Thursday, September 6, 2007

The Coming Shift in Attitude

With financial markets holding together amazingly well in the face of a drumbeat of very negative financial news and with the conflict in Iraq seemingly finding some sort of equilibrium (though I believe it to be just a pause on the road to Hell, I hope I am wrong) I wanted to revisit the topic of "attitude" or perception.

As Napoleon is reputed to have once said in the context of war, the moral is to the physical as three is to one.

In eras of great change, such as the one we are just now embarking upon, there can be significant tension between the old, accepted wisdom and the new reality. One of the main victims of this Coming Chaos, in my opinion, will be a repudiation of the excellence of U.S. scientific, financial and governmental institutions.

And when such perceptions change, then the door to revolution (military, scientific paradigm change, religious, etc.) or collapse is opened. A quote from the acerbic-to-the-point-of-distraction James Howard Kunstler paints the scene:

...As US manufacturing decamped to low-labor-cost nations, we turned increasingly to the manufacture of abstruse investment schemes designed to create "value" ingeniously out of thin air rather than productive activity. These succeeded largely because of the momentum of legitimacy American institutions accumulated in the years after the Second World War. The rest of the world believed our ingenuity was backed by credibility. That momentum has about run out.

You will hear about central banks and hedge funds and derivatives and mortgage backed securities, and all kinds of jargon, but the issue will really come down to matters other than finance. Are we building a society with a future? Does our culture affirm life or yearn for destruction? Are our daily ceremonies and rituals meaningful or empty? Are our hopes and dreams consistent with what reality has to offer? Can we look in the mirror and say that we are upright people?

Often I dismiss the more extreme conclusions of Mr. Kunstler. He strikes me as an angry Baby Boomer, longing for the destruction of a system he does not like but offering little in the way of something constructive to replace what he would tear down. Except for building more railroads and building prettier, more community-oriented homes (both of which I am in favor of) he has little to offer other than bile and scorn. An unfortunately common theme among that generation of "activitst" types.

But here he has a point. There will come a time where some large bastion of American excellence will fall because the foundations have been neglected and because we've relied on reputation rather than effort. My best guess? It will come somewhere either in the realm of physics, possibly with the Chinese, Japanese and Indians adopting the Electric Universe model of astrophysics, leaving U.S. Universities in the dust as new discoveries are made or something radical will happen in the realm of life sciences - some discovery about disease pathways or stem cell funtionality that is currently being missed due to cultural blinders.

What's the big deal? It's just science at work, right? Well, in my opinion, these types of revolutions can be watershed moments where cultures on the upswing take command of the intellectual heights and where a significant loss of confidence in institutions overwhelms a culture on the downswing.

This is not always a bad thing for the culture on the downswing. Such shocks can lead to the sweeping away of hidebound institutions and reinvigorate efforts in the sciences and industry. Of course, they can also lead to a fatal loss of confidence akin to what swept western Europe in the late 1930's when the rising, revolutionary power of Germany confronted, and almost crushed, the old imperials powers of France and the U.K.

This has been a bit rambling today. I'll try and put together something a little more coherent in the coming days. Until then, the markets and world events seem to be holding up well. We are seeing progress in North Korea. Things are dicey in Iraq, especially where Iran is concerned, but there is still time before the attack that I believe is inevitable.

Enjoy it and here's hoping this calm lasts a bit longer.

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