Blood in the Streets, by James Dale Davidson and Sir William Rees-Mogg, New York: Summit Books, 545 pages, $18.95
Investment guides. Jeez. That's just what we need, I'm thinking as I pick up Jim Davidson's coauthored new…"investment guide" to check out for REASON. I mean, fine, it's a venerable motif—basically, how to take what ya got, and turn it into more of the same—from the mid-'70s books about How I Turned Two Cruddy Outhouses into a Million Dollars of Real Estate to Harry Browne's epochal How You Can Profit from the Coming Devaluation.
But…do we need yet another "investment guide"? Even with 20 million yuppies out there wondering how to protect their money funds and stock accounts through the inflation/interest rate/stock market roller-coaster? Naw, what we really need is a book describing how and why the world can be headed toward an increasingly violent hell in a handbasket…while accelerating ever more rapidly toward a technological transfiguration that will make the Industrial Revolution look like a minor adjustment.
James Dale Davidson, founder and chairman of the National Taxpayers Union (and my former boss, during my taxpayer-revolt organizing days in California), along with his collaborator Sir William Rees-Mogg, have done just that with Blood in the Streets: Investment Profits in a World Gone Mad. The two, who publish an investment newsletter, Strategic Investing, acknowledge the fact early on: "Although the principles we explore are simple ones, they are manifested in ways that are far from obvious. In fact, for the first several chapters, this may seem more like a history book than an investment guide."
And that's what makes this a pretty good read. Davidson, who last weighed in with The Squeeze in 1982, quickly turns to the big picture, the really big picture: all of human political interaction. And a new word is coined: megapolitics. "You must turn to megapolitics to find the answers to the deepest puzzles of economic and political life," the authors tell us. Megapolitics is a word "to match the concept we believe is crucial to understanding the way the world works. [It] literally means 'politics in the largest sense.' It is the study of raw power. It is an attempt to analyze the most basic factors that govern the uses of power in the world."
What follows is a fascinating blend of hard-nosed history and futuristic prognostication, even while keeping in touch with the announced aim of telling us how to juggle our finances and avoid the shaky banks (a list is obligingly provided). Some of their megapolitical postulations are pretty startling, too.
The declining costs of offensive weapons systems—anti-ship missiles such as the Chinese Silkworm or anti-aircraft missiles like the American Stinger, for example—are quickly furthering a global breakdown of civil and economic order. Characterized by America's increasing impotence to "project power from the center to the periphery" (examples: Vietnam, Lebanon, and the Persian Gulf), the world is becoming more unstable, "quite apart from anything the politicians might do. Clarity of purpose and competent implementation cannot overpower the logic of deadly force. When chaos costs less, you will get more of it."
But all news is not bad. Increasing technological innovation, pushing irresistibly in the direction of decentralization, threatens to make the Soviet Union one of the 20th century's ugly memories. "Soviet Communism, based upon economic monopoly, cannot thrive or even survive in a decentralizing world where monopoly is deadly.…Their system is fundamentally at odds with the technological foundation upon which modern economies are developing.…Communism is doomed to destruction by its contradictions."
Among other prognostications of Blood in the Streets:
• A Third World debt default is inevitable; "it will mark the end of American financial hegemony…[and complete] the logical progression toward world economic disintegration that has been underway for decades.…It will weaken the U.S. economy for years to come."
• "Long run instability of money will eventually have to be corrected through a return to gold."
• "The sweeping 1986 tax reform in the U.S. can be seen as a confirmation of the triumph of decentralization and low scale operation."
• "There is a greater near-term danger of deflation than most people expect."
• "The potential for truly revolutionary technological innovation is greater today than at any time in history." An "ultimate industrial revolution, molecular technology," is almost upon us, and it "could be the most profound restructuring of life in all the ages of human existence."
All in, ahem, a book about "investment strategies." Give us a break, will ya, Jimmy? Your book's about change and survival for the next century or so, not about squeezing out a few crummy "investment profits in a world gone mad." It should be called "Watch Your Financial Buns: A Road Map for Understanding, Surviving, and Prospering in a World Headed for a Trip Your Grandmother Never Could Have Dreamed."
Contributing Editor Timothy Condon is an attorney in Tampa.