Tuesday, December 30, 2008

The Ruling Class Predators

Last night, I left a snippy comment on DeepCapture. The comment sums up a few of my thoughts on modern business thought. The comment was a response to a 2006 quote from a 13 year veteran rogue from the SEC named Richard Sauer:

SHORT sellers occupy a position in the stock market like that of predators in nature.

With a few edits, my rant was:

Saying that we need predators in the market killing companies is equivalent to saying that we need murderers roaming the street to keep the population healthy.

One of the primary themes of classical tradition was that man could use rationality to overcome the base state of nature.

That tradition works. It brings on prosperity.

Man is a rational creature. We can improve our lot through reason and deliberation. Short selling appears to be undermining the ability of investors to engage in the rational process of assessing investment options. With modern communication technologies, the market is so efficient that we no longer need artificial regulatory measures like short selling.

Just as we don’t need rogues roaming the streets randomly killing people, we don’t need an elite class of insiders in brokerage firms randomly destroying companies.

Human rationality overcomes the need for predators.

In the last several years, there has been a predator class randomly killing large numbers of people in Iraq. I see absolutely no sign that the average Iraqi is better off with the killings. They actually look quite miserable and unhappy about all the killing.

Anyway, the current rot in Wall Street is more like a plague than a sleek predator. Sauer’s argument is akin to saying that the market needs to be covered with a festering pustulation to be healthy.

Look ma! That man is oozing with superating sores ... he must be really healthy!

Mankind is a rational creature. We thrive by using reason to overcome the plight of disease and predators. That’s why there’s billions of us. Sauer is simply repeating a failed elitist ideology that causes widespread hardship and misery.

This funny little trick of using reason to overcome our base nature is called "civilization."

Sauer's use of the predator metaphor to describe short selling is quite interesting. Throughout history, a common trait of the ruling class is that they see and treat the lower classes as animals. The Marxist Dialectic out and out denies man's rationality. This ruling class mantality has always been the antithesis to civilization.

Personally, I think this division between the classical and modern view of rationality is much more important than the division between left and right.

I might write more about Sauer's editorial. It is a prime example of the progressive view of the way business works.

1 comment:

Scott Hinrichs said...

This funny little trick of using reason to overcome our base nature is called "civilization."

Quite profound. The constant (even institutionalized) efforts to devalue civilization and view humans as only animals seem, unfortunately, to be quite successful.