The "Rational" Mouse

In this month's edition of Mother Jones magazine, John Kenneth Galbraith -- an alleged economist -- describes the underpinnings of liberal capitalism in several dozen well-chosen (but unoriginal) words: "...[I]f people are rational, if markets can be 'contested,' if memory is good and information adequate, then firms will adhere on their own to norms of honorable conduct." He adds that, "Any public [by which he means 'government'] presence in the economy undermines this. Even insurance . . . is perverse, for it encourages irresponsible risk-taking." I kept reading, expecting Galbraith to make something of the not-so-well-hidden paradox embedded in his description. He didn't. Instead he peppered us with the same old hackneyed shibboleths the uninspired left has been using for at least a half century, couched in the shapes of modern villains -- New Orleans, Ken Lay, Halliburton -- the same old them against us world.

Ever since Hegel and Marx saddled the minds of humanity with notions of eternal class warfare, the "masters" of money and the "slaves" of penury have been at each others' throats demanding "liberty" on the one hand and "justice" on the other. Neither seems to have appreciated the fact that in the face of nature, masters and slaves are all alike. We're alone here together, struggling to make it as a species.

In lieu of the grey bearded complaints he made in the article, Galbraith might have sought to put a face on that word he used, information. I'm sure he meant what all alleged economists always mean, market data -- prices, costs, demand trends -- the sorts of info day-traders and CEOs sweat BBs over every morning, noon, and night. Certainly an old and experienced warrior like Mr. Galbraith should have seen that market-smoothing strategies like insurance (whether private or public) are expressions of that very rationality the laissez faire system assumes. Wise entrepreneurs seek to insure themselves against uncontrollable events, just as a wise middle class seeks to do what it can through government action to minimize its risks. And surely he should have admitted -- at least to himself -- that the world is ineluctably rational, that nothng ever happens that cannot be explained by a rational appeal to causes and effects.

The problem is not that men and markets are not rational. They cannot be otherwise. It is that men and markets do not behave in the best interests of the species. They behave as the nature of men and markets demand.

Perhaps this challenges one notion of what the word "rational" means. It is sometimes taken to mean "sane," and "sane" is sometimes taken to mean normal. Thus it is sane and normal for men and markets to seek to perpetuate themselves in being. Men, when referring to themselves, interpret this as surviving and improving. When applied to markets, "sane" means self-correcting, seeking balance, and the implication persists that sane markets and human survival operate in parallel -- what's good for the market is good for humanity.

But of course some markets are good only for sellers and are horrible for buyers, though the buyers may not know it. Tobacco, heroin, daytime television, and SUVs come to mind. The information relating to the usefulness of the products bought and sold in these destructive markets may or may not be available to the buyers, and the sellers may see only that the commodity they are trading for (money) has more usefulness to them than the commodity they're selling. Few would disagree that the sellers are entirely rational (though they may not be legal) -- they seek and satisfy their self interest. But even fewer would agree that the buyers are also acting rationally. There is, for their decision to buy, a clear and comprehensible reason. Their minds have determined them to act, and their minds are, in all cases, rational. To doubt their sanity would be to doubt the rationality of causes and effects.

But obviously, the buyers and sellers of stupid stuff are equally as stupid as the stuff of their trade. They just don't know they're stupid. To see the stupidty of stupid markets a person would have to be something other than purely rational. A person would have to be wise.

So, what does that mean? What's to be wise?

Well, to put it as bluntly as it ought to be put, if being wise means anything other than to transcend the emotions of the moment, and to act on the basis of reasoned motives, then the definition of "wise" must be reserved for those wiser than a Mouse. In Mouse talk, wisdom is nothing more or less than a description of the condition those people find themselves in who see a strong connection between the things they do and the things that happen to them. Wisdom does not consist in always doing the right thing. We cannot know or predict the future with anything more than a mere probability. But to act in a decisive way on significant matters, without having given consideration to the consequences of our actions on ourselves, our family, our nation, and our species, is to act unwisely.

Well, that conclusion may seem no less hackneyed than Galbraith's characterization of the world as a dog-eat-dog place. But there is a difference. To create the notion of a class struggle is to create a substratum of reason itself, a piece of information that may persist as an unexamined cause of action. We may passively react on the belief without being aware of its influence on our action. But the advice to the wise, that they should do their best to think things out before acting, constitutes a cause of a different sort. It is a challenge to the passive mind to stop being led by emotions and unexamined premises, to instead get actively involved in day-to-day behavior -- that is, to think.

It's one thing to not possess sufficient information, and quite another to be ignorant of the need for information. But that statement notwithstanding, no way exists by which the human mind can be assured that it is informationally fully equipped for action. There is no such thing as a fool proof system for human living. Even a wonderful idea like democracy can be turned into a nightmare by unwise elected offcials and their advisors. We do the best we can with the goods at our disposal, and if we have made mistakes, we had best be sure that we confess, at least to ourselves, that we know wherein we have erred.

Back when I was a railroader, we had a rubber stamp made up that said, in a beautifully apologetic, and yet declarative sentence: "I beg to advise I was in error and will strive to do better in the future." That's one of the weaknesses of democracy: those politicians who admit their mistakes are likely to be voted out of office. But then, that's a weakness of the electorate: they don't know how the human mind works. They must think poiliticians are more perfect than themselves.

Which is, of course, pure horse shit.