Category: Essays

What Do We Mean by “Spheres of Existence”?

The classic Hollywood film, How Green Was My Valley, is set in a Welsh coal-mining community over a hundred years ago. The spiritual head of the community, played by Walter Pidgeon, is walking along a hillside with a young boy who was traumatized after being injured in an accident. After some small talk, Pidgeon’s character tells the boy that prayer will help him heal. He explains that this isn’t mumbling in a church; what he means by prayer is the deepest possible communication with oneself, thus existentializing it.

This whole dimension derives from the existence-watchers Pascal and Kierkegaard. For example, Kierkegaard writes, “My principal thought was that in our age, because of the great increase of knowledge, we had forgotten what it means to exist, and what inwardness signifies.” (Quoted from “Truth Is Subjectivity”, a section in Concluding Unscientific Postscript to Philosophical Fragments.) Note that when you watch a very gifted scientific analyst, like Robert Lawrence Kuhn, whose PBS series Closer to Truth, represents the opposite of Kierkegaard’s inwardness.

In “Realms and Domains: Levels and Confusion”, we presented realms and domains as ways of shaping knowledge. Kierkegaard utilizes the word “sphere” to communicate a similar concept. Think of the term in geometry or as a “sphere of influence” in geopolitics.

Kierkegaard tells us, “There are thus three spheres of existence: the aesthetic, the ethical, the religious.” Let’s explain these three spheres. By “aesthetic,” he means the pursuit of wine, women and song as a life. The European academic song, “Gaudeamus igitur” embodies this philosophy. In the Eugene O’Neill play, Long Day’s Journey into Night, one of the characters exclaims, “In vino veritas!” (Latin: in wine, there is truth.)

By ethical, Kierkegaard is not describing a great concern for morality. He means, rather, the sense of camaraderie felt by someone for their fellows. A strong example of this occurs in the film, The Third Man. Trevor Howard plays a conscientious Royal Military Police officer, whose mission is to catch the elusive criminal played by Orson Welles. Howard’s officer’s entire existence is characterized by his desire to protect the public and his men. One could says this protectiveness is his bottom line.

To understand what Kierkegaard means by the religious, we quote, “Existence constitutes the highest interest of the existing individual, and his interest in his existence constitutes his reality. What reality is, cannot be expressed in the language of abstraction.” In The Third Man, the criminal’s girlfriend embodies the religious sphere. Her every task in daily life can be described by the previous quote.

Kierkegaard also has a very penetrating analysis of humor and irony, given his spheres of existence. Think of a comedian like Woody Allen, who has the intelligence to glimpse the profundity of existence but this wavelength makes him intensely anxious, provoking humor. These jokes are escapist, attempting to flee the tension of existence.

Finally, there are existence-watchers like the great American author Walker Percy. In his masterpiece, The Moviegoer, he depicts a current world so fragmented, adrift and soul-crushing that the protagonist tries to find his salvation in going to movies. He sees the experience of viewing the movie as being part of a congregation. Kierkegaard writes, “In our age it is believed that knowledge settles everything, and that if a man only acquires a knowledge of the truth, the more briefly and the more quickly the better, he is helped. But to exist and to know are two very different things.”

World-Watching: Minutes of the Monetary Policy Committee — Copom

272nd Meeting – July 29-30, 2025

[from the Central Bank of Brazil, 5 August, 2025]

