"IN PRAISE OF FOLLY" -- THE PALLIATIVE TO GLOOM!

“IN PRAISE OF FOLLY” – THE PALLIATIVE TO GLOOM!

James R. Fisher, Jr., Ph.D.
© February 20, 2009

REFERENCE: This is another excerpt from Confident Thinking.

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“Purely intellectual as Erasmus was, he could not be a partisan, not because of timidity, but because he saw good and the bad of all sides. He would not follow Luther, because he had mixed some evil with his good; he could not wish him utterly crushed, because of the Pharisees in the Catholic Church. He was always making exceptions, discovering distinctions, and toning down an otherwise too glaring statement. He could hardly write anything without some hedging, some slight doubt as to the unqualified validity of what he said. He, almost alone in his age, knew that truth had many faces, that no rule can be without exceptions, and that no position is unassailable.”

Preserved Smith, Erasmus: A Study of His Life, Ideals and Place in History (1923)

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If I have given the impression it is not healthy to see the Folly of our ways, I apologize because that is what is needed in troubled times. Folly is the foil to taking ourselves too seriously. The global economic meltdown of 2008, leading to the Recession of 2009 and beyond was fueled by panic, which is the bride of Folly. The investment bank of Bear Stearns had cash reserves of $18 billion when panic led to gloom and gloom led a raid on the bank.

A week later Bear Stearns was almost broke with its stock price plummeting from three digits to two digits and then to one digit, requiring a massive Federal Government “Bail Out.” This Folly is a reminder of the inaugural speech of President Franklin Delano Roosevelt when he took office in 1933 in the midst of the Great Depression, saying, “The only thing we have to fear is fear itself.”

FDR was well acquainted with Folly. Our actions indicate Folly does not have to be totally irrational when it is the bride of panic. After all, it has been scholars and learned men, some even called “wise men,” who have gotten us into these straits.

Plato reminds us, “We can easily forgive a child who is afraid of the dark; the real tragedy of life is when men are afraid of the light.” He was thinking of Folly. Absurd as the subprime real estate fiasco, or the run on the banks have proven to be, Confident Thinking was the greatest casualty. We sometimes forget it is personal trust that has always been the key to our survival.

Nobel Laureate economist Paul Krugman prefaces his televised remarks by assuring us “how smart” these financial people are running our economy. There is a touch of Folly here. Writer Studs Terkel, who lived through the Great Depression and wrote about it (“Hard Times”), tells us, “The lessons learned are that the big boys running the economy are not all that bright.” Folly is the palliative to gloom.

THE ANATOMY OF FOLLY – THE FINANCIAL MELTDOWN OF 2008

While we are busy applauding ourselves on how wise, sophisticated and advanced we are in the annals of human history, something happened in the first quarter of 2008 to remind us how prescient Erasmus (1466 – 1536) was 500 years ago, when he wrote “In Praise of Folly” (1509).

In the Spring of 2008, the subprime real estate bubble burst and the housing market crashed. There followed a run on the Wall Street investment bank, Bear Stearns. The banking stock was then trading for $171 per share. Company employees own 30 percent of the stock. Folly believed in the company.

Rumor fed by fear collapsed into panic and spread like a contagion. In 48 hours the stock was trading for $60. Alan Greenberg, a company executive, said there was no reason for the panic; that Bear Stearns had cash reserves of $18 billion. Before the week was out toxic assets consumed that cash reserve.

Bear Stearns didn’t invent greed but it drank from its polluted wells, buying hundreds of thousands of mortgages, bundling them up into securities, and then reselling them to investors. It was a formula for disaster but the best and the brightest thought it could be contained. Folly always wears a mask of confidence.

Morgan Stanley, the Federal Reserve, and the Securities Exchange Commission (SEC) now took notice believing it was a manageable situation and not an avalanche. They were wrong.

Folly convinced itself that this nightmare would never occur as all Wall Street firms were bundled together in what are called “credit default swaps” (CDS). These are a form of insurance, which secures bonds. Bear Stearns, like everyone else, paid a nominal fee for this insurance with no intention of ever being forced to pay the face value of the bonds. It held $100s of billions in CDS, as did all of Wall Street, as did investment banks across the globe to the tune of $ trillions.

