All Men are Created Equal

Why is it you can hold a perfectly intelligent conversation with a person about any various number of things, but when the topic is changed to the "War on Terror", or global warming, an otherwise clever person begins parroting nonsense they heard yesterday on MSNBC? Bill Bonner explores, in this DR classique, first published December 29, 2006…

"It is largely a matter of scale…in fact, it could all be reduced to a matter of scale," said a visitor yesterday.

We were talking about the way things work…and why there is such a big difference between the way people are able to function reasonably well in small groups and the way they seem to blow themselves up in large ones.

"Yes," our friend went on, "Once you get beyond what is usually known as the ‘human scale,’ things lose all their meaning."

It is a question that has puzzled us for years: how is it that a reasonably intelligent man can perfectly well drive through traffic without killing himself, but ask the same man his thoughts on global warming, the war on poverty or public education…and what you get is such preposterous nonsense you can barely believe your own ears?

We have mentioned many times that there is a world of difference between a New England town meeting and the U.S. federal government. The size of the New England town meeting is one that the human brain is prepared to deal with. At the town meeting, a man can know which of the people he is dealing with is a moron and which is a self-interested hustler.

But when it comes to national politics, the same man is totally ill-equipped…like a mechanic who shows up with a pair of pruning shears…or a veterinarian with a wrench in his hand. He is ignorant of the facts…innocent of the procedures…and completely helpless in front of the controls. He can’t tell the connivers from the honest bumblers. He has lost the points of reference that are meaningful to him. He is like a driver who looks ahead and sees only fog. He turns the steering wheel to the left…but the car lurches to the right. He puts on the breaks and the car speeds up!

What can the poor fellow do…but resort to lies and such uber-simplifications as take your breath away. "If we don’t fight the commies in Vietnam," he said in 1965, "we’ll have to fight them in California!" "If you want better educated people, you have to spend more on public education," he said in 1975. "If we don’t stand up to the Evil Empire, it will take over the world," he said in 1985. "If you invest in a balanced portfolio of stocks, you will always make money over the long run," he said in 1995.

What can he do? He replaces local knowledge and experience with empty slogans. He replaces the detailed evidence before his own eyes with broad categorical generalizations. Meanwhile, the precise figures and intricate calculations that he would make on his own give way to statistics and averages.

The world on TV becomes the woodcutter’s world too…a world where the local details are washed out and replaced by caricatures and national averages. It gives rise to a whole new understanding of things. Standards are set, not according to local custom or individual experience…but according to the great wash of national broadcasting and advertising in which particularities are bleached out…. local colors faded. Everything comes to be seen through the grayish, white light of national broadcasting.

Instead of speaking his local dialect, he is soon speaking the lingua franca of the nightly news. Instead of wearing the clothes he likes, he is dressed to suit The Gap or Brooks Brothers.

As the scale of his world increases, local nuance and particularities lose their appeal. The man begins to see himself and his world in new terms. It no longer matters whether his house is comfortable and attractive on his terms; now it has to be acceptable in national terms. He comes to realize that many people are lodged in ‘substandard’ housing. Of course, the whole idea makes no sense whatever without a standard. And the standard is hardly one that the man can set for himself. Instead, it is a standard set by people with no detailed knowledge whatsoever. It is a standard based on averages…generalities…and public information. How many square feet per person? How much heating? How much air-conditioning? Then, to make sure that all houses meet their standards, rules are imposed – building codes…zoning rules…materials standards. The owner can no longer ask himself – ‘is this house safe enough for me?’ Now, the question is: does this house meet modern safety standards? By the new standards even the Sun King, Louis 14th, probably lived in ‘substandard’ housing.

Education, too, takes on a new look. It is not enough to learn things; in any case, the busybodies are incapable of organizing real, individual learning. What they can organize is education… with the learning removed or standardized to fit into some new larger national standard. ‘Educators’ can’t be bothered with individual students as they actually are, nor even with local curricula. Everyone has to learn the same thing. And they have to learn it the same way. The world may be infinitely complex and detailed but in the national educational program, the details have to be knocked off…like the fine detailed trim work from an old house…so that all that is left is measurable, standardized space, which can be quantified and allocated by bureaucrats, who may have never met a single student in their entire lives. Are educational standards falling short? Spend more money to increase the space!

Who cares if anyone is actually learning? The critical thing is that all students get the same claptrap pounded into their poor heads, so that they leave the machinery with the same prejudices and illusions.

The woodchopper from New Hampshire may soon discover, too, that he lives not only in a ‘substandard’ hovel, but that he is ‘poor.’ Poverty is always a relative measure, but relative to what? A man may be perfectly happy with his lot in life. He may have no running water, no central heat, and no money. Imagine him tending his garden, feeding his chickens, and fixing his tattered roof. Out in the woods, he may even have set up a still for refining the fruits of the earth into even more pleasurable distillates. In fact, by all measures that matter to him, he could have a rich, comfortable and enjoyable life. But as the scale of comparison grows, the details that make his life so agreeable to him disappear in a flush of statistics. He finds that he is below the ‘poverty line.’ He discovers that he is ‘disadvantaged’ and ‘under-privileged.’ He may even be delighted to realize that he has a ‘right’ to ‘decent housing.’ Maybe he will qualify for food stamps.