  1. Update of the economic outlook and the Copom’s scenario1
    1. The global environment is more adverse and uncertain due to the economic policy and economic outlook in the United States, mainly regarding its trade and fiscal policies and their effects.
    2. Therefore, the behavior and the volatility of different asset classes have been impacted, altering global financial conditions. This scenario requires particular caution from emerging market economies amid heightened geopolitical tensions.
    3. Regarding the domestic scenario, the set of indicators on economic activity has shown some moderation in growth, as expected, but the labor market is still showing strength.
    4. In recent releases, headline inflation and measures of underlying inflation remained above the inflation target. Inflation expectations for 2025 and 2026 collected by the Focus survey remained above the inflation target and stand at 5.1% and 4.4%, respectively.
  2. Scenarios and risk analysis
    1. The inflation outlook remains challenging in several dimensions. Copom assessed the international scenario, economic activity, aggregate demand, inflation expectations, and current inflation. Copom then discussed inflation projections and expectations before deliberating on the current decision and future communication.
    2. The global environment is more adverse and uncertain. If, on the one hand, the approval of certain trade agreements, along with recent inflation and economic activity data from the U.S., could suggest a reduction in global uncertainty, on the other hand, the U.S. fiscal policy—and, particularly for Brazil, the U.S. trade policy—make the outlook more uncertain and adverse. The increase of trade tariffs by the U.S. to Brazil has significant sectoral impacts and still uncertain aggregate effects that depend on the unfolding of the next steps in the negotiations and the perception of risk inherent to this process. The Committee is closely monitoring the potential impacts on the real economy and financial assets. The prevailing assessment within the Committee is the increased global outlook uncertainty, and, therefore, Copom should maintain a cautious stance. As usual, the Committee will focus on the transmission mechanisms from the external environment to the domestic inflation dynamics and their impact on the outlook.
    3. The domestic economic activity outlook has indicated a certain moderation in growth, while also presenting mixed data across sectors and indicators.
    4. Overall, some moderation in growth is observed, supporting the scenario outlined by the Committee. This moderation, necessary for the widening of the output gap and the convergence of inflation to the target, is aligned with a contractionary monetary policy. Monthly sectoral surveys and more timely consumption data support a gradual slowdown in growth.
    5. At turning points in the economic cycle, it is natural to observe mixed signals from economic indicators—some leading, others lagging—as well as from comparisons between markets, such as the credit and labor markets.
    6. The credit market, which is more sensitive to financial conditions, has shown clearer moderation. A decline in non-earmarked credit granting and an increase in interest and delinquency rates have been observed. Moreover, regarding household credit, there has been an increase in the household debt–service ratio and a deepening of the negative credit flow—that is, households repaying more debt than taking on. It was emphasized during the discussion that some recent measures, such as private payroll-deducted loans, have had less impact than many market participants expected. Given the implementation agenda in this credit line, as well as the effects of introducing and removing taxes on other credit modalities, the Committee believes it should closely monitor upcoming credit data releases.
    7. In contrast to the credit market, the labor market remains dynamic. Both from the perspective of income—with real gains consistently above productivity—and employment—with a significant decrease in the unemployment rate to historically low levels—the labor market has greatly supported consumption and income.
    8. Thus, the Committee assesses that the signals from demand and economic activity so far suggest that the scenario is unfolding as expected and is consistent with the current monetary policy. The Committee reiterates that the aggregate demand slowdown is an essential element of supply–demand rebalancing in the economy and convergence of inflation to the target.
    9. Fiscal policy has a short-term impact, mainly through stimulating aggregate demand, and a more structural dimension, which has the potential to affect perceptions of debt sustainability and influence the term premium in the yield curve. A fiscal policy that acts counter-cyclically and contributes to reducing the risk premium favors the convergence of inflation to the target. Copom reinforced its view that the slowdown in structural reform efforts and fiscal discipline, the increase in earmarked credit, and uncertainties over the public debt stabilization have the potential to raise the economy’s neutral interest rate, with deleterious impacts on the power of monetary policy and, consequently, on the cost of disinflation in terms of activity. The Committee remained firmly convinced that policies must be predictable, credible, and countercyclical. In particular, the Committee’s discussion once again highlighted the need for harmonious fiscal and monetary policy.
    10. Inflation expectations, as measured by different instruments and obtained from various groups of agents, remained above the inflation target at all horizons, maintaining the adverse inflation outlook. For shorter-term horizons, following the release of the most recent data, there has been a decline in inflation expectations. For longer-term horizons, conversely, there has been no significant change in inflation expectations between Copom meetings, even though measures of breakeven inflation extracted from financial assets have declined. The Committee reaffirmed and renewed its commitment to re-anchoring expectations and to conducting a monetary policy that supports such a movement.
    11. De-anchored inflation expectations is a factor of discomfort shared by all Committee members and must be tamed. Copom highlighted that environments with de-anchored expectations increase the disinflation cost in terms of activity. The scenario of inflation convergence to the target becomes more challenging with de-anchored expectations for longer horizons. When discussing this topic, the main conclusion obtained and shared by all members of Copom was that, in an environment of de-anchored expectations—as currently is the case—greater monetary restriction is required for a longer period than would be otherwise appropriate.
    12. The inflation scenario has continued to show downside surprises in recent periods compared with analysts’ forecasts, but inflation has remained above the target Industrial goods inflation, which has already been showing weaker wholesale price pressures, continued to ease in the more recent period. Food prices also displayed slightly weaker-than-expected dynamics. Finally, services inflation, which has greater inertia, remains above the level required to meet the inflation target, in a context of a positive output gap. Beyond the changes in items, or even short-term oscillations, the core inflation measures have remained above the value consistent with the target achievement for months, corroborating the interpretation that inflation is pressured by demand and requires a contractionary monetary policy for a very prolonged period.
    13. Copom then addressed the projections. In the reference scenario, the interest rate path is extracted from the Focus survey, and the exchange rate starts at USD/BRL 5.552 and evolves according to the purchasing power parity (PPP). The Committee assumes that oil prices follow approximately the futures market curve for the following six months and then start increasing 2% per year onwards. Moreover, the energy tariff flag is assumed to be “green” in December of the years 2025 and 2026.
    14. In the reference scenario, four-quarter inflation projections for 2025 and for 2026 are 4.9% and 3.6%, respectively (Table 1). For the relevant horizon for monetary policy—2027 Q1—the inflation projection based on the reference scenario extracted from the Focus survey remained at 3.4%, above the inflation target.
    15. Regarding the balance of risks, it was assessed that the scenario of greater uncertainty continues to present higher-than-usual upside and downside inflation risks to the inflation outlook. Copom assessed that, among the upside risks for the inflation outlook and inflation expectations, it should be emphasized (i) a more prolonged period of de-anchoring of inflation expectations; (ii) a stronger-than-expected resilience of services inflation due to a more positive output gap; and (iii) a conjunction of internal and external economic policies with a stronger-than-expected inflationary impact, for example, through a persistently more depreciated currency. Among the downside risks, it should be noted (i) a greater-than-projected deceleration of domestic economic activity, impacting the inflation scenario; (ii) a steeper global slowdown stemming from the trade shock and the scenario of heightened uncertainty; and (iii) a reduction in commodity prices with disinflationary effects.
    16. Prospectively, the Committee will continue monitoring the pace of economic activity, which is a fundamental driver of inflation, particularly services inflation; the exchange rate pass-through to inflation, after a process of increased exchange rate volatility; and inflation expectations, which remain de-anchored and are drivers of future inflation behavior. It was emphasized that inflationary vectors remain adverse, such as the economic activity resilience and labor market pressures, de-anchored inflation expectations, and high inflation projections. This scenario prescribes a significantly contractionary monetary policy for a very prolonged period to ensure the convergence of inflation to the target.
  3. Discussion of the conduct of monetary policy
    1. Copom then discussed the conduct of monetary policy, considering the set of projections evaluated, as well as the balance of risks for prospective inflation.
    2. Following a swift and firm interest rate hike cycle, the Committee anticipates, as its monetary policy strategy, continuity of the interruption of the rate hiking cycle to observe the effects of the cycle already implemented. It was emphasized that, once the appropriate interest rate is determined, it should remain at a significantly contractionary level for a very prolonged period due to de-anchored expectations. The Committee emphasizes that it will remain vigilant, that future monetary policy steps can be adjusted and that it will not hesitate to proceed with the rate hiking cycle if appropriate.
  4. Monetary policy decision
    1. The Committee has been closely monitoring with particular attention the announcements regarding the imposition by the U.S. of trade tariffs on Brazil, reinforcing its cautious stance in a scenario of heightened uncertainty. Moreover, it continues to monitor how the developments on the fiscal side impact monetary policy and financial assets. The current scenario continues to be marked by de-anchored inflation expectations, high inflation projections, resilience on economic activity, and labor market pressures. Ensuring the convergence of inflation to the target in an environment with de-anchored expectations requires a significantly contractionary monetary policy for a very prolonged period.
    2. Copom decided to maintain the Selic rate at 15.00% p.a., and judges that this decision is consistent with the strategy for inflation convergence to a level around its target throughout the relevant horizon for monetary policy. Without compromising its fundamental objective of ensuring price stability, this decision also implies smoothing economic fluctuations and fostering full employment.
    3. The current scenario, marked by heightened uncertainty, requires a cautious stance in monetary policy. If the expected scenario materializes, the Committee foresees a continuation of the interruption of the rate hiking cycle to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level, assuming it stable for a very prolonged period, will be enough to ensure the convergence of inflation to the target. The Committee emphasizes that it will remain vigilant, that future monetary policy steps can be adjusted and that it will not hesitate to resume the rate hiking cycle if appropriate.
    4. The following members of the Committee voted for this decision: Gabriel Muricca Galípolo (Governor), Ailton de Aquino Santos, Diogo Abry Guillen, Gilneu Francisco Astolfi Vivan, Izabela Moreira Correa, Nilton José Schneider David, Paulo Picchetti, Renato Dias de Brito Gomes, and Rodrigo Alves Teixeira.
Table 1