So incestuous were these financial arrangements on Wall Street that everyone was plugged in and connected to everyone else. A cascade of failures was not only imminent but seem inevitable. Folly ruled the waves. Nothing in living memory approached the potential calamity envisioned.

Secretary of Treasurer Hank Paulsen and Federal Reserve Chairman Ben Bernanke were on the hot seat. Something had to be done. Bear Sterns was an unregulated investment bank, and money couldn’t be lent directly to it.

Bernanke got around this legality by giving $30 billion to J. P. Morgan to rescue Bear Sterns and assume control of its toxic securities. This was not an easy decision.

Two ideas were in play: “systemic risk,” that is, that failure was not an option as it would systemically cause irrevocably damage; and “moral hazard,” that is, the damage was self-inflicted and therefore those responsible should be punished by taking it on the chin.

Choosing the “systemic risk” option Paulsen and Bernanke thought they had stopped the leak in the financial dike. They were wrong. Their folly spelled “F-A-I-L-U-R-E” to Wall Street with the DOW Jones Industrials plunging 500 points, while Bear Stearns traded at $30.

This was not the end of Folly. Secretary Paulsen, a Republican who believed in “moral hazard,” wanted to punish Bear Stearns investors. He had J. P. Morgan pay stockholders of record $2 per share, when a little over a week before the stock was trading for $171 per share. Bear Stearns was now gone with many employees cleaned out of their jobs, life savings and stock portfolios. Employees cried openly without embarrassment as they felt they had done nothing wrong. With Folly, it is not necessary.

The tragic comedy was repeated with Fannie Mae and Freddie Max, two publicly traded companies that held more than $5 trillion in home mortgages. During this same period, these two firms lost 60 percent of their stock value. Systemic risk now ruled the decisions of our dynamic dual, as Paulsen and Bernanke had the Federal Government take over Fannie and Freddie. These are two of the largest companies in the world, proving that no company is too large to fail.

Next it was the investment bank Lehman Brothers, a company dominated by its CEO, Richard S. Fuld, Folly personified. He “was the company.” People cowered to him so he came to believe himself invincible, and thus ruled as if an anointed king with the swagger and arrogance of a financial Lone Ranger. He sought high-risk mortgages and wouldn’t listen to any of his people who sensed catastrophe. Nothing can touch Folly.

On a personal level, Paulsen and Fuld had gone head-to-head as competitors when Paulsen ran Morgan Stanley. Now, “it’s not my fault” Fuld was expecting the government to bail out Lehman Brothers as it had Bear Stearns. Folly is not too reflective. It didn’t happen. Paulsen applied his policy of “moral hazard.” Lehman Brothers went into bankruptcy and evaporated into the firmament.

Now, in the Fall of 2008 with American International Group, Inc. (AIG) holding $ billions of CDS of Lehman Brothers, capital is frozen. Banks are unable to borrow money. $ Trillions of debt threatens to put the global economy into another Great Depression. Systemic risk is now the policy of choice. The government loans $85 billion to AIG and takes 80 percent ownership of the company. This happened only two days after Lehman Brothers collapsed.

Still on the offensive, Paulsen and Bernanke pushed through Congress – on the second vote – a $700 billion “Bail Out” bill to purchase toxic mortgage securities. Congress had never acted so fast or with no chance to debate or modify the three and one-half page bill. Most Congressional bills take weeks if not months to establish consensus in committee before even coming to a vote, and then they run typically into the hundreds of pages. Congress was motivated to act quickly as the Dow Jones Industrials dropped 777 points after that first vote.

Next, Paulsen and Bernanke called the CEOs of the nine largest banks in the country to Washington, DC, sat them down, and told them the score. A capital injection of $ billions was to be made available to them to unfreeze the credit crunch. These CEOs were given a one-page non-negotiable document to take home, and return signed the next day. All nine CEOs signed. Within a week they had $125 billion. $350 billion of the “bail out” money had been spent already.

