Character and Circumstance

I think we all listen to our friends, relatives, and colleagues complain about their predicament, and then silently think, “Well what do they expect? Their predicament perfectly reflects their character.” If they are a lazy spendthrift, then they will go through life thinking that adverse circumstances are always denying them the money they need. If they are envious, then their colleagues will be unfairly promoted ahead of them. Etc, etc.

But when we think about ourselves, well then things are very different. If only we could get out from under burden X, our life would be so much easier. At least that’s the way I look at things, and I am pretty sure that others share this same sort of bias. Indeed I recall reading about some psychological study that showed this bias is fairly common. While reading the Portuguese writer Pessoa, I recently came across this quotation:

Whenever I’ve tried to free my life from a set of the circumstances that continuously oppress it, I’ve been instantly surrounded by other circumstances of the same order, as if the inscrutable web of creation were irrevocably at odds with me.

%$@#& that inscrutable web of creation.

When it comes to countries, I think most intellectuals exhibit the same bias. When we form a mental image of another democratic country, we don’t typically think in terms of the current leader, but rather a much deeper set of characteristics, what you might call the character of a country. France, Italy, Switzerland, Japan; the names of each of these countries trigger complex mental images for most of us, but how many readers of this blog could even name the leaders of Switzerland and Japan? I could name the current leaders of France and Italy, but I don’t think that these individuals have much to do with my mental image of each country.

For our own country things are much different. We all remember the idiotic celebrities who threaten to leave the country if so and so is elected. Most intellectuals are somewhat more level-headed, but don’t we all tend to exaggerate the importance of who is elected? I think this is especially true when the leader is someone you don’t like. Deep down, conservatives feel they have never been given a chance; that the liberal elite runs the media, courts, colleges, and there are enough squishy Republicans that nothing substantive gets accomplished. I think this excuse is hogwash, but I am pretty sure it is widely held. In contrast, left-leaning intellectuals often refer to “Reagan’s America,” or “Thatcher’s Britain.” But I’ve never heard the phrases ”Jimmy Carter’s America,” or “Gordon Brown’s Britain.” Why not? Because if the more liberal candidate is elected, the country will still face the same problems as before, just as Switzerland and Japan will still be Switzerland and Japan regardless of which non-entities happen to hold their highest offices. You obviously cannot admit that your country’s failings reflect the weaknesses of your own ideology. In fact they probably don’t reflect your ideology—but that is equally true when the bad guys are in power.

I seem to be the only person in the world who thinks Al Gore would have led us into Iraq. Why? Perhaps because he campaigned as a hawk, and was known to be very distrustful of Saddam. Perhaps because being elected by a tiny margin, with (in that case) blame for the intelligence failure of 9/11 falling 100% on the Dems, he would have been under tremendous pressure to look tough with a candidate like McCain getting ready for 2004. Perhaps because he would have been surrounded by pro-war hawks. He promised that Richard Holbrooke would be his foreign policy “czar.” And remember his VP pick in 2000? This counterfactual seems obvious, but I’ve never met a Republican or a Democrat who agrees with me. My history is a bit shaky, but didn’t McKinley oppose the Spanish American war? Didn’t Wilson promise to keep us out of WWI? Didn’t Johnson promise to keep American boys out of Vietnam? Presidents don’t go to war, countries go to war.

This post was triggered by recent liberal disappointment with Obama on health care and other issues. What did they expect? Perhaps they thought that when Obama was elected President that the United States would suddenly morph into France. But do they want the government to build 100s of nuclear power plants? Do they want the government to be able to ram double-tracked high speed rail lines through beautiful, pastoral suburbs and exurbs and small towns of Massachusetts, Connecticut, New Jersey and Maryland, with environmentalists powerless to stop it in the courts? Do they want us to send troops to prop up corrupt African governments without UN approval? I suppose progressives would respond that they want the high quality French public services. But America was settled by the Brits, the French went to Quebec. If we tried to emulate France we’d end up with big government and lousy public services, like the British.

You can tell a lot about an intellectual by their attitude towards trains. My 10-year old daughter loves trains. I like riding on trains. In a few days I will be riding on a 200mph train from Beijing to Tianjin. The trip will be 100 miles in 30 minutes. I am looking forward to it. But high speed rail makes no sense for the US, for all sorts of reasons. People that know far more about intercity rail than I do insist the proposed projects are hopelessly utopian. Americans will not use Amtrak outside the Northeast corridor, and we can’t even build high-speed track in the one place we need it. Even in England, a country we resemble much more than France, and a country far more suited to high-speed rail than the US, and a country ruled by Labour for 12 straight years, the only high speed line is the London—Paris link. And even that was very difficult for the Brits to build. Krugman recently announced that the sort of expert opinions I refered to are “stupid.” How does he know this? Because he looked out of the window of his train while in Rahway NJ, and things looked kind of densely populated. Something is dense, but it ain’t New Jersey. Northeast New Jersey has about 6 million people spread over a couple thousand square miles of suburbia. Paris is 20 times as dense, with 2.2 million people in an area of only 34 square miles, all living a few blocks from subway lines that will whisk them to high speed train stations. High speed rail in America? As they say in New Jersey, fugitaboutit.

