Tuesday, May 1, 2012

Cato on Humanity's Vast Fund of Stupidity

Two previous posts featured  selections from two essays from Cato's Letters, attacking eighteenth-century style crony capitalism as it unfolded in the South Sea Bubble.

Although the authors directed most of their animus in these early essays to the South Sea Company directors, they devoted the greatest portion of their letters to warnings about government.

In an essay entitled, The Art of Misleading the People by Sounds, John Trenchard reminds us how little has changed in two hundred years.

First, Trenchard ponders whether the the political follies which befall citizens originate from their own ignorance or from the politicians:

"SIR, In surveying the state of the world, one is often at a great loss, whether to ascribe the political misery of mankind to their own folly and credulity, or to the knavery and impudence of their pretended managers."
Trenchard's preliminary conclusion is that both causes seem to lead to the same evils. Regarding the specifics of the South Sea Company scandal, "if there were no bubbles, there would be no sharpers."
He also acknowledges the general ignorance the general public:
"There must certainly be a vast fund of stupidity in human nature, else men would not be caught as they are, a thousand times over, by the same snare; and while they yet remember their past misfortunes, go on to court and encourage the causes to which they were owing, and which will again produce them."

Going to court, in the above historical context, means lobbying the ministers serving the monarch to encourage policies which, in Cato's eyes, lead to the same political and economic miseries.

We do not seem any better off, despite two hundred years of additional history upon which we can reflect. Our generation has witnessed bailouts of Franklin National Bank (1974), New York City (1975), Chrysler (1980), S and L industry (1989), airline industry (2001), Freddie Mac/ Fannie Mae (2008), Wall Street (2008), and Chrysler . . .  again (2008).

Yet the malicious matrix of politicians and corporations still yields the same numerical result: an empty national treasury.


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