I’m undertaking a 1000-day reinvention project, blogging here daily to track my progress. In Tuesday Book Club, I share an idea from a book.
German Marxist philosopher Ernst Bloch (1885 – 1977) developed an optimistic teleology of the history of humankind. He wrote his magnum opus The Principle of Hope in a poetic aphoristic style, attempting to provide a comprehensive account of human kind’s and nature’s orientation towards an improved future. Influenced by Hegel, he proposed that the universe is transitioning from its first cause (Urgrund) toward its final purpose (Endziel). He believed that this transition occurs via a dialectic.
Bloch was focused on the Not-Yet, the future, rather than the past. He believed that humans have a forward-dawning consciousness. While many philosophers focus on what is or what was, Bloch focused on what could be.
Hegel famously wrote, “The owl of Minerva takes flight only at dusk.” He meant that we only understand a given phase of history in retrospect, after it’s complete. Minerva was the goddess of wisdom and the owl her wise companion.
Bloch, quoted in Byung-Chul Han’s The Spirit of Hope, writes of Hegel’s owl of Minerva:
All knowledge, it says in Meno, is nothing but anamnesis, the soul remembering what it beheld in the realm of ideas before its birth … And it was the spell cast by this anamnesis that ensured that being – especially being as essence, ontos, on – was taken per se as having-been: essence means having-been [Wesen ist Gewesenheit]. This spell remained effective up until Hegel. It even found its culmination in Hegel, at least in the shape of his creature of dusk, Minerva; in his association of knowledge exclusively with the historical development of content; in his rejection of the open not-yet, the store of unrealized possibilities.
Reflecting on Bloch’s commentary on Hegel, Byung-Chul Han writes:
The owl of Minerva is blind to the dawning radicance of the new, which escapes the logic of essence. The thinking of hope shifts knowledge’s interest from the past to the future, from what has been to what is coming, and against the always-already – the temporatily of essence – it sets up the not-yet.
Hope directs us towards the not-yet.
Han continues:
If we harbour the spirit of hope, we see what is coming even in what is past. What is coming, the truly novel – as the other – is a dream, the daydream of the past. Without the spirit of hope, we are held captive in the same. The spirit of hope seeks out in the past the traces of what is coming.
Yesterday, I considered selling some of my international equity positions given they’ve run pretty far recently and the U.S./Israel/Iran war puts them at significant risk of correction. Unfortunately, I didn’t, looking to my own past and seeing how I have often sold my winners too early. Yesterday, U.S. stocks held their own while rest-of-world stocks declined. And today, it looks like a complete panic, again with the U.S. the least weak. The S&P 500 future is down 1.37%, the Stoxx 600 (European index) down 2.85% and the Nikkei 225 down more than 3%. Precious metals are down too — gold -2.48% and silver – 7.5%.
In predicting the stock market, often analysts look to the past and then they say, “history doesn’t repeat but it rhymes.” I guess you could say this is what Han means by “the spirit of hope seeks out in the past the traces of what is coming.”
Looking to the past is no comfort today and doesn’t make me hopeful. The start of World War I bears uncomfortable parallels to what has happened with the Israel and U.S. war on Iran.
World War I was launched by a political assassination, though one very different from the weekend’s killing of Iran’s supreme leader and other country leadership. On June 28, 1914 in Sarajevo, Bosnia, Archduke Franz Ferdinand, heir to the Austro-Hungarian Empire, was killed by Gavrilo Princip, a 19-year-old Serbian nationalist.
This triggered a month-long diplomatic breakdown, as Austria-Hungary, backed by Germany, issued a list of demands to Serbia that Serbia couldn’t possibly meet. Iran has faced conflicting demands from the U.S. even as apparently good-faith offers they have made have been rejected or outright ignored. Omani mediator Badr Albusaidi said Friday that Iran had proffered a set of agreements that represented a “breakthrough that has never been achieved before” including zero stockpiling of uranium, irreversible blending of highly enriched uranium, full inspection access to IAEA inspectors to verify terms, and renouncing the objective of a nuclear bomb. But the U.S. expanded its demands beyond the nuclear scope, asking for limitations on Iran’s ballistic missile program and its regional proxies — existential for Iran as a sovereign nation. The U.S. did not even respond to what Iran had apparently offered, set on a course of bombing regardless of what agreements might be reached.
In summer of 1914, pre-existing treaties led Russia to mobilize to support Serbia and Germany to support Austria. France and Britain were pulled in shortly after. Similarly U.S. allies are being pulled into our aggression. Prime Minister Keir Starmer authorized the use of British bases for defensive strikes to destroy Iranian missiles at their source, after UK interests in the Gulf were hit. Canadian Prime Minister Mark Carney issued a statement on Saturday that strongly supported the U.S. position and affirmed Israel’s right to defend itself (but noted that Canada would not be directly involved in the military action). Spain, however, has come forth with the strongest criticism. Prime Mininster Pedro Sánchez called the intervention “unjustified and dangerous,” refusing to let the U.S. use its bases for the operation. Meanwhile, Russia and China, considered to be aligned with Iran, called the assassination a violation of international law.
And what can we see for financial markets by looking to the past? In late July 1914, the world experienced a shutdown of the global financial system. As the crisis deepened, stock exchanges across Europe began to close one by one. On July 31, 1914, the New York Stock Exchange closed its doors to prevent a total collapse. It remainder shut for four and a half months, the longest closure in history.
Investors panicked as they realized that the globalization of the era — heavily dependent on London as the world’s clearinghouse — was being dismanted by war. Everyone tried to sell their assets for gold at the same time.
What gives me hope today is that I know the current presidential administration has little appetite for a drawn-out ground war. They may have created a situation where they’re drawn into one anyway. But I’m imagining that the president’s desire to focus on his big ballroom will lead him to look for some off-ramps very soon. He’s probably looking for them now.
I think of the tariff situation last April and how it seemed like complete financial armageddon. And then everything recovered and more. While I don’t expect something like that in 2026 I do think that there will probably be some period of panic and then some recovery, perhaps before a longer-term bear market begins. (I can’t seem to get rid of my bearish attitude!)
And I hope for Iran that there is some way out of this that leaves them better off than they were before.
I still believe that precious metals are a good place to be right now; they almost always are during times of global instability. It’s probably time to sell some rest-of-world equities though. I might want until there’s some bounce on good news before I do it though.