Obama's comment this week that much of business success is due to luck, has set the internet en fuego, especially among the Libertarian set. It's a comment that could have derived straight out of Taleb's 'Fooled by Randomness', and a view I don't subscribe to. Of course there is luck in business. There is luck in being born too. And while there may be a low probability of success in business, the probability of success goes to exactly zero for those sitting on the fucking couch all day. And the PhD statisticians all say at once, "but how does he know that?"
Fatalism is Rising in Every Corner
Perhaps the most amazing aspect of the Obama comment is that so far he has gotten away with it. As economic success morphs to failure, we are witnessing a commensurate rise in fatalism across the board. I guess people only want to take credit for the end result when things are going well. Even more remarkably, America's 200+ year love affair with capitalism is waning. In a poll taken last year, TheEconomist found that more Germans trust capitalism than Americans !!!
What Difference Can One Man Make In All This Madness?
In a similar vein, all of this discussion around luck v.s. choice got me thinking about personal choice v.s. societal choice. We at the individual level do not have control over the actions of society - at best we have the illusion of control. Our single vote at the polls (if we choose to exercise it), represents that illusion. Society's, in particular democracies, don't make binary moral decisions - all policies and laws are just choices along a (heavily bribed) political continuum. Moreover, as we have found out the hard way, democracies have a hard time making any hard choices, let alone moral ones. After all, there is always that next more convincing politician willing to lie to us about the easier way out...
Perhaps the most amazing aspect of the Obama comment is that so far he has gotten away with it. As economic success morphs to failure, we are witnessing a commensurate rise in fatalism across the board. I guess people only want to take credit for the end result when things are going well. Even more remarkably, America's 200+ year love affair with capitalism is waning. In a poll taken last year, TheEconomist found that more Germans trust capitalism than Americans !!!
What Difference Can One Man Make In All This Madness?
In a similar vein, all of this discussion around luck v.s. choice got me thinking about personal choice v.s. societal choice. We at the individual level do not have control over the actions of society - at best we have the illusion of control. Our single vote at the polls (if we choose to exercise it), represents that illusion. Society's, in particular democracies, don't make binary moral decisions - all policies and laws are just choices along a (heavily bribed) political continuum. Moreover, as we have found out the hard way, democracies have a hard time making any hard choices, let alone moral ones. After all, there is always that next more convincing politician willing to lie to us about the easier way out...
So given the several thousand odd years of human history racing straight towards catastrophe, why should now be any different? For this economic crisis in particular, it's no coincidence that the current age of debt and delusion really got kicked off in the early 1970s when real individual worker wages hit their peak and the U.S. was "forced" (due to profligacy) to leave the gold standard. It was around that same time that former Third World colonies were throwing off their colonial masters en masse and otherwise taking control of their own natural resources for the first time in history. In other words our loss was their gain and at that point, as always, survival instinct took over. Subsequently, we followed the path of least resistance which was to propagate our unsustainable lifestyle as long as possible by whatever means necessary i.e. by borrowing from Third World Countries.
Malthus Was Right All Along - We Were Fools to Believe Otherwise
Fast forward 30+ years and the population of the planet has now grown inexorably larger. So even if we wanted to create a more equitable global economy, what standard of living would obtain today if by some Act of God we could evenly divide resources across 7 billion people? Clearly our standard of living would plummet well below anything any of us would consider worth living. So the idea of another "better" system for the global population does not exist mathematically. It's a zero sum game, given the size of the population relative to the amount of resources available. And for those who don't believe in the Malthusian dilemma, regardless, we have no realistic way of getting "there" from "here". Communism has been proven not to work in the longer term, because it turns out that no one wants to work for free - go figure. Meanwhile mainstream economics discarded Malthusian pessimism long ago, in favour of globalization, which in terms of raising global living standards has only failed miserably for 30+ years, so maybe it just needs a bit more time. It's amazing how much patience you can have for failed economic systems, when someone else is doing the suffering and the next Davos Summit is just around the corner.
Fatalism is a chosen philosophy. Reality is a brick wall.
As I indicated at the outset, I am not a fatalist at heart, otherwise I wouldn't have started this blog, but even I am coming to realize that as a species we are hardwired for catastrophe. I still think that there is a moral dimension to this fiasco, but if a given society can't take care of its own, then it certainly isn't going to give a damn about "the others". So the moral aspect has to be exercised at the personal level.
In summary, following the fatalist approach, it's mildly tempting to think that the 300 pounder sitting at home watching American Idol oblivious to reality, miraculously "got it right" by ignoring the macro-level sound and fury seemingly signifying nothing; however, there is still that one question worth debating at this juncture - which is, in a game of musical chairs, when half the chairs get taken away, who is still going to have a seat?
In summary, following the fatalist approach, it's mildly tempting to think that the 300 pounder sitting at home watching American Idol oblivious to reality, miraculously "got it right" by ignoring the macro-level sound and fury seemingly signifying nothing; however, there is still that one question worth debating at this juncture - which is, in a game of musical chairs, when half the chairs get taken away, who is still going to have a seat?
