On Recent Developments in the Market

Huh ... all these years I was told socialism was not only un-American, bad enough, but that it was bad for business too.

Now, of course, the charge led by Gordon Brown to nationalize banks isn't socialism per se. Oh, but it is entertaining to poke fun at the free-marketeers. One thing to recall when you hear them say, as you certainly will if you are apt to listen to them at all, that the market's rise today (& likely beyond) is an indication that the economy's fundamentals are and were strong, and that all we ever need to do is wait for the bull market to return, is that the floor of this particular fall was established primarily because of governmental action. The "invisible hand," as it were, did not sprinkle its faerie dust and save the day here.

It is, in part for this reason, that it is wrong to assert that because the bull always wins it is somehow a more natural state for the market than the bear. Capitalism does what capitalism must do to survive: if that means incorporating aspects of socialism and/or authoritarianism (e.g., China), it will. That the speculative market craves profit and growth, and a non-speculative economy requires them, and that they will forcibly (if necessary) adapt in such a way to make this happen, is not necessarily the stuff of nature. Continual growth is, rather, the stuff of viruses and cancers, not the natural workings of a healthy body. The market, rather, and by that we must include governments, whose stake in the market is as speculative as any individual or hedge fund manager, responds to the natural -- that is to the vicissitudes & material limitations of time, death, and decay -- and evolves accordingly. The way in which it evolves, however, is not necessary. THAT it evolves can perhaps be said to be "natural" . . . into what it evolves and by what it means, not really. Adaptation and evolution are not singular narratives that explain after the fact how we got to where we are now and forecast where we are headed, as though there were no other courses possible. Rather, to speak of adaptation and evolution is to reflect on the full range of possibilities before us at any time, and to realize that possibilities (that are being) embraced are no more natural than those that were (or are being) rejected or ignored.

Owning up to the unnatural element of nature, as it relates to the market, seems essential in actually coming to grips with its declines and keeping its rises in perspective. More importantly still, it reminds us that thinking otherwise is not only acceptable but fundamental to the processes of nature.