The world turns. The news flows. The interpretations, narratives, explanations follow.
Up here in the Andes, we are blissfully ignorant. Our internet connection stopped working two weeks ago. Since then, twice a week, we have driven an hour to a neighbour’s property just to check in with the outside world.
But sometimes we wonder why we bother.
‘News’ is a recent innovation. For most of our time on Earth, we humans had no access to internet, TV, newspapers, or telephones. Our brains evolved when there was no such thing as public policy, no public statistics, no public opinion, no public intellectuals, no public media, no public entertainments, no public markets, no public companies.
In fact, there was no public anything. At least, not in the way we think of it today. As a result, our brains are not evolved to deal with it. It crowds out useful knowledge with puerile nonsense.
In the investment world, you buy a share in a company. If you have done your work correctly, you paid a price that you thought was fair or better. Then, if the finance news comes on the TV and you discover that the price of the stock has gone down, so what?
What has changed? What do you know now that you didn’t know before? If you got a good deal when you bought the share in the first place, presumably you will be delighted; now buy more for an even better price.
Otherwise, why does the market news matter? As Warren Buffett tells us, in the short term, markets are ‘voting machines’. Why would you expect the voters to do any better in voting for stocks than they do in voting for presidents?
People will tell you that democracy requires a well-informed citizenry. Some will tell you, with a straight face and an earnest tone, that you have a duty to keep up with the news so you can participate in public affairs. And some countries – notably Argentina and Australia – even require citizens to vote.
But this presumes that people have access to some set of relevant facts and then make up their minds intelligently, applying the known facts to the public policy alternatives. It is nonsense for two fundamental reasons.
Bill Bonner on markets, economics & the madness of crowds
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First, there are no ‘facts’ in public life, just memes and BS.
Second, even if there were any meaningful facts, the individual citizen is hardly equipped to evaluate them. After so many millennia with no public life of any sort, we don’t know how to judge it or master it.
Candidate X tells us he is in favour of cutting government spending. Candidate Y tells us he intends to make the government more efficient. Candidate Z tells us that we will all be better off if the government spends more money to stimulate the economy. And President Obama says he has a plan to improve the nation’s health care system.
These are all the facts – reported in the news media and widely debated in the opinion columns and talk shows. But is there any way for the voter to know what the politicians really believe or which public policy is likely to produce the best result?
Nope. We know now, after decades of experience, that public policy rarely improves our private lives. The more ambitious it is – as in the Soviet Union or Hitler’s Germany – the more it subtracts from our own hopes and plans.
“The government came through the valley last year,” Jorge reported. “They gave every house a solar panel and a battery. Now, they all have TV. But they are forgetting how to do anything.”
In America, a survey reached us last week that told us that young people spend 18 hours per day connected to an electronic device.
Throughout those many millennia before the internet, people may have known where to find honey in a hollow tree, which seeds could be safely eaten or how to make an arrowhead out of a piece of stone.
But they knew nothing of the threat posed by Ukrainian unrest, had never seen Beyoncé twerk, and had no suspicion that Justin Bieber may be out of control.
Nowadays, a young man can graduate from a leading university with a head full of public facts, and know nothing at all.
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