Things Fall Apart (Part 1)

 Little Carmine: So, the reason I’m here you could probably guess.

Tony Soprano: What happened at Coco’s restaurant.

Little Carmine: This alteration you had with him. You’re at the precipice, Tony, of an enormous crossroad.

 ― The Sopranos, “The Second Coming” (2007)

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
― W.B. Yeats, “The Second Coming” (1919)

Ogbuef Ezedudu, who was the oldest man in the village, was telling two other men when they came to visit him that the punishment for breaking the Peace of Ani had become very mild in their clan.

“It has not always been so,” he said. “My father told me that he had been told that in the past a man who broke the peace was dragged on the ground through the village until he died. but after a while this custom was stopped because it spoiled the peace which it was meant to preserve.”

 ― Chinua Achebe, “Things Fall Apart” (1958)

Things Fall Apart is the best-selling book of any African author, with more than 20 million copies sold. Chinua Achebe got involved directly in politics when his native Biafra declared its independence from Nigeria in 1967. Nigeria won that civil war by imposing a blockade and starving as many as 2 million Biafran civilians to death. This is the least disturbing photograph of the Biafran War that I could find.

Revenge is profitable, gratitude is expensive.

 ― Edward Gibbon, “The Decline and Fall of the Roman Empire” (1776)

We are all Tony Soprano today. We’ve tried to reason with Phil Leotardo. We’ve tried to compromise. We’ve tried to maintain the cooperative institutions of Our Thing. But the guy won’t take “yes” for an answer. He wants it ALL. So when one of his crew insults our daughter, we lose our mind. We overreact. We suffer Phil Leotardo Derangement Syndrome and we kick the lieutenant’s teeth in. Now we’ve got a choice. Do we settle with the guy we hate? Do we voluntarily pay the heavy price for breaking the “norms” of conflict with a guy who we suspect wouldn’t hesitate to break any norm at all?  Little Carmine’s comic relief notwithstanding, we all believe that we are at the precipice of an enormous crossroad in American politics.

But what if it’s not a choice at all? What if the choice has already been made for us? What if we are immersed in a competitive equilibrium of a competitive game, where the only rational choice is to go to the mattresses? To do unto others as they would do unto you … but to do it first. What then?

I don’t want to overstate the case. It bugs me to no end when people say that something is “another Pearl Harbor” or that we’re talking about a “civil war”. You know what’s like Pearl Harbor? Pearl Harbor was like Pearl Harbor. You know what’s like a civil war? Go to Wikipedia and look up Biafra, and then get back to me about how awful it is that Democrats and Republicans are figuratively at each others’ throats, not literally.

But for First World snowflakes like you and me, this is a big deal. This is a new equilibrium in the American political metagame. This is the breaking of mediative and cooperation-possible political institutions and practices, and their replacement by non-mediative and cooperation-impossible political institutions and practices. This is what it looks like, in a modern Western context, when things fall apart.

How did we get here? We got soft. I don’t mean that in a macho sort of way. I don’t even mean that as a bad thing. I mean that, just like the Romans of Gibbon’s history and just like the Africans of Achebe’s novel and just like the mobsters of the Sopranos, we have long forgotten the horrors of literal war and why we constructed these cooperatively-oriented institutions in the first place. We are content instead to trust that the Peace of Ani or the Peace of the Five Families or the Pax Romana or the Pax Americana is a stable peace – a stable equilibrium – where we can all just focus on living our best lives and eking out a liiiiitle bit of relative advantage. We are content to become creatures of the flock, intently other-observing animals, consumed by concerns of relative positioning to graze on more grass than the sheep next to us. Besides, it’s so wearying to maintain the actual intent of the old institutions, to mean it when you swear an oath to a Constitution or a god or a chief, and not just see it as an empty ritual that must be observed before getting the keys to the car.

This has all happened before.

NARRATOR:     And so it came to pass that in the late days of empire, both Rome and America waged remote control wars through vassal states and provincial “citizens”, wars that were no longer debated by the Senate but were announced by administrative fiat alongside a schedule of entertaining games and pleasing economic distributions, wars that could last for decades in farther and farther flung corners of the empire, wars that were all about naked commercial interest even as they were gussied up with strong words of patriotism.

