Jezebel Spirit

Ha ha ha ha ha ha ...

Do you hear voices?

You do. So you are possessed.

You are a believer, born again and yet you hear voices and you are possessed.

Okay. Are you ready [unintelligible] ?
Ha ha ha ha ha ha.

— Unidentified exorcist, New York, 1980¹

Consider, Gentle Readers, a simple game:

It is an auction, with any number of participants, the object of which is to win a single, unadorned one hundred dollar bill. If you win the auction, you get to keep the money. (No tricks, I promise.) Bidding starts at a minimum of one dollar, and topping bids must exceed the prior bid by no less than one dollar, in even, undivided dollars. There is only one additional rule: the runner up in the auction must pay his or her last bid to the auctioneer, as well as the winner paying the winning bid. So, for example, if the winning bid is $10, and the next highest bid is $9, the winner will pay $10 and collect the hundred dollar bill, and the runner up will pay $9 and receive nothing.²

So, here we go. I am holding in my hands a crisp, new, freshly-issued one hundred dollar bill. Genuine U.S. currency, guaranteed legal tender for all debts, public and private. The opening bid is one dollar. Only one measly dollar to walk away with a crisp new hundo. Who will start the bidding?

* * *

I wonder how many of you raised your virtual hands. Contrariwise, I wonder how many of you recognized the trap for what it is: a slight variant of Martin Shubik's rational choice theory experiment, the Dollar Auction.

It is an odd sort of game, but one which leads to all sorts of interesting outcomes and associated implications. For some of you may have realized that once you make a bid, you are committed to a losing escalation. Sure, at the beginning, the prospect of winning $100 for a bid of $1, or outbidding a competitor to win it for $10, sets your rational utility-maximizing (i.e., greed) glands salivating. Eventually, however, you realize that you are trapped in a losing battle. If another person bids $50, you or someone else have to bid $51; otherwise, you will spend $49 and get nothing. All of a sudden the prospect of a risk-free gain of $51 begins to look like an unavoidable loss of $49. Surely you should just bid $51 yourself, right? But then your equally rational competing bidder does the same, and you are back to the races. Sadly, the escalation doesn't even stop once the high bidder reaches $100, the true value of the bill at auction. For then the underbidder faces the prospect of either bidding $101, and losing a dollar, or not counterbidding and losing $99.

Depending on how loss-averse the participants are, or how much utility they derive from inflicting greater losses on their competitor than they suffer themselves, there is no theoretical upper limit to how high bidding can go.

I have seen this auction played out in an academic setting in front of a diverse group of businesspeople for a $20 bill. The winning bid?: $50, before the business school professor running the auction took pity on the bidders and cancelled the experiment. This same professor later told us he had run a dollar auction like mine for $100 among a group of hardened, financially savvy investment bankers. The result there?: $1,000 and counting, before he cut it off. Apparently, some of the bankers in the room became truly incensed when they were not allowed to continue their mutually assured destruction.

In fact, one of the only ways to participate in such an auction and win is to bid first and not face a counterbid. In other words, you can win if you are by far and away the most aggressive, greedy, competitive, and stupid of the auction participants. (For if you are not stupid, you will think through the situation and realize that bidding second puts you at the mercy of the idiot who bid first, with no clear loss limit in sight. The only reason you might bid is if you refuse to allow the stupid guy to walk away with $99 worth of risk-free profit. But that can be a rather pyrrhic lesson to teach.)

* * *

Now I share this thought experiment with you, Dear Readers, because I think it illustrates an illuminating dynamic in many competitive socioeconomic situations. The dollar auction is simplified, and simplistic, but the win-at-all-costs motivation behind it can be witnessed in human activities as widespread and diverse as mergers and acquisitions, proprietary trading, simple auctions, and herding behaviors of all kinds. Even, I would argue, in the winner-take-all competitions of the human heart.

What is the solution? I have no fucking clue.

Greed is a mercurial and Protean thing. So is fear. Bottle them up in one part of the human psyche, and they will only reemerge in different form elsewhere.

The principle of exorcism is simple: an exorcist suitably skilled can expel an evil spirit from the victim it possesses, but he cannot destroy that spirit. That, presumably, is for God alone to accomplish.

* * *

Come out, grief! Come out, destruction!

Ha ha ha ha ha ha ...


¹ As sampled by Brian Eno and David Byrne in "The Jezebel Spirit," from My Life in the Bush of Ghosts. Listen to it. It will spook the crap out of you. Highly recommended.
² For you cleverboots, there is another rule: no bidding consortia. You're in this one alone.

© 2009 The Epicurean Dealmaker. All rights reserved.