Inflation projections in the reference scenario
Year-over-year IPCA change (%)

Price Index202520262027 Q1
IPCA4.93.63.4
IPCA market prices5.13.53.3
IPCA administered prices4.44.03.9
Footnotes

1 Unless explicitly stated otherwise, this update considers changes since the June Copom meeting (271st meeting).

2 It corresponds to the rounded value of the average exchange rate observed over the ten working days ending on the last day of the week prior to the Copom meeting, according to the procedure adopted since the 258th meeting.

Meeting information
Date: July 29-30 2025
Place: BCB Headquarters’ meeting rooms on the 8th floor (7/29 and 7/30 on the morning) and 20th floor (7/30 on the afternoon) – Brasilia – DF – Brazil
Starting and ending times:
July 29: 10:07 AM – 11:37 AM; 2:17 PM – 5:51 PM
July 30: 10:10 AM – 11:13 AM; 2:37PM – 6:34 PM
In attendance:
Members of the Copom
Gabriel Muricca Galípolo – Governor
Ailton de Aquino Santos
Diogo Abry Guillen
Gilneu Francisco Astolfi Vivan
Izabela Moreira Correa
Nilton José Schneider David
Paulo Picchetti
Renato Dias de Brito Gomes
Rodrigo Alves Teixeira
Department Heads in charge of technical presentations (attending on July 29 and on the morning of July 30)
André de Oliveira AmanteOpen Market Operations Department
Euler Pereira Gonçalves de MelloResearch Department (also attending on the afternoon of 7/30)
Fábio Martins Trajano de ArrudaDepartment of Banking Operations and Payments System
Luís Guilherme Siciliano PontesInternational Reserves Department
Marcelo Antonio Thomaz de AragãoDepartment of International Affairs
Ricardo SabbadiniDepartment of Economics
Other participants (attending on July 29 and on the morning of July 30)
Alexandre de CarvalhoOffice of Economic Advisor
André Maurício Trindade da RochaHead of the Financial System Monitoring Department
Angelo Jose Mont Alverne DuarteHead of Office of the Deputy Governor for Licensing and Resolution (attending on the mornings of 7/29 and 7/30)
Arnaldo José Giongo GalvãoPress Office Advisor
Cristiano de Oliveira Lopes CozerGeneral Counsel
Edson Broxado de França TeixeiraHead of Office of the Deputy Governor for Supervision
Eduardo José Araújo LimaHead of Office of the Deputy Governor for Economic Policy
Fernando Alberto G. Sampaio C. RochaHead of the Department of Statistics
Isabela Ribeiro Damaso MaiaHead of the Sustainability and International Portfolio Investors Unit (attending on the mornings of 7/29 and 7/30)
Julio Cesar Costa PintoHead of Office of the Governor
Laura Soledad Cutruffo CompariniDeputy Head of the Department of Economics
Leonardo Martins NogueiraHead of Office of the Deputy Governor for Monetary Policy
Marcos Ribeiro de CastroDeputy Head of the Research Department
Mardilson Fernandes QueirozHead of the Financial System Regulation Department
Olavo Lins Romano PereiraDeputy Head of the Department of International Affairs
Renata Modesto BarretoDeputy Head of the Department of Banking Operations and Payments System
Ricardo da Costa MartinelliDeputy Head of the International Reserves Department
Ricardo Eyer HarrisHead of Office of the Deputy Governor for Regulation
Ricardo Franco MouraHead of the Prudential and Foreign Exchange Regulation Department
Rogerio Antonio LuccaExecutive Secretary
Simone Miranda BurelloAdvisor in the Office of the Deputy Governor for Monetary Policy

The members of Copom analyzed the recent performance and prospects for the Brazilian and international economies, under the monetary policy framework, whose objective is to comply with the inflation targets established by the National Monetary Council. This document represents Copom’s best effort to provide an English version of its policy meeting minutes. In case of inconsistency, the Portuguese version prevails.

Realms and Domains: Levels and Confusion

Are we governed by words or numbers? Martin Heidegger’s star pupil, Hans-Georg Gadamer, points a penetrating flashlight at this question of words vs. numbers when he writes, “It is obvious that not mathematics but the linguistic nature of people is the basis of human civilization.”