If you get the impression the dynamic dual were flying by the seat of their pants as Folly, that Paulsen and Bernanke had no overarching plan, that they were reacting rather than acting, stay tuned. You’ve heard nothing yet. Folly has been passed on to President Barak Obama. He has successfully badgered Congress into approving his nearly $ trillion “stimulus package” of 2009, which has a striking similar DNA to $700 billion predecessor.

THE MORE THINGS GO AROUND THEY COME AROUND

Erasmus lived in an equally chaotic period in Western civilization. Six years after he published “In Praise of Folly” (1511), Martin Luther posted his 95 theses on the Castle Church door in Wittenberg, Germany (1517). Pope Leo X excommunicated the theologian for his heresy in 1521. Pope Clement VII excommunicated King Henry VIII in 1533 after the king divorced and remarried in defiance of Rome's refusal to annul his marriage. The king then formed the Church of England. Sir Thomas More, devoted friend of the king, was beheaded in 1535 for his refusal to vow allegiance to the king as his spiritual leader, remaining loyal to Rome to the end.

Erasmus and More were good friends, but very different men. Erasmus wrote “In Praise of Folly” in England while visiting Sir Thomas, but published it secretly and anonymously in France. Both men were rational intellectual leaders of the Renaissance, but of differing discretionary persuasions. Erasmus chose to work mainly behind the scenes of the Counter Reformation while Sir Thomas gave his life. Erasmus died a year after his friend was beheaded at age 70. More was 57 at his death.

It was religion, not finance that controlled the minds of men of the time. The Roman Catholic Church, which had been all-powerful since the Middle Ages, was declining. It was also corrupt, selling indulgences with popes claiming infallibility and being a law unto themselves.

Failure of the Church to recognize and deal with change fueled dissension and gave birth to the Reformation. The Protestant Movement was rich in leadership with such men as John Calvin. The French theologian created a unique and far reaching doctrine of “The Elected." You could tell who were among the elected by their discipline, dedication, frugality, morality, devotion and success. This gave birth to what Max Weber called “the Protestant work ethic,” and ultimately to capitalism. White Anglo Saxon Protestants (WASPs) came to dominate this economic system across Europe. The irony of this is not lost on our present situation.

GENESIS OF “IN PRAISE OF FOLLY”

In a general sense, we are an accidental race in which Folly has always been our guide. Erasmus was recovering from an attack of back pain, and resting at the home of his English friend, Sir Thomas More author of “Utopia” (1516), when he wrote the little book “In Praise of Folly.”

It was not until two years after the book was written (1511) that Erasmus had the book secretly printed in France. The fact that there were at least seven editions within months of this first printing provides a measure of its immediate success and popularity. Because of this work Erasmus became one of the most popular men of letters of his time, and consequently, one of the most influential.

In a letter to Sir Thomas he wrote:

“On returning from Italy, I chose to amuse myself with the Praise of Folly (Moria). What Pallas, you will say, put that into my head? Well, the first thing that struck me was your surname, More, which is just as near the name of Moria or Folly . . . I surmised that this playful production of our genius would find special favor with you, disposed as you are to take pleasure in a jest of this kind . . . For, as nothing is more trifling than to treat serious questions frivolously, so nothing is more amusing than to treat trifles in such a way as to show yourself anything but a trifler.”

This last sentence is key to Folly. The book is a witty sermon, an earnest satire, a joke with an ethical purpose, mockery with a moral. Folly was meant to be a shrewd blow directed at superstitions and human foibles. Erasmus intended to get beyond lampoons. He knew people deprived of power often sought revenge on their masters by heaping them with ridicule thus tempering despotism with epigrams. Political editorial cartoons do it today. He chose to be subtler.

Erasmus was not the first to use this device nor will he be the last, but it is striking how much his own observations and biases grace the pages. Folly speaks of what is rotten in the Church and state, something he himself had seen. When Folly satirizes the pope, it is his own pope Julius II he has in mind. When Folly points to the stupidity of theologians, he is drawing from the painstaking studies of his fellow theologians.

In earlier works, satire was a dagger or a scourge, but with Erasmus it is a mirror. True, all satire starts with the axiom that the world is full of fools, but where others take this to heart with indignation painting Folly as wickedness and at wickedness as Folly, Erasmus finds the idea infinitely amusing. So, Folly in his hands is personified as neither vice nor stupidity, but a quite charming naiveté, the natural impulse of the child or the unsophisticated man.

