Rationalist Arrogance

On display here.

Don't get me wrong.  Charles Hugh Smith is still one of my favorite bloggers and thinkers out there.  I will not change my opinion of him because he is as human and "irrational" as everybody else.

But the man is just as trapped in a box as all the ideologues he bemoans, he just can't see it.  And the reason he attracts so many readers is that his custom-made box (as opposed to pre-fabricated box) is the same as 99% of the pre-fab box that attracts most of his readers, i.e., the Austrian-inspired libertarian creed.  To one or both of his two minds, that makes everybody else a chimpanzee to his true human, but the fact is that he needs to evolve a little bit to reach the lofty heights which he claims to have attained.  When he starts questioning whether fiction (what he calls "mental constructs") should rationally lead to global instability, perhaps a bit of his conviction will crumble, even though it is based on logic, i.e. what he considers being rational.

If your logical chain of reasoning starts with a fiction, your conclusion will be a fiction.  Under such circumstances, being logical does not make your conviction any less false or irrational than those who do not try to rationalize their belief system.

Heirloom Humanity

Think of heirloom varieties of fruit, vegetables and livestock as compared to those bred for commercializtion.  Then think of modern society, which has been bred to be a consumer.

There's an analogy there somewhere.

The Fruit of the Digital Age: No Fruit

I am watching a PBS special on Mayan civilization, and I am struck by the fact that a the lack of permanent physical records of today's civilization means that it cannot be studied and understood by anthropologists even half as well as the Maya.

Then I realize that future anthropologists won't have any of a harder of time than we do. Truth in the Digital Age is a nose of wax that can and will be manipulated to serve the interests of the power structure.

The Reason "War is Good for the Economy" = Debt

Here's a half-formed thought that just struck me.

So often we hear that war can be good for the economy.  I recall that George W. Bush prescribed war as a way out of recession, for example.

From the other side of the alleged political spectrum, we often hear that war is all about empire and plunder, i.e., the reason war is good for an economy is that the victor subjugates the resources (and income) of the vanquished.

But the bottom line is that the financiers of war win regardless of the outcome, and in this sense finance (and the debt it creates) drives war.

Combine that thought with economist Steve Keen's credit-based model of economics, and it is easy to see that George W. Bush was right, albeit for the wrong reasons.

The Real Aim of Debt-Ceiling Kabuki: Corporate Tax Holiday?

I just ran across this over at Taibbi's blog:

I’ve been in and out of DC a few times in recent weeks and one thing I keep hearing is that there is a growing, and real, possibility that a second “one-time tax holiday” will be approved for corporations as part of whatever sordid deal emerges from the debt-ceiling negotiations.

Personally, I'm okay with a tax holiday, so long as strings are attached (i.e., you can bring the money back in tax free, but ONLY if you invest in creating real jobs in the U.S.), but that is not what we're talking about here:

Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it.

Think of it as a gigantic global IRA. Companies that put their profits in the offshore IRA can leave them there indefinitely with no tax consequence. Then, when they cash out, they pay the tax.

Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.

Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs.

The difference between now and 2004 is that, reminiscent of the events leading to the bank bailout and TARP, an existential economic crisis is being manufactured to justify something that is manifestly not in the American people's interest, but this time it is being peddled directly to the American people. 

All this smacks of desparation.  There are only so many times you can play the "financial fiction will doom economic reality" card.  The next phase of this game of managed deflation (as I call it) is war.  Nothing less than patriotic fervor induced by a perceived physical threat will be able to distract the populace from the fact that it is being mugged.

Seriously, does anybody think that this kind of story gets published without the complicity of the Fed, the entity managing deflation?

(Reuters) - The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.

Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.

"We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged. ... It's a very active process."

Plosser said his "gut feeling" was that President Barack Obama and Congress will come to an agreement to increase the Treasury's borrowing authority in time to avert a default on government obligations.

And sites like zerohedge eat the news up as confirmation of their theories, rebroadcasting it to confirm their readership's religious (i.e., economics), never realizing that they're aiding and abetting the system they claim to oppose.

