Musings Report #23 6-8-13 Civil Society's Role in Good and Evil
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Civil Society's Role in Good and Evil
The conceptual wires between two seemingly disparate ideas recently touched in my mind, eliciting an analysis of the connection between good and evil actions and civil society.
The first idea is presented by Philip G. Zimbardo, author of the book The Lucifer Effect: Understanding How Good People Turn Evil. Correspondent Chad D. sent me a lengthy (1:50) video lecture by Zimbardo of the same title.
Zimbardo, Professor Emeritus of Psychology, Stanford University and instructor at the U.S. Naval Post Graduate School, is an expert in the human capacity to inflict pain and suffering in sustained (i.e. cruel) ways. We call this sustained, intentional depravity evil.
He has built on the research of Stanley Milgram, author of Obedience to Authority: An Experimental View, and his own famous Stanford Prison Experiment, which demonstrated how the latent capacity for evil in "normal people" is activated and quickly manifests in sadistic torture, degradation and other shades of evil.
Evil is not so much inherent in individuals, Zimbardo showed, but emerges dependably when a sequence of dehumanizing and stressful circumstances unfolds.
The recipe for behavior change isn't complicated. "All evil begins with a big lie," says Zimbardo, whether it's a claim to be following the word of God, or the need to stamp out political opposition. A seemingly insignificant step follows, with successive small actions, presented as essential by an apparently just authority figure. The situation presents others complying with the same rules, perhaps protesting, but following along all the same. If the victims are anonymous or dehumanized somehow, all the better. And exiting the situation is extremely difficult.
Being social animals, humans are exquisitely sensitive to social norms and peer pressure, and it goes very much against the grain to non-conform or actively resist what everybody else around us is doing.
While evil may not be inherent, the capacity to divide essentially indistinguishable groups of people into Us and the Other certainly is a core human trait. Indeed, being able to identify belonging/my group and not us/a potential enemy has roots going back millions of years to all mammals that establish groups.
The capacity to quickly habituate to horrendously abnormal conditions is also inherently human. In the proper circumstances, i.e. in the constant presence of strong peer pressure, stress and authority, normally kind and well-adjusted humans soon become sadistic guards, soldiers inured to killing others, including civilians, or members of roving mobs exploiting the vulnerabilities of perceived enemies.
The second idea is expressed in a Foreign Affairs essay, The Promise of the Arab Spring (unfortunately it's behind a paywall. You may be able to borrow a copy at your local library.) Writer Sheri Berman makes a compelling case that many of the purported "failures of democracy" such as fascist Germany and Italy in the 1930s, and in the Mideast today, are not failures of democracy so much as civil societies that lacked the key building blocks needed to sustain democracy.
The two ideas intersect in places like Iraq and Afghanistan, where conventional wisdom holds that the U.S. failed to establish sustainable democracy despite tens of thousands of lives lost and trillions of dollars spent/squandered. As a contrarian, I tend to be skeptical of all blanket statements and slam-dunk received wisdom, and it seems increasingly clear to me that the key dynamic in both Iraq and Afghanistan is that both nation's civil societies were essentially destroyed by decades of warfare, civil strife and ruthless dictatorship.
In other words, the capacity for democracy was simply not present, and just constructing the basic building blocks of civil society from scratch takes decades and generations, not years. In these kinds of environments, tribal warfare is the only available perceived means to an end, as other traditional ways of settling disputes (for example, political debate and compromise) were shredded, suppressed or demolished by war or dictatorship.
We can easily see the connections between these two ideas. If a society has slowly disintegrated under stress to the point that social norms have become dysfunctional and civic organizations have been crushed or eroded, central authority quickly gains the upper hand. Once that setting of stress, peer pressure and authority is established, evil blossoms.
As financial and social crises become semi-permanent features of everyday life in nations such as Greece and Cyprus (and to a lesser but still chronic degree, in countries such as Japan, France and the U.S.), we see the building blocks of civil society--the open marketplace, the free press, non-governmental social organizations, local government councils, etc.--weaken and fray. As these foundations of democracy weaken, democracy itself becomes vulnerable to erosion and dysfunction.
One feature of this degradation of civil society is systems that once mediated conflict and disorder stop working. Beneath the surface of normalcy, I tend to think this is the case in Japan: the political/financial systems are now incapable of fixing what's broken, i.e. themselves. And when they stop working, conditions worsen and the options available to people to improve their conditions narrow. This reduction in systems that work soon leaves only desperate measures, which are eventually perceived as the last-ditch way to reverse deteriorating conditions. This paring away of functioning options is the acme of fragility and loss of resiliency.
This suggests that maintaining social structures that are resilient and flexible enough to withstand stress and a deteriorating economy are essential features of democracy and social stability. Since large-scale structures are costly and prone to mismanagement by central authority, the closer the social organization is to the bottom layer of individuals, the lower the cost to maintain them and the greater the benefit to those investing time and money in these organizations.
This is the very definition of community, which helps explain (at least to me) why it has been increasingly central to my thinking for the past six years.
Market Musings
The S&P 500 reversed at 1597, midway between the two targets mentioned last week, and shot up to 1643 on Friday. I sold my calls (bullish bet) on the SPX; if the run continues next week, there will be other opportunities. "Take the profit" is my new mantra. Which hurts more, the regret of leaving some profit on the table, or the regret of seeing a profit turn into a loss? Definitely the latter.
The global economy is presenting an interesting schizophrenia: on the one hand, central bank money-pumping is driving risk assets like stocks higher, while commodities that reflect actual economic activity like copper are tanking.
So which is it? Is the economy expanding (pushing stocks higher) or is it deflating (commodities get crushed)? There are two conflicting narratives here, and yet there's only one real economy. So one or the other of these narratives will be wrong: either stocks are rising on money-pumping, completely unrelated to a deflating global economy, or the economy is expanding and demand for commodities will rise, pushing commodity prices higher.
Commodities from coffee to oil share a dynamic of price, supply and demand. If prices decline enough, marginal producers close down, eventually reducing supply to match demand. That leaves the sector open to supply and price shocks: should a coffee crop fail in a major region, there is little marginal production left elsewhere to buffer the sudden disparity between supply and demand. The result is a large unbuffered price increase.
Could hot money rotate from stocks into commodities? In a deflationary setting, this seems unlikely, but as an investment rotation it makes sense, as stocks are at the end of a huge run-up while commodities from coffee to copper to coal have been crushed to multi-year lows.
If stocks sell off, all that hot money won't sit in cash for long--it will have to chase yield and capital gains somewhere.
The best thing that happened to me this week
I was able to be of some modest help to friend and colleague Adam Taggart, who just self-published his first book (see today's blog entry for more).
Self-publishing is the future, and it's rewarding to lend a hand to new authors tackling a complex and non-inutitive process.
From Left Field
The day of the locust (title of one of my favorite books): The Locust Economy (via Richard M.) Groupon and consumers as locusts....
The Diagnosis Is “Lying Bastard Fatigue” (via Ian D.) Overload of misinformation, prevarication, propaganda, lies, deception, embezzlement being passed off as capitalism, etc.
The Unexotic Underclass--highly recommended: enormous talent being squandered solving trivial anti-problems for marketers....
Thanks for reading--
charles
