The Gun Control Debate Accepts the Catalyzing Tragedy As a Given

When it comes to those who go what we used to call "postal," both sides of the gun rights/control kabuki "debate" accept the death of the homicidal suicide as a given and focus instead on trying to save the suicide's potential/intended victims.  Gun rights activists want to arm everyone to increase the chances of knocking off the homicidal suicide before he can kill others.  Gun control activists want to disarm everyone the point of a one-shot blunderbuss, forcing the homicidal suicide to use the only sure shot he has on himself.

Why can't we see the homicidal suicide himself as a tragic figure, a victim of something in his own way? In almost all "going postal" instances, gun rights activists portray the homicidal suicide as an evil "criminal," even if he wasn't one before his crime.  In almost all "going postal" instances, gun control activists portray the homicidal suicide as a deranged right-wing gun-nut, even if he wasn't one before his bout of insanity.  There is no room left to view the homicidal suicide as an innocent victim-- or even as a human being-- because the crimes he committed as a result of his own despair eclipsed the life he led before.  The tragedy he owns masks the tragedy that was his.

Am I saying that we forgive the homicidal suicide for his homicides?  Not at all.  I'm just saying we should not ignore what led him to killing others to give his own death meaning: the fact that he knew with certainty that his life meant nothing to anyone.  We-- Society-- teach the homicidal suicide that he is worth more dead than alive.  Is it any wonder that sometimes he comes to collect?

If you want a much wordier and (I think) opaque dissertation that makes similar points, you may enjoy Surly's essay more.

P.S. A local gun shop here in the Bay Area told a friend of mine today that they had sold more assault rifles in the last two weeks than they sold all of last year, and they are out of stock for another four months.  Gun control "debates" are great for the gun business.

A Phoenician Tale: Duping the Polis into Believing It Is Owned by the State

A key element to Plato's "antipolitics" is conning the polis into believing it has no real say in how it is managed. When successful, as it is in the US today, the con transforms the polis into little more than chattel owned by the state.

Brilliant.

Politics are Antipolitics

Tonight, I picked up Alan Ryan's On Politics: A History of Political Thought: From Herodotus to the Present.  In Chapter 2, he argues:

Almost all accounts of the history of political thinking begin with Plato.  This is a paradox, because Plato's political thought is anti political.  Readers of the Republic see that in the polis of Plato's imagination, there is no politics, and are puzzled; but throughout European history there has been a current of thought that seeks the resolution of the conflicts that "ordinary politics" resolves in the creation of such a degree of social harmony that the conflicts which everyday politics resolves have simply disappeared, and politics with them . . . The founder of European political thought is the founder of anti political thinking.

But there is no paradox, as "European" (more properly "Western") political thought seeks to marginalize and eliminate the role of the polis in how it is managed.  The point of "politics" is to provide the masses the illusion of power, not actual power.  And whenever the "politics" of antipolitics begin to fail, we find those who pretend that antipolitics failed because of the polis.  And those same people decry the violent reaction of the polis to being violated.

But why should these masters of society complain?  They are the fittest, after all.  They will obviously survive, so why do we lesser men need to worry about them?  They'll take care of themselves.

Hint: a con man is only "the fittest" so long as his marks remain conned.

Emperor Caracalla Built Something Beautiful. Really?

Educated folk often become enamored with history and its wonders, but are we really this stupid?:

"The emperor Caracalla was cruel, but he built beautiful things."

Emperor Caracalla didn't build anything, and even if he did, he couldn't have built something so massive on his own.  More likely than not, masses of slaves build this "beautiful thing" at the direction of artisans who designed it.  Certainly, slaves worked this "beautiful thing" out of the sight and, therefore, out of the minds of those who enjoyed it.

The decadence of opulence should not be admired but condemned.

Thoughts On Economics

Robert Vienneau has a new thought-provoking post up today.

At least I found it thought-provoking-- and on many levels.  Here's why:

1. On the one hand, I believe that all human social interaction can be explained through a fractal function of cognition.  So, in that sense, I believe that reductionism is possible in a fractal sense.
2. On the other hand, I agree with the J. E. King's quote of Kincaid is correct in arguing that reductionism is not possible when it comes to social sciences.  Why?  Because social sciences are not part of the natural world but an entirely human construct meant to secure, entrench and perpetuate the power of the dominant faction of society (aka, "the elite"), which is a long-winded way of saying that the social sciences are, first and foremost, propaganda.  I cannot see how one can reduce fiction to fact.
3. As a complete aside, as no hands are available, it strikes me that King may be a neoliberal in Post Keynesian clothing because his anti-reductionist argument works in the favor of orthodox neoliberal economics and against heterodox economic theories.  For example, Steve Keen well-reasoned attacks on the shaky (read non-existent) "microfoundations" of neoliberal macroeconomics are what give his macroeconomic theories their weight: by creating a theory of microeconomics that address the existence of money, credit and banking, his macro theory is logically consistent and creates a proper foundation for a new theory of finance.  I fear that King's work may well be used to "disappear" Post Keynesian analysis, just as prior economic theories have been disappeared.

We're Neither Citizens Nor Consumers, We're Tenants

In a world where the products we "consume" are designed to irreparably break (euphemistically called "planned obsolescence"), we no longer buy products, we lease their utility.

Really, what is the difference between (1) the manufacturer of a product, unbeknownst to you, rigging the product to self-destruct three years from the day you buy it, and (2) the manufacturer of that same product walking into your home three years from the day you bought it and destroying it, or simply taking it away?  In  either event, you will have to "buy" something to replace it, if you need the utility the product provided.

We're taught that when we buy something, we own it.  It is our property.  But how can it be our property when we do not control its disposition?

Set and Manage a Man's Expectations, Define His Reality

Man does not experience reality, he interprets it.  He compares what he observes to what he expects, and he acts based on the outcome of that comparison.  Reality is only a reference point, and a relatively minor one, as man will act to change the world around him (i.e., reality)  to meet his expectations before he will question those expectations.

Thus, if you set and manage a man's expectations, you define his reality.

In this sense, there are two realities.  The first is the physical world around us and is not open to debate or philosophical meanderings.  It is what it is, with or without us.  This is what I mean when I say, simply, "reality" without a modifier, e.g., "a" or "his" or "ours."  The second is our vision of what the reality ought to be, i.e., our expectations. This is what I mean when I ascribe reality as belonging to somebody, i.e., "his reality."  Generally, though, I don't think of the latter as "reality" in any sense, and I tend to refer to it as "expectations."

Mired in a Reality Somebody Else Created

That's what we are.

Ever since Plato posited "the Truth" -- a false god-- we have sought it out to the exclusion of reality.  Plato's Truth has taken many guises, but all of them comfort us, tell us that our sojourn is over.

And so we accept their propaganda as our insight, their chains as our liberty, their shit as our mana.  Eat it and be saved.

Heidegger Is Dangerous

I discovered Heidegger over the weekend. His Being and Time seems to be a long-winded and opaque version of my fractal theory of human cognition, which boils down to the very simple proposition that human beings do not experience life but interpret it by comparing what they observe to what they expected and acting according to the emotion that such comparison creates.

To put this in terms closer to Heidegger's, the Cartesian and Aristotlean view of the individual as a segregated, static thing is a failed model of humanity.  Human beings live from moment to moment, pushing off from the "reality"of their expectations towards their future actions based on how the present lives up to their expectations.  

I'm stunned that Heidegger could not explain what I just said so succinctly.  Every time I take the time to wade through so-called "philosophy," I find so much twaddle, so much bullshit, that I want to puke.  

That being said, Heidegger is very hard to find, which indicates to me that he spoke too much truth, notwithstanding the fact that it is incomprehensible to most people.  If I were in charge of the true elites, I'd be out pimping Heidegger in all his incomprehensible glory in order to make sure nobody ever took him seriously again.  Disappearing people like Heidegger, Henry George and Henry Simons (the excommunicated neoliberal) only makes their messages more valid.

"Fixing" Those Things Won't Change a Thing, Mish

Mish loves to engage in Austrian-inspired, fact-free pontificating.  Today he posited the following:

What's "Really" Behind Gross Inequalities In Income Distribution?