According to Gadamer, our primary way of being is interpretative rather than computative. Our fundamental function is to cope, not to theorize. He argues, we can never finally step outside the traditions and practices of our culture. As one critic stated, “the metaphysical aid of a view from nowhere is seen by Gadamer as a questionable illusion that can have damaging consequences for a culture. It is not that scientific methods are mistaken—he thinks that science is involved an unstoppable dynamic which cannot be halted by philosophical or other objections…Gadamer gives a central role to art in questioning the dominance of the methods of the natural sciences. The artwork is not something to be determined by concepts, but something which ‘happens’ via its reception in real social contexts…”

Think about the interaction between words and numbers in the opening of Vladimir Nabokov’s memoir, Speak, Memory:

The cradle rocks above an abyss, and common sense tells us that our existence is but a brief crack of light between two eternities of darkness. Although the two are identical twins, man, as a rule, views the prenatal abyss with more calm than the one he is heading for (at some forty-five hundred heartbeats an hour).

Vladimir Nabokov, Speak, Memory, Vintage Books, 1989, page 19.

Note how Nabokov describes our existence above. Think about the word “eternities”? It brings to mind infinity. For example, in algebra, 1/x goes to infinity as 1 approaches zero. Nabokov also states that man is doing all this infinity-watching which he describes in heartbeats per hour.

Another issue in this realm and domain confusion is provided by Gabriel Marcel, when he writes, “We must carefully avoid all confusion between the mysterious and the unknowable.” Marcel continues:

A problem is something which I meet, which I find complete before me, but which I can therefore lay siege to and reduce. But a mystery is something in which I myself am involved, and it can therefore only be thought of as “a sphere where the distinction between what is in me and what is before me loses its meaning and its initial validity”. A genuine problem is subject to an appropriate technique by the exercise of which it is defined; whereas a mystery, by definition, transcends every conceivable technique. It is, no doubt, always possible (logically and psychologically) to degrade a mystery so as to turn it into a problem. But this is a fundamentally vicious proceeding, whose springs might perhaps be discovered in a kind of corruption of the intelligence. The problem of evil, as the philosophers have called it, supplies us with a particularly instructive example of this degradation.

Just because it is the essence of mystery to be recognized or capable of recognition, it may also be ignored and actively denied. It then becomes reduced to something I have “heard talked about” but which I refuse as only “being for other people”; and that in virtue of an illusion which these “others” are deceived by, but which I myself claim to have detected.

We must carefully avoid all confusion between the mysterious and the unknowable. The unknowable is in fact only the limiting case of the problematic, which cannot be actualized without contradiction. The recognition of mystery, on the contrary, is an essentially positive act of the mind, the supremely positive act in virtue of which all positivity may perhaps be strictly defined. In this sphere everything seems to go on as if I found myself acting on an intuition which I possess without immediately knowing myself to possess it— an intuition which cannot be, strictly speaking, self-conscious and which can grasp itself only through the modes of experience in which its image is reflected, and which it lights up by being thus reflected in them.

Gabriel Marcel, The Mystery of Being, Vol. 1: Reflection & Mystery, Harper Torchbooks, 1965, page 260-261.

A final profound confusion is the body as a physical item vs. a means of expression. Picture Fred Astaire dancing opposite Ginger Rogers. You have both the movements of his dance and what he conveys through body language. In order to dance, you have the biochemical fuel (food) to enable the biomechanical movement of the dance. The courtship expressed through his movements is something different. Marcel describes it thus:

We should recall, at this point, what we said in an earlier lecture about the body; the latter is not merely an instrument, it presents us with a kind of reality which is quite different from the reality of any sort of apparatus, in so far as it, my body, is also my way of being in the world.

Gabriel Marcel, page 257.

See also “Existence and the Problem of Separability”, “Is It Good to Be a Detached Observer?” and “Arguments Without End: A Few Simple Examples” which also reference Marcel.

Arguments Without End: A Few Simple Examples

In the previous essay (“Is It Good to Be a Detached Observer?”), we just encountered Geyl’s phrase, “arguments without end.” Here we cover a few simple examples.

Language and the Mind

The twentieth century philosopher, Ludwig Wittgenstein, tells us that his purpose is “to show the fly the way out of the fly-bottle.” Where the fly is, of course, ourselves. He then tells us, that perhaps the main reason is that one is unable to free oneself from bewitchment of the mind by “language games.”

In the song “Hotel California” by the Eagles, there’s the line, “‘We are all just prisoners here / Of our own device.’” In this context, “device” could be interpreted as a bad decision.

My Body and Myself

The American philosophy professor, Samuel Todes, in his book Body and World, analyzes the human body, not as a meat-machine, but more like the silent partner of a person navigating their life. You can get a sense of this from Gabriel Marcel, when he writes:

Is my body my body, for instance, in the same sense in which I would say that my dog belongs to me? The question, let us first of all notice, of how the dog originally came into my hands is quite irrelevant here. Perhaps I found it wandering wretchedly about the streets, perhaps I bought it in a shop; I can say it is mine if nobody else puts in a claim for it—though this is still quite a negative condition of ownership. For the dog to be really, not merely nominally, mine there must exist between us a more positive set of relations. He must live, either with me, or as I, and I alone, have decided he shall live—lodged, perhaps, with a servant or a farmer; whether or not I look after him personally, I must assume the responsibility for his being looked after. And this implies something reciprocal in our relations. It is only it the dog recognizes me, obeys me, expresses by his behaviour towards me some feeling which I can interpret as affection or, at the very least, as wholesome fear, that he is really mine; I would become a laughingstock if I persisted in calling an animal that completely ignored me, that took no notice of me at all, my dog. And the mockery to which I would be exposed in such an instance is very significant. It is linked to a very positive idea of how things must be between my dog and me, before I can really say, ‘This dog is mine’.

Gabriel Marcel, The Mystery of Being, Vol. 1: Reflection & Mystery, Harper Torchbooks, 1965, page 117.

