The end of the age of reason

Which shares are soaring on false dreams and a tide of hysterical alternative fundamentals.

Article updated: 28 February 2017 12:00pm Author: Michael Baxter


My puzzle

Back in the ancient world there was a library in Egypt, in the city of Alexandria, that contained the greatest collection of wisdom that the world had ever seen at that point. A scholar who spent time in that library, reading the scrolls, was considered a font of wisdom.

Tragically the library was destroyed in a great fire, and as result what we know of the ancient world is massively diminished.

In the modern era, we have seen the emergence of libraries that make the great library of Alexandria seem like a local bookshop. And the men and women who visit these libraries are typically filled with the desire to learn and understand. You may not like what he concluded, but Karl Marx was a regular at the British Library, for example. And when I do look at a library, I often stare in wonder at such a collection of learning.

It is just that as I write these words, a new library sits in my pocket that is so big in scale that it makes the Library of Congress – which I understand is the biggest physical library in the world today – seem like my local newsagent.

Never before have we been so wise, never before have we fact checked what we read or hear with such gusto. Never before have we been so objective, so scientific in our view of the world. This must be so, we have access to so much knowledge.To quote a recent Donald Trump tweet: “Not!”

Despite the fact that most of us carry smart phones with us that enable us to Google and thereby fact check anything we read, I fear that we are descending into an age of ignorance; the age of reason, or enlightenment seems to be ending: to be replaced by one based on superstition and conspiracy theories, we descend into filter bubbles, locked in chambers that only ever tell us what we want to hear, confirm our bias, and reinforce our prejudices.

I have a joke

This joke relates to that period before the EU referendum.
The joke goes like this.
“I say: how are you going to vote in the referendum?”
“I am not sure, I don’t think there is enough information for me to make my decision.”

Okay, when I say it is a joke, I don’t mean it is funny, I mean it is joke in the sense of its absurdity. The EU referendum saw an abundance of well researched, thoughtful and detailed studies available for free on the pros and cons of the EU.

How could people possibly have said there was not enough information, had they not heard of Google? And yet I heard that very argument over and over again.

Listen to the wise men

I guess that if there are any people out there who are qualified to give an opinion on global politics its former Prime Ministers and Presidents. I was not a fan of George W Bush when he was president – although I now look back on his days with fond nostalgia of a time when the world had leaders who put truth before hyperbole. I quite liked John Major, and disagreed with Tony Blair over the invasion of Iraq, but not for the reason that a lot of people disagreed. I was one of those naive fools who actually believed there were weapons of mass destruction in Iraq, I just believed that when it comes to international politics, the UN must be the conduit within which all disagreements are settled.

But what I do acknowledge is that Major, Blair and Bush know more than me about global politics and they are probably a good deal cleverer – yes even George Dubya, I assume that the fact he went to Harvard means he is more intelligent than the media gave him credit for – although his comments that the problem with the French is that they have “no word for entrepreneur,” does somewhat diminish his credibility.

You can disagree with what Mr Major, Blair and Bush said, but if you refuse to even listen to them and dismiss their words as the rantings of failed men, then I would like to suggest that the next time you are feeling ill, instead of seeing a doctor, you dig out a book on medieval medicine and have yourself bled – there is as much reason in the doctrines of the Middle Ages as there is in the argument you can ignore what former UK Prime Ministers and US Presidents say.

The stock markets

But this lack of reason applies to stock markets too.

US stocks enjoy valuations that are out of touch with reality. They soar on the hope that President Trump will deliver on all the promises they like, but backtrack on the ones they don’t like.

I have alternative facts for you.

Fact one: Brexit = Brexit. This is true, in much the same way as 2+2 = 4.

Fact two: previous episodes of market euphoria have ended in crashes.

As we rein back on regulation, just as household debt to GDP hits levels comparable to those we saw in 2008, as US student loan debt reaches levels that threaten to suffocate a generation, I fear we are repeating the errors that created the 2008 crisis.

These views are those of the author alone and do not necessarily reflect reflect the view of The Share Centre, its officers and employees

Michael Baxter portrait photo
Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.