Sure, tell me again how much we’ve advanced over the past 2,000 years, how much smarter we are, how much more self-aware and woke we are. What’s the difference between a President Trump and an Emperor Commodus? Commodus didn’t have cruise missiles for his  Syrian theatrics. That’s really about the extent of it.

And it’s not Trump per se, although Trump – like Phil Leotardo or Commodus – is the apotheosis of what I’m talking about. If it weren’t Trump, it would be someone just as ridiculous. It WILL be someone just as ridiculous in the future, probably someone on the other side of the political spectrum, someone like Elizabeth Warren or Kamala Harris. See, I am an equal opportunity connoisseur of ridiculous politicians. I’d say don’t @me, all you Trumpkins and Good Leftie Soldiers alike, but it won’t do me any good. Ah, well. That’s the thing about an equilibrium. That’s the thing about a widening gyre. The times make the man. Or the woman.

Here’s what a widening gyre looks like.

The Pew Research Center does consistently excellent work on U.S. voting patterns. In this long-running research series, they tend to focus on the distance between the median Democrat voter and the median Republican voter, and that’s all well and good. What I’m focused on however, is the shape of the Democrat and Republican electorate distributions, such that the overall distribution in 2017 is no longer a single-peaked something-akin-to-a-bell-curve as it was in 2004, but is instead a double-peaked or (to use a $10 word) bimodal distribution.

The bimodal distribution began to take shape in 2014, well before Trump came on the scene, but it’s just gotten more and more pronounced since his 2016 election. There’s a time-lapse animation of these charts that’s cool to watch, and I’ve put a solo shot of the 2017 results below.

So what’s the problem with a bimodal distribution? The easiest way to think about it is to compare the size of the purple area (where both the Republican and the Democrat electorate overlap) with the pure blue area (Democrat with zero Republican overlap) and the pure red area (Republican with zero Democrat overlap). When the purple area is smaller than both the blue area AND the red area, a centrist politician (someone between the median Democrat and the median Republican) can win neither a national nomination nor a national election in a two-party system. For any centrist candidate or policy, there exists a winning majority of voters on both the left AND the right who will favor a competing candidate or policy on both the left AND the right. This is what it means to say that the center cannot hold.

This chart is why incumbent Republicans who speak up against Trump or Trump policies lose their primaries to 9-11 Truthers and that incel-in-training kid in 10th grade history class who proclaimed that the Civil War wasn’t really about slavery. This chart is why incumbent Democrats who aren’t outright Socialists lose their primaries to latte-sipping, fashion-forward young things who honest-to-god believe that Fidel Castro and Yasser Arafat had some pretty good ideas if you just stop and think about it.

This chart is why mainstream and relatively centrist political candidates like Hillary Clinton lost. This chart is why mainstream and relatively centrist politicians like Paul Ryan are quitting. And yes, this chart is why I will get angry emails saying, “how dare you call that devil incarnate [Hillary Clinton/Paul Ryan] mainstream and relatively centrist!” AND emails saying, “good riddance to that mainstream and relatively centrist [Hillary Clinton/Paul Ryan]!”. Good times.

If you’re an incumbent centrist politician, somewhere to the left of your median voter if you’re a Republican and somewhere to the right of your median voter if you’re a Democrat, you have exactly two choices.

  • You remain silent and just go with the party flow, clinging on for dear life against primary challengers, holding your nose at the party excesses, apologizing to your donors and your spouse in private, and hoping that one day the party comes back to you. You tell yourself “apres moi, le deluge.” Or in English, “sweet Jesus, have you seen the racist moron / lunatic communist who would take my place if I quit?”, and you’ve got a big enough ego to believe that sort of excuse as you slowly sell your soul.
  • You quit.

That’s it. Those are your options. I guess there are variations on #2, where you can either rage-quit (Jeff Flake) if your constituency is an eternal Trumpland desert or slink-quit (Paul Ryan) if your moderate constituency at least gives you a chance for a political comeback one day. But those are your only options.

And when I say that those are your only options, let me pour some cold water on the idea that there are centrist candidates who could carry votes from both parties in a general election, or that the time is somehow ripe for a third political party. Hahahahahahahahaha. No, gentle reader, the idea that Ben Sasse or Joe Biden can ride a purple wave to victory in 2020 is completely and utterly wrongheaded. Look again at that chart. Look again at the size of that purple area today versus its size in the past. In 1994 or 2004, that purple area is where Bill Clinton and George Bush lived and thrived. Today, that purple area is where political candidates go to die.

