Are the forces of "crusading ignorance" preparing to burn books in Latvia?

It is getting seriously deranged in this country, and hard to decide whether this is the culmination of one of the many processes that make Latvia a kind of failed state/society lite, or the start of a censorship and book-burning campaign by crazed religious fundamentalists.

It all started with a perhaps expensive (more that LVL 6000 for 500 print editions, an internet version and a teachers’guide) translated Danish children’s book with stories of small children switching gender roles for a day. The general idea is to put children in the place of others, to think what it would be like to play a girl’s traditional gender role (play with dolls) or for a girl to do “boy” things like team sports.

When Latvia’s Minister of Welfare Ilze Viņkele presented the book and the gender equality program, she was angrily criticized by a group of fundamentalist Christians. Some 50 Christian and “pro-family” groups also wrote letters to the Prime Minister, other government ministers and the media denouncing the book and asking for Vinķele’s resignation.

The reaction of Latvia’s holy rollers was hysterical, with one man claiming to be the father of six children suggesting on television that a book burning be organized. Many comments on the internet by people who had apparently never read the book saying that it was aimed at teaching homosexuality. Others saw it as a plot to deprave Latvia (as if a girl playing European football and a boy wearing a sweater with glitters was the height of moral collapse). It is almost as if Vinķele’s presentation of the book opened the depths of ignorance, religious fanaticism, and anti-Western or anti-modernist rage. It is like a time portal opened to the 19th century, if not the Middle Ages in a country that is outwardly a modern democracy and European Union member state.

Vinķele herself said that she feared book burning or physical violence could be the next step in the outrage by a segment of the public over what they see as “homosexual propaganda” in the kindergarten. Nothing, least of all facts and the views of modern science will convince these people otherwise. It almost makes one think that there was something positive about the Soviet Union’s “militant atheism” and anti-religious campaigns. A little of that might be useful, though as much at odds with democratic values and an open society (committed to freedom of belief) as the Soviet’s totalitarian crusade to repress everything except the secular religion of Communism. 

Banking with Chicken Little in Latvia

There are reasons for concern everywhere about the financial system, especially in light of the Eurozone debt crisis, the postponed, but still possible collapse of the euro and other things based on facts, figure, events and rational analysis. But that is not the biggest immediate risk for bank customers in Latvia. The biggest risk is proving to be the customers themselves.

Whatever else banks are, they are institutions based on trust at the customer level. That is, the bank is kept solvent by the fact that depositors a) believe the bank will be there the next day, which depends on b) most of the other depositors being there the next day. If that doesn't happen, whatever else the bank is doing with the money entrusted to it by customers doesn't matter, because, basically, the customers cannot be trusted to stay with the bank and can, for whatever reason, seriously damage it or pull it down.

This is what is starting to happen in Latvia with the initially groundless panic surrounding Swedbank and, to a far lesser extent, SEB. Both parent banks in Sweden are stable, solvent, and there are no signals from any of the many third parties watching the banks (auditors, analysts, shareholders) that anything is wrong (or, for that matter, that the official authorities, which there may be some reason to mistrust, are hiding anything). But now in Latvia, the mass hysteria of bank depositors is itself becoming at least a low intensity threat to Swedbank and the other banks. It at least suggests there is some truth, but little reason behind the saying that in bank panics and runs, the cool and rational will fare the worst, remaining as the “last man not taking everything out of the bank”.

There may be an explanation, but not a justification of public behavior in Latvia in connection with the recent closing of Latvijas Krājbanka. However, that was a relatively small bank in terms of assets (but broad-based in terms of numbers of customers) and its demise was the result of alleged criminal behavior by the owner of its parent Snoras Bank, the Russian millionaire Vladimir Antonov. Also, thousands of customers were compensated to the extent of their deposit insurance coverage very quickly, with some LVL 200 million paid out within days of the collapse.

The fundamental problem is that people in Latvia now have a largely irrational distrust of banking system as a whole, with Swedbank singled out as the market leader, and a far  less irrational mistrust of government authority based on inept initial statements (Krājbanka is OK) by the Financial and Capital Markets Commission (FCMC) in connection with the collapse of Snoras in Lithuania. This mistrust is showing signs of turning into a kind of mind-set of the Middle Ages. What I mean by that is that people see their surroundings as governed by incomprehensible, mainly malevolent and arbitrary forces beyond their control or understanding. Wars, plagues, famines were frequent occurances and to the average illiterate peasant, they simply happened or were acts of God or other mystical forces. It now seems that many Latvians view the financial system and their environment as a whole as a malevolent force to which one can only react in the short term, based on the basic emotions fear and suspicion, putting reason and the checking of emotions against facts on the back burner. It is the kind of mindset that led to numerous panics, delusions, witch-burnings, children's crusades and other acts of mass hysteria in one form or another. This is shocking and baffling to the more rational societies of Europe, in particular, the Swedes.

Another way to put it is that these recent and still ongoing events show that the greatest risk to any Latvian customer of a stable, well capitalized and profitable Swedish-owned bank is the fact the many of his or her fellow customers are like Chicken Little, ready to run about madly shouting that “the sky is falling”. It would almost be reason enough to move one's assets, if possible, to Swedbank in Sweden, where the cohort of bank customers is less excitable and irrational.