Monday, 22 May 2017

A Financial Approach to the 'Clash of Cultures'


Noah Smith has posed a question that resulted in a tweet thread


He later highlighted a book on the question of the ‘east-west divide’.  Noah’s question seems to have been prompted by discussion of the activities of Stephens Bannon and Miller in attacking Islam.

I can’t point Noah towards a book that explains the clash but for the past year I have been working on Ethics in Quantitative Finance which sheds some light on the topic, but from a different perspective.  The aim of the book is to investigate the relationship between mathematics, finance and ethics.  The initial findings were unexpected for a mathematician.  They revealed that there was a recurring theme that finance drove the development of science and democratic politics.  The book was written in the context of an emergence of intolerant populism that I experienced during Scottish Independence Referendum of 2014, the UK EU Referendum of 2016 and the US Presidential Election.

I became interested in Islam on the evening of 9 November 1989.  I was living in London as a recent graduate working for an oil company and, watching the collapse of the Berlin Wall with my two flat-mates we came to the conclusion that, following the collapse of Communism, tensions would emerge between Islam and the West, bearing in mind the two cultures had been allied against the Soviet Union for a decade.   The following weekend I bought Lapidus’ A History of Islamic Societies and spent the following decade forming a positive opinion of the culture, not least because in the early 1990s I spent about 6 months in the UAE.



A point struck me while reading a biography of Sir Richard Francis Bacon.  For most of Bacon’s lifetime, married women in Britain could not own property, it was all owned by their husbands.  This was not the case in Islam, with the famous example of Muhammed wife Khadija.  Rather than this custom being seen as progressive by Victorian Britain, it was regarded as another manifestation of the effeminacy of Islam and part of the justification for Europe’s dominance of Islamic states, from North Africa to East Asia.  Islam’s toleration of sexual diversity was another manifestation of this effeminacy.  Burton’s career in the East India Company was curtailed by his exploration of homosexual brothels and he coined the term ‘Sotadic zone’, which broadly coincided with the predominantly Muslim lands he was familiar with.  In Wilfred Thesinger’s 1920s books on Arabia there is discussion of mukhannath and mustergil, people who are transgender and long accepted in Arabic society.
These portrayals of Islam are diametrically opposite to contemporary attitudes.  Today it is the west that tolerates sexual diversity and gender equality while Islam is presented as repressive.  My conclusion was, and is, that Islam provides a convenient embodiment of “the other” where by specific examples of how Islam is opposite to the West come to dominate how the west sees Islam, while the similarities are ignored.  Many Muslims regard Friday 13th as the holiest day (the Arabic letter ‘M’ for Muhammed is the 13th in the alphabet); in the west it is regarded as unlucky. 

Both Islam and Christianity are built, substantially, on foundations laid by Greek philosophy.  One account (I think it is Unveiling Islam) of the difference is that Islam is rooted in the intellect ‒ it is logical to be a Muslim – where as Christianity is distinguished by its foundation on ‘charity’ (love).  This suggests that there is more in common between Islam and Christianity as there are differences this does not imply that there is not a ‘clash of cultures’, just that the clash is more complex than Christian v. Muslim or ‘East’ v. ‘West’. 

Greek culture that emerged around 600 BCE became known for being distinctive in its attitudes to politics and science.  Greek science developed a non-mythical cosmology.  The central idea emerged in Miletus, in Anatolia, and was apeiron (‘without limit’), something boundless, homogenous, eternal and abstract yet it held and motivated all things.  Simultaneously, across the Aegean in Athens, Greek ideas of democracy were codified.  The standard explanations used to argue that the non-mythical cosmology originated in the polis where citizens were equal and ruled by an impersonal law: democracy generates science.  This account did not acknowledge the temporal simultaneity of the origins of the ideas but there geographical separation.  There needed to be something that preceded democracy and science common to both Athens and Miletus.

A more empirical explanation for origin of the distinctive nature of Greek politics and science lies in the Greek adoption of money in everyday use. 

Money can be seen as a prototype for the apeiron.  Money is ‘fungible’, meaning one money-token is indistinguishable from any other, it is an empty signifier, like a word used in everyday language.  The impersonality of money means that it is universal and makes no distinctions; it is used by rich and poor uniting opposites.  There is a discrepancy between the value of money and its commodity value because money an abstract concept signified by a concrete token.  Because it is abstracted, unlike any substance, money is unlimited.  It has the power to transform objects, being able to turn wheat into wine in the market.  Together, these properties enable money to perform multiple functions simultaneously.  It is used to meet social obligations, such as tribute, legal compensation, and is the dominant means of conducting exchange; it stores value and is the unit of account.  Money’s myriad uses means that it becomes a universal aim of all members of the community using it. 

