Wisdom lost in knowledge | Brussels Blog

Wisdom lost in knowledge

posted by on 10th May 2011
10th,May

In lines from the first of his “Choruses from “The Rock” “ T.S.Eliot posed two rhetorical questions,

Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?

Written eight decades ago these lines still ring true. In fact, they are probably more true of today than they were of Eliot’s time. We swim in an ever widening sea of information. Access to the internet and to the never-sleeping media provides us with an inexhausitble supply of what we perceive to be facts. We collect facts obssessively. Our work is monitored by “indicators” our ideals become benchmarks and our acheivements “deliveries”. The English language has taken on the stilted and impoverished vocabulary of pseudo-fact certainty which is peddled by the middle-managers and HR drones of business. Judgement and wisdom are out of the window. Facts are in.

I blame computers, or at least the people who organise our lives around them. Consider this. Human activity has been reduced to a series of tick-box questions. Give information to your doctor, solicitor, local authority official etc. and it will be recorded in a series of tick-boxes which then can be fed into a computer. Information is tailored to suit the medium by which it is stored and processed. Nuances of thought are lost and delicate balances of judgment are no longer permitted. A fact, a prediction or a conclusion either is true or it isn’t, it cannot be allowed to be more likely than not or possible only in a given and potentially changing set of situations. This is the world of digital thought in which there is no room for doubt.

For those of us who have not yet been wired to think like a lap-top there are a few obvious realities out there in the analogue world of humanity which no amount of information can obscure. Take for example the situation of Greece, Portugal and Ireland.

For the last twenty years or so we in the West have been engaged in a vast Ponzi scheme. Those members of the population who were in work were allowed, indeed encouraged, to borrow vast sums of money. Much of the work that these people had was involved in the administration of these vast sums and its recirculation in shops and services. Relatively few were involved in what could be described as productive jobs, that is to say the work that is required to satisfy our basic need for food and energy.

The basic commodity upon which this spurious wealth was created was land, or, to be more precise, domestic dwellings. People bought houses and watched their value grow. They were able to borrow money against the value of their homes. In the gormless English of market traders they became “over-leveraged” that is, heavily indebted, but there was no need to worry because the value of their homes kept on rising. Often the tax-free profit that they made in this way exceeded the income from their employment. A boom based on the inexorable rise in the value of property had the additional benefit of stimulating employment in the industry that built and maintained domestic property. It was a win-win situation. Except of course that the lesson of history and a modicum of wisdom teaches that win-win situations exist only in the minds of micro-economists and their fact-driven ilk.

In the summer of 2008 the price of the commodity that fuels our economy, that is, crude oil rose to $147 dollars a barrel. Poor people in the U.S. who at the best of times, could barely afford to pay the mortgages that they had so recklessly been given found themselves squeezed by the high price of gasoline. Faced with the inability to make ends meet, they left their homes and walked away from the burden of their mortages. On masse this migration from personal debt repayment caused the near-collapse of the banking system. Exotic financial instruments that had wrapped these junk mortgages up in triple A rated securities unravelled and the banks were exposed in all their nakedness as having woefully few real assets. A sacrificial bank was allowed to collapse whilst others were rescued with public money, dusted down, forgiven and allowed to continue pretty much as before. Public money was used to shore up private enterprise. Socialism was placed at the service of capitalism.

Next on the list in this final reckoning in the post-oil days of financial readjustment came a country or two. The ratings agencies are not in the pay of governments. They were in the pay of the banks to whom they peddled their “expertise” when giving triple A ratings to mortgages granted to impoverished folk lving in the uemployment belt of the USA. When it comes to governments however, the ratings agencies have been models of rectitude, moderation and well-informed caution. After all, downgrading a country or two is good for business as far as the people who matter are concerned, by whom of course I mean their erstwhile masters, the banks . So countries were down graded, banks made money and private debts held by investors in sovereign funds were protected, once again, by the public purse. One by one the vulnerable countries in Europe were picked off. Greece was followed by Ireland and then, Portugal.

So, the economists and the governments, the central bankers the financial pundits and all the information-rich modellers and fact-fuelled forecasters reassure us that in time these countries (together with the others who eventually will follow them to the IMF and the EU bail-out fund), will one day pay back these debts. Economic growth will take-off again, we will all be buying holidays in Greece and using Greek ships, everything in the economic garden will be rosy.Life will get back to normal (whatever that might be). The Americans have an apt expression that they use to describe a situation in which there is a low probability of a certain event taking place. It goes something like this. “And monkeys might fly out of my butt”. Quite so. It is time to exercise a bit of judgment , to bring a modicum of wisdom to this situation.

In response to the strictures of the IMF and the EU bail-out fund the cap-in-hand countries of Europe have been required to slash public spending. Tax receipts have therefore been cut. Unemployment has risen. Greece for example is currently suffering a decline of around 4% in GDP. Furthermore these countries are being saddled with debt at a time when the price of oil is in a period of relentless increase. Having said that, at the moment it is going down. Don’t be fooled. A readjustment has taken place. In six months it will be back to $125 a barrel if not higher. No amount of tar-sands or oil-shales or deepwater wells will obscure the reality. The days of cheap oil are over and indeed the days of cheap energy are equally doomed. A gainst that backdrop there isn’t going to be economic growth in Europe save in those countries like Germany who make cars for the ascendant middle-classes of the nouveau-riche nations of Asia. Greece and Portugal and Ireland will not pay back their debts on time, if at all. The Euro will not survive in its current form. Monkeys will not fly out of my butt.

You don’t need wisdom to see through this situation a little common-sense will suffice. Nowadays even that modest and inexhaustible commodity seems to be in short supply.

Robert Urquhart Collins

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