I hope I don’t sound too fatalistic. Elections are very important, but mostly because of the fact that we have them. The real action is in changing the zeitgeist, not who ekes out an election victory. In some ways we will become much more like France, for instance I think we will move closer to universal health insurance. And in some ways France is becoming much more like the US, as when they deregulated the commercial airline industry and privatized lots of big companies. But none of these long run trends will be determined by who wins elections. Mitterrand started the mass privatization in France, and Bush just enacted a $1.2 trillion dollar program to expand government health insurance. The trends will be determined by the zeitgeist. Krugman does play an important role in that debate. But if he wants to continue to do so, I suggest he do his homework on high-speed rail.

In the 1960s most Americans knew that Mao was leader of China, whereas today very few can name Hu Jintao. Does that mean we are less well informed? No. There was good reason to know who Mao was, he was one of the most important figures in world history, and his decisions greatly affected the lives of millions. There is no need to know who Hu is (pun intended.) Fortunately for the Chinese people, Hu could not launch a Great Leap Forward or Cultural Revolution even if he wanted to. It is often said that China is not a democracy. That is true. But it is also true that China is far more democratic today than under Mao, just as Switzerland is far more democratic than America. There are degrees of democracy and degrees of authoritarianism. The more democratic it becomes, the less it matters who is president.

Earlier I said that character matters more than circumstance (of leadership) in democratic countries. Mao is an example of how circumstance can matter a lot in non-democratic countries. But even in China character matters more than people think. While hiking the Great Wall I spoke with a Westerner who lived in one of those ugly industrial towns in the Pearl River delta. He described it as a nightmarish place full of corruption, pollution, and crime; where money was everything. He said the tainted milk scandal occurred in a nearby town. The next day I read the following description of Chengdu, a big city in the western part of China:

Chengdu has been applauded as the Chinese city with the most “soft power” . . . In recent years soft power has become an increasing important factor in the success or failure of a city or region, in terms of both satisfying the needs of its residents and attracting external support from the commercial sector.

“Soft power” is now annually evaluated across 10 different criteria, including cultural appeal, innovative capacity, ability to support science and education, effectiveness of government administration, city cohesion, attractiveness to the business sector, social harmony, capability of image communication, level of coordination, and effectiveness of information transmission.

In other words, the extent to which it resembles Denmark (to refer to one of my earlier posts.) The communist Chinese media get it.

[BTW, the same issue of the China Daily indicated that while China grew 7.1% in the first half of 2009, Chengdu grew 14.3%. Chengdu is also located next to some of the most sublime scenery on earth. Jiouzhaigou is an area of lakes and streams with such gorgeous colors that you’d think you had awoken in some fairytale dreamland. And there are mountains nearby that rise to almost 25,000 feet. It makes Denver seem like Dallas in comparison.]

So even within China character matters a lot. You may wonder if I should be relying on a paper published by the Chinese government. The answer is yes. As with any paper you must filter out biases, but when you do so the China Daily is just as informative as any American paper, and far more entertaining. I was about to compare the Chinese government to the French government in terms of their ability to ram high-speed rail through neighborhoods, but then I remembered that a citizens groups in Shanghai stopped a maglev train from going through their neighborhood. I learned this from the China Daily. You might argue that that is only because Shanghai residents are influential, and that farmers’ land rights are ruthlessly exploited by local officials in league with property developers and local gangs. And you’d be right; at least that is what the China Daily says. China’s government-owned media is often critical of the government.

In an earlier post I discussed overcoming our inclination to believe that our side of the political dispute is good and the other side is evil. (Call it the Krugman/Limbaugh misconception.) But we also have to overcome our perception that elections are about the future course of our country. Actually, they are about picking managers who will oversea public policy as we move into a future that is determined by the changing zeitgeist. I like Obama at a personal level; he seems to have the right qualifications to be a relatively non-annoying president. He comes across well. But let’s not expect too much of him. In his inaugural address of 1929 the young, energetic and supremely competent Herbert Hoover promised a much more activist government than Coolidge had conducted. Coolidge reportedly muttered, “We’ll see what the wonder boy can do.” Obama had the good fortune to take power when the economy was already in crisis, so he won’t be as unlucky as Hoover. But make no mistake about it, like any president Obama’s reputation in the history books will depend far more on luck, than on anything he does or doesn’t do while in office.

PS. I am well aware of the fact that there are many people who are unhappy because of circumstance, not character. I just don’t happen to know them. If I lived in North Korea I’m sure my attitude toward this issue would be much different.

PPS. I just noticed that Krugman has a follow up to his high-speed rail piece. I presume he got some feedback. Unfortunately his is just about the only blog I can get over here in China, so I am out of touch. I’m sure others can criticize his post much more effectively than I can, and perhaps some already did so. BTW, I am not denying that some token high-speed line might get built somewhere in the US, and that a few people might ride it. What I do deny is that it makes any sense from a cost/benefit perspective. And I also deny that it would ever carry more than a miniscule percentage of intercity travelers.

• Become A Funded Futures Trader