1. Fractional Reserve Lending

2. Inflation targeting by the Fed

3. Moral hazard policies of the Fed that encourage winner-take-all speculation

4. Government interference into free markets

5. Public unions

The result of all five practices is the hollowing out of the middle class from the bottom up. The solution is sound money, elimination of the Fed, the end of public unions, and minimal government interference in the free markets, not income rules, not misguided regulation of banks, and not more debates about how to measure something that cannot be measured.

Here's reality: the gross inequalities in income distribution pre-dated the formation of the Federal Reserve and, therefore, predated items 2 and 3 above.  Furthermore, those inequalities also predated items 4 and 5, both of which started with the New Deal, which did not go into full swing until the late 1930s.  Indeed, if you scroll down to Figure 1 of this article, you will see (1) government regulation and the establishment of private and public unions correlate quite nicely with a significant REDUCTION in income inequality and (2) union-busting in the Reagan era and bank de-regulation approved by Carter but implemented during the Reagan era signaled a return to the income inequality that existed when the Fed was formed.  Make sure to look at Figure 2.

So, apparently, eliminating Mish's items 2-5 won't change a thing.  What about eliminating fractional reserve lending?  Well, that's a relatively new innovation, as well, at least with respect to the broader economy.  First, fractional reserve lending wasn't invented until the 17th century.  Second, savings banks for the common man didn't come into existence until the 19th century.  My intuition is that most lending in the 19th century and early 20th century was commercial nature, that personal home loans were rare until the New Deal in the late 1930s.

In other words, eliminating Mish's item 1 won't change a thing, either.

Fundamentally, there is a gross inequality in income distribution because labor is not voluntary.  Fuck around with money, credit and market regulation all you want, but all you're changing is the nature of life in bondage. Under the current fiat money system, the "monetary vortex" (see the commentary starting at 1:15:40) collects its rents on the back-end through inflation.  Under Mish's "sound money" system, the constrained liquidity created by private money and credit will force the payment of rents on the front-end through interest payments that seem unwarranted in an inflation-free, slow growth environment.

Oh! So close . . .

A really good piece by James C. Kennedy may be found here.

Where he goes astray is in believing that the "free market capitalism" envisioned by classical liberalism was any different than the "free market capitalism" envisioned by Milton Friedman.

I may write more about this later, but I doubt it.  I understand Kennedy's mistake because I once made it, too.

Any Sense of Superiority Is False

One of the hardest things to maintain is the recognition that no human being is inherently superior to any other.

This is not to say that we are all equal.

Then again, how many dimensions of social value do we actually measure?  I know plenty of people who are nowhere as "successful" as I am who are clearly superior in certain areas that are viewed as "intangibles" because we refuse to measure and pay for them.

But it can become quite tempting to forget what is not measured, what is not appreciated, and to convince ourselves that we are really as great as others hold us out to be.

Hint: that's just your ego.  Human beings from top to bottom are basically the same. While the distribution of sociopaths may be much higher at the upper rungs of society, that's only because the rules of society are sociopathic in that they were not designed to apply to the people who created them.

People like Jesse who want to believe that the Elite are sociopaths need to consider that the societal values were created and driven by the Elite, who created societal values to inhibit everybody but themselves.  So why do you continue to advocate those societal values, Jesse?

And I'm not saying that we should abandon these societal values, only that we should recognize that they control us, whatever they may be.

And Yet You Perpetuate the Lies [Updated]

People like Jesse and Yves recognize the lies, but they can't help themselves in normalizing the evil the lies perpetuate.

Great headline from Jesse:

Propaganda and Perception Management, and the Process of Dehumanisation

Then he invariably pimps gold and silver, the Plutocrats' preferred control mechanism.

To be clear, the post in question does not perpetuate any lies, does not pimp gold and silver, but wait for that to happen in a later post.  He is like clockwork: he pimps gold and silver on a daily basis.

To be clear, I like Jesse and Yves a great deal.  I just think they are cowards.  They both have a following and the credibility to create movements, but they'll never do it.

UPDATE:  Yves Smith gives a much better example of what I say above.  She argues for a "tax to kill high frequency trading," essentially accepting that HFT is legitimate under current law.  A strong case can be made that HFT is, in fact, a form of securities fraud that is already outlawed under the Securities Exchange Act of 1934.  No new laws are required.  Just apply the existing securities fraud laws against HFT.

But that won't happen.  There is no such thing as the US stock market any longer.  Between dark pools and internalization at large retail houses like TD Ameritrade, there is almost no real trading going on in the exchanges.  Without HFT to act as a proxy for price discovery, stock prices would plummet.  HFTers own the ball.  If you throw them out of the ball game, there is no game because the ball goes where the HFTers go.  Unless you freeze the markets, outlaw the dark pools (another form of securities fraud), outlaw retailers from front-running their customers (via internalization), and outlaw HFT -- all of which can be done by simply applying current law-- nothing will be done about HFT.

But just by arguing about HFT on the HFTers' terms, you have legitimized their right to play.  You have perpetuated their lies.

How Big a Lie is the "Big Lie"?

Golem XIV has the third part of his now four-part series on "Why Are We Bailing Out the Banks?"

There's some good observations here:

To tackle a big lie can feel as if you are weakening yourself more than those you oppose. You feel the branch you are sitting on starting to weaken. Which makes it all the harder to defend what you are doing and saying against those who cast doubt not just upon what you say but upon your motives and even your sanity.

For many people the feeling of self-inflicted unease becomes too great. And the bigger the lie the greater this effect. To oppose a really big lie, particularly one vocally supported by a network of mutually re-enforcing powerful people and institutions who all claim they have your best interests at heart, is hard because of the sheer scale of what your opposition entails. To oppose the well constructed, well supported, really big lie you are faced with having to question far more than you want to. Questioning is hard to do. It sets one apart. No one likes to be set apart.We are by instinct social animals. If we must set ourselves apart we at least want to feel confident of where we stand. The really big lie ups the ante. It forces us to feel the widening circles of disruption of our own beliefs.

One can oppose the small lie from the solid ground of the rest of your beliefs. The big lie’s strength and defense is that it forces you to question all the ground you thought was solid; the ground you thought you could stand upon to make your stand. To question the big lie is to feel that you are casting yourself out. It is not a great feeling.

Ultimately, I fear, Golem XIV will end his unraveling of the Big Lie at the fig leaf covering this instance of so-called "Capitalism," that he will not see Capitalism is itself the Biggest of Lies, offering slavery as liberty.

You see, the reason we are bailing out the banks is that they own us.  We serve them, they do not serve "Capitalism" or "society."  We serve them.  A better question is "Why do we think we have the right to question why we are bailing out the banks?"  Real people must die so capitalism's fictions may live.

An even better question is "Why should we accept being owned?"  FDR allegedly "saved Capitalism," but here we are, right back to the Gilded Age and the Great Depression.  Any "Golden Era" of Capitalism after FDR's reforms was short-lived, as the stagflation of the late 1960s and early 1970s was the direct result of a counter-attack by the FIRE sector.

To be clear, I am not proposing any alternative to Capitalism.  I don't feel qualified to do so, and I tend to believe that our conditioning under Capitalism will lead us to propose something too much like it, e.g., Communism.

It is hard to believe that I once believed, as Ian Fraser wrote today, that "neoliberalism perverted Adam Smith."  I came to that conclusion over three years ago, and wrote about it two years ago here.  While people I trust and who have read Adam Smith much more deeply than I have assure me that Smith was sincere in what he wrote, I fear that he was not.  The one thing that keeps me hopeful is that Smith was very much against usury, the corporate form, and financial speculators.  It may well be that he was the equivalent of a modern day "progressive" and inadvertently legitimized evil by attempting to engage it on its own terms.

Meaningful Concepts, Meaningless Phrases

Jesse has pointed us to a three part essay by Golem XIV, who asks the question "Why are we bailing out the banks?".  Here is part one and part two.  I am looking forward to part three.

