Fear and Panic

There’s an old Portuguese joke about the difference between fear and panic. Fear is the first time you can’t do it twice, panic is the second time you can’t do it once.

The distinction comes to mind as we watch Europe lurch after a poor Spanish bond placement, and the Greek far left explode after a pensioner committed suicide in front of the parliament building in Athens. In two shakes of a lamb’s tail Europe was back in the doghouse (what’s up with all the animal crackers today?)

Politicians, businessmen, economists, and pundits in general, are appalling at predicting the future. In the early 1940s the president of IBM predicted a world market for five computers. A Las Vegas gambler, who became immensely wealthy at the roulette tables, is on record as saying ‘if economists were any good, they’d be millionaires, rather than advisers to millionaires.’

I extend that to stockbrokers. Any broker who could truly beat the market would work for himself and become a millionaire. At a paltry fifty grand per year investment, considering typical Wall St. wages, any broker who could beat the street by one third on an annual basis would make a gross profit of over four million dollars in a ten year period. You can calculate this using a simple differential equation for compound interest, which scales linearly on capital. Put in a mere five grand a year, it turns into half a mil over a decade.

Scientists, whose job it is to perform small, and occasionally big, miracles, within the bounds of possibility, can be a lot better at predictions. Particularly those scientists who give their imagination a free rein. Some of those turn their hand to science fiction. Not all are scientists, though. H.G. Wells studied biology, but later described himself as a journalist; Jules Verne, however, had no formal scientific training of any kind―he was in fact a stockbroker for a part of his life.

I have huge admiration for Verne, perhaps because I read practically all his books in my formative years. The great man had a manuscript refused by his publisher, which was apparently dredged up and printed in 1994. It’s called Paris in the Twentieth Century. Below is an abridged review on Amazon.

…Verne in a darker, frankly dystopian mood. His mid-20th century Paris is an enormously wealthy society, a place of technological wonders, but, like Huxley’s Brave New World, it is also a society without meaningful art. Engineering and banking are the prime industries of this civilization and, as the book’s protagonist discovers, not even the most talented poet can find a place for himself unless he’s willing to produce odes to blast furnaces or locomotives. …the narrative contains many startling predictions, among them fax machines, electronic calculators, automobiles and elaborate subway systems…

Apparently, Verne also predicts electronic music in this book. Overall, it’s not rated a good book, particularly with respect to plot and character development. I learnt the hard way with The India Road that those are essential ingredients for selling ideas masquerading as books.

Perhaps the good sci-fi writers are so successful because, as Singer puts it in Wired for War, sci-fi is more ‘about playing with possibilities than about making predictions.’ Like giving a top-class scientist a wish list freed of budget constraints. The emerging ideas are wild but only up to a point, because there is an intrinsic honesty to science that limits the totally improbable. More interesting is the fact that the focus is often on the ways new technologies change society. Huxley did a wonderful job of this in Brave New World.

If we look back to the societal cycles of empire boom and bust, we see scales of roughly one to two centuries, in a succession not unlike what happens in ecology. The Portuguese Empire lasted about a hundred years, The British Empire less than two hundred and fifty, the Soviets less than a hundred. The Roman Empire endured for about five centuries, at least insofar as Western Europe is concerned.

In Europe, a number of countries are seen as  uncompetitive, and are being pressured to effect change. Much of the justification for that change resides in the school of liberalism, and much of the resistance therefore comes from entrenched values of social-democracy, workers’ rights, and the welfare state.

Back in the day, if you worked you got paid. If you didn’t, you didn’t. That’s what happens in much of the world in 2012. Southeast Asia, Africa, South America.

Greece, Italy, Spain, and Portugal are all countries with a tradition of greatness. As in the United States, the UK, or China, the people understand the values of empire. They see it in the history their children learn, in the monuments built with the gold and silver purloined from overseas possessions, and in the languages spoken in faraway lands. These are all well-educated people, who share the same core values. It’s a well mixed sea, you can see it in the blood groups. By world standards, the people of Europe are both hard-working and productive. All Europe. Not bits.

The whole concept of cycles escapes us, the idea that a poorer Germany and a richer Spain may well reccur. As wages go down in Europe and unemployment goes up, the balance of competitiveness is already shifting among countries. You cannot mention the word recover without thinking of the word overtake. If you’re smart.

What if Europe turns upside down? Or more to the point, what stops that happening? Will Germany remain the export powerhouse of Europe and the world when the Chinese build a better Mercedes? It’s not long ago that Europe and the US were full of jokes about silly Japanese “cars” with motorbike engines. Forty years is a long time for the human brain to deal with.

Now that Nissan owns Renault and India’s Tata Motors owns the emblematic British brands of Jaguar and Land Rover, are the jokes still relevant?

And just to show you Portugal doesn’t have a monopoly on bad jokes, I found this US one on the net while I was researching this article. It’s pretty awful, but at least it’s vehicle-oriented.

The eighty-eight-year-old millionaire married an eighteen-year-old country girl. He was quite content, but after a few weeks she told him that she was going to leave him if she didn’t get some loving real soon. He had his chauffeured limousine take him to a high-priced specialist who studied him and then gave him a shot of spermatozoa. “Now look,” the doctor said, “the only way you’re going to get it up is to say “beep,” and then to get it soft again, you say, “beep, beep.”

“How marvelous,” the old man said.

“Yes, but I must warn you,” the doctor said,” it’s only going to work three times before you die.”

On his way home, the man decided he wasn’t going to live through three of them anyway, so he decided to waste one trying it out. “Beep!” he said. Immediately he was UP. Satisfied, he said, “beep, beep,” and he was down again.  He chuckled with delight and anticipation. At that moment, a little yellow Volkswagen pulled past his limousine and went “beep,” and the car in the opposite lane responded with “beep beep.”

Alert to his jeopardy, the old man instructed his chauffeur to “speed it up.”  He raced into the house as fast as he could for his last great lay.  “Honey,” he shouted at her, “don’t ask questions.  Just drop your clothes and hop into bed.” Caught up in his excitement, she did.  He undressed nervously and hurried in after her.  Just as he was climbing into bed, he said, “beep,” and he was UP.

He was just starting to enter his young wife when she said, “What’s all this ‘beep beep’ shit?”

Happy Easter!

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