Archive for May 31st, 2012

Catastrophe unforeseen – as usual

Just heard Paul Krugman on BBC Radio 2. Standout quote: “I was never a big fan of the Euro, but I never foresaw this catastrophe.”

‘Catastrophe’ means to ruin and/or overturn in ancient Greek. It was the word used to describe a tragic dénouement to a drama – a disastrous one.

The piquancy in Greek tragedy derives from the audience’s awareness of that imminent disaster – contrasted with the characters’ ignorance and/or refusal to contemplate it.

We know it’s coming. They don’t. We wince.

It’s odd how such an effective device – so old, so well used and well known in so many cultures – fails utterly to inform human beings’ response to the real world around them.

You would think we would stand back more often and wonder whether catastrophe might, in fact, be around the corner. We so rarely do.

Very, very few people ever foresee catastrophe. Those that do are studiously ignored or ridiculed.

I’ve written before about optimism, and our preference for it. This is a related phenomenon, deriving from a riff on the Appeal to Tradition fallacy. Things have always been this way, goes the thinking, so they will likely go on being this way.

My favourite analogy (with thanks to Nicholas Taleb) is the farmed turkey on December 20th. It’s lived for about 8 weeks. In that time, it’s been fed every day, the same amount, at the same times, by the same people. It has eight weeks of experience of things being predictably comfortable and uncatastrophic. On December 20th, the turkey feels entitled to believe – on the evidence so far – that tomorrow will be the same as all the other days.

Catastrophes are rare (though not as rare as we think). Non-catastrophe is the daily ‘standard’. It is, and it seems, overwhelmingly normal. Catastrophic events are highly unusual. We even have a special adjective for them: “Unthinkable”.

The important characteristic of a catastrophe, though, is not its rarity. The important thing is its absolutely revolutionary, transformative effect (remember: it’s a ‘ruinous, overturning’ event).

We don’t remember catastrophes for their rarity. We remember them for their destructive consequences – consequences that can reverberate for years, decades or millennia to come. Some catastrophes have permanent, apocalyptic results.

Catastrophe, therefore, should figure more prominently in our imaginings. Instead of saying “That’s not worth considering – it’s unlikely'” we should instead ask: “If this did happen, how far-reaching might be the consequences?”

Sure, it’s unlikely. Perhaps very, very unlikely.

But if it does crop up… by God, things will never be the same again. The insane, the absurd – all will start happening.

Thus I mused as I listened to Mr Krugman on the radio. He’s an engaging fellow, full of useful and worthwhile insights.

But I did find myself wondering why one of the world’s brightest economists – a Nobel prizewinner, no less – hadn’t been able to imagine what a Eurozone bank/sovereign debt/fiscal catastrophe might look like.

Sure, it looked unlikely on January 1, 2002, when the Euro launched. It looked very, very unlikely indeed.

By 2007, I’d argue, it looked a lot less unlikely. By 2009, it was looking vaguely possible. By this time last year, money markets were betting on it.

But great economists still hadn’t – and still haven’t – imagined it.

You gotta ask: just what the fuck is wrong with human beings?

Posted on 31st May 2012
Under: Rants | 1 Comment »

Attention Blogger users

I’m not a fan of Blogger. I don’t use it.

I do understand, though, that lots of people DO use it – and nothing I say will ever change that.

So I’m not going to waste your time urging you to dump it. This is just a very simple plea to you to look at one thing in Blogger and one thing only:

Your comment settings.

By default, Blogger (or certain themes in Blogger) make it impossible for non-Blogger (or non-Google) users to comment. It IS possible to change this setting so that anyone can leave a comment… but lots of Blogger users either don’t know how to do this, or aren’t aware that people are being locked out by their comment settings. That’s the way Google likes it: they want everyone to be registered, tagged and monitored in their universe – so that’s their default setting.

There’s plenty of folks whom I’d love to engage with on their site… but can’t. This seems a shame.

Fancy doing something about it?

PS You might also consider turning off that Blogger CAPTCHA anti-spam function that produces impossible-to-decipher words and numbers.

Posted on 31st May 2012
Under: Uncategorized | 7 Comments »