The Rich Are Different than You and Me

The best thing I have (re)read all afternoon:

The girl gave him a look which ought to have stuck at least four inches out of his back. It didn't bother him enough to give him the shakes. At The Dancers they get the sort of people that disillusion you about what a lot of golfing money can do for the personality.

— Raymond Chandler, The Long Goodbye

There is more.

© 2010 The Epicurean Dealmaker. All rights reserved.

It’s All How You Look at It

“No, and I don’t want to,” said Frodo. “I can’t understand you. Do you mean to say that you, and the Elves, have let him live on after all those horrible deeds? Now at any rate he is as bad as an Orc, and just an enemy. He deserves death.”
“Deserves it! I daresay he does. Many that live deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgment. For even the very wise cannot see all ends.”

— J.R.R. Tolkein, The Fellowship of the Ring

Peggy Noonan launched a cruise missile of sorts in her Wall Street Journal Declarations column this weekend, entitled “Youth Has Outlived Its Usefulness.” In an age where youth ascendant seems to be the chief aim and value of our private and public culture, this does seem rather a (minor) declaration of war. Certainly, her characterization of “young bloggers” as “hyenas” and “trash-talking rage monkey[s]” is guaranteed to get her removed from the electronic Christmas card lists of hundreds of underannuated prognosticators.

Too bad her essay is one of the more scattershot and confused efforts she has penned, for it addresses an interesting state of affairs in our polity. Confused, for she seems to bewail the absence and wish for the return of, sequentially, old men, father figures, wise men, mentors, and grown-ups. Scattershot, for she jumps from politics to business to journalism to politics at a word.

Setting aside whether her explicitly male models of good judgment and advice reflect some deeper flaw in her worldview or not—being male I (naturally) have no problem with this¹—I do have to say Ms Noonan seems to confuse several very different things. For one thing, age is no guarantee of wisdom. If there is one thing we should have learned from witnessing the maturation of an entire generation of Baby Boomers into full-fledged, self-absorbed, self-indulgent, materialistic emotional and intellectual teenagers with age spots and dentures, it is that.² For another, the common association of age and experience with wisdom and good judgment is and always has been weak at best, if not downright misleading. I know plenty of old people whose judgment I would not trust to order an ice cream cone. (And I’m not talking about dementia.)

This is particularly true among the great and good—from whose serried ranks Ms Noonan would presumably like to draw her consiglieri—because so many of them have risen to ranks of position, power, influence, and reputation on an uncommon mix of luck, skill, and patronage, if not downright nepotism. (Never underestimate the potency of the Lucky Sperm Club.) Why should we trust a man—let’s say—who made a huge success of himself running an important business line within Goldman Sachs to give us good advice on the running of the war in Afghanistan or diplomatic relations with the Chinese? Why the fuck would he know anything about that? I’d trust him to give effective advice on running an important business line within Goldman Sachs, but not much else. His capacity for wise counsel in other things is and should be, in my humble opinion, very much up for proof and debate. The size of a man’s bank account, and the number of hits of his name on Google, are no measure of his intelligence, much less an indication of the quality of his wisdom.

For another, being a father myself, I am highly skeptical that fatherhood itself—even that sadly too-infrequent form which entails sustained attention to and engagement with one’s progeny and the conscious assumption of what are commonly known as fatherly duties—is any strong recommendation for handing over the metaphorical keys to the nuclear arsenal. It is true that an important element of fatherhood as it is traditionally defined includes the father attempting to impart to his children what are known as the unpleasant facts of life. That is: that no-one in the world outside of your mother will give you unconditional love (and even she is no certainty); that most people alive couldn’t care less whether you live or die; and that naked power, selfishness, fear, aggression, and hate are deep and puissant elements of human society in any age, and that you cannot ignore them or wish them away. In this the engaged father does indeed impart some form of wisdom, if only the negative kind to counterbalance the potentially misleading love and sheltering offered by a mother.

But this is not what Ms Noonan identifies as what she wants from her father figures. She wants them waiting through the night at the side of the hospital bed, like Atticus Finch, or providing safety and security by their very presence. But, while emotionally powerful and probably universal, this view of the father is that of a child. Which adolescent among us has not discovered the feet of clay and the lifetime membership card to the Universal Guild of Imperfect Humanity in his or her father’s clothes one sad day? Who among us has not had to swallow the bitter pill that all-powerful Daddy can in fact not protect us from life or our enemies when we most need him? The bittersweet fact of a good father is that he can and will throw himself in front of a speeding car or a charging lion to protect his children, even if he cannot save them. But that is not wisdom. That is love. Let us be clear-eyed enough to distinguish the two.