I think Golem XIV dwells too much upon the current instance of self-serving behavior on the part of the ruling elite and ignores entirely the true state of reality implied by what is unfolding before our eyes in the context of two thousand years of history.  I'd argue there is no such thing as "equality," no such thing as "liberty," no such thing as "democracy," and no such thing as "virtue" and "ethics" EXCEPT to the extent required to enslave us.  All of these concepts, representative of the best instincts of humanity, have been perverted and turned against the masses for millenia, all thanks to the hard work of political philosophers like Plato and Aristotle, misanthropic, cynical bastards who turned the best instincts of humanity against it, all because they feared everybody else was as petty and conniving as they were.

The only hope for the ruling elite (who are very few in number) is to make the current crisis so bad that we fight each other over meaningful concepts that have been rendered meaningless phrases.  And when we are done killing each other to uphold an ideal that we killed with it, the ruling elite will return to rebuild a "brighter future" that will look just like the past.

Plato and Aristotle were really all about power.  Their works provide a Rosetta Stone for translating human spirituality and generosity into power for an elite few.  Those same works can provide the basis for reversing the flow and returning the power to its source: the individual.

The Roots of My Disdain for Plato and Aristotle

RE's recent post at the Doomstead Diner reminded me of something I wrote awhile ago.  So, I looked it up and found a trilogy of posts from June 2011 that laid the foundation of my disdain for Plato and Aristotle.  At the time I wrote these posts, I had not read much Plato or Aristotle, and I had yet to delve into the politics and morality of Athenian society and their response to it:

Why I See a New Dark Age and Not Merely A Greater Depression

To me, the Dark Ages are "dark" because of the knowledge that was lost, if not intentionally destroyed. In this sense, I do not view the coming new Dark Age as a return to subsistence farming or involving the complete loss of modern technology, but as the fulfillment of Neoliberalism's mission to engineer a "great forgetting" of classical liberalism and other fruits of the Age of Reason. The ideas of people like John Locke and Thomas Jefferson had a power beyond that which even those two intellectual giants could contain, and they must be destroyed in their raw form and viewed only through the Neoliberal prism. (Note: my thesis is that both Locke and Jefferson crafted their ideas with the aim of controlling the masses, not empowering them.)

The sociopathic dogma of Neoliberalism drives narcissistic institutional values that prevent the masses from thinking beyond themselves, encouraging them instead to embrace selfishness, or "self interest, wrongly understood." The purpose of the coming Dark Age is to forget the classical liberal ideas that resulted in self interest, rightly understood, i.e., self interest that recognizes the good of the community as part of self interest. Mix in the "now-opia" (or is that "now-opiate") of the modern consumer culture, and you have a perfect set of conditions for a new closing of the Western mind.

My next post explained my thesis that people like Locke and Jefferson were not truly on the side the common man or justice:

Explaining My Thesis Re: Locke and Jefferson 

In response to my last post, where I said "my thesis is that both Locke and Jefferson crafted their ideas with the aim of controlling the masses, not empowering them," I was asked to explain how I came to that conclusion. 

The journey to that conclusion has been a long one, but it ultimately comes back to Mark Twain's obervation "History doesn't repeat itself; it rhymes." This is an aspect of what my own half-formed theory on the fractal nature of human cognition, which is based on the basic comparative mechanism by which human beings decide. This mechanism is responsible for the fractal nature of markets observed by Mandelbrot, and for history rhyming with itself. 

In every era, somebody rediscovers the basic mechanism of human decision making and seeks to use it, and the ruling elite invariably seeks to it to its advantage. Knowledge of this mechanism, i.e., the comparing of what is experienced to what was expected (as filtered through cognitive bias), is something that predates cognitive science and behavioral economics by millenia. Plato certainly seemed to understand it . . .

Neoliberalism has been relatively open in its purpose and its means for achieving it. Its break from classical liberalism is marked by Walter Lippmann's The Good Society, which identifies and laments his perception of classical liberalism's shortfalls, which include the mistaken belief that educating the masses makes it easier to govern them. Under Neoliberalism (and its offshoot. neoconservatism), we've seen a concerted dumbing down of the populace. More importantly, however, we've seen the deliberate redefining and demeaning of important, visceral words such as "liberty," "freedom" and "democracy," all to the ends of securing the power of the elite that arose and flourished under classical liberalism. 

When I realized that Neoliberalism merely recasts feudal doctrines of control such as the divine right of kings (the market is God and winners are chosen by God to win) and excommunication (the poor and unemployed have been cast out by God, the market), I recognized the possibility that classical liberalism itself was merely an earlier recasting of the same doctrines of elite control to secure the place of the then elite: the educated oligarchs like Locke and Jefferson. The difference is that the transformation that took place in the Age of Reason was triggered by the Reformation and the realization that the Roman Catholic Church was corrupt, which resulted in classical liberalism focusing on God as man (i.e., Jesus) instead of the disembodied authority figure who will strike you dead if you do something wrong. 

Interestingly enough, however, Locke constructed his "natural law" to protect and preserve the "property" that a person already owned, regardless of how he came by that ownership, even though there is no such thing as property in nature. Locke and Hobbes were merely two sides of the same coin, which requires a state to hold society together. Both sought to achieve the same end of protecting the gains the elite had achieved under the prior system of feudalism. 

One of the reasons that I'm worried about a new Dark Age is the fact that we are moving to completely digital media, which means that documents can be disappeared or altered without anybody being aware of it. At least the Church of the Dark Ages had to go around burning books and killing people to purge the world of knowledge. In another century or so, there will be no permanent record of anything. All knowledge that is publicly available will be subject to censorship and manipulation that nobody can detect, even if they thought to look for it.

I realize that this post has been somewhat stream-of-consciousness, but I hope you get the giste of what I'm saying, which echoes and amplifies what people like Niebuhr and Myrdal have said: the ruling elite define the institutional values that set the baseline of decision making in a society. Those values are only changed consciously in response to a clear an present danger to the elite themselves. Marxism kicked classical liberalism in the head, which would have been fine but for the Great Depression. So the ruling elite kicked things into overdrive to define neoliberalism, and they documented what they did every step of the way.

Completing the trilogy of posts:

Responding to the most recent comment 

Blogger is puking on my attempt to provide a comment, so I'm responding to Mr. Falberg here.
I prefer to not resort to ideas like the "New World Order."

First, to the extent that a New World Order is actually contemplated, it is merely a new new New World Order (at least) meant to secure power in light of society evolving to a point where it wants to take that power away. 

Second, the current NWO theory infuses far too much lifelike detail into what is at best a thumbnail sketch. Indeed, the ruling elite would be stupid to insist on a "one world government" because a key aspect of maintaining control without responsibility is to be behind the scenes and out of sight. The more people there between you and the audience, the less likely they'll be able to see you. The current system is already far more effective than a one world government would ever be. 

And the worst part about it is that a lot of the people who believe in and push the NWO thesis love them their natural law, their John Locke, and their Thomas Jefferson, i.e., they just prefer the old NWO over the one they see coming. 

I care less about the conspiracies and more about the mechanisms that allow us to be duped by them. The only thing we can control is our own actions. I can't stop somebody from trying to dupe me, but I don't have to allow myself to be duped. The problem with the NWO theory is that it assumes its starting worldview is itself valid and true when, in fact, it appears to be just a prior version of the NWO, at least to me.

Based on my further study of the matter, as far as I can tell based on the historical record available to us, Plato and Aristotle were the first to focus on systematically legitimizing the illegitimate. Plato is to Aristotle what Hobbes was to Locke, what Hamilton was to Jefferson, what Romney is to Obama, i.e., two men who agree on the strategy but disagree on the tactics for achieving it.

I apologize for anyone who finds this post to be a shaggy dog story, but I have a day job, and this blog is primarily for jotting down thoughts that I might find useful later.  Still, I felt compelled to respond to some of the shock/concern over my disdain of Plato and Aristotle.  To be clear, my disdain is not a rejection of the truth of everything they wrote but of the falseness of what they wrote as a whole.

Irony 101

I find it both puzzling and interesting that my rejection of the Quantity Theory of Money is rejected by supporters of MMT.  MMTers, after all, choose to reject the Quantity Theory of Money when money is sovereign.  I simply go farther and reject the Quantity Theory of Money outright.

