The two groups of people in the world - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 7 November 2013
PRINTER FRIENDLY | ARCHIVES
The two groups of people in the world A  A  A

Baltimore, Maryland

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?

Last 48 hours: Subscription Fee Set to Double in Just 2 days...

At 11:59 PM on 9th November this premium service will be closed for new registrations.

And when it reopens later, Subscription Fee is set to be DOUBLE of what it is today!

Yes, this is a Special Limited-Period Invitation for You to try this service at its Lowest Price Ever.

And it Expires in Just 48 Hours.

Full details are available in this short video (Just 6 minutes) - Click Here to watch it now!

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.

Disclaimer:
The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Get The Daily Reckoning directly
in your mail box.
Just enter your e-mail address » 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "The two groups of people in the world". Click here!

1 Responses to "The two groups of people in the world"

naveen

Nov 11, 2013

If the passage is from Adam Smith himself, then I have to conquer with the co-author that Mr. Smith earlier and more so today remains just a theorist, probably a planner but definitely not an implementer.
There may be vast gap in timeline between Aristotle-Smith-Bernanke's (ABS) however theorists have remained theorists and never were implementers.
Implementers are the ones who clean up the mess in another timeline because as we all know destruction, more so in recent decades, naturally happening in longer periods of time than ever. (please note I am not talking about stock market indices drop). You can assume stock market drops as smaller negative S curves of destruction in Longer/elongated negative S curves of destruction.

Like 
  
Equitymaster requests your view! Post a comment on "The two groups of people in the world". Click here!

Recent Articles:
Will They Haul Off Trump's Statue, Too?
August 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
Farm Loan Waivers: Why Bad Economics Makes for Good Politics
August 14, 2017
It is because the negative effects of the waivers aren't clearly visible.
The Most Important Innovation in Finance Since Gold Coins
August 10, 2017
Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.
The Most Profitable Investment in the History of the World
August 8, 2017
'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'