|The two groups of people in the world
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Wowee! More highs in the stock market. The Dow up 128 points yesterday.
Is this market headed for a bubble? Maybe...but what do we know?
The people who are buying stocks today have a lot more confidence in the Fed than we have. As near as we can tell, today's stock prices owe a lot to the Fed's manipulation of asset prices and little to the fact that the companies are actually more valuable.
Watch out. Artificially priced markets are like huge bungee cords. You can stretch them out...but the further they get pulled out...the greater the sting when they suddenly snap back.
When will that happen? We don't know that either...but we're not going to stand in front of it waiting for it to happen.
There are two groups of people in the world.
In one group are those who think they know things. In the other are the people who think those in the first group are idiots.
These are not absolutely separate categories. Instead, they share a long border between them and plenty of spots for crossing over under cover of night.
Aristotle was perhaps the first and foremost of those who thought he knew something. He had it all figured out more than 2,000 years ago. There was a natural order to things, he thought. Civilized people should live in city states; anyone beyond the city walls was either a "beast or a god." And the city state itself - the ideal form of political organization - was to be ruled by...well...the rulers.
That was just the way it worked. Aristotle:
"For ruling and being ruled are not only necessary, they are also beneficial, and some things are distinguished right from birth, some suited to rule and others to being ruled".
Why a city state and not a country state? Why couldn't people rule themselves? Who was to say who the ruler should be?
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You could ask as many questions as you wanted. Aristotle would have just as many silly answers. But even the ancients were on to him.
"None of us knows anything, not even whether we know anything or not." said Metrodorus of Chios, aiming for Aristotle's head.
But it was the great Pyrrho from Elis who developed the philosophy we know today as "skepticism." Loosely, a skeptic is someone who suspects that other people don't know nearly as much as they think they do.
And loosely speaking, the skeptics are mostly right. When it comes to central banking and central economic planning, they are always right.
For more on Aristotle and Pyrrho, check out:
The planners and world improvers are reliable sources of amusement, and not much more.
Tom Friedman, Ben Bernanke, Paul Krugman reduce the sum of human wisdom every time they open their mouths. Bernanke thinks he can solve a debt problem...with more debt. Krugman thinks he can solve a spending problem....with more spending. And Friedman doesn't think at all...but he has a solution for every problem. And if you actually applied his solution...you'd have a much bigger problem.
Our old friend and co-author Pierre Lemieux reminds of Adam Smith's comment:
"The man of system... is apt to be very wise in his own conceit, and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests or to the strong prejudices which may oppose it: he seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard; he does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chessboard of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it."
The idea that you can organize a whole society according to your own prejudices is ancient. Old too is the notion on which it depends, that you have some knowledge that others don't.
In fact, all you know is what everyone else knows...nothing. And we're not sure about that.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.
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