The idea of a third party is somewhat more interesting, but only somewhat. The interesting part is that most liberal democracies have had bimodal electorate distributions for a long time. We call this Europe. And if, like European democracies, the United States had a proportional representation system, where getting 20% of the national vote would give you 20% of the seats in Congress, well then, centrists would no longer be the sad sacks of American politics. On the contrary, they’d be the swing partner in any conceivable coalition and would wield enormously outsized political power. But we don’t have proportional representation, and until that happy day of a Constitutional convention and a complete reconfiguration of American democracy … fuhgeddaboutit, as Tony Soprano would say.

The bottom line is this. In a two-party system with high-peaked bimodal electorate preferences:

There is no winning centrist politician.

There are no stable centrist policies.

Sorry.

One of the big points of Epsilon Theory is to call things by their proper names, to speak clearly about what IS. And what America IS today is a two-party political system with high-peaked bimodal electorate preferences. So long as that is the case, we will be whipsawed between extremist candidates of the Right and the Left. Our choices for president in 2020 will be The Mule and Madame Defarge. Enjoy.

I say “enjoy” because I can’t help but use snark in my despair. But the truth is … and again, this is what a bimodal electorate preference distribution means … a significant majority of Americans will enjoy very much, thank you, a choice between The Mule and Madame Defarge. Or as all the pundits will say on TV, “the base sure is excited”, and that will be true for both Democrats and Republicans.

So why do I despair? Primarily because I think that the policy agendas on both extremist sides are an absolute dumpster fire, and that lurching from stem to stern on fiscal policy and social policy and national defense is a really crappy way to run a country. All I can hope for is gridlock.

But secondarily I despair because, as much as a significant majority of Americans will want and will enjoy a contest of extremists in 2020, an even larger majority of Americans will be very unhappy with whoever wins. A bimodal electorate preference distribution doesn’t just go away on its own. It doesn’t just get better over time. It is a widening gyre. It gets worse over time, as more and more extremist candidates, full of passionate intensity, strut and fret their hour upon the stage. That’s a mixed poetic metaphor, but you get my point. The widening gyre, as Yeats put it so perfectly, is a period of mere anarchy, not special or momentous anarchy. It is a tale told by, if not idiots, then ridiculous people, full of sound and fury and ultimately accomplishing nothing.

Has all this happened before? Sure. Time to dust off your copy of Gibbon’s Decline and Fall. Time to reread Will and Ariel Durant. Just be forewarned, the widening gyre can go on for a loooong time, particularly in the case of a major empire like Rome or America. It took the Romans about four centuries to officially exhaust themselves, at least in the West, with a few headfakes of resurgence along the way. Four centuries of mostly ridiculousness. Four centuries of profitable revenge and costly gratitude. Four centuries of a competitive equilibrium in a competitive game.

Has this happened before in American history? Hard to say for sure (how dare the Pew Research Center not be active in the 1850s!), but I think yes, first in the decade-plus lead-up to the Civil War over the bimodally distributed issue of slavery, and again in the decade-plus lead-up to World War II over the bimodally distributed issue of the Great Depression. I really don’t think it was an accident that both of these widening gyres in American politics ended in a big war.

I think that’s how this widening gyre ultimately resolves itself, too. In a big war. Not another Civil War, because the issues at stake today in the aftermath of the Great Recession aren’t existential and foundational like slavery, but are echoes of exactly the same issues we wrestled with in the aftermath of the Great Depression. No, we’ll need a big war with an Other to get out of this.

So one way or another, that’s what we’re gonna get.

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This is Part 1 of a three-part series. Next, what’s the market/investing corollary to all this? Because there is one. And finally, what do we DO about this, as both investors and as citizens? Spoiler Alert: you may not like the answer.


Before and After the Storm or: Make America Good Again


Thanks for being part of the Epsilon Theory community. One of the other communities that matters to us is Brazoria County, a rural county south of Houston that is experiencing heavy floods in the wake of Hurricane Harvey. The United Way of Brazoria County is a charity focused on recovery for this heavily impacted region.