Folly is no grim demon, but an amiable gossip that sees everything and reports it candidly rather than as a malignant force. Folly is what it is.

Erasmus is saying, without Folly, society would tumble on its ears, and the human race would die. Then he gives his take on some human conundrums: what calculating wise man or woman would take the risk of marrying and bringing up children? Would women or children have any attraction without Folly?

Erasmus is convinced that the act of procreation is one that no wise man would willingly perform. Without Folly, he says there would be more care than pleasure; without her there would be no family for marriages would be few and divorces many. He goes on: without Folly there would be neither society nor government at all, arguing, do not the wisest legislators recognize the necessity of fooling the people most of the time?

Socrates, he says, shows good sense in declaring philosophers should be kept far from politics, while Plato lacks good sense in thinking philosopher kings are history’s answer to man’s dilemma. Folly points to the miserable state of the Church and government when philosophers have ruled them. In our time, Eric Hoffer states it bluntly, “Give intellectuals everything but power.”

Folly has allegiance to no one. She finds medicine mainly quackery and lawyers little more than shysters. Men, she says, would be far better off if they lived in a state of nature according to their instincts. Folly finds the wisest men are the most wretched, fools and idiots, adding, “unfrighted by bugbear tales of another world” are far happier. She reflects, “How much pleasure comes from hobbies which are mere foolishness! Or man delights in hunting, another in building, a third in gaming, but a sage despises all such frivolity.”

Folly has much fun with the follies of superstition. She sees the analogy between the worship of the saints and ancient polytheism: Polyphemus has become Christopher to keep his devotion safe; St. Erasmus gives them wealth; St. George is but the Christian Hercules, “but what shall I say of those who flatter themselves with the cheat of pardons and indulgences?” These fools think they can buy not only all the blessings and pleasures of life, but heaven hereafter. What is worse, priests encourage them in their error for the sake of filthy lucre.

Each nation has its own pet foibles as well. England boasts handsome women; Scots are of gentle blood; the French intrigue is good breeding; and the Italians is their eloquence.

Nor do the wise escape having their own peculiar foibles. No race of men is more miserable than students of literature, Folly declares: “When anyone after a great deal of poring, spell out the inscriptions on some battered monument, Lord! What joy, what triumph, what congratulations upon his success, as if he had conquered Africa, or taken Babylon the Great!”

As for scientists or “natural philosophers, Folly has this to say:

“How sweetly they rave when they build themselves innumerable worlds, when they measure the sun, moon, stars, and spheres as though with a tape to an inch, when they explain the cause of thunder, the winds, eclipses, and other inexplicable phenomena, never hesitating, as though they were the private secretaries of creative Nature or had descended from the council of the gods to us, while in the meantime Nature magnificently laughs at them and at their conjectures.”

But for Folly the theology of the divines is still more ridiculous:

“They will explain the precise manner in which original sin is derived from our first parents; they will satisfy you in what manner, by what degrees and in how long a time our Savior was conceived in the Virgin’s womb, and demonstrate how in the consecrated wafer the accidents can exist without the substance. Nay, these are accounted trivial, easy questions; they have greater difficulties behind, which, nevertheless, they solve with as much expedition as the former – namely, whether supernatural generation requires any instant of time? Whether Christ, as a son, bears a double, especially distinct relation to God the Father and his Virgin Mother? Whether it would be possible for the first person of the Trinity to hate the second? Whether God, who took our nature upon him in the form of a man, could as well have become a woman, a devil, an ass, a gourd, or a stone?”

Folly enumerates the stupidities, and injustices done by the monks, who insist that ignorance is the first essential, by kings and courtiers, by pope and cardinals whose lives contrast so painfully with their professions.

“I was lately,” Folly continues, “at a theological discussion, for I often go to such meetings, when some one asked what authority there was in the Bible for burning heretics instead of convincing them by argument? A certain hard old man, a theologian by the very look of him, not without a great deal of disdain, answered that it was the express injunction of St. Paul, when he said: ‘A man that is an heretic after the first and second admonition reject.’ When he yelled these words over and over again and some were wondering what had struck the man, he finally explained that Paul meant that the heretic must be put out of life. Some burst out laughing, but others seemed to think this interpretation perfectly theological.”

