Have you ever heard this quote (ascribed to the Greek philosopher Socrates) being pronounced by politicians or economists?
We may never be able to, since political debates tend to be substituted by teleological rambling, or, at best, by crystal ball divination. Unfortunately, this applies to experts too, and not just economists. The ball, however, is often left at home.
To illustrate where this type of attitude leads, let me use two examples.
A turkey is fed daily with nutritious food. Day by day it puts on weight. Shortly, it gets used to this treatment and expects it to continue; it is comfortable, it does not require thinking. Everything changes with Thanksgiving Day – for the nescient ones, a well-known epidemic of turkey extermination, for the benefit of overflowing tables of the American households. Butchers can predict this event with a hundred percent certainty, yet for turkeys it comes unexpected and is, ultimately, fatal. Please do not look for a Greek parallel here; it happens at other times and places as well, and it occurs often.
Sometimes a politician, in his carelessness and intoxication on power, blows off and pronounces something which is surprisingly stupid even at his level. He has power and function, so he “throws” a snowball, which grows into a panic that affects banks, economies and citizens, and as it changes it grows into an avalanche. After the avalanche stops, we can only count the victims. And even at this point, at a time of uncertainty, the numbers keep rising.
Is there any recipe for minimising such costs? Let´s forget the idea that we could predict them. Did anyone predict 9/11, historical wars, bank failures or the economic crises? Indeed, after a significant event, experts always retrace back to some explanation for its occurrence, and especially an explanation why they were not, at that particular time, able to analyse these causes, and predict their outcomes and implications. We can surely find someone who “always said it”. Unfortunately, even these wise men are wise only accidentally, and next time they might be fatally wrong.
It is necessary to admit to ourselves that in the same manner as we are able to read only a fraction of published books, what we know is only a fraction of what we don’t. This is however only a sad statement, rather than a solution. The only thing that can help us is the strategy of our grandmothers – to think of the “rear wheels”. The truth of this statement has not changed even with the invention of the independent four-wheel drive. It is good to spread the risks, not to have all of one´s eggs in one basket, and not to spend our “expected” future earnings. Should a devastating event come, we might lose our pants but not everything. As history shows, this will not teach us a lesson, but we can at least keep using the right parts of our bodies for thinking, adopt this strategy, and repeat it.
Unfortunately, we cannot expect anything so reasonable from the politicians lulled by their self-confidence and belief in their infallibility, nor from the interpreters of past parallels and connections, nor from the experts flashing their mathematical models. A look to the past demonstrates that all of their tactics have failed thus far. It is possible to live with it – after all even Socrates managed to live with Xanthippe. It suffices to think and doubt.
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