As global stock markets continue to look limp and dismal, it would seem tempting to turn to people who claim to know how to buck the market, for sage advice, to keep your money safe, if not to see it grow. Cash is king; and this is the time for investment aphorisms.
One aphorism is getting wider currency: The Chinese character for “crisis” represents “danger” and “opportunity”. The seductive message: Even if times are bad, they can be turned around. This idea has acquired a nearly-holy status, with everyone, from Al Gore in his Nobel Prize acceptance speech, to charlatans who claim to know how to master the market, declaring that a crisis is an opportunity.
Market analysts love unbridled optimism. Buy stocks when there is blood on the streets, an investment banker had told me when Thai soldiers killed protesters in 1991 as they overthrew a corrupt-but-elected government, replacing it with a not-yet-corrupted-but-unelected military government.
I was at a business school in the US when methyl isocynate leaked from the Bhopal plant of Union Carbide, killing thousands. A finance professor expressed sympathy for the incident, and then said, matter of factly as Union Carbide’s stock began to wilt: “Now is the time to buy Carbide. It will regain its value within months.” He was right; it did.
Anti-globalizers are left aghast by such an attitude. Looking at the crisis-opportunity dyad from another angle, Canadian writer Naomi Klein has said in her recent book, The Shock Doctrine, that the international financial institutions, Wall Street, the US treasury and the Pentagon act almost in cahoots, sniffing out crises, sometimes engineering them, looking for opportunities, playing the game of being master manipulators and puppeteers, converting socialist countries in the developing world to the cause of neoliberal capitalism. John Perkins, in his provocatively titled book, Confessions of an Economic Hitman, presents a thriller, where a boring economic adviser becomes a Bond-like conspirator, leaving a trail of destroyed economies, all for quick profit.
These books perpetuate the notion that the Chinese believed every crisis represents opportunity. Er, except that it is an urban myth.
While it is true that the Chinese language is made of many ideograms (ideas represented by images) there are many characters which render sounds through graphics, making “sinographs” or “logographs” a more appropriate term. True, again, that the character for “crisis” (weiji) is made of two different characters, one representing “danger” or “moment” (wei), another, representing “incipient moment” or “opportunity” (ji). But, to paraphrase Victor Mair, professor of Chinese literature at the University of Pennsylvania, we don’t say that the mechanical contraption that flies in the skies defying gravity is a composite of ether and a geometric term denoting a representation of straight lines. Or, an airplane is not air plus plane. Likewise, crisis does not mean danger plus opportunity.
The Chinese know crises paralyse people; its government would not place so much emphasis on “harmony” otherwise, even if it means killing students in a public square. Instability scares its leaders; part of the reason the Communist Party resents Falun Gong is because it is an alternative, independent cadre-based organization from outside the state apparatus.
But some do make a financial killing during a crisis. That perpetuates the myth that crisis means an opportunity. (Crisis forces choices. As the Soviet empire disintegrated, P.V. Narasimha Rao, as prime minister, told reporters: “Choices are easy when no options are left.”) And indeed, some of the countries, which undertake rigorous belt-tightening measures — even if under duress — have no choice. Nobody lost weight on a fat-rich diet.
Crisis, then, is a moment. That moment can be terribly painful. It could defeat — or transform — a person into someone sterner, stronger and wiser. We recall the cliché because we like success, and victors write history. The marginalized get forgotten, until an Amitav Ghosh comes along, writing about their pain with exceptional compassion, as in his new novel, Sea of Poppies. In a crisis, thousands lose; there is an element of randomness to those losses — we are fooled by the randomness of success. And we try to see a pattern, even if there is none. And we confuse a Chinese character, reading into it the meaning we want to read, and not the idea — and the gravity — it represents.
Reality is always messy: options and alternatives that complicate our lives. We muddle through crises, emerging whole, somewhat wounded, often chastened, with the hope that we might be able to handle the next crisis. But, as every investment advisory notes, past performance is no guarantee of future success. And like all generalizations, it is only partly true — like this one.
Salil Tripathi is a writer based in London. Your comments are welcome at firstname.lastname@example.org