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Although written five hundred years ago, the book remains an effective examination of man’s aspirations, inclinations, indulgences and vanities, which seem never to escape feeling as contemporary as if written moments ago. Folly gives the modern reader an idea of the chaotic struggle people have always had to face in cutting through the hypocrisy of their times. It was feudalism, Catholicism, and sanctimonious corruption in the days of Erasmus. It is corpocracy, theocracy, genocide, homicide, suicide, preemptive war, and meretricious greed that corrupt ours.

Erasmus put a mirror up to his time. Others of us far less gifted have attempted to do the same to ours; knowing man being man will persist in the folly of his ways nonetheless.

Folly is also a book about individualism and freedom. Protestantism and capitalism were inextricably fused in individualism. It was a time men were persecuted unless they submitted to a life in which they exercised no choices of their own. Every door was blocked from them no matter how noble their character. They could not “sin against truth,” but whose truth, certainly not their own? Erasmus made this truth Folly’s truth.

Erasmus could see the modern world was being born, that men were bent on a life of their own to live as they saw fit. Luther put this into theology declaring the individual could seek salvation through faith alone rather in human works; that man could address his concerns directly to God rather than have a priest act as his intercessor in the Sacrament of Confession.

People were ripe for change with a growing army of protesters against exploitation and humiliation, against the intrusion of public authority in their private lives. The Church was dying, as was its mass hypnosis of custom and organized propaganda failing. Epigrams flourished in these times connecting Erasmus and Luther: e.g., “Erasmus laid the eggs and Luther hatched the chickens”; “Erasmus is the father of Luther”; and “Luther, Zwingli and Erasmus are the soldiers of Pilate, who crucify Christ.” These noxious gems studded the sermons of many Catholic priests who were convinced Erasmus started the Reformation, and when he in fact was one of the fathers of the Counter Reformation.

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Sixty years earlier in 1455, Guttenberg had invented the movable type, and now Luther could translate the bible into German and disseminate across the country. This fueled reading, education and nationalism, which in turn spread throughout Europe as the bible was translated into dozens of European languages. Individualism, once much disputed and maligned as a concept of man, was now on the march.

Folly is a mirror of her times and wonders if man is ready to leave the cave’s darkness that man knows so well for the light that might blind him. Folly wasn’t taking wagers. She knows man wants to continue doing everything that he is now doing, and to retain everything that he has always had without sacrifice, risk or pain. Folly took pleasure in exposing this human condition.

Erasmus wrote this book when society was uncoupling itself from the feudal system with the lowly merchant class emerging from the docks to take charge of commerce with the complexion and character of society being based increasingly on performance rather than birth, pomp, ritual and circumstance.

WHY "IN PRAISE OF FOLLY" IS A PALLIATIVE TO OUR TIMES

Folly is the orator of Erasmus’ own concerns; her subject is society and morality and the faulty confidence of the time. Folly quickly becomes a many-sided symbol that stands for all that is natural in man, for his misdirected effort, and for all of his attempts to get the wrong things out of life.

She discusses the problem of man’s wisdom and tells how it can be united with man’s action to gain success in a world of Folly. She is concerned with the way in which reason and simple moral advice can be presented to mankind. She wonders what the secular humanists, who reject the supernatural and stress only individual dignity, worth, and self-realization, can do for man and the world.

Parody, irony, and satire are used throughout the work to show man what he does and what he has harvested. No one is spared: not king or prince, not pope or priest, not aristocrat or workingman.

Folly is preoccupied with her passion for Youth, and lists among her followers Drunkenness, Ignorance, Self-love, Flattery, Forgetfulness, Laziness, Pleasure, Madness, Sensuality, Intemperance, and Sound Sleep.

All these followers help her to gain control of all things in society. Folly goes on to say that she is the source of all that is pleasurable in life. She insists man will never be completely free from her because he is ruled more by passion than by reason, and the two most important aspects of passion are anger and lust, and he is shrunken by both.

