Wednesday, June 06, 2012

Martin Wolf Now Understands The Great Depression

Brad DeLong has posted most of Martin Wolf's latest article called Panic has become all too rational. The relevant section for me is this:

Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events.
I, too, used to wonder how people could suffer so much and why things were so bad back then. Now, I am beginning to understand. The unfortunate lesson appears to be that people aren't very intelligent. It's almost as if all of society is living down to the saying, "A person is smart, but people are stupid". The thing is that a person is seldom "smart". And, people believe those who are ruthless and obsessively focused on accumulating wealth are "smart" when in fact they may be extremely lucky. In the old days, people accumulated wealth on the point of a sword and later, from the barrel of a gun. That's not smart, so much as "might makes right". There are smart people, but they are likely 5-10 percent of society. Half of the population is going to be average or dumber than average, so collectively half the race will be dumber than the other half. Being a social species, the default is to trust those we know for advice to make up for our own deficiencies, but there's a lot of disinformation and outright lying going on right now. Such a state of affairs is poison to a democracy. Oligarchs thrive on lies, the bigger the better. Hitler is famous for lying:

All this was inspired by the principle--which is quite true within itself--that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.

Hi John

I myself live a monastic life of scholastic poverty and (God forbid) celibacy.

While I don't believe in God as such I believe in the Christian message, morality and, of course the intelligence deity.

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