Where I seem to disagree with MMTers is in their blind spot: the private central bank's balance sheet.  I argue that the private central bank's balance sheet matters.  One MMTer seems to argue that if you pretend the private central bank's balance sheet doesn't exist, it doesn't matter.  He/she also makes numerous assertions about a couple of country's private central banks that he/she cannot substantiate because he/she does not seem to understand accounting rules and seems to assume that the numbers on an audited balance sheet can be made from whole cloth. That is not the case.

At the end of the day, this blog exists for me to write down my thoughts.  While I appreciate comments that help me think better and more critically, this really isn't a place for ideological arguments.  I just don't have the time or inclination to argue with people who don't know what they are talking about.  On the other hand, if you can show me that I am mistaken, that I don't know what I'm talking about, that would be a service much appreciated.

I live to learn.  This blog just logs what I believe I am discovering.  I am not invested in being right, but if you think I'm wrong, please prove it and be clear in your proof.  Thanks.

When A Central Bank Is Private, Currency Collapse Is Caused By Insolvency Not Money-Printing

I've said before that the Quantity Theory of Money ("QToM") is hogwash.  Inflation, deflation, hyperinflation, stagflation, and any other -flation - none of these depend upon the quantity of money available in an economy.  From what I can tell, the QToM was invented do convince labor that increasing their wages did not improve their lot.

Credit drives everything.  When new credit is tight and old loans get called in, assets are sold below the current market price, giving the illusion that money is worth more.  Actually credit-inflated assets are worth less.

When a central bank is privately held and subject to the accounting rules of the private sector, the balance sheet drives everything.  If a central bank's liabilities should ever exceed its assets and the central bank's creditors gets wind of that fact, the central bank's liabilities will get called in, and it will sell off its assets to appease the secured creditors first.  The holders of central bank notes, e.g. Federal Reserve notes, are unsecured creditors who will be the last to know.  But once they know, the value of the central bank notes rapidly goes to zero.  When a bank is not a central bank, this phenomenon is called a bank run.  The elite have falsely labeled this phenomenon as "hyperinflation" and blamed it on excessive "money-printing" to mask the fact that a private central bank sometimes has to die so its owners may live.

If the Fed is purposefully buying toxic assets to insulate its owners from liabilities. the Fed is becoming a "bad bank" that will eventually be recognized as insolvent, rendering its bank notes valueless.  When this happens, all the Federal Reserve notes that the banks are sitting on as "excess reserves" will be released to give credence to the lie that "money-printing" caused the collapse of the dollar, but don't be fooled.  The Fed's insolvency will have preceded the release of those reserves by a substantial period of time.

When a central bank is privately owned, what appears to be hyperinflation is actually the fallout from a bank run that ended in the central bank's insolvency.

Capitalism Is Not Wasteful

Capitalism does to the common man what the Inuit do to whales.  No part of the common man goes to waste.  All of him is consumed.

Capturing A Thought

A comment that I posted at Naked Capitalism that may not make it past the filter:

We get it. Our former Great White Hope is now consigned to forever being just another Great White Hype.

So when do we stop talking about Schneiderman et al.? Why do he and other proven frauds deserve our continued consideration?

Could it be that we in the “reality-based community” merely follow the reality that is created for us? Could it be that we are irrelevant so long as that is all we do?

I fully understand that the kind of commentary we see above is what drives traffic to your site, that confirming what people already believe they know is easy money. While I am not accusing you of consciously “selling out”, I think your desire to run a “successful” web site has compromised your objectivity. Self interest is always unenlightened, no matter how hard we try to make it otherwise.

Being a progressive inherently means perpetuating today’s fraud with the hope of making it less fraudulent tomorrow. Perhaps what we need for real progress is subversives, not progressives.

Embrace your inner subversive.

Read more at http://www.nakedcapitalism.com/2012/10/schneiderman-suit-against-jp-morgan-a-weak-rehash-of-other-lawsuits-likely-to-produce-meager-settlement.html#37FmGmxE5xBh3Zr2.99 

UPDATE 1:  Yves' response:

Yves Smith says:October 2, 2012 at 1:50 am

With all due respect, you can go to hell.

I am sleep deprived while out of town at a conference getting this post out, which meant reading the filing and comparing it to past filings on relevant cases. This was substantive work that you just pissed on. I’ve been on the mortgage and securitzation beat consistently, and this is separately of interest because the Obama fans ARE treating this like the real deal and are putting out e-mails touting this case as significant.

And this is one of the major news stories tonight, which the WSJ regarded as important enough to send out as a news alert and the NY Times has as its #2 story on its business page. But no, I’m covering it not because it is one of the important news items tonight and the one that is logical for me to write about given my past coverage. Instead you use it as an excuse to attack me personally, which calls into question what your motives are, as opposed to mine.

Read more at http://www.nakedcapitalism.com/2012/10/schneiderman-suit-against-jp-morgan-a-weak-rehash-of-other-lawsuits-likely-to-produce-meager-settlement.html?replytocom=832854#6HAdWbiUtIX5Blj4.99 

 UPDATE 2: My Response to Yves (I'm assuming this will be censored, so I'm producing what I wrote before submission):

With all due respect, Yves, you are already there.  And I get that because I am there, too.

Take a step back and think on what I've said in the comment to which you responded as well as in the comment that you censored (it is your site, so I'm not complaining).

Being sleep deprived is no excuse for consciously perpetuating a system you seem to believe is wrong.  You are not sleep deprived every moment of every single day you blog.

The fact that the Schneiderman case is "major news" does not absolve you of anything that I have said.  Yes, major news drives traffic to your site, but does it make the subject matter at all relevant?  No.

You're covering the "major news" because doing so makes YOU relevant, not because it is actually major news.  And you hope by being relevant, you can make a difference.  Unfortunately, you're just putting lipstick on a pig.  And I feel for you.  I really do.  I think you are trying to fight the good fight.  I also think you are fooling yourself, and that saddens me.  No matter what you believe, I think very highly of you, and I only criticize you because I believe you can do better.

Be subversive, not progressive.

Capitalism Isn't a Failure, It's a Lie

I had jury duty today.  To pass the time waiting to be called by the judge, I decided to do a little light reading:  Karl Popper's The Open Society and Its Enemies, Vol. 1: The Spell of Plato.

I view everything that Popper has written as highly suspect due to his role as a founding father of neoliberalism.  My views of neoliberalism have morphed over time.  While I still abhor it, I no longer view it as a repudiation of classical liberalism and finally accept it for what Popper, Hayek, Friedman and Mises described it to be: the intellectual and moral successor to classical liberalism merely stripped of its communist fiction.  That is, neoliberalism is everything classical liberalism was designed to be without the alleged "flaw" of collectivism that gave rise to socialism, communism and fascism.

Neoliberalism, known in the US as "libertarianism," is not anti-State.  Indeed, Popper, Hayek, Friedman and Mises were all Statists, only their perfect state does not serve the collective, it only keeps the collective in check.  The purpose of the neoliberal State is to control the collective from which it draws its power so as to benefit the true elite.  The collective serves the neoliberal State, not the other way around.

So, I was pleasantly surprised when Popper rightly noted the Double Truth of Plato's Republic that arises from Plato's deliberate perversion of the word "justice" to mean something other than its common understanding.  Leaving aside the obvious anachronism of Popper's applying the modern day understanding of the word to a work written for the elite of Athens, who may have very well have understood the term exactly as Plato described it, it is remarkable that Popper felt comfortable in laying bear Plato's artifice, which has been duplicated in form by philosophers and theologians for millenia know.

Popper's discussion of Plato has forced me to question my assumption that-- like Friedman, Hayek and Mises-- Popper was a despicable man.  He may have had genuinely good intentions and not realized what he was creating in neoliberalism.

That being said, I note that Hayek did to "liberty" what Plato did to "justice," and yet I am unaware of Popper criticizing him for it.  On balance, I'm led to the conclusion that Popper's criticism of Plato was intended to deflect attention away from the fact that neoliberals were engaged in their own propaganda that relied upon using common words in an uncommon way to manufacture consent.  After all, the aim of Popper's book is not an end to Double Truth but an end to historicism, i.e., romanticizing the past as the ideal and justifying violence by one people against another.