The idea of being ‘poor’ may never have occurred to him before. He may live in a part of the world where everyone is about as poor as he is…and all perfectly happy in their poverty. But now that the spell is on him, it sits like a curse. Poverty seems like something he has to escape…something he has to get out of …something that someone had better to do something about!

His new scaled-up consciousness has turned him into a malcontent. The poor man, previously happy in his naïve particulars, is now miserable in his role as a poverty-stricken hick.

But the worst thing about it, TV and popular opinion twist him towards thinking that it is the public view of himself – not his own private view – that really matters. In a matter of months he has forgotten how content he really is. He might as well be a stock market investor; the public spectacle has turned him into a chump. He sees himself on television…as an unfortunate hillbilly. The national newspapers say he needs help. They even make fun of the way he talks. And now the revenuers are in the woods looking for his still!

All over the world, local customs, styles, manners, accents are disappearing. As the scale increases, with the expansion of the globalized market economy, people are being homogenized, leveled. Their food, their music, their clothes – all are becoming standardized, mongrelized.

While it is true that regional variations hang on in vestigial, folkloric form, whether you go to New Orleans, Nashville or Vienna, you will hear about the same music, find the same fashions in the same shops, and be able to eat the same McDonalds’ hamburger.

An investor in Bombay speaks the same language as one in New York. Yet, it is the particularities of investments that make the difference between investment failure and investment success, the very things the world financial media cannot be bothered with – the kind of precise, detailed, particular, local knowledge that you really need for investment success. Instead, what you get is the standardized imprecise broadcast news. And what the investor gets is the equivalent of a public school education; he knows nothing much…and thinks he knows everything.

And since all investors know pretty much the same thing – which is to say, they all share the same illusions and take them for wisdom – the markets tend to reflect the popular fashions as if they were the season’s latest blue jeans.

A man knows perfectly well that he needs to be able to defend himself. Around the hills of New Hampshire, he may judge the risk of attack so slim that he goes unarmed. But walking through the back alleys of Manchester he may wish he were packing heat.

But as the scale increases, he is unable to judge the risk. Give him a little TV news and he is ready to go to war with people he has never met, in places he has never been, for reasons he will never understand. Here again, the scale of the thing makes a mug of the man. He cannot know the facts, the people, or even the theory; he doesn’t know what he’s buying, but he’s ready to pay with his life.

Even in matters as personal as health, a man soon finds himself the victim of scale. The state of his health scarcely matters. What matters is statistics. He is overwhelmed by the slogans and prejudices of the national media. Does he weigh too much? Does he get enough exercise? Does he eat enough seafood? Should he have a check-up every year; what do the statistics say? What do the papers tell him?

The large-scale chatter doesn’t even stop at the bedroom door. He may have enjoyed a perfectly satisfactory sex life. But now he is confronted with comparisons…with averages…with the statistical expectations of the national press. Is he doing it often enough? Is he doing it well enough?

Before, these matters were personal and private. In the company of his wife, the two of them set their own standards. But now, there is no such thing as a private matter. There is scarcely anything that is so private, so personal, so detailed, so local, and so important that it does not yield to large-scale standardization.

No longer does he know what really matters except by reference to the public spectacle, from how frequently people make love to what kind of misgovernment they have in Iraq.

We are now all equal…all the same, all the time. We live in the same houses…we eat the same food and suffer the very same illusions as every one else. If we are unhappy, it is because the TV says we should be.

Bill Bonnner
The Daily Reckoning
December 28, 2007

The week between Christmas and New Year’s is usually fairly uneventful for the markets, as most traders are not participating due to the holiday. More often than not, it’s a boring week. However, with yesterday’s assassination of Pakistani opposition leader Benazir Bhutto, and some not-so favorable data, this week became a little less mundane.

Following the news of Bhutto’s assassination, the Energy Department released data showing that oil stockpiles have fallen to the lowest level since January of 2005.

"Supplies of distillate fuel fell 2.77 million barrels to 126.6 million barrels, the Energy Department report showed," says Bloomberg. "A 900,000-barrel decline was expected, according to the median of responses.

"’Widespread fears of a gasoline crunch in 2008 are fueling high prices now as crude runs and refinery utilization in the world’s biggest consuming country are only slightly above levels seen at the end of 2005,’ analysts at PVM Oil Associates GmbH in Vienna said in a report today."

Oil is heading for it’s biggest annual gain in eight years, reports Bloomberg.

Following yesterday’s news, the dollar dropped…and then dropped even further today, after data released by the Commerce Department showed that new home sales fell by 9% in November.

"With risks for the U.S. economy vastly to the downside and the Federal Reserve still perceived as being dovish, it is little wonder the greenback is so susceptible to losses, especially at times of geopolitical distress," wrote Terri Belkas, currency strategist at Forex Capital Markets.

Those holding on to our Trade of the Decade are certainly sitting pretty though…gold for immediate delivery rose $7.48, to $833.06 an ounce. Our friend James Turk, over at tells Bloomberg that "Gold may reach $1,500 next year, surpassing the all-time high of $850 set in 1980."

Sounds pretty good to us…

Have a nice weekend,

Short Fuse
The Daily Reckoning

The Daily Reckoning