Fractal Dysfunction

I've recently taken to describing the two most important factions of "the Elites" (note: I did not say "major" factions) as "rationalists" and "realists."  I did not coin these two terms, but I've come to use them in a peculiar way.  In particular, I view "realists," as exemplified by modern realists in the tradition of Carl Schmitt (Hitler's lawyer) and F.A. Hayek (neoliberalism's primary architect) as power addicts, and I view "rationalists," as exemplified by pretty much every other intellectual as enablers of the power-addected realists ("he beats me because he loves me").  Applying the Pareto Principle, I'd argue that 10% of "the Elites" are realists, and almost all of the rest are rationalists.

Interestingly, if you look at the broader adult population, "the Elites" are probably only 10%, leaving almost everybody else-- who I've come to think of as the SSDD (Same Shit, Different Day) crowd.  By the way, I celebrate the SSDD crowd precisely because they are just normal folk trying to get along and enjoy life.  I'd love to be half as happy as the SSDD folks I know, who include the majority of my family.

If my ballpark estimates are correct, that means that no more than 1% of our population dictates how all of us live, which is consistent with economic data.  And I'm sure that we can drill down further and discover that the core power-a-holics that drive society represent only between 0.0001-0.1% of the entire population.

Does that make any sense?  Should the societal equivalent of a desparate heroin addict dictate society's mores and actions?  I don't think so.  The fact that people like me are instictively compelled to fill any perceived power vacuum does not mean that people like me should dictate how everybody else lives.  I am not superior to the SSDD crowd.  Indeed, I'm so far away from the mean that I should be classified as deviant, but people like me are elevated to leadership roles every day.  Unfortunately, the vast majority of people like me view "leadership" as an opportunity to prey upon the rest of society as opposed to an obligation to serve.

Comments Fixed?

I switched back to the pop-up method to see if that helps.  Seems better.

Odd Blogger Behavior

If you want to comment, select "Anonymous."  The OpenID and Gmail methods don't seem to work (I can't post comments using either method, only by using Anonymous).

Hoisted Placeholder: Taking Issue WithPhilosophy and Theology

Hoisting my comment from over at Russ's place:

"But if we could overcome our childishness, profligacy, idiotic dogmas, petty and self-hobbling resentments, if we could assume adult responsibilities and become more rational and scientific (but also recognize the limits of reason and science), we’d transcend ourselves. If we, passionate beings, could live a fuller life of passion controlled and mediated by reason, passion sublimated as spirit and creativity, we’d transcend ourselves. This fuller, richer, more intelligent, more creative human being would be an “Overman” compared to the flawed, childish, dogmatic person of today, vacillating between hating his passions and being their slave; between the nihilistic worship of science and reason and the nihilistic rejection of them."

My fundamental (and growing) problem with Western philosophy generally is its insistence on describing how things are, which, once it is accepted as correct, becomes the description of how things ought to be. Because of the way the human brain works, merely substituting one description of how the world is with another will not, cannot, achieve the transcendence you seek. This is because the world is not a static thing. It is dynamic, never stuck in any one state.

The only way to break free of false dichotomies that our brains spawn whenever they accept an orthodoxy (i.e., anything that is not orthodox fails to meet expectations and, as a result, gives rise to a negative emotion that compels us to attack and change what disappointed us) is to stop trying to describe how things are and focus on describing how things work. We need to accept that human beings are NOT rational in the manner described (falsely) by Western philosophy, that human beings merely compare what they experience to what they expect and act emotionally on the basis of that comparison. Most philosophy/theology seeks to control human action by defining how the world is and, therefore, setting and controlling expectations of how the world ought to be.

The one exception I've found is the Tao Te Ching (I purposefully am not saying Taoism because I think the religion that has spun up around the Tao Te Ching is contrary to the Tao, which describes how the world works, not how it is or ought to be). I actually view the Tao Te Ching as just an ancient recognition of what I've discovered recently on my own.

The way for humanity to transcend itself is to embrace its humanity, and what defines humanity is the process of how we make decisions. We need to be realistic in what it means to be rational. We also need to be rational in what it means to be realistic. When we strike the proper balance between realism and rationalism, we will find a third way that transcends both.

Placeholder: The Illusion (and Lie) of "Complexity"

I've said before that the world is no more complex today than it ever was, that human beings, through the division of labor, have become simpler and, therefore, less capable of understanding the world as it is (i.e., as it always has been and as it always will be).  In this sense, complexity is an illusion.