Marcel goes on to explain:

We should recall, at this point, what we said in an earlier lecture about the body; the latter is not merely an instrument, it presents us with a kind of reality which is quite different from the reality of any sort of apparatus, in so far as it, my body, is also my way of being in the world.

Marcel, page 257.

Marcel elaborates:

When I try to make clear to myself the nature of my bond with my body, it appears to me chiefly as something of which I have the use (as one has the use of a piano, a saw, or a razor); but all these uses are extensions of the initial use, which is simply the use of the body. I have real priority to my body when it is a question of active use, but none whatever when it is a question of knowledge. The use is only possible on the basis of a certain felt community. But the community is indivisible; I cannot validly say ‘I and my body.’ The difficulty arises from the fact that I think of my relation with my body on the analogy of my relation with my instruments—whereas in fact the latter presupposes the former.

Gabriel Marcel, Being and Having: An Existentialist Diary, Harper Torchbooks, 1965, page 14.

The connections between the trio of “me, myself and I” and the body is very elusive (as you may sense from your own introspection). This is another “argument without end.”

Psychology and National Moods

The great historian, George Rudé, in his book, Revolutionary Europe, 1783-1815, tries to give a believable and multifactorial explanation of the French Revolution. Based on Ernest Labrousse’s studies of the French economy during that period, Rudé gives a thoughtful and subtle analysis of how wages, prices and other factors correlated to unrest. Interestingly, he concludes on a note of French national mood:

But, of course, it needed more than economic hardship, social discontent, and the frustration of political and social ambitions to make a revolution. To give cohesion to the discontents and aspirations of widely varying social classes there had to be some unifying body of ideas, a common vocabulary, of hope and protest, something, in short, like a common “revolutionary psychology”. In the revolutions of our day, this ideological preparation has been the concern of political parties; but there were no such parties in eighteenth-century France.

George Rudé, Revolutionary Europe, 1783-1815, Wiley, 1964, page 74.

Rudé uses the phrase, “revolutionary psychology.” Apply this to our time and ask yourself, did a demagogue like Donald Trump create a revolutionary psychology, or did it cough up Trump? Notice that in the recent political tract, What’s the Matter with Kansas?, Thomas Frank makes the point that people’s sense of grievance involves not only economics, but also other psychological factors, just as Rudé does with the French Revolution.

Is It Good to Be a Detached Observer?

The famous Dutch historian, Pieter Geyl, in his Napoleon, for and against (Dutch, Napoleon: voor en tegen in de Franse geschiedschrijving) teaches us that there are “arguments without end.” One example is the question surrounding the concept of detachment. Aristotle, in his Nicomachean Ethics, proposes “eudaimonia,” a Greek word literally translating to the state or condition of good spirit coming from imperturbability. This sense of things is all over the Western tradition. Think of the line from the British poet, Alexander Pope, “For Fools rush in where Angels fear to tread.” (An Essay on Criticism, 1711). You see from this that fools lack detachment and act on impulse.

We get a confirmation of Geyl’s arguments without end when we remember that almost every love song recommends the opposite. For example, “Fools Rush In (Where Angels Fear to Tread)” originally made famous by Frank Sinatra and later Elvis Presley, offers us the line “But wise men never fall in love / So how are they to know.” From this, we can interpret that wise men can be foolish and foolish people can be wise. You may also have in the back of your mind Tennyson’s “Tis better to have loved and lost / Than never to have loved at all.” It is not wise to be careful always.

We get a twist on this in the Rodgers & Hammerstein musical South Pacific. Think of “Some Enchanted Evening”:

Who can explain it?
Who can tell you why?
Fools give you reasons—
Wise men never try.

Fools give you reasons because they think everything can be explained, where wise men realize this is not always true. The larger point, from existential thinker Gabriel Marcel, is that all the phenomena of life that are explainable are themselves wrapped up in a larger mystery. He discusses the question of detachment in Being and Having: An Existentialist Diary, which we covered in “Existence and the Problem of Separability” and “Is the World Broken?”.

Marcel says:

March 8th [1929]

I am more and more struck by the difference between the two modes of detachment: the one is that of the spectator, the other of the saint. The detachment of the saint springs, as one might say, from the very core of reality; it completely excludes curiosity about the universe. This detachment is the highest form of participation. The detachment of the spectator is just the opposite, it is desertion, not only in thought but in act. Herein, I think, lies the kind of fatality which seems to weigh on all ancient philosophy—it is essentially the philosophy of the spectator.

But one thing must be noted: the belief that one can escape pure spectatorship by devotion to a practical science, which cannot quite clearly formulate it as yet. I should express it by saying that the modifications which such a science imposes on reality have no other result (metaphysically of course than of making that science in some sense a stranger to reality. The word ‘alienation’ exactly expresses what I mean. ‘I am not watching a show’—I will repeat these words to myself every day. A fundamental spiritual fact.

The interdependence of spiritual destinies, the plan of salvation; for me, that is the sublime and unique feature of Catholicism.

I was just thinking a moment ago that the spectator-attitude corresponds to a form of lust; and more than that, it corresponds to the act by which the subject appropriates the world for himself. And I now perceive the deep truth of Bérulle’s theocentrism. We are here to serve; yes, the idea of service, in every sense, must be thoroughly examined.

Also perceived this morning, but still in a confused way, that there is profane knowledge and sacred knowledge (whereas previously I have wrongly tended to assert that all knowledge was pro-fane. It isn’t true, profane is a supremely informative word). Inquire on what conditions knowledge ceases to be profane.

Incredible how thronged these days are spiritually! My life is being illuminated right into the depths of the past, and not my life only.

Every time we give way to ourselves we may unawares be laying an additional limitation on ourselves, forging our own chain. That is the metaphysical justification for asceticism. I never understood that till now.

Reality as mystery, intelligible solely as mystery. This also applies to myself.

Gabriel Marcel, Being and Having: An Existentialist Diary, Harper Torchbooks, 1965, pages 20-21.