Folly praises herself under the guise of Prudence because she allows man to have first-hand experience with the world. She frees man from shame and fear, which clouds his mind and inhibits his actions, thus preventing him from any real experience.

Because of Prudence man goes along with the crowd, which is Folly. Indeed, it is Folly who has caused all the great achievements of mankind, yet wisdom and learning are no great help to relieve man’s anxiety.

Self-love, self-importance, and flattery motivate everything that man does. To lead such a life of Folly, error, and ignorance is to be human. It is to express one’s nature. All other forms of life are satisfied with limitations but man is vainly ambitious. Folly concludes the most ignorant men are the happiest and some of the most deluded men are those who delight in telling lies.

Erasmus, who was a priest, chides priests, who Folly sees as relying on magic, charms, relics, prayers, saints and particular rites to create the delusion of happiness. Priests are conjurers of deception. Man cannot find happiness without Folly, since all emotions belong to Folly, and happiness depends on expressing our nature, which is full of Folly.

One of the most foolish of men, Folly insists, is that person who tries to deny his true nature through religion. Folly proves that religion has more to do with her own nature than with wisdom by showing that children, women, old people and fools take more delight in it than anyone else. It is they who are always nearest the altars.

In the way that religion is taught and practiced, man must deny his true nature by disdaining life and preferring death. He must overlook injuries, avoid pleasure, and feast on hunger, vigils, tears, and labors. He must give up and score all physical pleasures, or at the very least take them more lightly than he does spiritual pleasures.

Folly is most serious when she tells man that this is the most foolish way, and the only sure way to true happiness. Only by forgetting his body and everything physical can man approach this goal. He must give himself up completely to the spiritual aspects of life in order to achieve it.

Only a very few men are able to accomplish this task completely enough while in this world, Folly concedes. This is because in order to approach such an experience is very close to madness. This madness, in turn, is similar to the heavenly joys that one will experience after death when the spirit has completely left the body.

Erasmus had sympathy for The Protestant Reformation, but decided to stay in the Church and lead the Counter Reformation. Historians are divided as to whether this was courageous or cowardly. In this dichotomy, he is not unlike many of our current opinion makers: that is, a man of reflection rather than action. He wanted to preserve things as they were and to deny intellectually as much as possible things as they were becoming. Unlike Martin Luther or Sir Thomas More, he was unwilling to put his life and mind on the line, but instead retreated into parody. He remained committed to inevitable change but not actively involved in it.

Luther changed the world. Erasmus put the bite of sarcasm into his world without engendering any radical change. Still, he composed this work in seven days five hundred years ago and it is still read.

We live in an Age of Anxiety with the definition of many things not only in jeopardy, but in mass confusion: from political ideologies to economic systems, from what constitutes a society to what defines a nation, from military engagement to coping with subversive terrorism, from balance of power to material-spiritual stability, from individualism to multiculturalism, from the primacy of religious freedom to the prudence of authority.

Erasmus, too, lived in an Age of Anxiety with the collapse of feudalism and the birth of the great universities in a climate of low literacy. It was a time when science was lifting the fog of mythology. Nations were being formed around discrete languages and common cultures. This disruption was like a constant earthquake across the Western world. Only a few years previously America had been discovered which threw all of Aristotle’s benchmarks into question.

So, in reading In Praise of Folly, it should come as little surprise that its irreverent humor and self-deprecating style should have lightened the heavy heart of the times. But today, I see no Erasmus-like essayist; no analysis of our follies, foibles and vanities that speaks with such eloquence as his words did five hundred years ago. It is partisan politics, partisan academics, partisan theologies, partisan cultures, and even partisan genders, as if the human race were tainted with a divided soul. Dr. Szasz writes in “Ceremonial Chemistry”:

“It seems clear that only in accepting human beings for what they are can we accept the chemical substances they use for what they are: in short, only insofar as we are able and willing to accept men, women, and children as neither angels nor devils, but as persons with certain inalienable rights and irrepudiable (sic) duties, shall we be able and willing to accept heroin, cocaine, and marijuana as neither panaceas nor panapathogens, but as drugs with certain chemical properties and ceremonial possibilities.”

Szasz is not advocating drug addiction, but realistic dealing with people as they are. This should extend across the board.

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