Historicism, after all, is always and everywhere, the enemy of globalism.  The chosen people must rule, they cannot play on a level playing field with their inferiors.

Anyway, these thoughts ultimately led me to the thesis that is the title to this post: Capitalism Isn't a Failure, It's a Lie.

Elsewhere in the blogosphere today, a very earnest Mike Krieger accused Ben Bernanke of lying about Milton Friedman.  (NOTE: all Bernanke did was express an opinion, which may be wrong but cannot be a "lie" because it is not presented as a fact.)  Bernanke actually knew Friedman, and I tend to believe Bernanke's assessment over Krieger's or Anna Schwarz's, who Krieger relies upon to substantiate his argument that Bernanke lied.  The fact is that Krieger's reliance upon Friedman and Schwarz is misplaced because the seminal work they became known for was itself a subterfuge, a sleight of hand that played with numbers to make a fiction a fact.  Specifically, Friedman and Schwarz successfully used M1 data to argue that the Fed caused the Great Depression by not expanding the money supply.  However, what the Fed controlled was base money, i.e., M0, and M1 shrank during the "Great Contraction" even as M0 expanded.  If you think about it, Friedman and Schwarz lied to make a case for expanding the Fed's power to what it is today.

That still doesn't get us to the title of this post, though, does it?

I could not bring myself to respond to the substance of Krieger's post because I've done it too many times in too many places to too many unwitting neoliberals (who champion Hayek's vision of negative liberty without realizing it), but Krieger said something in comments that has been said many times by others:

How can the problem be capitalism when there is no captalism?

If you conclude that what we have today is not capitalism, the next question is when did we have capitalism? Most people, apparently including Krieger, assume a point in history where the ideal of capitalism as expressed in the literature was actually practiced.  However, if they were to actually investigate the reality of that historic era, they'd realize that "capitalism" then was the same as "capitalism" today.  "Capitalism" in reality has never looked much like the idealized capitalism that Krieger thinks he wants.

Okay, if true capitalism does not exist and has never existed, what is the basis for assuming that it will ever be allowed to exist?

What if the "capitalism" we have today is all the capitalism that the elite will allow us to have?  What if capitalism deliberately misdescribes reality to hide the truth from those far away from the machinery of power?  What if capitalism isn't a failure but a lie?

After much consideration, I've concluded that capitalism is indeed a lie.  Yes, it is a far more elaborate lie than what Plato did to "justice" and Hayek did to "liberty," but its nature and purpose is identical: control the masses by presenting fiction as fact.

Update 10/3/2012:  My October 1st comment to Krieger's post is still awaiting moderation.  In the comment, all I do is ask two simple questions.  Here is my comment in its entirety:

Have we ever had what you consider to be capitalism? If so, when was the last time we had it? Thanks.

I hope the wait means he is going to provide a lengthy post in response because I am really interested in what he has to say.

CHS Confirms His Stupidity (Ignorance, Really)

CHS incorrectly equates inflation with price increases, deflation with price decreases, to confirm the belief system of his personal cargo cult (Austrian-inspired pseudo-libertarianism).

I guess this basic misunderstanding of the concepts of inflation and deflation is what caused him to encourage deflation.  I mean, the guy actually argues that the price reduction of the PC over the last thirty years is an example of "deflation" when, in fact, the price reduction has nothing to do with the money supply (i.e., it is not a result of monetary phenomenon) and everything to do with wage arbitrage (aka offshoring), increased demand (you know, of that dynamic price setting duo of Supply and Demand), and reduced manufacturing cost due to technological innovation (aka, Moore's Law).

CHS still has a lot of worthwhile things to say regarding social policy, and I even continue to agree with some of his economic solutions, but I can no longer take him seriously as an economics pundit.

Poor People. Lots of Poor People.

That's what it takes to make one rich person: lots of poor people.

And the purpose of Western civiLIEzation is to scale globally to impoverish the world and benefit a select few.

Indeed, the alleged "Clash of Civilizations" between the West and Islam, at heart, is motivated by Islam's refusal to allow usury, the West's preferred means for creating poor people to sustain the few truly rich.  While religious differences and intolerance are often touted as the reason for the West's aggression against Islam, the only religious difference that matters is never discussed: Islam's ban on usury.  Only through conquest or usury can the West maintain the illusion of exponential growth required to sustain it.  Without more people to impoverish through usury, Western civiLIEzation will sputter and die.

Forget Peak Oil.  Peak Credit is what really matters to Western economies, and we have reached it.  Yes, oil is important, but oil's importance is secondary to the fact that almost 25% of the world's population is off-limits to the West's usury.

Western civiLIEzation is done.  This does not mean that any form of collapse is imminent, or even that collapse is inevitable.  CiviLIEzation is fueled by fictions to which we need not chain our fates.

Of Two Minds, At Least One Not His Own

CHS has claimed to be a free thinker, but he proves time and again that he is ruled by his very own cargo cult.

CHS had a largely good post up today on "Why QE Won't Create Inflation Quite as Expected."  His problem is his reliance upon the fictive Quantity Theory of Money as truth to make his points.

Money is a false commodity.  It's value does not depend upon supply and demand.  This is true under a fiat system or under a gold-backed system.

The value of money depends not upon the supply and demand of money, but upon the supply and demand of credit.

The "velocity of money" is merely a fiction to make the tautology of the Quantity Theory of Money hold together.  Without the fiction, the theory fails, and it has failed in practice.

Nevertheless, CHS gets things mostly right in his post.  His biggest problem is relying on the velocity of money to explain the absence of inflation.

Perhaps one day he will break himself of the blinders that bind him.

UNFINISHED: Putting the Lie In CiviLIEzation

A concept I've discussed previously is that of "Double Truth," i.e., language that speaks one truth to the masses and the opposite truth to the elite.  Nietzsche termed the concept the "Double Lie."

Once you've become aware of the concept- whatever you call it- you learn to recognize its application.

Toby understands the concept, even if he does not tag it with a label at all:

By the way, when I say “the state”, I refer to that dynamic concealed behind the infamous The State vs. The Market Show most left/right wing loyalists and ideologues get so hot and bothered about. I think of that dynamic as elitist exploitation of the majority, as hinted at above.

I generally hate philosophers.  They are so steeped in the manufacture of Double Truths that many of them probably never recognize what it is they do. Still, I try to reserve directing my hatred towards those philosophers (and "applied philosophers") who actively and knowingly engage in duping the masses to benefit the lite.

Because of my aversion to philosophers, I did my best to avoid reading the works of the most famous Western philosophers, Plato and Aristotle.  Much to my surprise, a seemingly unrelated research project ultimately led me to their writings.  But as soon as started reading them, their Double Lies were clear as day.  While Plato spoke far more plainly than Aristotle, both relied on "Hidden Truths," the unspoken/unwritten keys to unlocking their political philosophy as a control mechanism.

Once unlocked by their Hidden Truths, Plato's and Aristotle's writings can only be read as bemoaning the failure of the Athenian version of "democracy" to scale: they determined that the vast majority of Athenian citizens so believed the lie of Athenian democracy that they undermined the ability of the Athenian state to grow beyond a certain size.  Each man reacted differently.  Plato developed utopic visions of authoritarian/totalitarian states.  Aristotle was much more subtle and developed a utopic vision that has ruled us ever since.

Finding Truth, Losing Art

I have found in my journey that the more I understand "truth," the less I can embrace the arts.

Blogging is an art.

Art is inherently manipulative because art stages conflict (or contrast) to evoke emotion.

My music, my graphics, my writing -- all have suffered because I cannot bring myself to manipulate or be manipulated.  The very notion of creating a point of conflict or contrast to make a point sickens me, even when doing so is completely legitimate and warranted.

I need to find a way through this.

A Driving Need to Normalize Terminology

Charles Hugh Smith channels his inner-Austrian and argues that the Fed has "failed, failed, failed".  Yet he recognizes that the Fed exists to serve the banks, even at the expense of the American population the Fed ostensibly serves.  If the Fed is succeeding in its real mission and serving its true constituents, how can anyone argue that the Fed is "failing"?  The Fed is succeeding wildly in its true mission, but CHS can't get past his Austrian-induced cognitive dissonance.