It is no disrespect to Atticus Finch to say his midnight vigil over his wounded child was the result of love, and perhaps even guilt that his principled defense of his client put his own child in mortal danger. Love and guilt are powerful things, and they can inspire wonderfully selfless behavior, but they are not wisdom. I do not want a counselor who loves me. I want one who is wise.

* * *

So let us talk then about wisdom.

It is an old saying, but true nonetheless, that the wise person is certain of little but his or her ignorance. A wise man is wise enough to know what he does not know. He believes the world is too multifarious, changeable, and miraculous a place to put much trust in feeble humanity’s ability to comprehend and control it as we would wish. Therefore, a wise man counsels caution, and encourages us to pay attention to our ignorance—what we do not and cannot know—as we make our way through life.

A wise man does not provide answers. A wise man asks questions, and encourages us to ask questions of ourselves. For this reason, Peggy Noonan’s implicit identification of the Best and Brightest as “the wise men” of the Vietnam era is flat wrong both chronologically and conceptually. JFK’s whiz kids were a bunch of brilliant, arrogant young Turks, not a collection of grizzled old veterans of the Second World War or the Korean War. And they did not have or offer any questions at all: in contrast, they had all the (in retrospect, wrong) answers. They didn’t offer wisdom. They offered an agenda.

But here’s the rub, Dear Readers. If our beloved wise men, wherever we find them, cannot or will not provide the answers, then we must come up with them ourselves. We may value their sage counsel and radical skepticism concerning the source and security of our own apparent knowledge and opinions, but we’re gonna have to make the difficult decisions ourselves. Wise men counsel caution and care; we the living cannot help but act. If we are truly listening, our wise mens’ counsel will only make those decisions and actions harder to take.

Which is not to say we should not find them, and employ them, and value their advice. But we must understand that cultivating the path of wisdom does not lead to the answers to life—if any such childish fantasies exist. It merely allows us to test and practice our courage in the face of the ineluctable Unknown.

Never forget: every wise man started out a simple fool like you or me. He learned wisdom by questioning, by learning, and by doing. There is no secret stash of wise men waiting at WalMart for us to purchase.

It is time we manned up and learned to become our own wise men.


Note: In addition to my firm belief that it is a shamelessly beautiful painting and a seminal contribution to the development of modern art, my illustration of this post with Henri Matisse’s 1914 masterpiece “Goldfish and Palette” actually does have a point larger than an impulse triggered by my recent viewing of it in New York. The painting is a fierce and violent reimagining of a small, unimportant slice of reality through the lens of artistic vision. The artist truncates, distorts, and shapes what he sees in support of his aesthetic (and hence philosophical) purpose. All of us do this, in ways large and small, every day of our lives, whether we know or acknowledge it or not. And yet Matisse’s lies, his distortions, are beautiful, and thought-provoking, in a way a (purportedly) more “honest” representation of the scene—say, a photograph—would not be. But at the same time, the artist is scrupulously honest about his presence, his explicit intermediation of reality, by drawing attention to his thumb, arm, and palette at the right of the painting.
“I am here,” he announces to us. “I am lying to you. Do you like it? Do you find it beautiful? Do you find it true?” If only the pundits, would-be philosophers, and politicians braying in our ears and eyes could be half as honest and thought-provoking about their own pitiful efforts.
¹ Exempli gratia: I am here. I am lying to you. Do you like it? Do you find it beautiful? Do you find it true?
² Being arguably on the tail end of said generation myself, I am allowed to say such things. Prove me wrong.

© 2010 The Epicurean Dealmaker. All rights reserved.

Four Fragments in Search of an Argument

From the unpublished archives:
1.

Jimmy Dugan: "Shit, Dottie, if you want to go back to Oregon and make a hundred babies, great. I'm in no position to tell anyone how to live. But sneaking out like this, quitting, you'll regret it for the rest of your life. Baseball is what gets inside you. It's what lights you up, you can't deny that."
Dottie Hinson: "It just got too hard."
Jimmy Dugan: "It's supposed to be hard. If it wasn't hard, everyone would do it. The hard ... is what makes it great."

— A League of Their Own

2.

"You think him honest;—don’t you?" asked Lady Carbury. Mr Booker smiled and hesitated. "Of course, I mean honest as men can be in such very large transactions."

"Perhaps that is the best way of putting it," said Mr Booker.

"If a thing can be made great and beneficent, a boon to humanity, simply by creating a belief in it, does not a man become a benefactor to his race by creating that belief?"

"At the expense of veracity?" suggested Mr Booker.

"At the expense of anything?" rejoined Lady Carbury with energy. "One cannot measure such men by the ordinary rule."

"You would do evil to produce good?" asked Mr Booker.

