“Optimism is the madness of insisting all is well when we are miserable” – Voltaire
There were reports in this morning’s papers that manufacturers were at their most optimistic since the 1970s. Those of you who read the stories fully will already know what I am about to point out, namely that the headlines were not borne out by the detail. What the figures actually showed was that the increase in optimism over a three month period was the greatest since April 1973; not quite the same thing as I’m sure you’ll agree. It’s easy to significantly increase one’s level of optimism if one wasn’t that optimistic to start with, and it doesn’t necessarily mean that one ends up terribly cheerful anyway.
I have no need to elaborate on why business may have been less than bullish during the last few years; you’ve all lived through them. It might however be worth reminding ourselves of what happened last time manufacturers rapidly increased their levels of optimism. In October 1973, less than six months later, there was war in the Middle East and the price of oil quadrupled. In January 1974, less than nine months later, the UK government imposed a three-day week to conserve electricity, a restriction that lasted for two months during which period the government fell from office. So, one must surely ask oneself, how much reliance should we place on sudden surges in the optimism of manufacturers? Rhetorical question of course, but I personally am off to the bookies to place a bet on war with Russia followed by disruptions to gas supplies and periodic blackouts.
“We all agree that pessimism is a mark of superior intellect.” – J.K. Galbraith