Money centralised social power in a single, abstract and impersonal entity.  In monetised, Greek, economies personal power arose from the possession of impersonal and non-substantial money.  The impersonality of Greek money nurtured the concept of equality, which is the foundation of democracy.  The Greek word nomos, associated with ‘law’, is the root of the Greek word for money, nomisma.  When combined with ‘auto’ – self – it gives autonomy, the idea that people can govern themselves and out of it, the concept of the individual emerges. 

The foundations of Athenian democracy where laid by Solon (c. 638‒558) when he instituted several legal reforms.  These sought to address instability created by conflicts in society caused by growing inequality created by the financialisation of society.  Solon’s reforms solved the problems by substituting judicial violence with fines, something that was only possible because money was widely used.  In the process, justice was depersonalised so that hostility between people was replaced by an impersonal quantification between an injury and its compensation.  While money was disruptive of society it was also integral to Solon’s reforms that created a political system in which all citizens were equal.

Greek’s highlighted how their culture was distinctive from that of their neighbours, notably those in the civilised East.  The Greeks contrasted Solon’s democratic laws to those of the Median tyrant Deioces .  The Greeks assumed that the Medes had originally lived in autonomous towns but Deioces determined to unite them under his rule.  He achieved this by gaining a reputation as an honest judge and then stopped giving judgements.  The Medes were so desperate for his decisions that they offered him the crown.  On achieving his objective Deioces ordered his subjects to build him the palace of Ecbatana, surrounded by seven concentric circular walls of different colours with the inner most being silver then golden.  Deioces hid himself from his subjects in the palace and ruled through messengers using a network of spies to monitor the kingdom.  The Greeks compared Solon’s position as impartial arbiter in an open court to Deioces’ despotism, where the judge was hidden.

The essential difference was that Greek society was monetised and operated through inter-personal exchange where as that of the neighbouring societies were re-distributive.  In re-distributive societies, power originated in the gods.  Priests (or a king, the distinction was often blurred) were the direct servants of the gods who mediated between the population and the divine.  All that the community produced was owned, exclusively, by the gods and managed by a hierarchy of priests/kings.  Produce was delivered to the temple (or palace) and the priests, from behind closed doors, would re-distribute the aggregate production per their own rules, taking a cut for their own use.  In return, the priest/kings were expected to provide material and social security: food stores, walls, law and order.  These societies maintained themselves so long as the priest/kings prevented famine and ensured peace and justice.  It was passed through the priests/kings into the community through a clear hierarchy.  The transference of power was often done through seals (amulets, talisman) that magically carried the power of the god.

Greek religious practice diverged from this standard model.  The Greek gods lived on ambrosia and nectar, not on mortal food.  When Homeric Greeks, in around 800 BCE, performed an animal sacrifice the smoke ‘honoured’ the gods, who were not located in their icons but ‘somewhere else’, alienated from the people.  The sacrificial meat was then shared out amongst the community.  The fairness of this sharing was fundamental to Greek culture, with both the Iliad and the Odyssey resting on problems resulting from unfair distribution.  Consequently, the wealth of the Greek temples was owned and managed, inclusively, by the community in an egalitarian manner, in contrast to the wealth of temples in re-distributive societies.  There is a relationship between these Greek religious practices and the emergence of money in Greek society.  The lowest value Greek coin was the obolos that took its name from the cooking spits (obelos) that were used to distribute sacrificial food and it is almost certain that the word drachma comes from obeliskon drachmai ‒ handfuls of spits.

The Odyssey focuses on the Greeks’ sense of identity and emphasises the humanity and individuality of Greek society.  It describes the transformation of Odysseus from an aristocratic warrior to a democratic leader and represents a metaphor for the transformation of Greek society from a hierarchy to a democracy.  It begins with Odysseus and his followers leaving the defeat of Troy and brutally attacking the Cicones.  This indicates that they have been traumatised by their experience of war and need to be tempered before returning to the ideal of Ithaca.  After attacking Cicones, the company arrive on the island of the Lotus-eaters.  Here the traumatised fighters can eat the lotus and fall into oblivion.  However, Odysseus chooses not to succumb to the intoxication, rather he introduces the key theme of Greek philosophy of reflecting on life and acting rationally.  This is essential in establishing an individual’s identity. 

