26 April 2010

Short sale

People in our age seem to be gripped by the desire to find some human villain at the root of every calamity that strikes us. This is perhaps above all caused by the desire of "historical" peoples to shift their own responsibility for the state of the world on to others. In the case of the recent economic malaise that has afflicted large sections of the globe, we find the blame often placed on short sellers. The major banks (both nationally and internationally) blamed short sellers for the decline of their shares, leading the SEC to temporarily ban short selling in these issues -- an action they took without first discerning whether or not there was any truth to the accusation. More recently, Greece has taken to blaming the shorts for the rapid devaluation of their government debt.

For those without the dubious advantage of some financial knowledge, short selling consists in borrowing some sort of security with the intention of immediately selling it. The short seller is betting that the security will lose value so he can repurchase it later (whether a few seconds later or months later) and return it to the entity that loaned it to him. The entity loaning him the security is paid a fee by the short seller for the transaction, and since the entity (typically banks or investment firms) would be holding the security anyway, it is an excellent way for them to make extra money with little to no extra risk.

I feel the recent backlash against short sellers has two principal causes. First, there are considerably more "long" (that is, people who are betting securities will rise in price) investors than short sellers. Anyone who holds a stock or bond in an IRA, retirement plan, or other investment account is almost always long in that security. Since long positions and short positions are a zero sum game, whenever the shorts win, it means the longs are losing. Therefore, the majority is likely to dislike the shorts since the shorts are profiting precisely when the longs are losing. Secondly, there seems to be a confusion between cause and effect in the case of short selling. Given that the short side to the market is vastly smaller than the long side, the effect of the shorts selling shares of a security into the open market (thereby decreasing the value of that security) will be infinitesimal. There is a strong correlation between a lot of people shorting a stock and the stock declining in value, but the stock's decline is not caused by the people shorting it; rather, people are shorting it because they think it will decline in value.

The world is a terrifically complex place. Part of this terrific complexity is that there are in fact situations that are extremely black and white. Rarely do we find such a situation in the realm of economics, however, and the attempt by collapsing institutions to blame short pressure for their collapse is yet another manifestation of the desire to find a bad guy for something for which no one (and almost everyone) is to blame.

19 April 2010



Empiricists (I am told, though I'm not convinced I've ever really met one) believe that what is particularly disclosed in sense-experience is all that is objectively true. Universal affirmations and knowledge of essence are abstractions from sense-experience that do not specifically correspond to anything outside the mind, and are therefore untrue insofar as they cannot correspond to any physically "real" object. However, it is not clear that sense-experience is ever given directly in sense-experience. Indeed, it rather seems as though sense-experience is a universal. If this is so, then the belief that universals cannot correspond to particulars disclosed through sense-experience would appear to be a contradiction in terms, since it would immediately negate the possibility of its correspondence to anything objectively real.


It is not advisable to restrict possible evidence against one's position in advance. For as Socrates says in Republic to Thrasymachus, we cannot be certain in advance whether or not what we are seeking may lie within the area which we have closed off. Now, we can close off possible realms of evidence in two ways: a provisional way, and an absolute way. We close off evidence provisionally if the closure is temporary and methodological. The closure is absolute if a whole realm of phenomena are determined (extrinsically to the matter under consideration) to be off limits. It would seem that the absolute closure of the non-empirical in empiricism is problematic precisely because it is using an a priori concept (the empirical) to argue against the reality of a priori concepts.


It is not clear exactly what material means to empiricists. Dr. Johnson kicking the rock seems to be about as deep as the reflection on this point goes. There is a reason for this. If they deny that materiality has any objective meaning, then they open themselves up to the question of how they have decided to exclude immaterial objects. But if they admit that materiality does mean something, what could it mean but the essence of the material? And if material has essence, then their whole position seems to unravel rapidly.

13 April 2010

The Waste Land [part iii]

The Waste Land is often criticized as being "abstract" on the grounds that it is difficult to precisely decide on what is going on at any given point in the poem. We expect poems to either be lyrical or (at least in some rough sense) plot-driven and therefore at least tangentially inhabited by characters. The Waste Land fits in the later category, though the manner in which this is the case is not immediately apparent. Let me first suggest that there are several discrete "locations" identified in the poem. There is the "unreal city," which is largely coterminous with the desert "where the sun beats." There is the hyacinth garden, which is another image of the death by water that eventually overcomes Phlebas. There is the boudoir of the lady (Belladonna), called "rat's alley" by her companion, which is the same as the ruined space by the river where "a rat crept softly through the vegetation." Finally, there is the chapel in the mountains.

The majority of the action (more properly, inaction) that transpires in The Waste Land takes place in the unreal city. The poem's protagonist dwells in this city until he is freed by "death by water," at which point he is able to see the city from the outside as "the city over the mountains
/ [that] Cracks and reforms and bursts in the violet air / Falling towers." The poem is principally concerned with a journey out of The Waste Land, which is made possible by the recognition that no action or inaction one can undertake alone can free one from the wasteland. Rather, it is precisely the moment at which one recognizes one's inability to free oneself that the possibility that one might be freed takes place. Note well that this is where the poem's greatest terror and greatest uncertainty dwell, for even if one recognizes one's inability to free oneself one still may not be freed.