Mr. Advocate, the rotten tree-trunk, until the very moment when the storm-blast breaks it in two, has all the appearance of might it ever had. The storm-blast whistles through the branches of the Empire even now. Listen with the ears of psychohistory, and you will hear the creaking.
— Isaac Asimov, Foundation (1951)

Do you hear the creaking?

I don’t. It’s not that I don’t see what’s going on in America or that I’m not pained by an increasingly bi-polar distribution of political, social and ethical views. After all, the belief in narrative-driven politics and narrative-driven markets isn’t a belief in their virtue, only their existence. I also don’t know how we get out of this cycle, but I believe that we will. This is not a Seldon Crisis, and Trump is not the Mule.

That Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies. Leave men free, and their natural inequalities will multiply almost geometrically, as in England and America in the nineteenth century under laissez-faire. To check the growth of inequality, liberty must be sacrificed, as in Russia after 1917. Even when repressed, inequality grows; only the man who is below the average in economic ability desires equality; those who are conscious of superior ability desire freedom, and in the end superior ability has its way.
— Will and Ariel Durant, The Lessons of History, 1968

Cersei Lannister: You should have taken the realm for yourself. Jaime told me about the day King’s Landing fell. He was sitting in the Iron Throne and you made him give it up. All you needed to do was climb the steps yourself. Such a sad mistake.
Ned Stark: I’ve made many mistakes in my life, but that wasn’t one of them.
Cersei: Oh, but it was. When you play the Game of Thrones, you win or you die. There is no middle ground.
Game of Thrones, Season 1, Episode 7

Perhaps the cause of our contemporary pessimism is our tendency to view history as a turbulent stream of conflicts — between individuals in economic life, between groups in politics, between creeds in religion, between states in war…but if we turn from that Mississippi of strife, hot with hate and dark with blood, to look upon the banks of the stream, we find quieter but more inspiring scenes: women rearing children, men building homes, peasants drawing food from the soil, artisans making the conveniences of life, statesmen sometimes organizing peace instead of war, teachers forming savages into citizens, musicians taming our hearts with harmony and rhythm, scientists patiently accumulating knowledge, philosophers groping for truth, saints suggesting the wisdom of love. History has been too often a picture of the bloody stream. The history of civilization is a record of what happened on the banks.
— Will Durant

  Unidentified man/hero/Texan

Reporter:  You guys going to jump in and help out?
Unidentified Man:  Yes, sir.
Reporter:  Where you coming from?
Unidentified Man:  Texas City.
Reporter:  What…what are you going to do?
Unidentified Man:  I’m going to try to go save some lives.

“Val”, said Father, “we don’t expect you to understand this, but some of the things that make Peter…difficult…are the very things that might also make him great someday.”
“What about me?” asked Valentine. “As long as you’re telling fortunes.”
“Oh, Val,” said Father. “All you have to do is live your life, and everyone around you will be happier.”
“No greatness, then.”
“Val,” said Mother. “goodness trumps greatness any day.”
“Not in the history books,” said Valentine.
“Then the wrong people are writing history, aren’t they?” said Father.
Orson Scott Card, Ender in Exile, (2008)

Damn right, they are.

It’s hard to stay focused on a lot of things in the face of human tragedy. Including markets.

I’m writing this on Tuesday, August 29 from my home office in Memorial, a village on the west side of Houston. We’ve gotten more than 30 inches of rain through this morning, we can still do our jobs, and we’re doing fine. The people to the west of us in Katy aren’t. Waters from rains upstream have led to overflowing reservoirs that will be released over time, keeping flood waters high. People to the east of us aren’t, either. Many of Houston’s most populated areas are under water. We have colleagues that have been evacuated from houses they evacuated to, and clients and friends who haven’t been able to leave their second floors for a week.

My little hometown in Brazoria, Texas, some 60 miles to the south, is about to have the screws put to it next. It sits between two rivers. One is a stream called the San Bernard River. The other is a Big, Nasty River called the Brazos. It puts nine times as much water through it as the Rio Grande. Come later this week when this piece is published, it will be putting through 45-60 times as much water — at my hometown maybe some 70-80,000 cubic feet per second. If extrapolations from this NWS projection are to be believed, it could be more like 120-140,000 cubic feet per second. As you can see from the missing right axis, it is both literally and figuratively an unfathomable amount of water — an Olympic-sized swimming pool flowing every 3 seconds through a channel where it usually takes two minutes.

