Site   Web

December 2, 2010

Twitter ye not, Europe is but another random meme

In “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay, he treated many psychic states as that of the economically hackneyed word of today, “random”; the new bubble meme of demographic herds.

Will Self postured in an article for the New Statesman in 2009 that the word “random” has become a “nonce phrase” and ventured that ever since the credit crunch it registered with him that the word “random” has insinuated itself into British vocalisation by responding to the universal, but imperfectly acknowledged, awareness that it was bankers’ willingness to accept systematically flawed calculations of risk that led to the near-collapse of the Western financial system. “Random,” he asserts, has resurged like a talismanic word in a form of prayer.

While European banks are busily extending loans to bankrupt states on the basis that “they cannot go bankrupt”, bailouts have been issued to European governments like the burgeoning underclass of celebrity; as Greece and Ireland receive their billions, Portugal and Spain are under pressure to request even more.

And this has led some observers to note that the whole financial system seems to be tottering on the precipice, with Bloomberg predicting that as the global financial crisis moves on to Spain, the “big elephant” will spell Europe’s conclusive financial chapter over.

At the same time as the random meme takes hold of the instability in the Eurozone, it is causing the value of silver to spike, according to CNBC. A Manhattan coin dealer admitted: “This is probably the strongest demand there’s been in the last 25 years for silver,” as gold is now so expensive.

There is also talk of Belgium and Italy “being in danger”, and that if France and Germany continue to extend these “guarantees” they’ll get sucked into the maelstrom of the damned.

In “Extraordinary Popular Delusions and the Madness of Crowds,” there is a history of such national follies, such as England’s South Sea Bubble and Holland’s Tulip Frenzy. The Scottish historian Charles Mackay observed: “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” And that “money, again, has often been a cause of the delusion of the multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper.”

These words take on their own peculiarity when one looks at the Dutch tulip mania of the early seventeenth century. At the time, the Dutch aristocracy was extremely wealthy, while the average Dutch worker in the 1600s made about 150 florins annually; a rare tulip bulb, however, could easily be sold for 1,000 florins. Tulips were worth more than gold.

But then the market crashed because the unregulated futures market or derivatives market for tulip bulbs had skyrocketed. Tulip bulbs had bubbled and the market abruptly collapsed. It was decreed that futures in tulips could no longer be traded as an investment, but only as an actual product in the marketplace. How strangely familiar.

Among the crowd syndrome of bubbles and financial manias, as described by Mackay, are the South Sea Company bubble of 1711–1720 and the Mississippi Company bubble of 1719–1720.

Bubbles had all seem so rare at the turn of the millennium, but the first recorded bubble case in England was that of the State Lottery in 1569. The South Sea Company had a monopoly in trade with South America, which underwrote English National Debt, which stood at £30 million. Shares immediately rose to 10 times their value; the country went wild and vast fortunes were made.

Then the bubble burst; stocks crashed and people all over the country lost all of their money, mostly the moneyed clergy, bishops and gentry, who lost their life savings. The whole country suffered a catastrophic loss of money and property. Suicides became a daily occurrence and the gullible mob, whose innate greed had lain behind this mass hysteria for wealth, demanded vengeance, much like it is today towards bankers in particular and elected governments (some unwittingly like the Obama’s inheritance of the global ponzi scheme) in general. Socially, the South Sea Company bubble caused frantic bankers to throng the lobbies of parliament until the Riot Act was read to restore order.

Will Self referred in another of his articles to The Stockholm Syndrome. When landing at the airport one day he observed guys with mobiles phones that were “either talking to Wotan or were schizophrenics”. He could not tell which. What is it nowadays with civil society, he mused, that anyone with a portable phone now believes they have an inalienable right to “yatter on in public, at inordinate length and as loudly as a trombonist”? As an antidote to this random meme, when “deranged persons” begin to “Samsung-soliloquise”, he tries to bring them to their senses by reading aloud from Schopenhauer…” The mobile bubble; the communications centre of the insane.

About a year ago I read, dubiously now, that the only country ever to go bankrupt was Newfoundland. Now I see that Spain defaulted on its financial obligations seven times during the 19th century alone; Argentina’s bankruptcy in 2001 was caused by a run on the banks following a collapse of the country’s national currency; Germany has the dubious distinction of having gone bankrupt not once, but twice in recent memory, the first during in the 1920s as a result of losing World War I; Britain was bankrupt after World War II; and Russia went bankrupt in 1998, when the former communist country suffered the “ruble crisis”.

In J.P. Chaplin’s “Rumour, Fear and the Madness of Crowds”, on 24th August 1926, one of the worst riots in the history of New York erupted, with between sixty to eight thousand people involved. And the cause of these unruly legions in the heart of New York City was the dead body of Rudolph Valentino as he lay in state.

It is said that it was an outbreak of mass hysteria in an era celebrated for excess and exhibitionism. In his words: “There seemed to be no limit to human ingenuity in contriving masterpieces of sheer stupidity.” The riots today seem so redolent of this one event.

Similarly, the exaggerated newspaper reports of wild grief and the long delay between the actor’s death and his departure for Hollywood added fuel to the fires of madness in conjunction with panic and fear.

Today, the financial auditorium, the false sanctity of grief, is fuelling another random meme. And in the words of Shakespeare, “the blind monster, with uncounted heads, the still discordant, wavering multitude” social media would do well to abandon its interactions on this subject lest it actively drives dialogue into fear and panic into the random meme.

John Sylvester is the media director of V9 Design & Build ( and an expert in search engine optimization and web marketing strategies.