The Automatic Earthers are not similarly burdened, recognizing that "Bernanke and Draghi Are Not Trying to Save Our Economies":

It's time to get this through our heads once and for all: Bernanke And Draghi Are Not Trying To Save Our Economies. Perhaps they would if they could, but the question is moot: they know they can't. Instead, they're trying to save the financial system by stealing our remaining wealth while making us believe that the economy and the financial system - a.k.a. the banking industry - are one and the same thing. They are not, and that's why we see our jobs and benefits and homes go up in thin air and smoke while the S&P looks rosy. 

Those last two things are connected. The first are not, no matter that so far most people fall for the sleight of hand. Which is sad today, and will turn to tragedy tomorrow.

Catherine Austin Fitts reaches conclusions similar to mine on the true purpose of QEternity (the best label for it so far), which is to clear the market of soon to be toxic mortgage backed securities.  Her only error is in assuming that the GSEs are the intended beneficiaries of QEternity, but they only hold 10% of the outstanding MBS, while the TBTF banks hold almost three times that.

QE3 = WWIII

The Fed's recent announcement of $40 billion a month in quantitative easing for the indefinite future is nothing more or less than a declaration of war on the bottom 99.9% of the world's human population.

As the big money piles out of agency mortgage-backed securities into the commodity markets, the real economy will suffer.  The cost of everything needed to live will rise.  The cost of everything needed to make things will rise.  The result will be reduced consumer spending on discretionary items (because the money is needed for food and energy), increased production costs (because precious metals and other industrial base materials are rising in price), and increased unemployment (and overall suffering).

To most people, rising prices means inflation or "stagflation."  That's because most people believe in the fairy tale Quantity Theory of Money.  Prices these days are rising purely on leveraged speculation, and this form of -flation is more properly called "screwflation" because the Fed is screwing everybody in the world to maintain and even inflate fictitious asset values.

Real people must die so fictitious asset values may live.

Here's the Fed's quandary: deflation is no longer manageable.  The collapse of the US housing market is inevitable, and QE-infinity is designed to get soon-to-be toxic assets off the books of the big banks, who own 25% of agency MBS valued at roughly $1.3 trillion a year ago.  See here.  Most commentators argue that the Fed is trying to ignite another housing bubble, i.e., that the Fed's monthly purchase of $40B in agency MBS will cause the banks to further lower mortgage interest rates and increase lending so that there are more mortgages to bundle into MBS.  While we may see interest rates go down, there's no reason to believe that we will see an increased demand for mortgages, even if the banks are more willing to lend.  Certainly, the data show that prior QE efforts that targeted the purchase of MBS seemingly had no effect on the levels of mortgage debt outstanding, which has declined year-over-year since 2009.  See here.  At best, QE-infinity is designed to keep the US housing market treading water so the TBTF institutions have the opportunity to minimize their exposure to it.

The Fed is purposefully turning itself into a "bad bank" that holds all the toxic assets of the TBTF banks.  Of course, once people realize that the Fed is a bad bank, what will happen to the value of a Federal Reserve Note (aka, the US dollar)?

For the first time ever, I believe something akin to hyperinflation is possible here in the USA.

Money = Force

Interesting post at NC today.

"Money" quote:

Money, it seems to me, is rules. Rules about value and obligation. The rules can be enforced or overseen by government or they can be loosely enforced through private self organisation. The opposing arguments about money being from the state or private sources is really a non-argument. They are just different kinds of rules. What we are seeing in the global capital market is the shifting of the rule making away from governments and towards private actors, but both are typically involved. It is just that the balance over the last decade has been skewed towards traders, leaving governments to fix the mess when it all inevitably went wrong.

Given that definition-- which I think is profoundly insightful-- the real question is not "what is money," but who made the rules?  The folks at NC seem incapable of asking that deeper question.

Anyway, I answer the original question-- what is money-- by considering what money does in a society, while pondering who made the rules that money embodies.   Money equals force.

The Choice

I arrived at my handle, Tao Jonesing, as an ironic pun that expressed my sensibility at a particular moment in early 2009.  On the one hand, I was greatly concerned about the spirituality of mankind, which had led me to study the world's "religions," including Taoisim.  On the other hand, I was greatly concerned about my "wealth," which led me to study economics and, more importantly, modern finance, as exemplified by the Dow Jones industrial average.  The urgency of the spiritual and material worlds met, and my online persona was born.

I must admit, however, that the spiritual concerns soon (and greatly) outstripped the material concerns.  I quickly grasped humanity's limitations and its wonders.  Both are impossible to understand while locked into a Western mindset.  Western philosophy, which informs everything we do in the United States, is rotten to its core because it inherently seeks to mandate reality.  As I've said before, human beings do not experience reality, they interpret it by comparing what is experienced to what is expected.  All Western philosophies seek to control reality by mandating what it ought to be in the guise of describing what it is.  Once human beings accept a particular description of reality for "what it is" they translate that into what reality ought to be, and they innately seek to construct institutions to reinforce that particular reality.

Certainty is the enemy of all mankind, and Western philosophy breeds certainty that is always unwarranted and never unwelcome to the power structure.

I've come to view the description of Taoism as a religion as a mistake.  The Tao Te Jing is a humanist tract, not a philosophy or theology at all, but a coded message regarding the limitations and wonders of humanity.  While I must accept that there is a religion that describes itself as "Taoism," there's no way for me to look at the Tao Te Jing's essential description of human nature and human cognition as a religion.  Whoever wrote the original tract understood what it took for ideas to survive across centuries, and they planned well.  Indeed, they planned well enough to make plain when "priests" stood between the people and the essential truth of humanity offered by the Tao Te Jing (e.g., Western translations often and obviously run counter to the spirite of the Tao Te Jing, which never takes sides; when an English translation of the Tao Te Jing takes a side, that is the side the Western translator took).

I'm not pimping Taoism.  I am not now, nor will I ever be, a religious person.  I am arguing, however, that Taoism cannot be properly viewed as a religion, that it must be viewed as a statement of the human condition, of how things work.

All Western philosophies are a statement of how things are and how they ought to be.  As a result, all Western philosophies seek to define a state, i.e., something static.  The Tao Te Jing describes how things work and, thus, defines a dynamic.

Your choice is to choose between a world that is static and a world that is dynamic.  The vast majority of our fellow citizens have been conditioned to expect a static world, a world with immutable truths and equally immutable falsehoods that leaves no room for the "moral relativism" of a dynamic worldview.  The fact is that the morality of the static world is relativistic in that evil has continually been justified in pursuit of the rigid "morality."  The morality of the dynamic world is always consistent because it recognizes that evil is a label applied to actions, not to people.  Good people do evil.  Evil people do good.  The fact that a "good" person performs an evil act does not make it an act of good.  Neither does the fact that an "evil" person performs a good act does not make it an act of "evil."

Whose morality is "relative"?  Not mine.  In a dynamic world, which is the world in which we live, it is acts that are good and evil, not people.  The only way a person can be judged evil is if he or she consistently acts in a way that is evil.

Actions - not intentions or words-- are what matter.

Today's SCOTUS Decision Opens the Door to "Tax" By Forcing the Public to Purchase Private Goods and Services

Posterity will judge today's SCOTUS decision in the so-called "healthcare debate" as empowering Congress to force individuals to purchase goods and services from private corporations under the auspices of Congress's power to levy and collect taxes, even though Congress won't actually collect the so-called "taxes" at all.  (You need to think like Roberts to understand what Roberts actually intends by supporting this outcome.)

That's the game, folks.  Legalizing the "privatization" of public functions through Congress's power to levy and collect taxes (even if they can't collect; i.e., Roberts is saying that Congress has the power to levy or collect taxes, and that it is enough to levy the tax without the power or opportunity to collect it).

Any liberal/progressive who hails this decision as a "victory" is either an innocent, a lunatic, or a shill.

The Dangers of Stopping Your Search Before It's Done

I do my best here to avoid commenting on what other bloggers have to say, both because it is too easy to criticize and, basically, I'm more interested in using this blog to jot down what I'm thinking/discovering.  This blog has truly become more of a journal than anything else.