We tend to think big thoughts when big things like this happen, and there’s been a lot of that going on. For me, those thoughts have turned local, but I know a great many people outside of the Greater Houston area are focused on other things that are going on: Charlottesville, the Trump presidency, Berkeley, Eclipses, Nazis. It’s a lot to take, and Ben has accurately predicted and is now observing how some of these issues are manifesting themselves in Competitive Games that force us all into positions where we must either fight or lose. He was absolutely right that the aftermath of the Trump presidency would break us, that it would destroy any chance at productive political, social — hell, even investment dialogue. Was the event that broke us irrevocable? How do we get out of this Competitive Game? Can we?

These questions form the central context for one of the greatest works of science fiction ever written: Foundation, by Isaac Asimov. Spoilers follow, but frankly if you haven’t read it, you should stop reading this note and read it instead. It’s better. The story of Foundation is the story of a massive multi-planetary civilization and the development of a robust, flexible system for understanding and modeling the sociopolitical trends of its very large societies: psychohistory. The main champion of this system, a generational genius named Hari Seldon, identifies the inevitable fall of the prevailing government and its devastating aftermath. While the collapse is unavoidable, he determines, not all subsequent outcomes are equivalent. He devises a plan to plant seeds of the civilization that would survive in two corners of the galaxy, predicting that the evolution of those societies over future generations would lead to the maximum possible peace and stability. The system of psychohistory hinges on the behaviors of very large groups of humans and the simplifying assumption that no individual could possibly have the influence or power to break these models.

There are two kinks in Hari Seldon’s system. The first is the idea that Foundation — but really, any civilization — will reach inflection points from time to time where one set of actions will break the path back to peace and harmony, and one set of actions will maintain it. These events require active intervention outside of the normal behaviors that those in power would otherwise pursue. These are Seldon Crises. The second kink is different in that it is unpredictable, or at least was unpredicted. It is the existence of a single individual who does reach the level of power — in this case through the development of abilities to influence the emotions and judgments of those he encounters — to change the inevitability of Seldon’s map of history. The Mule, as he is called, nearly breaks the Seldon model, until those who rediscovered psychohistory rebuild the models and determine the appropriate strategy to ensure that the Foundation civilization gets back on its long-cycle path back toward peace and stability.

This is fiction and there is nothing in political science , economics or sociology that approaches psychohistory’s fictional robust stochastic framework for predicting the ebbs and flows of history. But there is truth here. The long cycles of history do have repeating features, which have never been better described in a non-fictional sense than by Will and Ariel Durant. Despite already having recommended one book, I think very few books are truly “must-reads.” Still, every human should own and read The Lessons of History as well. Among many other lessons, the Durants present a framework in which the path of history swings between liberty and freedom on the one hand, and equality through social control on the other. That control may extend from a government, from the seat of a priest, spiritualist or imam, from a military strongman or warlord, or from a particularly influential social structure.

In the days and weeks since Charlottesville, I think that a lot of people are starting to see President Trump’s election as a sort of Seldon Crisis. The language people used — the language *I* used when I left the GOP to be a #NeverTrumper — was the language of statistical distributions. “Sure, Hillary Clinton has a lower mean, but Trump has a fat left tail” was the particular phrase I used to sound smart and inoffensive to friends and family who either supported or opposed him. In a lot of ways, this is the language of a Seldon Crisis, because it begins to characterize the threats to society posed by an event or person as existential. I don’t know exactly how to communicate to you that existential language is now our lingua franca, but do I really need to?

Source: Google 2017

A lot of people see the president as The Mule now, too, I think, by which they imply that Trump was both unpredictable and capable of disproportionately large influence on the direction of society relative to what we would have expected from the ordinary ebbs and flows of history. Of course, the Voxsplainer types would be happy to provide you with their latest patronizing explanation for why and how Trump was elected. They’ll also follow it up with a series of snide sub-tweets to give themselves ironic cover. But the many on the left who cannot understand his election or his continued support often have difficulty fathoming that his base did not form as the result of Mule-style manipulation of some sort of another. It’s a backhanded compliment for a big slice of humanity: they couldn’t possibly be this stupid. Of course, it’s also condescending as hell.

