The Nap of Reason: Financial Collapse and the End of Enlightenment

It’s a day of forceful rain here in Tokyo. In fact, it’s the first real rain in at least a month, and while I would prefer to be off using the last few days of my unlimited rail pass to drift lazily through the countryside on a local train, it’s not too unpleasant to clean my temporary apartment and drink green tea. I’ve also just been listening to the latest Deep Read from Planet Money, an interview with Satayajit Das, a longtime trader and analyst, and author of Traders, Guns, and Money: Knowns and Unkowns in the Dazzling World of Derivatives. His basic perspective – that the market is essentially unpredictable - is in line with the ideas presented by many other guests of the show, with Nasim Taleb (The Black Swan) the most entertaining and bold.

While very significant in the realm of economics, what interests me most is that these writers and thinkers are part of a larger explosion into the popular consciousness of a broad set of ideas that refute or revise enlightenment rationalism.  In addition to economics, you'll find these in mathematics and psychology - books like Mlodinow's Drunkard's Walk, Ariely's Predictably Irrational (which I haven't been able to read yet) and the model for most current writing about science and society, Malcolm Gladwell's Blink (A fine book, but all the one-word titles that have coattailed it are infuriating: Sway, Nudge, Click . . . ugh).  These books (at least, the ones not by Taleb) are often tentative and hedged, and generally try to integrate their insights into a larger rationalist framework.  But they have nonetheless managed finally to mass-market a vision of the world - and in particular, the world of human action - as one that we are not at all well-equipped to understand.

I'm far too ignorant as yet to make this argument with any sophistication or detail, but there seems to be a lineage here with the set of philosophers that we associate with poststructuralism - figures like Derrida and Lacan who focus on the failures of dialogue and interaction, on the limits of language and reason, particularly, again, as regards human interaction.  What the economic anti-rationalists have discovered is, basically, the same problem of intersubjectivity at the core of Lacanian thought. In post-rationalist economics, no prediction can be accurate, because that prediction itself has consequences that it cannot have taken account of. Similarly, Lacan's account of human action is one in which all of our targets constantly move exactly because we are pursuing them.  All of the conclusions we draw about the people in our lives are distorted by the lens of our own mind, which erects illusion and image where we lack true knowledge.

Economics is also linked with the Lacanian human in a more emotional way. Finance is supposed to play the role of society's resource-allocator, placing investment where it will best serve to satisfy human desire.  But what if the failure of market rationality is caused not just by our inability to anticipate others' perceptions of our actions, but by the ultimate futility of a finance aimed towards Satisfaction? Bringing to bear the concrete strength of money on such a fleeting, ever-changing, and ultimately unattainable thing is surely a recipe for just the chaos we have witnessed.

It remains to be seen whether the financial collapse heralds a greater consciousness of our own limits, and finally push society as a whole to a stage beyond the Enlightenment progressivism that has been our limit for centuries. Even if this shift does begin, there will surely be those who continue to be victims of rationalism. Most obviously, there’s no sign Wall Street traders are going to give up their formulae or the sense of certainty they’re selling. There’s also a strange sense in which rationalism, albeit in distorted form, underlies one of the most patently irrational phenomena of the past few years - the mania, particularly among those most afraid of collapse, for gold bullion.  Gold is the ultimate illusion of safety, a safety based entirely on the expectation that others will continue to think of it as valuable.  While simple-minded, this is not so much different from the faith that traders put into their models and graphs.  What gold represents is the externalization of faith - and we as a society are beginning to see just how much of a blind leap it is to trust in reason.

Book Review: Daniel Pipes, "Conspiracy"

I just happened to see this on the library shelf the other day, and I thought I'd give it the rundown. For people with an interest in conspiracy (and/or the related social phenomena of New Age thinking, self-help, and racism), this book provides a solid and critical intellectual history, giving you the names you need to know if you're trying to understand where all these crazy ideas come from. Pipes also makes some contributions to the social analysis of the conspiracy phenomena, though he falls quite short as a philosopher. Specifically, his epistemology is hazy at best, so he has some difficulty drawing meaningful lines between "conspiracy theory" and real, if complex and sometimes overzealous, attempts by intellectuals and laymen to understand the broader forces that impact society. The most egregious of these slips is his characterization of perceptions of anti-black racism and misogyny in the West as paranoia, characterizations that are both deeply offensive and demonstrably wrong – institutional racism and sexism are about as real and widespread as it gets. Similarly, Pipes harries a false distinction by claiming that the proven, documented involvement of CIA operatives in the crack trade in Los Angeles in the 1980's is not the same as a conspiracy, and that therefore Black anti-government sentiments are unfounded. Such statements are simply ludicrous.

More generally, Pipes often blurs the distinctions between conspiracy theories that place immense power in the hands of a few individuals, and known "conspiracies" that take place across the globe because of how the economy, government, or culture are structured. So, for example, he will describe people's fears of the Rosicrucians and the Jewish conspiracy in the same terms, and apply the same explanations to them, as he does people's fear of Western imperialism. This looks particularly bad reading it ten years after the fact, as documents are increasingly readily available showing that many of the economic attacks that Pipes characterizes as conspiracy theories have actually taken place – for example, the fully intentional roles of the WTO and World Bank in destabilizing developing countries.