That said, I can't help myself when it comes to the recent three-part rant from Jim Quinn over at the Burning Platform.  The last installment may be found here, and includes links to the other two parts.

Quinn spends three long, data-rich blog posts documenting how the oligarchs have stolen the middle class's wealth through a rigged game, then he finishes with recommendations on how to un-rig the game.

There are two problems here.  First, his proposals for un-rigging the game do not result in the return of the middle class's wealth.  The oligarchs he rails against get to keep all their ill-gotten gains to use in his idyllic vision of the "free" markets.  Second, his new game is just as rigged as the current game, its just rigged differently.  Indeed, the constrained liquidity he demands is even more prone to manipulation and control by the oligarchs, and is sure to hasten the spread of neofeudalism.

Basically, the problem is that Quinn didn't read his history deeply enough to find the truth he was searching for.  Instead, he got enamored with Austrian School (i.e., neoliberal) economics and new-agey "Fourth Turning" nonsense and thought he had found some kind of truth.  I've said it many times before: the Chicago School and the Austrian School have the same political aims (i.e., neofeudalism), their apparently opposing economic view points both achieve those aims, and they were designed as a one-two punch with the Chicago School's having the aim of stealing the middle class's wealth and the Austrian School's having the aim of keeping the ill-gotten gains.  As I've also said before, the Austrian School and the libertarian movement are honey-pots to capture intellectual gadflies like Quinn and neutralize their ability to develop any choices that the power structure does not offer.

To be clear, I don't disagree with everything Quinn has to say.  There's a lot of good stuff there.  Heck, the data alone are with slogging through his very predictable rant.

My issue is that any proposal to solve the problems Quinn correctly sees must include fundamental reforms to both debt and money, as these are the mechanisms that have been used for millennia to enslave humanity.  Any system that rests on those twin pillars will have the same fundamental flaws as the current system.

My favorite part of reading the series is the irony of Quinn's decision to quote Jesse in justifying his decision to proffer solutions developed by people like Ron Paul and other Austrian School devotees:

Sometimes when faced with problems that are confusing and troubling it is easier to think what someone tells you to think, particularly something that touches a deep and dark nerve in your nature, rather than carry the burden and ambiguity of struggling with the facts and thinking for yourself.  

That's deep, Jim.  Did you think of it yourself?  Sadly, no.  And none of "your" solutions are your own, either, they're just a parroting what you've heard.

All States Are Oligarchies; Everything Else Is a Fig Leaf

That's the way I see it, anyway.

The funny thing is that it occurs to me that Aristotle must have secretly viewed oligarchy (rule by the few) as the mean between king (rule by one) and democracy (rule by the many) and, therefore, the preferred form of state.  But there never has been rule by one, just as there has never been rule by the many.  Both monarchy and democracy obscure reality and distract people from seeing who truly makes the decisions.  A monarchy just concentrates the ire of the masses and has the problem that the king may let the illusion of power go to his head and start wielding it against the oligarchy in reality (which led to the Magna Carta).  A democracy diffuses the ire of the masses and has the problem that each individual among the masses believes he/she has a right to be heard, which can be really annoying.

Aristotle was a pathological liar and one of the more despicable men in history.  Everything he wrote must be read carefully and with an eye towards the unspoken truth that makes what he wrote its diametric opposite.  The man was a master of propaganda through misdirection.

Human Fractals Everywhere

At the end of an interesting but ultimately dishonest article by a pro-Austrian School author (as I've said before, the Chicago School was created to prove resoundingly that fiat currency systems cannot work so that the Austrian School will finally reign supreme in the aftermath of the neo-fuedal neoliberal "success"), there is a reference to the "human fractal" (although he is making a Biblical reference).

So, I searched for "human fractal" and found a 1993 article here (a .pdf) that expresses the author's ambitious view of it and attempts to find the math behind it.  I have not read in detail, but what he's saying seems consistent with my thinking, but he is focused much more on the macro, where I am focused on the micro.  Looks interesting, though.

Once You're Certain, You're Finished

Certainty is the mechanism through which the few control the many.  

Once you become certain of what is true, you have blinded yourself to reality.  Truth is a static thing.  Reality is ever-changing.   Once certain, human beings cannot recognize when reality differs from their truth, rendering it false.

And if an event arises that forces human beings to see that their truth is not, they usually act violently towards each other.

The Human Fractal and the Tao (Updated)

I have written previously that the Tao Te Ching, for the most part, appears to me to be an ancient recognition   of the Human Fractal.  I say "for the most part" because there are passages in the Tao Te Ching that do not seem to belong to it, and there is the fact that the Tao Te Ching became the basis for a religion, Taoism, which strikes me as four square against the philosophy of the Tao.

But let me start by summarizing what I've come to call the "Human Fractal."  People don't experience life, they interpret it.  Specifically, human beings make decisions by comparing what they observe to what they expect and reacting to the emotion caused by the difference between what was observed and what was expected.  When things go as expected, a positive emotion arises.  When they don't, a negative emotion arises.  This is a form of positive feedback, i.e., self-reinforcing behavior that would tend to drive people to one extreme or the other without hysteresis, which works to prevent you rapidly changing states.  That is, hysteresis predisposes you to remain in your current state unless what you observe is too much different than what you expected.  The Human Fractal is applied at all levels of abstraction, from a purely physical sensation (e.g., reacting to reaching the first floor when you expected one more step down) to very abstract things like trading stocks and bonds on secondary markets (e.g., manias and panics).  At higher levels of abstraction, i.e., almost anything beyond the physical, hysteresis manifests itself as what have become known as cognitive biases, for example.


Those who understand the Human Fractal recognize that you can use it to control human action by (1) defining expectations (e.g., through societal values, which are normative) and (2) shaping observations (e.g., through propaganda).


The Tao Te Ching understands the Human Fractal for what it is and offers a path away from it.  More specifically, the Tao Te Ching offers a path to stop interpreting life through the lens of the Human Fractal and to start actually experiencing it.


The Tao Te Ching starts out by recognizing that it is man's desire to control his world that opens him up to being controlled.  Human beings are driven to create the illusion of their control over their environment by creating a division and picking a side.  Doing so yields the comfort of certainty and apparent free will.  Chapter 1 of the Tao identifies humanity's desire to name things and, therefore, control them:

The tao that can be told is not the eternal Tao The name that can be named is not the eternal Name. 

The unnamable is the eternally real. Naming is the origin of all particular things. 

Free from desire, you realize the mystery. Caught in desire, you see only the manifestations. 

Yet mystery and manifestations arise from the same source. This source is called darkness. 

Darkness within darkness. The gateway to all understanding.

Chapter 2 of the Tao Te Ching continues by noting that a person's desire to exercise control over the world leaves him open to being controlled by his expectations:

When people see some things as beautiful, other things become ugly. When people see some things as good, other things become bad. 

Being and non-being create each other. Difficult and easy support each other. Long and short define each other. High and low depend on each other. Before and after follow each other. 

Therefore the Master acts without doing anything and teaches without saying anything. Things arise and she lets them come; things disappear and she lets them go. She has but doesn't possess, acts but doesn't expect. When her work is done, she forgets it. That is why it lasts forever.

If you eliminate your expectations, which you created by creating false divisions, you cannot be controlled by those expectations.  Chapter 3 gives concrete examples of how this individual weakness manifests itself within the collective of society :

If you overesteem great men, people become powerless. If you overvalue possessions, people begin to steal.  

The Master leads by emptying people's minds and filling their cores, by weakening their ambition and toughening their resolve. He helps people lose everything they know, everything they desire, and creates confusion in those who think that they know. 

Practice not-doing, and everything will fall into place.

To "lose everything they know, everything they desire" is to become free of the Human Fractal, which "creates confusion in those who think they know" because they can only control others through the Human Fractal.  But to remain free of the Human Fractal requires resisting the temptation to boil things down to two choices and pick one.  Indeed, as Chapter 5 explains:

The Tao doesn't take sides; it gives birth to both good and evil. The Master doesn't take sides; she welcomes both saints and sinners. 