The truth is even more condescending. Trump is not a Seldon Crisis. Trump is not the Mule. Sorry. The rotation between equality and liberty continues unabated, peacefully or otherwise, over the centuries. And it’s all happening again. Except it is different this time. It is happening faster. Much faster. Not because of the existence of a Mule character like, say, Hitler, whose individual influence thwarts the ability of the psychohistorians like Hari Seldon or Will Durant to predict paths. And it’s not because of Trump, as much as many want to paint him with that brush.

It’s because of the internet.

Taxonomy of Tribalism

“All politics is local.”
— Tip O’Neill, Jr.

It wasn’t that long ago that Speaker O’Neill was right in saying that politics was local. Politics and civics were largely formed in a household, shaped by a local community and then influenced by a largely regional experience. Most people shared party affiliations with their parents, and if they shed them, it was a ritualistic shedding of those affiliations in favor of another held by a similar group — think Woodstock or Haight-Ashbury. Diversity of belief was protected by general isolation from other groups. You knew what the politics and civics of a small town in Oklahoma with one Baptist church would be. You knew what politics a union town in Ohio with a steel mill would adopt. The meeting at the community center in a poor district of a big city held few secrets. Our towns, our families, our communities were our echo chambers.

I come to bury this notion, not to praise it!

These structures fostered social stability, which was often a boon to those communities. People had structures for emotional and material support, people who would be there to keep an eye on their home when they traveled. People who would stop by with food after a funeral (which they always went to). People who provided accountability and comfort and resources to empower productive risk-taking. They show themselves in the wake of tragedies like Hurricane Harvey in huge quantity because — and I genuinely believe this — people are generally good. But as much as I sobbed like a baby watching the good-ol-boys of the Cajun Navy roll in from New Orleans, Lafayette and Baton Rouge, I’m not naïve, Kay. I know this won’t last forever. In a few weeks, maybe a couple months, we’ll be back to business as usual. A lot of people (these are not the generally good people I was talking about earlier, in case you were wondering) have already jumped the gun, trying to decide which political stance they want to justify through use of the disaster. If history is any guide, the rest of us will follow.

If Charlottesville and Berkeley are a reminder of anything, however, it’s that our community echo chambers were often vile, too. When a community jointly agreed that racism was acceptable, that a socialist revolution was imminent, that communists were under every bed, or that southerners were all provincial rubes, the forces compelling change in those views were few. Oh, sure, some bold ones would stand up from within the community to speak truth to power. These were virtuous men and women, those who accelerated the necessary conversations. People moved, television and radio and newspapers still communicated narratives, and thoughts still flowed through the country. But slowly. And slowly but surely change took place in gradual, predictable ways. For centuries, it was a conservative America, not in the modern issue-based political sense but in the more traditional Buckleyan sense of standing athwart history yelling, “Stop!” It wasn’t slow because of some strong political force, but because the force required to change the inertia of a geographically massive country with relatively low population density was not there. Politics instead followed the patterns of linguistic dialects, where isolation and proximity drove deviations in diction, syntax and grammar, and where the things that caused interaction like trade, diplomacy, television, culture and politics, led to their convergence.

Both virtue and vileness notwithstanding, everyone was generally still playing a Collaborative Game. Not because of any special virtue of the parties involved, but because there were so many pockets of difference in experience that any kind of engagement required identifying commonalities and finding compromise. Of course there was conflict. But these were (figuratively) isolated populations coming together to discuss radically different world views, which generally required explanation, empathy and patience. Going Competitive meant true isolation, because the other side didn’t have to play our game, not really. Politics were local. In the same way that people coming together who speak different languages had to find a means of communication to proceed to rubrics and translations, there was a natural need for collaboration — and the occasional threat of conflict bred out of mistranslation! But after any negotiation, there was a home to return to. The Competitive Game didn’t work, because people had the option to leave that game and join another. You couldn’t force people to play in your game and lose, because they could take their ball to their community and go home.

The internet broke that.

