Infantilism and Economic Analysis

In Infancy and History: The Destruction of Experience, the Italian philosopher Giorgio Agamben takes on the subject of the infantilism of adults which he links to the absence of experience in the modern world. Experience is the knowledge of the outside world. Experience is what separates adults from children. Without experience, adults seem childlike.

Agamben does not convincingly explain why the modern man cannot have experience. Those “eternal moments of dumb promiscuity among strangers in lifts and buses” are not the only exposure of the modern man to the outside world. His thesis of defining adulthood with experience, at any rate, is incomplete. Nasser offers a more profound view in the upcoming Vol. 4 of Speculative Capital. He stays that ability to think abstractly is the true measure of adulthood and development. Abstract thinking is placing the individual in the context of its proper universal. That is the stuff judgments are made of: individual is universal -- this man is guilty, that rose is red -- is the general form of judgment.

Experience facilitates that ability but does not guarantee it. One can be a successful businessman and still look childlike precisely because of his inability to think abstractly. The flip side of this relation is the the deep-seated suspicion of intellectuals in the famously “pragmatic” and businessman oriented U.S. In yesterday’s Financial Times, the paper’s Lucy Kellaway was unknowingly hitting on the very same point:

It means I can chuck out half of my business books. Farewell Jack Welch. Farewell Sir Terry Leahy. Goodbye Lord Browne and Sir Richard Branson. I won’t miss you. I can’t think of a single thing I learnt from all you megastars, except a bit of shockingly poor counsel from Steve Jobs. One of his most trusty principles was “don’t settle” – possibly the worst tip ever. Just now I popped out for an egg sandwich, only to find that the shop had run out so I settled for ham and cheese instead. As a result, I didn’t starve and the sandwich turned out to be rather tasty.

In saying “don’t settle”, the late Apple CEO was no doubt remembering a particular situation in which not settling had helped him. But unable or unwilling to think the matter further through, he did not recognize that out of context his advice would look banal and even idiotic.

I remembered all this reading the latest column of Paul Krugman in the New York Times. The subject was economic/financial crisis in the EU zone.

Advisers warned politicians not to re-enact 1937 — the year F.D.R. shifted, far too soon, from fiscal stimulus to austerity, plunging the recovering economy back into recession.

[The crisis in Europe in 1931] started with a banking crisis in a small European country (Austria). Austria tried to step in with a bank rescue — but the spiraling cost of the rescue put the government’s own solvency in doubt.

The really crucial lesson of 1931, however, was about the dangers of policy abdication. Stronger European governments could have helped Austria manage its problems. But nobody with the power to contain the crisis stepped up to the plate.

It seems obvious that European creditor nations need ... to assume some of the financial risks facing Spanish banks. [Instead, their] “solution” was to lend money to the Spanish government, and tell that government to bail out its own banks. [So] the European crisis is now deeper than ever.

You see what I mean by the childish form and content: There was this guy, FDR, who shifted too soon to austerity and then there was this small country in Europe which could not pay its debt which created a panic that spread around the world because nobody with the power stepped up to the plate. And now it is obvious that European creditor nations must assume some of the financial risks facing Spanish banks. And then there was this dog walking down the street …

The 50-something economist explains the crisis in Europe in the same spirit that a 5-year old would tell a story she had just made up. He thinks Angela Merkel’s advisers do not know what is at stake; if only they had read Paul Krugman. Such are the fools who toss around expressions like “the international community”.

You want an adult writing on the crisis in Europe? Check out Nasser’s 6-part series on the subject starting here. His definition of ”Europe” is one the most original pieces on the Continent that I have seen anywhere. And look the Epilogue which explains what drives the decisions in Europe and why things are the way they are.