug on one point, and a whole string of free-floating premises begin to unspool. For instance, you make an assertion about how certain strains of anti-realism have during the last century become bound up with political and ideological considerations without specifying which strains of anti-realism and which ideological considerations, or how they are connected… You then bring up progressivism within the context of hostility towards science and rationality, misuse of abstraction, tabula rasa, the impossibility of objectivity or truth, and the problem of ‘theorizing society’ [not my phrase, by the way], again without a connecting argument running through these. And no specifics, apart for [sic] a mention of Sonia Zawitkowski and standpoint theory. I’m left wondering what you mean by progressive, which progressive ideology, and whether “moderates, radicals and reformers” [again the quotation marks are misleading] all fall under the category of progressive, or if progressive falls somewhere within these on a spectrum?”

To tell the truth, reading this description (garbled as it is) prompted me to re-read the essay just to make sure that the fairly clear and straightforward ideas I had intended to communicate were reflected in the text. They were. I’m not saying there is no scope for disagreement (there always is when you talk about values), but in this case there is little scope for misunderstanding, I think.

Joe Smith thought my “worry” (as he characterized it) concerning the loss of confidence in the objectivity of science and scholarship was unwarranted, arguing that – given the social nature of science – the idea that it (or any other human institution presumably) could ever represent an ideologically neutral space was “a rather dubious premise to begin with.” What’s more, he insisted, the very meaning of objectivity has changed over time.

I had, of course, explained my side of the argument, why the question of objectivity is important. But this is not the sort of thing you can make a knockdown argument about, one way or the other. One’s view is inevitably going to be affected by personal perspectives on the nature of science and the nature of human knowledge more generally.

But I won’t attempt to deal with all the details of the exchange or with the substantive issues which were discussed. The essay and comments are there for anyone to read and interpret for themselves. My focus here is really on patterns of communication.

I usually deal with negative comments in a courteous way, and I tried to be open and courteous with Joe Smith, taking the time and trouble to attempt to address the concerns he raised about the content of my piece. But (according to my reading of the exchange) he showed himself not to be interested in understanding the substance of what I was saying at all.

There was clearly a degree of pomposity in his assertion that he “felt compelled to jump in” because of the vagueness of my claims or the weakness of my arguments or due to my supposed lack of knowledge of intellectual history. As I suggested earlier in a sarcastic aside, there was also a certain disingenuousness about the claim.

But there is something else, something rather more significant, which can be discerned in Joe Smith’s comments. They reflect (as I read them, at any rate) a cultural trend which many have observed and commented on in recent years: a propensity to see other people as “friends” or “enemies” according to how they might align themselves with respect to preconceived ideological criteria, rather than as individuals.

Rightly or wrongly, I had the sense that Joe Smith was not really wanting to converse with me as an individual. Having identified me as “the enemy” he was determined to keep his distance as he engaged in a kind of ritualized academic combat. The goal, essentially, was to discredit my claims – which were not, strictly speaking, philosophical or intellectual-historical claims at all – by calling into question the depth of my knowledge of intellectual history and my ability to mount an argument in the standard philosophical style.

The irony is that, in criticizing an openly polemical piece for being written in a rhetorical rather than a scholarly way, he was deploying rhetorical methods himself, parading his philosophical expertise and projecting a scholarly persona for patently polemical purposes. There’s a lot of it about, I have say, and I may even have been guilty of this myself from time to time.

This brief exchange at a relatively obscure, intellectually-oriented site is significant only to the extent that it parallels other exchanges, to the extent that it reflects a trend, to the extent that it is part of a larger pattern. I think a strong case can be made that – in a wide range of contexts – individuals are now being seen and treated much more in terms of group membership than they used to be.

Moreover, the fact that the groups in question often tend to be ideologically defined (at least in a broad sense of that term) portends, I think, an extended period of cultural disintegration and social and political turmoil.