It didn’t happen immediately, in part because of the pace of adoption of the technology itself, but more because the forms that constant, broad communication would take took some time to settle on. The message board begat the chat room begat the personal webpage begat the blog begat closed social media networks begat open social media networks. That was the singularity. The open social media network — Twitter and, increasingly, Facebook — replaced the community. Even for those who weren’t active participants in the networks themselves, a critical mass of other of society’s structures became connected to it, its language and its norms. The media, corporate executives, politicians — even sports leagues — cannot escape the influence of the norms promoted by these networks.

You could argue that churches, community groups, neighbors, extended families, political action groups, and other causes still act as anchors for cultural values, but for the most part, you’d be wrong. The average child may spend 6-8 hours a day on social media. The average adult spends two. How many hours does the average American spend in Church/Temple/Mosque? Reading his Bible/Torah/Koran? Outside of a natural disaster, how often does he really talk to his neighbors? Add to this the network effect of other media that are inextricable from the ways in which news is consumed, evaluated and parsed, and it becomes clear that there is no community to run to. Choose your box, because the game has changed, and you can’t leave the table.

So what’s the big deal? The big deal is that this has driven much more rapid propagation, acceptance and incorporation of new ideas. In the same way that a meme is already the subject of meta-jokes about cynical responses to the original meme by the time that half the country is just seeing it, dizzying new social values emerge almost daily. It took 396 years for America to decide that it probably doesn’t make sense to criminalize being born as a gay person. It took 12 years after that for America to recognize that the world isn’t going to come crashing down around us if we recognize that gay people who love each other ought to be able to get married. It took 2 years after that for social media to decide that there are 183 shades of human sexuality, and read the sticky post on the top of the forum for the acceptable terms to use for each of them, because the old terms you used yesterday are now hateful. The world is moving very, very quickly.

The social liberal looks at this state of affairs and says, “Hell yes!” Maybe we overshoot sometimes, but that overshooting is overstated. If moving quickly and pissing people off along the way is the cost of taking away the safe places for bigots, racist and sexists, and starting the process of taking away oppressive systems put in place by rich white men, then it’s worth it. Look, I hear you. A lot of good people think this way.

The social conservative looks at this and is puzzled. We’ve transitioned from a society that cared what you did, to a society that cared what you said, to a society that cared what you thought, he says. I’m kind to my family, to my friends, and to strangers. I really do try to improve myself, and I know I’m not perfect. I really do care about what happens to people, and I’ll drive 300 miles with my pick-up truck, a boat and some hip waders, and I’ll work myself to exhaustion for a week for people I don’t know and will never see again. But I also have values and beliefs I grew up with, and they’re values that have worked for hundreds of years. I’m not ready to throw them away on a whim. I hear you, too. A lot of good people think this way.

Good or not, neither of these people can take his ball and go home anymore, because there is no home. If they would be a part of the process of making social, cultural and political decisions at all, they must play, whether it is a Collaborative Game or a Competitive Game. The steering wheel has been ripped away from them, but to make the game of chicken complete, someone must point the cars at each other and set the stakes. Those who would marshal these forces find an easy tool to achieve this, whether intentionally or subconsciously: convince people they’re part of a tribe, and tell them they’re under attack.

What I’m talking about here isn’t just applying names to things we or others attach ourselves to. It isn’t just saying that “You’re a democrat so you’ll think this” or “You’re a black/white/Hispanic man, so this must be your view on this topic.” No, what we are talking about is the scorched earth tactic that treats every defining issue as an existential one. It’s us or them. You win or you die.

This dynamic isn’t out of character with the path of history, some aberration caused by an unduly influential Mule. It is an emergent property of a society undergoing too-rapid change.

Manufactured Existential Crises

The forces that seek to manipulate the political right do so through the creation of wholly imaginary ideals that are assumed to be in need of defending. Since they are imaginary, to conjure threats against them is purely a matter of narrative creation of the sort that has graced these pages for years. Consider the white race or white culture. It is a myth — it doesn’t exist. Racially, admixture analysis finds a tremendous amount of diversity within Europe. Mediterranean populations often have more in common with those of the Levant than with Northern Europe. Modern and ancient DNA archetypes found within Scandinavia, Ireland and the Balkans are extraordinarily different. I belong to a Y-DNA sub-clade called A738, a relatively recent off-shoot of M-222 that includes a narrow set of names: Guinn, Egan, Keegan, Morgan, Goggins, Larkin. And I am more likely to share a direct male line ancestor with a man from N’Djamena than a man from Nuremberg or Nizhny Novgorod. The below is the spread today of the R1b haplogroup, which is even further up the chain.

