Bonfire of the Vanities

The road to hell is paved with good intentions

As an ideological mantra, ‘Never Again’ is associated primarily with the genocide politics of the 1940s, and in this context its effectiveness has been questionable, at best. As a dominating imperative, it has been vastly more consequential within the economic sphere, as a response to the Great Depression of the 1930s. Whilst ethnically selective mass killing is widely frowned upon, its attractions have been difficult to suppress. Deflationary depression, on the other hand, is simply not allowed to happen. This has been the supreme axiom of practical morality for almost a century, uniquely and distinctively shaping our age. We can call it the Prime Directive.

For the Western world, the 1930s were a near-death experience, an intimate encounter with the abyss, recalled with religious intensity. Because the threat was ‘existential’ – or unsurpassable – the remedy was invested with the absolute passion of a faith. The Prime Directive was adopted as a basic and final law, to which all social institutions and interests were subordinated without reservation. To question or resist it was to invite comprehensive disaster, and only a radically uninformed or criminally reckless heretic – a ‘crank’ – would do that. Anything is better than deflationary depression. That is the New Deal Law.

The consolidation of financial central planning, based on central banking and fiat currencies, provided the priesthood of the Prime Directive with everything it needed to ensure collective obedience: No deflationary depression without deflation, and no deflation with a well-oiled printing press. ‘Counter-cyclical’ inflation was always an option, and the hegemony of Anglophone economic-historical experience within the flourishing American century marginalized the memory of inflationary traumas to global backwaters of limited influence. Beside the moral grandeur of the Prime Directive, monetary integrity counted for nothing (only a crank, or a German, could argue otherwise).

The Prime Directive defines a regime that is both historically concrete and systemically generalizable. As Ashwin Parameswaran explains on his Macroeconomic Resilience blog, this type of regime is expressed with equal clarity in projects to manage a variety of other (non-economic) complex systems, including rivers and forests. Modern forestry, dominated by an imperative to fire suppression, provides an especially illuminating example. He notes:

The impetus for both fire suppression and macroeconomic stabilisation came from a crisis. In economics, this crisis was the Great Depression which highlighted the need for stabilising fiscal and monetary policy during a crisis. Out of all the initiatives, the most crucial from a systems viewpoint was the expansion of lender-of-last-resort operations and bank bailouts which tried to eliminate all disturbances at their source. In [Hyram] Minsky’s words: “The need for lender-of-Iast-resort operations will often occur before income falls steeply and before the well nigh automatic income and financial stabilizing effects of Big Government come into play.” (Stabilizing an Unstable Economy pg 46)

Similarly, the battle for complete fire suppression was won after the Great Idaho Fires of 1910. “The Great Idaho Fires of August 1910 were a defining event for fire policy and management, indeed for the policy and management of all natural resources in the United States. Often called the Big Blowup, the complex of fires consumed 3 million acres of valuable timber in northern Idaho and western Montana…..The battle cry of foresters and philosophers that year was simple and compelling: fires are evil, and they must be banished from the earth. The federal Weeks Act, which had been stalled in Congress for years, passed in February 1911. This law drastically expanded the Forest Service and established cooperative federal-state programs in fire control. It marked the beginning of federal fire-suppression efforts and effectively brought an end to light burning practices across most of the country. The prompt suppression of wildland fires by government agencies became a national paradigm and a national policy” (Sara Jensen and Guy McPherson). In 1935, the Forest Service implemented the ‘10 AM policy’, a goal to extinguish every new fire by 10 AM the day after it was reported.

In both cases, the trauma of a catastrophic disaster triggered a new policy that would try to stamp out all disturbances at the source, no matter how small.

At Zerohedge, The World Complex elaborates on the history of fire suppression in the United States:

The forests of the southwestern United States were subjected to a lengthy dry season, quite unlike the forests of the northeast. The northeastern forests were humid enough that decomposition of dead material would replenish the soils; but in the southwest, the climate was too dry in the summer and too cool in the winter for decomposition to be effective. Fire was needed to ensure healthy forests. Apart from replenishing the soils, fire was needed to reduce flammable litter, and the heat or smoke was required to germinate seeds.

