The Most Flattering Fraud of All

We have been urged to give up on this series of love letters. But we continue to wander anyway, a bit aimlessly, in the hope that we might stumble on something worthwhile.

The old arranged marriages have given way to spontaneous ones; now, people fall in love, and while in that addled condition they make the most important decision in their lives. How different is that from financial manias…or mass political upheavals, we wonder? There too, in the pursuit of happiness, people take leave of their senses…and usually regret it.

Last week, John Locke reminded us why we choose our own mates. We need liberty to pursue our own happiness, he explained. The more choices we have, the freer we are…said the great philosopher…and therefore, the more able we are to choose those that will bring us the greatest happiness. We repeat his quotation not in admiration, but in wonder….

“As therefore the highest perfection of intellectual nature lies in a careful and constant pursuit of true and solid happiness; so the care of ourselves, that we mistake not imaginary for real happiness, is the necessary foundation of our liberty. The stronger ties we have to an unalterable pursuit of happiness in general, which is our greatest good, and which as such, our desires always follow, the more are we free from any necessary determination of our will to any particular action, and from a necessary compliance with our desire, so upon any particular, and then appearing preferable good, till we have duly examined whether it has a tendency to, or be inconsistent with, our real happiness: and therefore, till we are as much informed upon this inquiry as the weight of the matter, and the nature of the case demands, we are, by the necessity of preferring and pursuing true happiness as our greatest good, obliged to suspend the satisfaction of our desires in particular cases.”

Poor Locke. We see the problem in the first sentence. He flattered himself and his species. Man may build bridges with a “careful and constant pursuit” of the best choices. But in his pursuit of happiness, he is rarely either careful or constant.

“A great fallacy,” explained our friend Nassim Nicholas Taleb in the International Herald Tribune, “…has marred Western thinking since Aristotle and most acutely since the Enlightenment. That is to say that as much as thinking of ourselves as rational animals, risk avoidance is not government by reason, cognition of intellect. Rather it comes from our emotional system.”

Taleb was referring to the reactions to terrorist bombings. Agitated by media or hormones, a man might come to believe anything. Reading the newspaper headlines he might believe that terrorism was a big risk. Statistically, it is insignificant. Following September 11, for example, many people decided to drive rather than to fly. As a result, more died in traffic accidents than would have died in airplanes.

Even a careful reading of the press reports reveals that terrorism is hardly the sophisticated international conspiracy threat it is made out to be. The bombers in London were the rankest amateurs. Some didn’t know how to detonate their bombs. And when they contacted their “mastermind,” they did so on cell phones — which they then took with them on their bombing missions. All you have to do is watch a few spy movies and you know better than that — call from a payphone; at least it’s not registered in your name…and there’s no record of the call!

In America, meanwhile, you’d think terrorists who had their wits about them would strike at the electricity grid during a heat wave. Without air-conditioning, Americans would surely get hot and do something foolish.

Popular politics and bubbles are almost always flattering frauds. Terrorists, for example, believe they are fighting in some great, heroic struggle — rather than merely blowing themselves up on a fool’s errand. Westerners believe Muslim billionaires are plotting against them because they are “jealous.” And the hundreds of thousands of security personnel would much rather think of themselves as guardians of the public safety rather than the shiftless time-servers they usually are. And when they miss an opportunity to arrest Osama bin Laden or thwart a teenager with a death wish…well, doesn’t that show how clever those terrorists really are!

Of course, some things are too important to leave to the rational part of the brain. Faced with a postal worker in full battle armor or a fashion model stark naked, a smart man doesn’t think at all. Nor does a man typically stop to think when he’s in a bar fight, a market bubble… or in love. Not that he wouldn’t like to; it’s just that he hasn’t the time for it. The thinking can come later.

Romantic love may be a flattering fraud, too. A man never feels more noble, handsome or worthy as when he sees himself reflected in the eyes of his admiring lover. All rational thought ceases immediately. Unless he is a seasoned cynic with a pre-nup in his hand, he believes it will last forever, or at least as long as a bubble in the housing market. He looks at his lover and sees no faults or flaws. If she is fat, he finds her pleasingly plump. If she is stupid, she finds her admirably unpretentious. And she returns the favor, looking upon him as uncritically as a Wall Street analyst on a balance sheet. To the rest of the world, he may be an oaf and a dimwit; to her he is an oaf and dimwit, too, but an adorable one. She can’t imagine anyone better suited to her…until he comes along next month.

All frauds have their price. A man who invests his dollars in a bubble…or gives his life to a high-minded swindle…pays dearly. There is a price to pay for l’amour, too. If he were a Lockean man, he might avoid it altogether, just as he would stay away from over-priced stocks. Why waste caresses; why wear out the heart? But nobody ever got rich or happy by storing up kisses. And even ironicists look upon a couple in love with a little envy; they are fools, he says to himself…and wishes he could be one, too.

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.