The next episode is the story of the Cyclops and is an example of a rebirth myth, where the hero enters a tomb/womb and is reborn.  Odysseus’ inquisitiveness leads him to enter the cave of the cyclops, Polyphemus.  The cave is full of food (cheese-symbolic of animal husbandry).  Odysseus intends to exchange the cheese for wine but the cyclops does not understand the tradition of exchange and starts eating Odysseus’ while trapping Odysseus and the rest in the cave.  Odysseus realises he cannot defeat the cyclops using brute force, but must employ intelligence, in particular dolus (trickery, cunning) which is bestowed on Odysseus by Athena.  Odysseus’ plan is to offer Polyphemus wine as a gift (as distinct from in exchange), get him into a drunken stupor that will enable the crew to blind the cyclops and escape.  The meaning is that Odysseus is reborn as a thinker not a fighter and as a thinker he can defeat the myopic cyclops.

The encounter with the cyclops introduces the political theme of the Odyssey: should people be ruled by petulant autocrats supported by an aristocracy of warriors or by thinking individuals who can rationally solve problems.  The fact that Odysseus is still short of the ideal is demonstrated in the next encounter.  The crew stay with King Aeolus who gives to Odysseus a bag containing the winds that will prevent their ship returning to Ithaca.  However, Odysseus does not explain the gift to his crew.  They think the bag contains gold that Odysseus is keeping for himself.  While Odysseus sleeps the crew open the bag to share out the gold, releasing the winds that blow them away from their destination.  Odysseus and his crew are punished for not trusting each other.

Odysseus has further experiences that temper him.  The most profound being his trip to the underworld where he encounters the dead warriors from Troy, Achilles, Ajax and Agamemnon.  Achilles tells Odysseus that he would prefer to be a living servant than a dead hero.  This enlightens Odysseus who, having returned from Hades, is able to resist the temptations of the Sirens’ offer of fame and glory and ends up on the island of Ogygia, captured by the beautiful nymph Calypso.  Calypso offers Odysseus immortality and a life of pleasure, but she also represents death, in the same way that the oblivion of the lotus eaters is vacuous.  After seven or so years, Athena persuades Zeus to order Odysseus’s release and the hero escapes on a raft.  After all these trials, Odysseus has been transformed into a judicious individual and is able to return to Ithaca disguised as a beggar, the polar opposite of the aristocratic hero.

The difference between the Greek (democratic, individualistic) and Persian (hierarchical, re-distributive) cultures is exemplified in Herodotus’ description of the first contact between Athens and Persia in 507 BCE.  The Athenians were seeking Persian protection from the Spartans and initiated negotiations based on their experience gained in the agora, the main meeting place of the polis that also severed as the market (agora, forum in Latin), as that of equals.  This was inconceivable to the Persians who maintained a hierarchical state that ruled from the Indus valley to Anatolia.  The Persians promised to support the Athenians in exchange for them ritually offering earth and water.  After some discussion, the Greeks agreed.  They had not realised that they were symbolically submitting Athens to Persia and would be punished if they did not comply with Persian demands in the future.  Following this misunderstanding, it was inevitable that the Persians invaded Greece in 490 BCE.  Despite the material odds stacked against them, the Greeks, in the Delian League led by Athens, first defeated two invasions and then pushed the Persians out of much of the eastern Mediterranean by 449 BCE.

While the clash of cultures is not geographical (western v. eastern) or religious (Islam v. Christianity) but societal, relating to a difference in ideology between monetised societies based on reciprocal exchange resting on individual judgement in a democracy and those based on hierarchical distribution of resources based on autocratic, often hidden, decision making.  Within Europe this conflict repeats itself itself.  It is central to the Reformation, caricatured as between Calvinist merchants and Catholic aristocrats.  In England, there is the Civil War, that ends with the Commonwealth, the Anglicisation of the Latin res publica, followed by the political divide between Whigs and Tories.  The United States is the exemplar of Whig political philosophy, rooted in Locke’s empirical political theories.

The perennial question is why should an unstable monetised society (capitalist) be preferable to a re-distributive one (communist).  The answer depends on whether you believe the future is predictable or not.  If you believe that science can tame uncertainty the implication is that the optimal allocation of resources can be determined by a central authority, such as Deicoes.  If, on the other hand, you believe the future is not knowable, you cannot rely on the calculations of the auto/techno-cracy.  Instead it is best to allow anyone to participate in decision making in order to enable the best solution to be identified. 

