Thinking Outside of the Bubble

Purists think they have the answer. Pragmatists don’t. Pragmatists play well with others. Purists don’t.
The ultimate purist I ever encountered was a character named Richard Digby in a Nathaniel Hawthorne short story called “The Man of Adamant.” Digby was such a purist that his final solution to the problem of corruption within the Puritan flock, as he saw it, was to isolate himself in a cave where he could commune with his god apart from all others. He developed a religion of one, so pure and unadulterated, that it turned him into a stalagmite. Of course, Hawthorne had Richard drink the limestone-laced drippings from the ceiling of the cave, so he had some pseudo-scientific explanation for the result. In a sense, he became a pure libertarian, a self-contained rock of ages.
Stalagmites are what the market purists have become. Just a little fine tuning and all will be glorious. A little self-discipline is all it takes to cure whatever ails us. Just believe in the market system and all will be well. Just leave us on our own.
The unreformed alcoholic has a similar argument. Today he will discipline himself not to drink too much. By five o’clock, he is off to the bar or the liquor store, unable to quench his thirst. The gambling addict is much the same. Today he will wager only a reasonable amount of money. By the end of the night, he has lost everything.
The latest economic bubble and bust was the product of belief and thinking analogous to that of the alcoholic and compulsive gambler. The scale of the scandal is the chief difference. When thousands of people get hooked on the game and the stakes continue to rise astronomically, a delusion of grandeur mixed with a magnitude of scale so grand it is god-like in its proportions, enraptures and insulates a person’s thinking from reality. He adopts the belief that a thing this big could never fail. As a result, some companies, in the eyes of even the government, became too big to fail once the bubble burst. And their sheer size convinces the purist that the pure market system is good, because we can see what huge constructs (companies) result from it. That’s the circular reasoning that mirrors the bubble and bust reality of market economies. As Antonio says of Gonzalo’s vision for Prospero’s island, “The latter end of his commonwealth forgets the beginning.” So does the market purist have a short memory in that, like the alcoholic or compulsive gambler who forgets his last hangover or bankruptcy respectively, gets back in the game as if this coming bubble will last forever this time.

Purists have blind faith in something. Digby had the blind faith that he should trust only his own instincts and commune with god from the isolation of a cave. That is a pure expression of Protestantism and ultimately serves as the basis for the development of the pure expression of the market economy. The chief difference is that the market purists, even in the wake of the current market collapse, still think that the market system is rational, not blindly faith-based. That is the ultimate delusion to which they continue to hold fast, like doomed captains going down with their ships. In both Digby’s world and the market world, you are on your own, and you should be. Using your own resources, you compete for your share of the worldly kingdom or the kingdom of god. Just have faith in yourself and you’ll make it.
Referees need not apply. They just interfere in the natural flow of the game. That’s why market-faithful love the game of golf, for in that game alone the individual ultimately plays against his own self and calls his own game on his own honor. However, what is strange is that affirmative action is very much a part of the golf game, something one would think to be anathema to market purists. In golf, handicapping enables lesser players to compete with greater ones in any given game. No one is too small or too large to be excluded from the system of handicapping. Someone let a pragmatist in under that tent. Of course, at the professional level, you’re on your own. No handicapping when it comes to big purses. Apparently when money is at stake, the leveling of fields of play is discarded.
Pragmatists should stop trying to negotiate with purists. Nothing will ever get done to improve the human lot let alone the economy if pragmatists persist in trying to draw purists into their fold. It will never happen. Leave the purists to withdraw into their caves to howl at change. Sooner or later, they will howl their way into extinction, like the saber-toothed tiger who grew too long in the tooth to survive, or like Richard Digby, who succumbed to the pursuit of purity itself.