Notice this discussion starts by analyzing modes of detachment and concludes with Marcel talking about reality and himself as mystery. This brings us full circle to Geyl and his concept of arguments without end because trying to define pros and cons of detachment and what is a mystery is ultimately undecidable. This may remind you of Gödel’s incompleteness theorems, that finding a complete and consistent set of axioms for all mathematics is impossible.

World-Watching: 272nd Meeting of the Monetary Policy Committee (“Copom”) of the Central Bank of Brazil Press Release

Copom maintains the Selic rate at 15.00% p.a.

[from the Central Bank of Brazil, 30 July, 2025]

​The global environment is more adverse and uncertain due to the economic policy and economic outlook in the United States, mainly regarding its trade and fiscal policies and their effects. Therefore, the behavior and the volatility of different asset classes have been impacted, altering global financial conditions. This scenario requires particular caution from emerging market economies amid heightened geopolitical tensions.

Regarding the domestic scenario, the set of indicators on economic activity has shown some moderation in growth, as expected, but the labor market is still showing strength. In recent releases, headline inflation and measures of underlying inflation remained above the inflation target.

Inflation expectations for 2025 and 2026 collected by the Focus survey remained above the inflation target and stand at 5.1% and 4.4%, respectively. Copom’s inflation projections for the first quarter of 2027, currently the relevant horizon for monetary policy, stand at 3.4% in the reference scenario (Table 1).

The risks to the inflation scenarios, both to the upside and to the downside, continue to be higher than usual. Among the upside risks for the inflation outlook and inflation expectations, it should be emphasized (i) a more prolonged period of de-anchoring of inflation expectations; (ii) a stronger-than-expected resilience of services inflation due to a more positive output gap; and (iii) a conjunction of internal and external economic policies with a stronger-than-expected inflationary impact, for example, through a persistently more depreciated currency. Among the downside risks, it should be noted (i) a greater-than-projected deceleration of domestic economic activity, impacting the inflation scenario; (ii) a steeper global slowdown stemming from the trade shock and the scenario of heightened uncertainty; and (iii) a reduction in commodity prices with disinflationary effects.

The Committee has been closely monitoring the announcements on tariffs by the USA to Brazil, which reinforces its cautious stance in a scenario of heightened uncertainty. Moreover, it continues to monitor how the developments on the fiscal side impact monetary policy and financial assets. The current scenario continues to be marked by de-anchored inflation expectations, high inflation projections, resilience on economic activity and labor market pressures. Ensuring the convergence of inflation to the target in an environment with de-anchored expectations requires a significantly contractionary monetary policy for a very prolonged period.

Copom decided to maintain the Selic rate at 15.00% p.a., and judges that this decision is consistent with the strategy for inflation convergence to a level around its target throughout the relevant horizon for monetary policy. Without compromising its fundamental objective of ensuring price stability, this decision also implies smoothing economic fluctuations and fostering full employment.

The current scenario, marked by heightened uncertainty, requires a cautious stance in monetary policy. If the expected scenario materializes, the Committee foresees a continuation of the interruption of the rate hiking cycle to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level, assuming it stable for a very prolonged period, will be enough to ensure the convergence of inflation to the target. The Committee emphasizes that it will remain vigilant, that future monetary policy steps can be adjusted and that it will not hesitate to resume the rate hiking cycle if appropriate.

The following members of the Committee voted for this decision: Gabriel Muricca Galípolo (Governor), Ailton de Aquino Santos, Diogo Abry Guillen, Gilneu Francisco Astolfi Vivan, Izabela Moreira Correa, Nilton José Schneider David, Paulo Picchetti, Renato Dias de Brito Gomes, and Rodrigo Alves Teixeira.

Table 1

Inflation projections in the reference scenario
Year-over-year IPCA change (%)

Price Index202520261st quarter 2027
IPCA4.93.63.4
IPCA market prices5.13.53.3
IPCA administered prices4.44.03.9

In the reference scenario, the interest rate path is extracted from the Focus survey, and the exchange rate starts at USD/BRL 5.55 and evolves according to the purchasing power parity (PPP). The Committee assumes that oil prices follow approximately the futures market curve for the following six months and then start increasing 2% per year onwards. Moreover, the energy tariff flag is assumed to be “green” in December of the years 2025 and 2026. The value for the exchange rate was obtained according to the usual procedure.

Note: This press release represents the Copom’s best effort to provide an English version of its policy statement. In case of any inconsistency, the original version in Portuguese prevails.

World-Watching: Old Problem, Modern Solution: Emerging Technologies for Anti-Corruption

[from Asia-Pacific Economic Cooperation, 29 July, 2025]

by Emmanuel A. San Andres and Glacer Nino A. Vasquez

Harnessing new tools to strengthen transparency and accountability can help APEC economies combat corruption and build public trust.

The Code of Hammurabi is one of humanity’s oldest surviving legal texts. Etched in basalt nearly four millennia ago, one of the many crimes it proscribes is corruption by a judge, for which the punishment is a hefty fine—“twelve times the fine set by him in the case”—plus removal and perpetual disqualification from office. Today, laws are published online rather than on stone tablets, but corruption remains a scourge across societies.

Thousands of years later, the fight against corruption continues. Corruption scandals continue to make headlines across the region, affecting both public and private institutions. Whether involving procurement fraud or illicit finance flows, these cases underscore how quickly trust can erode when institutions fail to adapt. The need for preventive systems, powered by data, backed by law and enabled by technology, has never been more urgent. Across APEC, the principles of transparency, accountability and integrity remain central to strong public institutions. As economies become more interconnected and more data-driven, emerging technologies are offering new ways to advance these goals.

APEC economies have long relied on oversight mechanisms such as audits, procurement rules, and internal checks to prevent, detect and prosecute corruption. These tools have been effective in fighting corruption, and they remain essential. But at the same time, new technology has also opened new pathways for corruption: The discreet meeting at a coffeeshop may now occur over an encrypted messaging app, and the cash-filled envelope replaced by a cryptocurrency transfer.