This point was made by Moses ben Maimon, the twelfth century rabbi from the Almoravid Islamic Empire.  The Bible explains suffering on the basis that people were expelled from the Garden of Eden.  This is usually interpreted as going from plenty to scarcity into a world of scarcity but ben Maimon argued that God’s punishment was not so much about scarcity as uncertainty.  In the Garden of Eden, humans had perfect knowledge, which was lost with the Fall, and it is the loss of this knowledge which is at the root of suffering: if people know what will happen they can manage scarcity.  Up until the nineteenth century, it was widely accepted that the world was fundamentally uncertain.  This was expressed in Aristotle’s acceptance that there was a class of phenomena not amenable to science, the Scholastic’s acceptance that God could defy the laws of nature and Locke’s belief that knowledge would always be doubtful. 

Spinoza, a Jewish marrano living in Amsterdam in the mid-seventeenth century understood Greek philosophy through Judaic and Islamic interpretations had argued that the Olympian perspective of the scientist made the world deterministic.  He argued that people believed themselves to have free-will and had autonomy because they did not see the complete picture, being only finite.  Spinoza believed that the purpose of the individual was to lift themselves out of a mundane perspective so that they could understand the totality of creation, coming to understand the true nature of God’s will: the laws of nature.  The ethical nature of the Ethics was in describing how different actions helped, or hindered, the individual in approaching God, which would give the correct perspective on everyday phenomena.  Spinoza believed that at the most basic level people had direct knowledge of nature through their senses.  This could be improved into a scientific knowledge of the world that showed connections between phenomena and so could make generalisations.  The goal was to have direct knowledge of the generalisations, not mediated by ‘finite’ ideas or concepts and this knowledge delivered true freedom.  
Spinoza’s contribution to western philosophy was in suggesting that humans can reach a complete picture of the universe that delivered certain knowledge.  This was novel to Europeans rooted in the Scholastic tradition that synthesised Aristotle and Catholicism.  However, it was reminiscent of Jewish and Islamic mysticism.  Jewish mysticism ‒ Kabbalah ‒ had become prominent in the thirteenth century through Moshe ben Naiman Girondi, from Catalonia, while Sufi thought was legitimised in the eleventh century by the Islamic scholar al Ghazali.  Both these scholars challenged Hellenistic philosophy, with al-Ghazali’s repudiation of Aristotle in The Incoherence of the Philosophers being pivotal in the development of Islamic thought.  Associated with al-Ghazali was the doctrine of ‘occasionalism’, that effect follows cause not because of a physical law but only because God’s will.  Spinoza echoed this attitude when he argued that a law of nature was simply a consequence of God’s ‒ or nature’s ‒ consistency.  In Sufi metaphysics, there is the concept of ‘Unity of Essence’ (wahdat al-wujud, وحدة الوجود) and the idea that people seek ‘annihilation in God’ (fanaa, فناء‎‎) just as for Spinoza people sought a God-like perspective.  While Islam and Spinoza both denied contingency, they did not deny the ability of the individual to assert their own will, it was just that asserting one’s will against God ‒ or nature ‒ would be detrimental to the individual.   This idea of determinism was unusual in European thinking.  The Greeks (especially in the Oedipus myth) and Calvinists believed in predestination, that the fate of a person’s soul was destined , but an individual had will throughout their life.  Spinoza’s argument was that individuals do not have a choice in correct action; knowledge guides them to the correct course.  If someone makes an immoral choice, it is through ignorance. 

As a mathematician ‒ that is someone who sees an equivalence between a donut and a coffee cup ‒ there is no real clash of cultures between Donald Trump and Salman bin Abdulaziz, they are equivalent in representing non-democratic rulers.  While it seems incongruous that the President of the US is accompanied on state occasions by his daughter and son-in-law and that he is above the rule of law, this would be normal for an absolute monarch.  Modern populism involves an economic shift to the left accompanied by a cultural shift to the right.  It does not really matter if this is in Russia, India, Saudi Arabia, Britain or France.  The opposite of this populism is pluralistic debate rather than simple panaceas, which are destined to fail.

2 comments:

  1. This is fascinating, as ever, and illuminating and wonderfully erudite. Thank you.

    May I ask whether you feel your initial hypothesis about "a recurring theme that finance drove the development of science and democratic politics" is proved by the foregoing "schrift"?

    While I'm inclined to support the hypothesis, I'm not yet convinced.... w humble apologies

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    1. Do I think the initial hypothesis is proved above: No.

      In the book I discuss what can be meant by "proof" of a theory, particularly one that does not relate to 'matters of fact' ("this cup is blue", "the gravitational constant is ...", etc.)

      The case finance in driving the emergence of (Western) science and democracy is made by, amongst others, Richard Seaford (Money in the Early Greek Mind), Richard Hadden (On the Shoulders of Merchants) and Joel Kaye (Economy and Nature in the Fourteenth Century).

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