Mark Twain on Public Opinion: As a Rule We Do Not Think, We Only Imitate

Samuel Langhorne Clemens, a novelist popularly known with his pen name Mark Twain (1835-1910), sees public opinion to be mostly social signaling or about attaining social conformity or "corn-pone opinions", rather than independent thinking.

A longish excerpt from Mr. Twain (at the LewRockwell.com) [bold mine]

Our table manners, and company manners, and street manners change from time to time, but the changes are not reasoned out; we merely notice and conform. We are creatures of outside influences; as a rule we do not think, we only imitate. We cannot invent standards that will stick; what we mistake for standards are only fashions, and perishable. We may continue to admire them, but we drop the use of them. We notice this in literature. Shakespeare is a standard, and fifty years ago we used to write tragedies which we couldn't tell from – from somebody else's; but we don't do it any more, now. Our prose standard, three quarters of a century ago, was ornate and diffuse; some authority or other changed it in the direction of compactness and simplicity, and conformity followed, without argument. The historical novel starts up suddenly, and sweeps the land. Everybody writes one, and the nation is glad. We had historical novels before; but nobody read them, and the rest of us conformed – without reasoning it out. We are conforming in the other way, now, because it is another case of everybody.

The outside influences are always pouring in upon us, and we are always obeying their orders and accepting their verdicts. The Smiths like the new play; the Joneses go to see it, and they copy the Smith verdict. Morals, religions, politics, get their following from surrounding influences and atmospheres, almost entirely; not from study, not from thinking. A man must and will have his own approval first of all, in each and every moment and circumstance of his life – even if he must repent of a self-approved act the moment after its commission, in order to get his self-approval again: but, speaking in general terms, a man's self-approval in the large concerns of life has its source in the approval of the peoples about him, and not in a searching personal examination of the matter. Mohammedans are Mohammedans because they are born and reared among that sect, not because they have thought it out and can furnish sound reasons for being Mohammedans; we know why Catholics are Catholics; why Presbyterians are Presbyterians; why Baptists are Baptists; why Mormons are Mormons; why thieves are thieves; why monarchists are monarchists; why Republicans are Republicans and Democrats, Democrats. We know it is a matter of association and sympathy, not reasoning and examination; that hardly a man in the world has an opinion upon morals, politics, or religion which he got otherwise than through his associations and sympathies. Broadly speaking, there are none but corn-pone opinions. And broadly speaking, corn-pone stands for self-approval. Self-approval is acquired mainly from the approval of other people. The result is conformity. Sometimes conformity has a sordid business interest – the bread-and-butter interest – but not in most cases, I think. I think that in the majority of cases it is unconscious and not calculated; that it is born of the human being's natural yearning to stand well with his fellows and have their inspiring approval and praise – a yearning which is commonly so strong and so insistent that it cannot be effectually resisted, and must have its way.

Read the rest here 

Bottom line: Without independent-critical thinking, we become subject to the mind manipulation-control ruse or easily succumb to indoctrination (brainwashing) schemes employed by various vested interest groups via populism. Think collectivism, statism, nationalism, demand based economic policies, climate change, and more...

Mark Twain and China’s Yuan

The brilliant nanotech investor and analyst Josh Wolfe of Forbes offers three invaluable investment insights premised on the maxims of literary and philosophy luminaries: F. Scott Fitzgerald, Mark Twain and Arthur Schopenhauer

The wisdom from the select quotes of the three wise men seem representative of openmindedness (Fitzgerald), the risks of overconfidence and comfort of crowds or the contrarian stance (Twain) and innovation (Schopenhauer).

Read them here

I’d like to make a brief comment on the Mark Twain situation applied to the Yuan

Mr. Wolfe writes, (bold emphasis mine)

Mark Twain said that: “it ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just aint’ so.”

Twain Situations are those where the consensus is near certain about something. But as Buffett has noted, you pay a high price for a cheery consensus. These are situations with payoff structures that Nassim Taleb would call Black Swans. The opposite of the consensus is often entirely unrecognized, unappreciated and massively underpriced. If they are wrong, it’s a massive blow-up. Buying puts and expressing a contrarian view, with cheap insurance may be ways to express this “Twain” view. And this is precisely where the prescient Cullen Thompson and Bienville Capital Management LLC has done along with Mark Hart of Corriente Advisors LLC (who correctly nailed the huge asymmetric payoff with a contrary to consensus view on subprime housing, when all others believed housing prices could only rise). Here is Thompson quoted in today’s WSJ:

“Given the magnitude of China’s credit problems, it’s at least a possibility the yuan drops sharply. The potential of the trade is so great, and when there’s cheap insurance in today’s environment it’s silly not to buy it”

Everybody I speak: politicians, pundits and principal investors all believe, nay they “know” that the Yuan is undervalued and must rise. It just must! And therein lies the opportunity.

Like Mr. Wolfe, I have been saying that the consensus expectations of an overvalued yuan have been misplaced.

That’s because the mainstream’s macro analysis and prescription over ‘global imbalances’ has been premised on flimsy and tenuous grounds.

First, global imbalances have been a diversion (if not a patent misdiagnose) from the true problem: the US dollar paper money system that abets inflationism and interventionism.

Second, the currency valve policy resolution is too oversimplistic and naive, which essentially views the global economy as homogenous.

Lastly, the excessive fixation over these two supposed cause and effect dynamic overlooks the bubble nature of China’s economy.

This reminds me of the Asian crisis where the Thai baht largely operating on a fixed or pegged exchange rate blew up as the Asian crisis emerged (above window).

China’s quasi pegged currency trend looks alot like the Thai baht prior to the Asian crisis (below window). [Charts courtesy of Thai Baht Tradingeconomics.com and Yuan forecastchart.com]

Inflationism only obscures the way the public reads or analyze markets.

As Murray N. Rothbard wrote,

Inflation has other disastrous effects. It distorts that keystone of our economy: business calculation.

Mark Twain’s Rational Optimism

Samuel Langhorne Clemens popularly known by his pen name Mark Twain reveals his rational optimism, in a letter birthday greeting letter to contemporary Walt Whitman.

Here is part of that letter (hat tip Matt Ridley, go to Letters of Note see the complete letter)

Transcript as follows: [bold emphasis mine]

You have lived just the seventy years which are greatest in the world's history & richest in benefit & advancement to its peoples. These seventy years have done much more to widen the interval between man & the other animals than was accomplished by any five centuries which preceded them.

What great births you have witnessed! The steam press, the steamship, the steel ship, the railroad, the perfected cotton-gin, the telegraph, the phonograph, the photograph, photo-gravure, the electrotype, the gaslight, the electric light, the sewing machine, & the amazing, infinitely varied & innumerable products of coal tar, those latest & strangest marvels of a marvelous age. And you have seen even greater births than these; for you have seen the application of anesthesia to surgery-practice, whereby the ancient dominion of pain, which began with the first created life, came to an end in this earth forever; you have seen the slave set free, you have seen the monarchy banished from France, & reduced in England to a machine which makes an imposing show of diligence & attention to business, but isn't connected with the works. Yes, you have indeed seen much — but tarry yet a while, for the greatest is yet to come. Wait thirty years, & then look out over the earth! You shall see marvels upon marvels added to these whose nativity you have witnessed; & conspicuous above them you shall see their formidable Result — Man at almost his full stature at last! — & still growing, visibly growing while you look.

Read the rest here

Well, Mark Twain was right. Such marvels has been brought about by capitalism.