As corrupt actors grow more technologically sophisticated, so too must anti-corruption efforts. APEC economies are not new to digital solutions—e-government and e-procurement portals have reduced opportunities for hidden transactions. Beneficial ownership registries and asset tracking systems make it easier to prosecute and penalise incidents of corruption when they do occur. But emerging technologies offer even more powerful tools to prevent, detect and deter corruption.

For example, artificial intelligence and machine learning (AI/ML) enable real-time monitoring, risk scoring, pattern detection, and predictive analytics. These tools can support monitoring and investigation by automating document review and evidence gathering. AI/ML can also enhance institutional capacity through adaptive, personalized training systems.  Meanwhile, advanced data analytics can support the review of large volumes of data, revealing patterns of corrupt activity and informing decision-making. When data from different sources are connected, it becomes easier to understand corruption risks early and act with greater precision.

Blockchain—the technology that enables cryptocurrencies—can be used to create immutable, transparent ledgers for government transactions, supply chain monitoring and secure identity management, making it harder to conceal corrupt activity. Remote sensing and facial recognition technologies also offer potential in compliance monitoring and anomaly detection.

However, implementing these emerging technologies have their share of challenges and risks. The effectiveness of AI/ML systems is only as good as the quality, integrity and objectivity of the data they are fed; biased inputs can produce biased outcomes. Blockchain technology is very energy-intensive, which may hinder its scalability and availability. Facial recognition raises serious concerns over privacy and due process, enabling widespread surveillance without individual consent.

These trends mirror growing international momentum around the digitalization of integrity systems. International organizations are helping lead the way: the OECD is leveraging AI and big data to detect corruption risks and improve compliance, while the World Bank’s Governance Risk Assessment System [archived PDF] uses analytics to uncover fraud in public procurement, with pilots already underway in Brazil. As stewards of major anti-corruption conventions, these institutions are turning innovation into accountability. For APEC economies, this alignment offers a timely opportunity to shape global standards while advancing domestic reform.

It is also important to recognize the central role of human and institutional elements in anti-corruption efforts. Emerging technologies are not a silver bullet; they will only be effective if they are well integrated into government processes and are aligned with the skills of the people who need to use them. Training and capacity building will be essential to bridge capability gaps, while a committed leadership will be needed to implement the legal reforms and oversight structures needed to ensure effective adoption.

Buy-in from anti-corruption stakeholders across government, the private sector and civil society is also crucial to this pursuit. Technologies like AI/ML and advanced analytics require large volumes of reliable data, requiring cooperation and information sharing. Public understanding and trust, ethical use of data and equitable access to technology are all essential to ensuring long-term success.

APEC economies are at different stages of readiness to adopt these emerging technologies. While some economies have yet to develop adequate digital infrastructure, human capital and institutional structures, others are already in a position to expand or integrate more advanced anti-corruption tools into their day-to-day processes. Capacity building, information sharing and dialogue can help narrow this gap while learning from the experiences of those ahead.

This is where regional cooperation can make a difference APEC provides a platform for knowledge sharing, capacity building and policy cooperation. The Anti-Corruption and Transparency Experts Working Group could provide a venue for a collaborative strategy to mainstream emerging technology in anti-corruption work, while building technical capacity for economies that need it. Likewise, the upcoming APEC High-Level Dialogue on Anti-Corruption Cooperation provides an opportunity to reaffirm values and shared commitments in the fight against corruption.

Corruption has existed since the dawn of civilization. As methods to commit corruption have evolved, so must the tools to combat it. People and institutions will always remain at the heart of anti-corruption efforts, but with the right governance and safeguards, emerging technologies can be game-changers in fighting corruption and recovering its proceeds, whether it’s in Babylonian sheqels or in bitcoins.

Emmanuel A. San Andres is a senior analyst, Glacer Niño A. Vasquez is a researcher at the APEC Policy Support Unit. For more on this topic, read the latest issue paper “Technologies for Preventing, Detecting, and Combatting Corruption” [archived PDF].

World-Watching: India: Building an Export-Oriented Apparel Sector

[from ICRIER, 28 July, 2025]

The Kotak-ICRIER Centre of Excellence for Agriculture Policy, Sustainability, and Innovations (KICEAPSI) is delighted to present its Agri-Food Trends and Analytics Bulletin (AF-TAB), Volume 5, Issue 1, on “Building an Export-oriented Apparel Sector.” [archived PDF] Amidst an evolving geopolitical landscape and shifting global trade patterns, India’s textiles and apparel (T&A) sector stands at a crucial juncture. The country has a rich cultural heritage in textiles and is one of the few nations with the entire T&A value chain, yet its export share in apparel market remains low and stagnant over the last two decades, at least. With China gradually vacating the export market space and global buyers looking to diversify sourcing, India must act swiftly.

This AF-TAB issue explores this window of opportunity through three interesting articles. The first article, ‘India’s Apparel Sector and the Window of Opportunity’, examines India’s stagnant export performance and the structural constraints that have prevented it from capturing a larger global share. It highlights how fragmentation, poor logistics, and high input costs weigh the sector down, despite strong domestic potential. The second article, ‘Missing the Closet: Is India Exporting What the World Wears?’ analyses India’s export basket against global demand trends. It reveals a mismatch between what India produces–largely cotton-based basics and what the global markets demand—man-made fibres (MMF)-based, fashion-forward garments. This misalignment is most visible in key markets like the U.S. and EU. The third article, ‘PM MITRA Parks—Can They Lift Apparel Exports?’, evaluates the government’s flagship scheme designed to address these inefficiencies. While PM MITRA is a much-needed step to create scale, plug-and-play infrastructure, and attract investment, its success depends on timely execution, policy alignment, and strategic targeting.

Read the bulletin [archived PDF].

Existence and the Problem of Separability

In contracts and legal documents, there is a concept of “separability” which means that clause A is connected to clause B in a way that cannot be undone.