In the late 19th century, light burning — setting small surface fires episodically to clear underbrush and keep the forests open — was a common practice in the western United States. So long as the fires remained small they tended to burn out undergrowth while leaving the older growth of the forests unscathed. The settlers who followed this practice recognized its native heritage; just as its opponents called it “Paiute forestry” as an expression of scorn (Pyne, 1982).

Supporters of burning did so for both philosophical and practical reasons — burning being the “Indian way” as well as expanding pasture and reducing fuels for forest fires. The detractors argued that small fires destroyed young trees, depleted soils, made the forest more susceptible to insects and disease, and were economically damaging. But the critical argument put forth by the opponents of burning was that it was inimical to the Progressive Spirit of Conservation. As a modern people, Americans should use the superior, scientific approaches of forest management that were now available to them, and which had not been available to the natives. Worse than being wrong, accepting native forest management methods would be primitive.

Spelling out the eventual consequences of the ‘progressive’ reformation of forest management practices probably isn’t necessary, since – in striking contrast to its economic analog – its lessons have been quite thoroughly absorbed, widely and frequently referenced. Ecologically-sophisticated environmentalists, in particular, have become attached to it as a deterrent model of arrogant intervention, and its perverse consequences. Everybody knows that the attempt to eliminate forest fires, rather than extinguishing risk, merely displaced, and even accentuated it, as the accumulation of tinder transformed a regime punctuated by comparatively frequent fires of moderate scale with one episodically devastated by massive, all-consuming conflagrations.

Parameswaran explains that the absence of fires leads to fuel build-up, ecological drift towards less fire-resistant species, reduction in diversity, and increased connectivity. The ‘protected’ or ‘stabilized’ forest changes in nature, from a cleared, robust, mixed, and patch-worked system, to a fuel-cluttered, fragile, increasingly mono-cultural and tightly interconnected mass, amounting almost to an explosive device. Stability degrades resilience, and preventing the catastrophe-to-come becomes increasingly expensive and uncertain, even as the importance of prevention rises. By the penultimate stage of this process, crisis management has engineered an impending apocalypse: a disastrous event that simply cannot possibly be allowed to happen (although it surely will).

Parameswaran calls this apocalyptic development sequence The Pathology of Stabilisation in Complex Adaptive Systems. It’s what the Prime Directive inevitably leads to. Unfortunately, diagnosis contains no hint of remedy. Every step up the road makes escape more improbable, as the scale of potential calamity rises. Few will find much comfort in the realization that taking this path was insane.

‘Black-boxes’ (or flight recorders) retrieved from air disasters are informative in this respect. With surprising regularity, the last words of the pilot, announced to no one in particular, eloquently express an acknowledgment of unattractive but unmistakable reality: “Oh $#it!” Less common – in fact, unheard of – is any honest address to the passengers: “Ladies and gentlemen, this is your captain speaking. We are all about to die.” What would be the point?

Everything to be realistically expected from our ruling political and financial elites can be predicted by rigorous analogy. This flight doesn’t end anywhere good, but it would be foolish to await an announcement.

Unencumbered by official position in the Cathedral of the Prime Directive, ‘Mickeyman’ at World Complex is free to sum things up with brutal honesty:

We have lived through a long period of financial management, in which failing financial institutions have been propped up by emergency intervention (applied somewhat selectively). Defaults have not been permitted. The result has been a tremendous build-up of paper ripe for burning. Had the fires of default been allowed to burn freely in the past we may well have healthier financial institutions. Instead we find our banks loaded up with all kinds of flammable paper products; their basements stuffed with barrels of black powder. Trails of black powder run from bank to bank, and it’s raining matches.