"I do not call it doing evil. You have to destroy a thousand living creatures every time you drink a glass of water, but you do not think of that when you are athirst. You cannot send a ship to sea without endangering lives. You do send ships to sea though men perish yearly. You tell me this man may perhaps ruin hundreds, but then again he may create a new world in which millions will be rich and happy."

"You are an excellent casuist, Lady Carbury."

"I am an enthusiastic lover of beneficent audacity," said Lady Carbury, picking her words slowly, and showing herself to be quite satisfied with herself as she picked them.

— Anthony Trollope, The Way We Live Now

3.

In short, if you believe this, how can you also believe that? The answer is that the realms of belief supposedly existing in a condition of opposition and conflict are, at least to some extent, discrete. What you believe in one arena of human endeavor may have no spillover into what you believe, and do, in another.

Thus, for example, you may have assented to an argument that calls into question the solidity of facts, but when you’re not doing meta-theory, you will experience facts as solidly as the most committed and polemical of empiricists. In doing so you will not be inconsistent or self-contradictory because the question of a belief in facts arises only in the special precincts of philosophical deliberation. In everyday life, we neither believe nor disbelieve in facts as a a general category; we just encounter particular ones in perfectly ordinary ways; and any challenge to one or more of them will also be perfectly ordinary, a matter of evidentiary adequacy or the force of counter examples or some other humdrum, non-philosophical measure of dis-confirmation. The conclusions we may have come to in the context of fancy epistemological debates (a context few will ever inhabit) will have no necessary force when we step into, and are asked to operate in, other contexts.

— Stanley Fish, here

4.

There are those who style themselves intellectuals—a notably large portion of whom, in my personal experience, happen to be economists—who are deeply suspicious of anecdotal data in general and anecdotes about finance, economics, and the behavior of market participants in particular. This has always struck me as revealing both a superficially shallow skepticism about the primary sense and experience data of others—which, after all, is the most reliable data each of us individually possesses—and a similarly unwarranted credulity about its opposite, broad and impersonal third party datasets.

Perhaps I am being overly harsh, and the division I perceive is simply one between insiders like me who do [investment banking] for a living and outsiders without germane experiences of their own to call upon. In any event, the disjunction has explained to my total satisfaction most economists' thorough misunderstanding of and inability to explain my business without making complete asses of themselves.

Oh, and by the way, while quality has certainly improved since I started in investment banking 20 years ago, it remains true, for example, that the banker who wishes to remain employed will always check the accuracy of third party data against original sources before he incorporates it into his own work product. So much for the reliability of external datasets when real money—as opposed to, let's say, a research grant—is on the line. Oh snap.

— TED, unpublished remarks

* * *

It may be a little late, but I always find Spring cleaning—physical and intellectual—to be therapeutic. Don't you?

© 2010 The Epicurean Dealmaker. All rights reserved.

Flight of the Puss Moth

Kilimanjaro is a snow covered mountain 19,710 feet high, and is said to be the highest mountain in Africa. Its western summit is called the Masai "Ngàje Ngài," the House of God. Close to the western summit there is the dried and frozen carcass of a leopard. No one has explained what the leopard was seeking at that altitude.

— Ernest Hemingway, "The Snows of Kilimanjaro"

Well, it's official. You know you have achieved blogging irrelevance when Alltop drops you from its econoblog pages.

Not that I'm complaining, mind you. For those of you who haven't noticed, my non-self-referential, non-self-indulgent blogging output at this location has plummeted precipitously over the past several months. There are several reasons for this, most of which I will not bore you with. Suffice it to say the primary obstacle to my regular engagement with these pages has been a change in my vocational responsibilities. These new duties allow me neither the time nor the energy to 1) think cogently about issues and topics which might be of interest to my audience or 2) write them down in a form and with a polish which I would not be ashamed of. Neither of these is easy or quick, at least for me. Hence the silence.

This silence will continue for the forseeable future. I cannot anticipate a change in my circumstances which might allow me to return to regular blogging. Nor can I rule one out. We'll just have to see, and, if it happens, find out whether whatever I may or may not choose to write in the future is something my past readers will find interesting.

Before I leave, I do wish to express deep appreciation for the many individuals who have spent valuable time out of their limited lives reading and responding to my work here, and engaging in argument and discussion with me through this strange electronic medium. Their names and contributions are too numerous and lengthy to list in this brief farewell, but you can find most of them scattered throughout these pages. I have learned a lot from many, many people over the past several years, and I have enjoyed their virtual company. Perhaps we will meet in another life over a cigar and a vintage Port, and laugh about everything and nothing at all.

But now, Compton and the plane are here, and the mountain is waiting. It's time to go.

See ya.

© 2010 The Epicurean Dealmaker. All rights reserved.