But despite the seeming tenuousness of Pipes characterization of, for example, Noam Chomsky as the equal of Lyndon LaRouche, he did succeed in getting me to ask some hard questions about the intellectual style of the left. It is undoubtedly true that, as Pipes points out, leftist Afrocentrism is far more institutionally accepted than right-wing Farrakhanism, even though each are based on tenuous concepts. Ultimately, how much responsibility do theorists such as Chomsky have to be rigorous in their diagnoses of wider political or social situations? Pipes provocatively quotes Susan Faludi's statement that misogyny is an ideology that has moved through "the culture's secret chambers" – and while clearly Faludi is speaking metaphorically, I think Pipes is fair in pointing out the parallels in style. Left-wing intellectuals do have a tendency to cast a very wide net in searching for causes of the problems they seek to diagnose, as well as attributing observable effects to causes both subtle and widespread – invisible, mysterious and often malevolent forces such as racism or exploitation. Sometimes this style of thinking can verge dangerously close to conspiracism; it is not enough that a system or statement be true in essence, it must be true in fact.

While he may be a lummox on more recent events, the benefit of hindsight makes Pipes a very good resource, as he recounts the history of conspiracism in high style. This is a shockingly long history, but measurable, with anti-Semitism and anti-Masonism having their starting points roughly in the 11th and then 14th centuries. The passage of these originary ideas forward in time is easily where the book is most useful and least controversial, as Pipes explains quite clearly and convincingly how the anti-Semitism of the Crusaders traveled through time to fuel the Nazis and, ultimately, over the sea to Japan (the popularity of anti-Semitism in Japan makes perfect sense if you've had much exposure to that culture).

Pipes also does a very creditable job of presenting some ideas as to why people chose Jews and Masons as the overwhelming targets of their suspicions, saying that these two groups represent the Modern – they are generally sophisticated and often powerful, thus fomenting resentment among people less likely to be dedicated to intellectual rigor. The only real problem with this thesis is that it is inconsistent with Pipes' millennia-long history of anti-Semitism – Jews were not always the successful, "model minority" they are now. They could hardly have been hated for their modernism, social advancement, or financial prowess in the 12th century, when most were living in segregated ghettos and were penniless.

The most important unanswered question, though, remains that of epistemology. How do we determine where "conspiracy" theories sit on the spectrum from concrete knowledge to broader, "spiritual" truth - is there a spot available somewhere between religion and science? Ultimately, how do we determine what is a 'conspiracy theory' and what is potentially valid speculation? It is because he fails to address such questions beforehand that Pipes occasionally stumbles in his classification of specific cases. But it is also what leads him to the very interesting choice to include left-wing theorists in the 'conspiracy' category, a move which I think is manifestly incorrect, but nonetheless sends a powerful message of warning to the most extreme indulgers in left-wing rhetoric that, if you're not careful, you might be mistaken for an Antimason.

Guns, Germs, and Steel: What it Means for Race

I'm sitting here watching the National Geographic documentary based on Jared Diamond's book "Guns, Germs and Steel," and it's fucking incredible – both on its own terms, and because of its implications for race studies. For those unfamiliar with the basics of Diamond's argument, it can be boiled down fairly clearly. The argument is that the historical dominance of European cultures over rest of the cultures on Earth boils down to the geographical accident that granted Europeans certain natural resources. Specifically, these are domesticated grains, such as wheat, and domesticated beasts of burden such as cows and horses. These, along with other geographic advantages, allowed for surpluses of labor that led, in time, to innovations in technology, such as steel swords and horsemanship. European domestication of animals also bred new human diseases, but prolonged contact increased immunity to them to levels not present in other populations. All of these, in turn, led to European military and, ultimately, cultural dominance.

Diamond's extremely compelling hypothesis is essentially the nuclear option of anti-racist argumentation – but without any of the negative implications of that phrase. Any historical thesis dependent on an essential difference between people, whether couched in terms of race or culture, is rendered absurd by Diamond's view of human history. All of the differences between human societies, and therefore all the differences between their accomplishments, arise not from any essential genetic or moral superiority, any surplus of bravery, intelligence, or creativity, but from natural advantages inherent in certain groups' homelands. In light of this, all previous explanations of certain groups' dominance are revealed as post-facto justifications of a geographical fait accompli that predates any race, much less individual.

A command of this material is an essential part of any rhetorical arsenal aimed at countering racialist or culturalist worldviews. Diamond explicitly describes the Europeans as "accidental conquerors," and this is the only self-understanding that can grant the dominant population groups a healthy distance from the mythology of their own superiority.

This is, incidentally, a perfect example of one of the unspoken driving principles of academic and intellectual life. Independent of its intellectual merit, Diamond's conceptual framework has gained a lot of traction because it can be reduced to a catchphrase. Although, ultimately, it's not a terribly accurate one – guns in particular are not nearly as valuable to European dominance as, say, grain, or horses. I guess grain isn't nearly as sexy as guns.