I'm always impressed by people's behavior during massive panics. They rarely believe or admit that they are panicked. Instead they assure one another that at last the wool has been lifted from their eyes. They are seeing the clear daylight of rationality after years of delusion.
But a delusion that lasts for decades is not a delusion. It's an institution. And these, our institutions, are what now fail us. People no longer know what they value. They don't know what to believe. And unfortunately, it's part of the human condition to believe and invest in things that are demonstrably not true.
As 2009 opens, our financial institutions are deep in massive, irrational panic. That's bad, but it gets worse: Many other respected institutions have rational underpinnings at least as frail as derivatives or bundled real-estate loans. Like finance, these institutions are social constructions. They are games of confidence, underpinned by people's solemn willingness to believe, to conform, to contribute. So why not panic over them, too?
Let's consider seven other massive reservoirs of potential popular dread. Any one of these could erupt, shattering the fragile social compact we maintain with one another in order to believe things contrary to fact.
1. The climate. People still behave as if it's okay. Every scientist in the world who isn't the late Michael Crichton knows that it's not. The climate is in terrible shape; something's gone wrong with the sky. The bone-chilling implications haven't soaked into the populace, even though Al Gore put together a PowerPoint about it that won him a Nobel. Al was soft-peddling the problem.
It's become an item of fundamentalist faith to maintain that the climate crisis is a weird leftist hoax. Yet, since the rain falls on the just and the unjust alike, an honest fear of the consequences will prove hard to repress. Since the fear has been methodically obscured, its emergence from the mists of superstition will be all the more powerful. Unlike mere shibboleths of finance, this is a situation that's objectively terrifying and likely to remain so indefinitely.
2. Intellectual property. More specifically, the fiat declaration that properties that are easy to reproduce shouldn't be reproduced.
Declaring that "information wants to be free" is an ideological stance. A real-world situation where information can't be anything but free, where digital information cannot be monetized, is bizarre and deeply scary. No banker or economist anywhere has the ghost of clue what to do under such conditions.
Intellectual property made sense and used to work rather well when conditions of production favored it. Now they don't. If it's simple to copy just one single movie, some gray area of fair use can be tolerated. If it becomes easy to copy a million movies with one single button-push, this vast economic superstructure is reduced to rags. Our belief in this kind of "property" becomes absurd.
To imagine that real estate is worthless is strange, though we've somehow managed to do that. But our society is also built on the supposed monetary worth of unreal estate. In fact, the planet's most advanced economies are optimized to create pretty much nothing else. The ultimate global consequences of this situation's abject failure would rank with the collapse of Communism.
http://www.seedmagazine.com/news/2009/01/2009_will_be_a_year_of_panic.php