I've recently come to the conclusion that complexity is not just an illusion, but a lie.  Throughout the ages, the "complexity" of the current era has been pointed to as an excuse for maintaining the current power structure.  Founders like Hamilton and Monroe relied on complexity, as did proto-neoliberal Walter Lippmann. Nieburh points to additional examples.  The argument always goes something like this (although it is sometimes turned on its head): "the modern world is far too complex for any one man to fully understand, therefore, democracy is impossible and undesirable."  Unspoken is the fact that all societies form so that both physical and intellectual labor can be divided among several people, which implicitly requires that no one person in society will ever know everything that is needed to run the society.  "Efficiency" demands this.

The lie of complexity is often unwittingly employed by smart people like Charles Hugh Smith.  Why?  I believe it is because people like CHS are rationalists, that they honestly believe that human beings are "rational" in the manner economists and other social scientists (witch doctors) describe, and that the only way to describe "irrational" choices embraced by most people is by identifying a limit to rationality.  But the commonly peddled definition of "rationality" is itself a lie, one that those in power ignore constantly.  (And, not to mention, it is the alleged limits of human rationality the elite use to maintain their power.)  At the end of the day, rationalists are the enablers of the power addicts (the hallmark of a co-dependent relationship).

The best way for me to demonstrate the lie of complexity is to use fractals.  Fractals are often described as defining complexity or even chaos, but they are, in fact, the purest form of order: a pattern that iteratively repeats itself.  As I've said before, I believe that humans behave fractally, that they apply the same basic decision-making function iteratively and at different levels of abstraction, thus explaining why markets appear fractal in nature.  To understand (and even control) a society, all you need to do is understand the seed function employed by the mean of that society.  Basically, all human action is determined by comparing what is experienced to what was expected and reacting to the emotion created by the mismatch, if any, between the two.  The easiest way to control human action is to define expectations, as humans will work tirelessly (and violently, if necessary) to ensure that expectations are met.  But propaganda is a useful tool for playing upon the cognitive biases of people to help them see perfect alignment (when expectations and experience are actually in conflict) and conflict (when expectations and experience are fully aligned).

The specific fractal I'm thinking of is called the Koch Star.  As explained quite well by Wikipedia:

The Koch snowflake can be constructed by starting with an equilateral triangle, then recursively altering each line segment as follows:

1.divide the line segment into three segments of equal length.
2.draw an equilateral triangle that has the middle segment from step 1 as its base and points outward.
3.remove the line segment that is the base of the triangle from step 2.
After one iteration of this process, the result is a shape similar to the Star of David.

The Koch snowflake is the limit approached as the above steps are followed over and over again. The Koch curve originally described by Koch is constructed with only one of the three sides of the original triangle. In other words, three Koch curves make a Koch snowflake.

Let's visualize the explanation:

So, here's the lie of complexity.  Mathematically,

The Koch curve has an infinite length because each time the steps above are performed on each line segment of the figure there are four times as many line segments, the length of each being one-third the length of the segments in the previous stage. Hence the total length increases by one third and thus the length at step n will be (4/3)n of the original triangle perimeter: the fractal dimension is log 4/log 3 ≈ 1.26, greater than the dimension of a line (1) but less than Peano's space-filling curve (2).

But we can see intuitively from the animated .gif above that after the fourth iteration of the fractal, the area enclosed by the "infinite length" curve does not change, i.e., an infinite length bounds a finite space:

So the area of a Koch snowflake is 8/5 of the area of the original triangle, or .^[2] Therefore the infinite perimeter of the Koch triangle encloses a finite area.

Thus, in spite of the beauty and certainty of mathematics, increasing the complexity of the fractal Koch curve to infinity does not change the fundamental, finite nature of what that curve actually describes. 

The Koch Star is no different than our current reality.  You can divide labor as much as you want, to infinity even, but that will not change the fact that we live in a finite world.  The complexity of the modern world is just as illusory as the infinite length of the Koch curve.  Yes, in theory, if you keep on dividing things in two forever, you theoretically create perpetual exponential growth, but reality quickly intrudes by placing real limits on what can be achieved.  Anybody who attempts to sell complexity beyond the limits of reality is, by definition, a liar and a fraud.  Even if they don't realize it.

A separate but related thought I will develop is that Taoism (as set forth in the original Tao Te Ching) is not a spiritual or religious tract at all, but a timeless description of the seed function of the human societal fractal.