Here, we stroll…perambulating and cogitating…with reflections that bounce back on one another.
The subject is contrarianism. We know it works in the investing world. “Buy when blood is running in the streets,” was how Jacob Rothschild put it.
But if it works in investing, how about the rest of life? “You are either a contrarian…or you are a victim,” says our old friend Rick Rule. Crowd followers are the victims of the financial markets. Last week, we saw how ordinary soldiers are the victims of wars. Today, we walk a little further down this hall of mirrors…hoping to see something new.
We watched a little television while we were in Ireland. A group of grown Englishmen caught our eye. They were jumping up and down like children…whooping and clapping… What were they so happy about? Their team had won. They had won. They were winners. They stood taller. They were prouder. There was real joy in Mudville.
The men didn’t look like winners. They looked like losers. They were out-of-shape…poorly dressed in tee-shirts and jeans…with stupid expressions on their faces. And yet, as if by a miracle akin to transubstantiation, they were made winners… What had they done? Nothing. What merit or skill had they revealed? None. And yet, they felt like winners, simply because the home team had scored more points than its opponents. They were fans caught up in sports…emotionally and intellectually. Far more mental energy goes into second-guessing coaches at sporting events than went into the Brandenburg Concertos or War and Peace.
“You know,” said Elizabeth, “you risk becoming so alienated you can’t take part in these things…and you can’t enjoy them. You risk putting yourself so far away from everyone else that you are like a man with his nose against a pane of glass…like Frankenstein’s monster…looking in at the human race. It will be very lonely…
“You might also think of Rhett Butler in Gone with the Wind. Now, there was a real contrarian. He knew the war was a lost cause. He urged his fellow southerners not to go to war in the first place. Then, instead of joining up himself, he profited from the war…he was a blockade runner, remember? But even he couldn’t stay out of it for long. Near the end, when the Great Cause was almost lost, he joined the Confederate Army. He didn’t have to. He knew it was hopeless. But he did it.
“It is all very well to be a contrarian…but we are human too. And humans operate on instinct…what’s more, many of those instincts are noble and good. You don’t want to put yourself at too great a distance from those instincts…or you will cease being human at all.”
A Greek philosopher – we can’t remember which one – argued that the greatest curse a man can suffer is to be married to a smart woman. She will laugh at his pretensions and find the flaws in his arguments. No, what a man needs is a good woman…he said, one who makes cookies and looks adoringly at her husband, as she would at a cocker spaniel.
But the Greeks were wrong about a lot of things. A smart wife is a man’s greatest protection from his own absurd logic and his own preposterous vanity. She will point out that he is a fool…and he will see that she is right.
Contrarianism, as a philosophy, only takes us so far. (We are not contrarians…long term Daily Reckoning sufferers will remember. We are Essentialists. Distill the transaction down to its bare essentials, we say. Then, find the rule that governs it. More on that when we have nothing better to do…)
Getting back to our subject…modern wars, often, are like sporting events. There is a logic to them. But we are often as bamboozled by own logic as we are misled by our instincts. Take the American Revolution, for example.
The history books tell us that it was a war of liberation. ‘No taxation without representation’ was the War Party’s cry. And yet, an Englishman lays out the facts:
“One of the great ironies of the American Revolution” writes Martin Hutchinson, “is that the colonists, who rebelled against British-imposed taxes lower than those of the mother country, were in reality living in the lowest tax polity in the history of civilized mankind. Needless to say, once the United States had achieved independence, the taxation on its people was never as low again, even though for the country’s first century and a half most US governments pursued admirably frugal policies.”
The Founding Fathers were driven by their own instincts and deceived by their own logic. It happens to the best of us.
The Daily Reckoning Australia