Many critics make a great deal of the supposed temporal or spatial fragmentation taking place in the poem, but I rather think a better way of talking about what they are trying to say is that the poem is dominated by a coming together of all things. Not the coming together that Eliot explores in Burnt Norton "at the still point of the turning world," but rather a coming together where nothing is different any longer form anything else. Distance is destroyed though the physically measurable remnants of what was distance may remain.

11 April 2010

The Waste Land [part II]

The poem opens with the image of the Sybil of Cumae "hanging in a cage." The Sybil's immortality renders her unable to die, despite her intense desire to do so. In one sense, the Sybil symbolizes the fact that everyone in the wasteland is trapped in a cage that both is and is not of their own making, unable to die yet unable to live. In another sense, however, the Sybil is not like almost anyone in the wasteland since she "wants to die." An odd wish, given that men of every nation have sought out immortality for as long as we have recorded history. By death, the Sybil does not simply refer to the cessation of respiration in the "human animal." Rather, it is precisely the fact that death has become a biological event that makes the actual experience of death impossible from the outset! Furthermore, as the possibility of experiencing death is necessary to be human, men who can no longer experience death qua death are no longer exactly human. But they have not reached either deathlessness of the immortals or the eternal return of the animal. They are somewhere quite different.

The reason that Madame Sosostris does "not find / The Hanged Man" and cautions her querent to "fear death by water" is twofold. On one hand, she is a false prophet; precisely what is needed is "death by water," but as she is a sort of oracle of the wasteland itself, this is exactly what she will not counsel. On the other hand, her cards nonetheless speak the truth. All the forces and personages which are active in the wasteland are enumerated on her cards. The one that is absent - the Hanged Man - is the card that most directly deals with the possibility of properly dying.

07 April 2010

The Waste Land [part I]

It seems fitting with the onset of April and beautiful weather to offer some remarks about T.S. Eliot's extraordinary poem The Waste Land. The poem famously opens with the line "April is the cruellest month." The perversion implied in this declaration is often lost in the extreme confusion caused by reading the poem. Let us try and capture how this opening line articulates the essential nature of the curse that has hold over the wasteland. The cruelty of April is specified as follows: it "breed[s] / Lilacs out of the dead land," it "mix[es] / Memory and desire," it "stir[s] / Dull roots with spring rain." These three charges laid against April all relate to the awakening of life from death, the natural resurrection that cycles year after year. Miraculously, each year spring comes. What sort of a person prefers the warmth of "winter?" The paradox implied in this line is that there is something so objectionable to the inhabitants of the wasteland about new life that they would rather it not happen at all. What sort of a people clings to infertility and a perpetual, zombie-like existence instead of the exuberant risk of new things?

Usually the cause of these people's rejection of spring is interpreted as the fear of death. This reading, while somewhat correct, misses the reason why the people are so afraid of death. After all, (almost) everyone who has ever lived has feared death. But the wasteland is something new, something modern. So we are not just faced with the fear of death. We are faced, rather, with the fear of life! Rain, the life-giving force that the poem's parched soil screams for, is what everyone in the poem is trying to avoid (until the end). When the rain comes the inhabitants of the wasteland venture into the "colonnade" or the "closed car at four." If I may venture an explanation of why this is the case, I would suggest that it is precisely the incredible power to control (seemingly) everything, or at least potentially control, that has led the inhabitants of the wasteland into this darkness. Those things that they cannot control grip them with terror. In an image of a diabolical Pentecost, the sound of the "wind under the door" which betokens a divine manifestation possesses the lady in the chair (symbolized by Belladonna in Madame Sosostris' wicked pack of cards) with an overmastering fear instead of a life-giving spirit.

06 April 2010

Justice and medicine

"The soul and body being two, have two arts corresponding to them: there is the art of politics attending on the soul; and another art attending on the body, of which I know no single name, but which may be described as having two divisions, one of them gymnastic, and the other medicine. And in politics there is a legislative part, which answers to gymnastic, as justice does to medicine; and the two parts run into one another, justice having to do with the same subject as legislation, and medicine with the same subject as gymnastic, but with a difference." Plato, Gorgias

Socrates notes the close connection between justice and medicine because both justice and medicine are only necessary in a world that is already out of balance. Since I have previously suggested that the essential difference between dialectic and sophistry consists in the manner in which dialectic brings justice to discourse, I might also suggest the analogue, which is: if the city was ruled by philosophy, there would be no need for Socrates' habit of questioning everyone. Though Socrates identifies himself as a midwife, perhaps we may more appropriately say that he was a doctor who sought to cure the city of its ills. This would also explain the consistent contrast that Socrates draws in Gorgias between the relative strengths and weaknesses of the doctor and the sophist. Though Socrates as the spiritual doctor of the polis is the only person truly qualified to save Athens, the sophists' superior capacity to convince the ignorant that they have all the answers renders Socrates unable to stop them. While Socrates (as he demonstrates in Phaedrus and other places) is capable of using sophistic techniques of speechifying, he refuses to use them to save the city since such an action is inherently impossible, since the salvation of the city could not consist just in right action, but in right thinking. This is the one virtue that no rhetorician can properly teach his disciples.