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Jewish World Review May 7, 2008 / 2 Iyar 5768 Will a canary be our last meal? By Rod Dreher
http://www.JewishWorldReview.com | It's not every day that you see a Wall Street Journal columnist suggesting that Americans consider stockpiling food. But that's exactly what investment writer Brett Arends did recently, predicting that global food prices are about to take off into the stratosphere. "Load up the pantry," top Wall Street investor Manu Daftary told the writer. "I think prices are going higher. People are too complacent. They think it isn't going to happen here."Complacency about the prospect of catastrophe can be a "deadly enemy," warns top investment strategist Barton Biggs in his new book, Wealth, War & Wisdom. The rich are especially vulnerable, Mr. Biggs writes, "because they cherish the illusion that when things start to go bad, they will have time to extricate themselves and their wealth. It never works that way. Events move much faster than anyone expects." How much faith can any of us have that we'll see devastating events coming? According to Nassim Nicholas Taleb, not much. Mr. Taleb is a former Wall Street trader who has become a philosopher of probability. He wrote a terrific nonfiction bestseller last year, The Black Swan – the title is his term for a totally unexpected, utterly game-changing event, like 9/11 – that explored the importance of what we falsely think we know. The notion that it isn't going to happen here is an example of a logical fallacy that Mr. Taleb calls confirmation bias. It's the same mistake made by the turkey that wakes up the day before Thanksgiving convinced that this day is bound to be just as terrific as the last thousand, based on his own experience. And then there's the narrative fallacy, which depends on the human weakness for imposing patterns on data. Because we're hardwired to interpret facts in terms of a story, Mr. Taleb explains, we erroneously exclude information that doesn't fit our preferred narrative. It was easy for Americans to believe erroneously that the Iraqis would welcome U.S. invaders as liberators because that conclusion fits the story we like to tell ourselves about human nature and progress. Both fallacies work to keep us from taking seriously the possibility that the country could face something as seemingly absurd as food shortages. We are psychologically invested in the idea that America is insulated from history and that our wealth, creativity and technological expertise will keep the barbarians, figuratively speaking, at bay. Which is true – until it isn't. At which point we will, in retrospect, look back at all the signs that pointed to the Black Swan event, as if its advent had been obvious all along. It's not that nobody can ever see Black Swans coming, but rather that we tend to dismiss the dark spots on the horizon as meaningless, until they take us by surprise. How can we get better at seeing them coming? "Train yourself to spot the difference between the sensational and the empirical," advises Mr. Taleb. Scary forecasts may not have facts or logic to support them. And make sure to be prepared for the worst, he says. You never know. What this has to do with food shortages is plain and sobering. The price of food is ballooning for two basic reasons. For one, there is increased demand from consumers in China, India and other industrializing nations experiencing a rapid rise in their standard of living. For another, the massive thirst for oil from those same nations is driving up the costs of food production and transportation. If you believe the rise of China and India is a temporary phenomenon – and that we will return to normal once the oil supply responds, as it always has, to meet unprecedented global demand – you've got no worries. But what if those emerging Asian powers are here to stay, and world oil demand will outstrip production, as most experts predict? In that case, rising grocery prices likely signal a more fundamental crisis in a modern civilization built on inexpensive, readily available oil. Food prices these days are certainly sensational, but there are empirical reasons for their rise, reasons that point beyond a momentary spike. Grocery bills could be a proverbial canary in the coalmine, warning of dangers the rest of us can't detect. And that canary? It might just be a Black Swan. We'll know eventually – but too late for the complacent who didn't discern the empirical signs of the times and prepare. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
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Rod Dreher is assistant editorial page editor of the Dallas Morning News and author of "Crunchy Cons" (Crown Forum).
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