The great twentieth century French philosopher, Gabriel Marcel, has a profound non-separability analysis of existence itself. Marcel wrote:

…We cannot really separate:—

  1. Existence
  2. Consciousness of self as existing
  3. Consciousness of self as bound to a body, as incarnate.
Gabriel Marcel, Being and Having: An Existentialist Diary, Harper Torchbooks, 1965, page 10.

This leads to saying things that are very deep aspects of existential thinking governed by the points above. For example, Marcel wrote, “As I have said elsewhere, the moment I treat my body as an object of scientific knowledge, I banish myself to infinity.” Consider the end of the previous phrase. The very notion that someone, within themselves could go down a route to “banish themselves” in this way, shows you a door into very deep psychological problems. In other words, Marcel is telling you that some psychological problems could have a philosophical or existential root cause and are a type of blunder.

This is not to say that one should avoid scientific thought. Taking a drop of your blood and viewing it under a microscope is not a blunder. However, if you take this to the extreme of trying to analyze everything scientifically, to the exclusion of philosophy in daily life, this is Marcel’s warning.

Marcel’s context for this thinking is given here:

Notes for a Paper to the Philosophical Society

Undated, written in 1927 or 19281

When I affirm that something exists, I always mean that I consider this something as connected with my body, as able to be put in contact with it, however indirect this contact may be. But note must be taken that the priority I thus ascribe to my body depends on the fact that my body is given to me in a way that is not exclusively objective, i.e. on the fact that it is my body. This character, at once mysterious and intimate, of the bond between me and my body (I purposely avoid the word relation) does in fact colour all existential judgments.


What it comes to is this. We cannot really separate:—

  1. Existence
  2. Consciousness of self as existing
  3. Consciousness of self as bound to a body, as incarnate.

From this several important conclusions would seem to follow:

  1. In the first place, the existential point of view about reality cannot, it seems, be other than that of an incarnate personality. In so far as we can imagine a pure understanding, there is, for such an understanding, no possibility of considering things as existent or non-existent.
  2. On the one hand, the problem of the existence of the external world is now changed and perhaps even loses its meaning; I cannot in fact without contradiction think of my body as non-existent, since it is in connection with it (in so far as it is my body) that every existing thing is defined and placed. On the other hand, we ought to ask whether there are valid reasons for giving my body a privileged metaphysical status in comparison with other things.
  3. If this is so, it is permissible to ask whether the union of the soul and body is, in essence, really different from the union between the soul and other existing things. In other words, does not a certain experience of the self, as tied up with the universe, underlie all affirmation of existence?
  4. Inquire whether such an interpretation of the existential leads towards subjectivism.
  5. Shew how idealism tends inevitably to eliminate all existential considerations in view of the fundamental unintelligibility of existence. Idealism versus metaphysics. Values detached from existence: too real to exist.

Existential and personalist interests closely linked. The problem of the immortality of the soul is the pivot of metaphysic.

Every existent is thought of like an obstacle by which we take our bearings—like something we could collide with in certain circumstances—resistent, impenetrable. We think of this impenetrability, no doubt, but we think of it as not completely thinkable.2 Just as my body is thought of in so far as it is a body, but my thought collides with the fact that it is my body.

To say that something exists is not only to say that it belongs to the same system as my body (that it is bound to it by certain connections which reason can define), it is also to say that it is in some way united to me as my body is.

Incarnation—the central ‘given’ of metaphysic. Incarnation is the situation of a being who appears to himself to be, as it were, bound to a body. This ‘given’ is opaque to itself: opposition to the cogito. Of this body, I can neither say that it is I, nor that it is not I, nor that it is for me (object). The opposition of subject and object is found to be transcended from the start. Inversely, if I start from the opposition, treating it as fundamental, I shall find no trick of logical sleight of hand which lets me get back to the original experience, which will inevitably be either eluded or (which comes to the same thing) refused. We are not to object that this experience shews a contingent character: in point of fact, all metaphysical enquiry requires a starting-point of this kind. It can only start from a situation which is mirrored but cannot be understood.

Inquire if incarnation is a fact; it does not seem so to me, it is the ‘given’ starting from which a fact is possible (which is not true of the cogito).

A fundamental predicament which cannot be in a strict sense mastered or analysed. It is exactly this impossibility which is being stated when I declare, confusedly, that I am my body; i.e. I cannot quite treat myself as a term distinct from my body, a term which would be in a definable connection with it. As I have said else-where, the moment I treat my body as an object of scientific know-ledge, I banish myself to infinity.

This is the reason why I cannot think of my death, but only of the standstill of that machine (illam, not banc). It would perhaps be more accurate to say that I cannot anticipate my death, that is, I cannot ask myself what will become of me when the machine is no longer working.3

[1] This paper was never delivered.

[2] It is thought of, but it is never resolved. The opacity of the world is in a certain sense insoluble. The link between opacity and Meinbeit. My idea is opaque to me personally in so far as it is mine. We think of it as an adherence. (Note written Feb. 24th, 1929.)

[3] ‘To be involved.’ (idée d’un engagement) Try to shew in what sense this implies the impossibility (or absolute non-validity of my representing my death. In trying to think of my death I break the rules of the game. But it is radically illegitimate to convert this impossibility into a dogmatic negation. (Note written Feb. 24th, 1929.)

It is evident that this whole train of thought is at the root of le Gouvernail: the first notes on the theme of le Gouvernail were composed a few days after these. (Note written April 13th, 1934.)

Gabriel Marcel, Being and Having: An Existentialist Diary, pages 10-12

The reader should not be afraid of converting this level of discussion to everyday life and everyday slang. For example, when Marcel uses phrases like, “I banish myself to infinity” that should resonate with phrases like “flipping out.”

Take this example from Kierkegaard. There’s a book-seller in Copenhagen and he greets a customer who has just entered his shop. The book-seller turns to his wife and says, “It is I who am speaking, isn’t it?” Kierkegaard’s book-seller seems to have “banished himself” and cannot return.