March 25, 2005
by J. R. Nyquist
Financial Sense
When analyzing international politics we have a tendency to see the logic in everything – even when there isn’t any. Consider, for example, Hitler’s attack on Poland in 1939, Saddam’s invasion of Kuwait in 1990 and the Soviet invasion of Afghanistan in 1979. All too often, given the shadowy nature of human consciousness, the mainsprings of action are irrational rather than rational. “ Danzig always will be a German city,” said Adolf Hitler. “ Kuwait is Iraq ’s Province #19,” said Saddam Hussein. “We cannot allow a communist regime to collapse,” said Leonid Brezhnev. Every regime has a plausible rationale for its actions, viewed from its own perspective. Examine the action more closely, however, and you will find deep emotions at work. Among these, you will find fear, hatred, arrogance and greed. Men like to give actions a rational tint. But actions are fueled more by emotion than reason. The emotions stirred up by 9/11 made the American invasion of Iraq possible. We are driven by hidden motivations. Later, we rationalize our actions. One of the founders of modern psychology, Carl Jung, warned that self-knowledge is a “task so exacting” that man forgets himself in the process and puts “his own conception of himself in place of his real being.”
We fool ourselves into thinking that we are acting rationally when irrational factors are driving us toward an abyss. “It needs only an almost imperceptible disturbance of equilibrium in a few of our rulers’ heads to plunge the world into blood, fire, and radioactivity,” wrote Jung. The United States was attacked on 9/11. As a result of this attack, the United States invaded two countries: Afghanistan and Iraq . These invasions have now triggered an emotional reaction abroad. The Arab world feels a sharp pang of humiliation. The Russians eye us with envy and feelings of thwarted greatness. In Beijing , the ruling clique sees the Anglo-American invasion of Iraq and remembers China ’s humiliation at the hands of “European barbarians” in the 19th century. Feelings give rise to actions, and actions give rise to feelings. We are misled if we think that policy is based on reason. Ignoring the emotional dimension, we pave the way for miscalculation and the escalation of conflict.
As civilization advances, new techniques of destruction are invented. With each step, civilization approaches its own self-inspired disorganization. If all statesmen were rational, there would be no danger. If all understood the powerful interrelatedness of humanity, things would not develop pathologically. But statesmen are creatures of history. That is to say, they are emotional animals. Every statesman justifies his actions. Reason does play its part. Given a set of objectives, the military commanders set to work. But the motivation of the troops, their morale and their feelings, must be engaged. Soldiers do not die for a syllogism. Emotions are necessary to success – even within the purely rational calculus of the general staff.
A few years ago, during a conference at the George Bush School, I met a number of “experts” in politics and military affairs who stressed that a large-scale WMD war in East Asia wasn’t likely because governments are “rational.” Policies are based on rational deliberation, they explained. Leaders act in their own interest. Present at the table were three heroes of the Korean War. “War is entirely irrational,” they countered. “We know because we were in one.” Go to war and you find that men must kill themselves and others for the sake of an operational plan. But men do not give themselves up to operational plans at the level of imagination. As emotional beings they are bound by feelings of brotherhood that inspire acts of heorism. Take a course in military science and everything is reduced to rational categories: logistics, the concentration of firepower, and the training of troops. In all of this we lose sight of the fact that war makes reason the servant of insanity. And here I use the word “insanity” without exaggeration. The destruction of all-out modern war bears witness to a collective madness. In starting this war, the politician does not make war by himself. A country does not mobilize its men or its rockets without an inward, burning desire. It may be revenge for the past, hopelessness in the present, or a strong desire for dominance.
In real history (as opposed to rationalized history) people sometimes act contrary to their interests. When we watch a political process unfold, we are not watching a chess match where the players make one sensible move after another. We are watching a mix of rational and irrational actions. Because we prettify an action with a rationale, we miss the emotional mainspring of the action. All parties at war are equally in the grip of a rationalized delusion. One country may be more rational, more civilized and closer to self-understanding than others. But one country does not determine whether we have war or peace. All countries, together in one pot, make the stew of history. The guardian of rational economic civilization may seek to smash a rising irrational element; but in the course of fighting fire with fire, a chain reaction is engaged. And who is wise enough to predict where a thing will lead?
This week I was fascinated by article in the March/April edition of Foreign Affairs titled “The Overstretch Myth, or How We Learned to Stop Worrying and Love the Current Account Deficit.” The authors of this article, David Levey and Stuart Brown, say that America ’s economy isn’t about to implode from debt. “ U.S. hegemony is … solidly grounded: it rests on an economy that is continually extending its lead in the innovation and application of new technology….” According to Levey and Brown, “The dollar’s role as the global monetary standard is not threatened, and the risk to U.S. financial stability posed by large foreign liabilities has been exaggerated.”
I smell fear.
A brave front is presented. Rationalizations are offered. Dangers are denied. The authors refuse to acknowledge that all systems are fragile, that America ’s global dominance stands on a questionable foundation. Ignoring today’s danger signs, the authors make love to calamity. Disasters are avoided only when we recognize the danger signs. Levey and Brown look at the current account deficit and see no danger. Instead, they rationalize the deficit – denying the danger while rationalizing its course. Their reaction is based on a hidden level of emotion – i.e., FEAR.
Last month I was talking to a colleague about his health. He was young and fit. “I never get sick,” he told me. Five days later he had a fatal heart attack. Living systems are fragile. They are subject to periodic breakdowns. Animals die, states collapse, economies wither and countries are leveled by war. Hidden imbalances exist, and nature will correct them. The supremacy of the United States is sustained by the economic emphasis of American culture. Yet this emphasis is an imbalance. The world may seem to be a global market, rationally guided by economic choice. But humans are divided by ethnic, political and religious differences. There is a dimension of enmity built into history. And wherever enmity begins, trade and economic combination take a back seat
We are a world of nation-states driven by rational and irrational factors. Fragility is built into this equation.
© 2005 Jeffrey R. Nyquist
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