The Lost Cause vision of the Confederacy is a myth. I say this as someone who will defend almost any cemetery installation celebrating the simple bravery and honor of the individual soldier, and as someone who thinks Robert E. Lee was sufficiently brilliant as a tactician to merit historical remembrance. But anyone who says the largely disposable plaques and generic statues churned out by a generic factory to celebrate the “spirit of the Confederate Cause” are those kinds of monuments to history is defending an imaginary construct. It is vapor, but useful vapor to those who would divide us. It’s forced us into a world where people who don’t know Paul Johnson from Paul Blart have become self-appointed defenders of history, and where people who learned about the Federalist Papers in a Broadway musical are deeply concerned about celebrating treason. Please.

The forces motivating and influencing the political left in America have cultivated an even more perfect, self-reinforcing tool for division, I think. The post-modern sensibilities of the movement are utterly Foucauldian. In a rather clever sleight-of-hand from the intent-, conviction- and character-driven views that drove the Civil Rights movement, the manipulators of the American left now fully embrace the language of the Panopticon. By presenting society as citizens operating within a controlled and monitored system, the left can argue at any juncture that those who oppose their arguments are simply agents of an oppressive system. Can’t find data to support your statement? Can’t develop a logical path to support your conclusions? You need only say that your opponent argues from a place of privilege or status within an oppressive system, and the argument is over. This kind of language that automatically asserts the pervasive existence of oppression as an argument-ender, whether it exists or not, is just another way to promote the constant existential crisis.

If after reading one of the prior three paragraphs we think to ourselves, “Yes, but ____ is a fake existential crisis. Mine is real, and here’s why,” then we have to consider whether we’re part of the problem. All of these things, and the politicians we elect to promote our narrow view of them, are natural patterns in the swing of the pendulum toward equality-motivated control.

So what do we do?

It is time now for us to rise from sleep.
— Benedict of Nursia

What does the path of history tell us? What does the aftermath of one of America’s greatest natural disasters and human tragedies tell us? What can we do to survive and escape a Competitive Game that doesn’t allow us to pull away from the table? If you’re reading this, you’re probably in the investment industry, or at least have an interest in financial markets. If you’re in the investment industry or in the financial markets, you like to win. So you’re not going to like my answer.

We play. And we lose.

The story of history, I think, is that the only way to defuse a Competitive Game is to win by eliminating your competition, or to choose to play a Collaborative strategy even when you know it is sub-optimal.

There is a time for war, and that is usually our instinct. But there is a time for sacrifice, too. In 529 A.D., Benedict of Nursia chose sacrifice. At a time where the Competitive Game had so gone off the rails that Rome fell into ruin, Benedict and his adherents isolated themselves from society and devoted themselves to service, industry and memory. The result of their efforts was isolation, poverty and celibacy. It was also the preservation and creation of much that was and is good about European culture and society. They preserved and practiced techniques for making foods and wines. They preserved writing, language, literature and histories. Agricultural methods and metallurgy. They were the Foundation during the collapse of the Empire.

What about us? What can we do?

We can start by laying down our right to take offense. We can be unfailingly committed not only to the principles of freedom of speech, but to the value of free expression and exchange of ideas. In other words, by not pursuing the counterproductive, obstructive aims of the worst cartoon the otherwise brilliant Randall Munroe ever made. We can be vulnerable, we can let our opponents assign us identities and titles we would never adopt for ourselves without complaint. We can believe the best about people, even if we know it may cause us harm. We can give up our right to be right.

This is true in our businesses and lives as investors as well, because most of you know as well as I do that the cynicism that pervades politics has invaded our world as well. So what can we do? We can be unfailingly honest with our clients, our families. We can hold loosely to the things we think about markets and our portfolios by focusing on a narrow group of things that matter. We can engage with our clients and build portfolios that will allow them to focus on the things that happen on the banks, and not in the bloody river. We can do all in our power to destroy the agency issues and career risk dynamics that influence decisions and cause harm to the people who put their trust in us. We can gas up the boat and try to save some lives.

In short, we can choose goodness over greatness. It only works if we do it together.

Join us!

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