The Tao is like a bellows: it is empty yet infinitely capable. The more you use it, the more it produces; the more you talk of it, the less you understand.

Hold on to the center.

Some might argue that refusing to make a distinction between good and evil renders the Tao immoral, but I'd argue that it recognizes morality as a human construct that obscures reality (as it must in order to control people with it).  


Chapters 8 and 9 shift away from encouraging people to let go of expectations and begin to focus on the comparison function of the Human Fractal and changing it.  For example, Chapter 9 says:

Fill your bowl to the brimand it will spill.  Keep sharpening your knife and it will blunt. Chase after money and security and your heart will never unclench.  Care about people's approval and you will be their prisoner.

Do your work, then step back.  The only path to serenity.

The Tao Te Ching continues in a similar manner through Chapter 16.


Anyway, this gives you a sense of how I find the Human Fractal in the Tao Te Ching.


A full translation of the Tao Te Ching may be found here.  Reading through it for the purpose of this post, I found Chapters 13, 19, 20, 22 and 29 to resonate.  The Mitchell translation, which I link to, is not my favorite, but his approach highlighted for me the "out of place" chapters that seem tacked on to and inconsistent with the foundational material.  See, for example, Chapter 65, which Mitchell seems to translate as "keep the people stupid so you can make them do what you want."  There are other translations that make Chapter 65 consistent with the earlier stuff, though.  I prefer to think of Chapter 65 as saying that people should be taught to question and not given "answers," which imply truth (and its opposite).

The Simplicity of Complexity That Orders the Chaos

In hindsight, I view this post on the illusion of complexity the most important that I've written, primarily because it crystallized my thinking on the fractal nature of human cognition (and, more importantly, human action) and did so in a manner that tied it back to so-called "complexity."

NOTE: those links are to three different posts, the first being the most important and the other two putting stakes in the ground re: fractal cognition and complexity, respectively.

I think I can boil things down further.  My working theory is that the true elite (however you label them) are able to shape and control the illusory complexity of society by manipulating a very simple, fractal function that underlies how human beings make decisions and, therefore, act. I've described the base fractal function qualitatively numerous times in the past, including in all of the linked-to posts, above.  To understand how the same simple fractal function can lead to widely different results, see here.  You manipulate the human fractal through the social institutions that set societal values (i.e., the coefficients in the equation).  The founders of Neoliberalism understood this and set out to control those institutions.  And they succeeded.

My approach to reality forces me to look for the human fractal and its manipulation.  I can't help myself.  For example, whenever I see somebody boil down macro-politics to an either-or, binary choice, I usually confirm both the human fractal and its manipulation.  The fractal is apparent from the urge to drive certainty by limiting the available options to only two.  The manipulation of the function is apparent from the fact that the two options are both ALWAYS dictated by the manipulator.  How is that?  Because the manipulator defines the status quo, and the human fractal naturally creates the opposite of the status quo through the process of normative inversion.  

Another way of getting at what I am trying to say is that if you use their frame, you will lose the game.   An example of this phenomenon may be found here.

What I ultimately hope to accomplish through The Project is to articulate the human fractal in a way that everybody will understand.  Anybody who comes to understand the human fractal can manipulate those who don't and, at the same time, avoid being manipulated.  If EVERYBODY understands the human fractal, NOBODY can manipulate or be manipulated.  My goal is to make sure that everybody gets it.

Change the frame.  Change the game.  Don't get suckered into fighting power with power.  Knowledge trumps.  That's why we're taught to avoid it.

There Has Never Been a Social Contract

The "social contract" is God's "covenant" with man, just with an Age of Reason makeover.

How exactly do you enforce a contract against God?

And who do you sue to enforce the "social contract"?

In both instances, there is nobody on the other side of the transaction who can be held accountable for failing to perform their obligations.

So, what is the point of these "contracts"?  To control the behavior of those who believe in them.

And who benefits?  Look to the philosophers who developed the social contract theory.  Then look at who they worked for.

Meet the New Now, Same as the Old Now

"Nowopia."  That's the term I coined to describe the serial focus on new "crises" and scandals to the exclusion of "old" crises and scandals (and advancing crises and scandals).

People need to learn how to solve the current crisis/scandal before moving on to the next one.  Who knows, maybe taking that kind of approach will solve the next crisis/scandal before it actually "happens" (the trick being that the next crisis/scandal is just another consequence of the last one).

Bitching about the latest crisis accomplishes nothing but an empty adrenaline high, which is why you immediately look for the next one.

Refuse to be manipulated.  Don't let the emphasis on "now" be the boss of you.

Driven to Distraction

As I delve into a rather esoteric (but fundamental) study of Western history, I am struck by the level of specialization.  All I can think is "Wow, what a waste of intellect."

The knock on becoming a PhD in any discipline is that you know more and more about less and less.  When it comes to social sciences, and history in particular, you actually know less and less about less and less.  That's because the error caused by false foundational assumptions are multiplied as you build upon them.

The fact that we live in a society where so many of our potentially best thinkers either wind up as banksters perpetrating the Ponzi scheme or as navel-gazers engaged in frenzied mental masturbation is a testament to the concerted effort to prevent the rise of a new Marx, i.e., somebody who "gets it" but is not part of the club.  American society is geared to distract us from making moral choices by promising us personal gain for choosing something else.  That is the essence of neoliberalism.

Myths, Laws, Ethics and Hidden Truths

All modern states are based on four things: myths, laws, ethics and hidden truths.

The first three - myths, laws and ethics - are taught to everybody and driven through social institutions that condition individuals to be good members of the collective.

The fourth - hidden truths - are not for general consumption because they render the first three false. Once these hidden truths are understood by the masses, the myths, laws and ethics they were taught can no longer control them, and they look for new myths, laws and ethics to sustain them.

Civilizations "collapse" because elites who know the hidden truth ultimately cannot help themselves.  The ethics created to bind the masses do not control the true elites, and this fact ultimately leaks out as the true elites become brazen in their hubris and begin openly breaking the laws.

Once the masses realize that the laws and ethics of society only bind them and not those who truly rule, the masses begin to question their myths.

And that is when all hell breaks loose.

"Complexity" - The Last Refuge of Ego (and Hubris)

Ego and hubris are in plain sight whenever anybody argues that "complexity" has made the world unpredictable.

The world was NEVER predictable.  Anybody who believes differently focused only on risk and not at all on uncertainty.

I've said it before, and I will say it again: the world is no more complex today than it ever was before.  And humanity is just as simple as it always has been.  When the simple human meets the complex world, the simple human fakes it.

Plato and Aristotle Penned the Post Mortem for Athens

As I read more from and about Plato, Aristotle and their times, it becomes clear to me that these two political philosophers did not mark the height of Greek (or Hellenistic) civilization but the demise of the Athenian culture.

It simply is incorrect to lump in the heterogeneous city states of Greece and argue they represent an homogeneous Greek (or Hellenistic) culture.  The tendency to do so is most likely the legacy of Roman historians, who could not help but to think of Greece as a prior Rome.  Moreover, what Plato and Aristotle did amounted to nothing more than a post mortem of Athenian culture to identify what had gone wrong and how to correct it going forward.

Plato and Aristotle did not come to praise Athens, but to bury it.

Losing The Argument By Accepting the Frame

Here is a comment I made to this post, in which the author, in making the case that "Robert Shiller Is Wrong," all the while accepts Shiller's false assertion that world was once graced by "virtuous" finance:

We would all love to go back to the world Shiller describes.

That statement accepts the false premise that Shiller's world once existed.   

Accepting a false frame of a problem renders any subsequent disagreements about its solutions irrelevant as the frame defines the range of acceptable solutions.

Finance never has been and never will be "virtuous."  Finance always has and always will be parasitic and, when abused, oppressive.  Finance, like nuclear fission, can be put to productive use (instead of destructive use), but even when the short term result appears benign, you need to carefully consider the long term, malignant consequences.

The Irony of Arriving Among the Elite

To reach "elite" status from the outside, you must continually exceed expectations (which are naturally set lower because you are not connected).

But once you have reached elite status, you cannot exceed expectations, you can only meet them, or not.  As an outsider, the very instincts that vaulted you to the top of the heap can bring you down much more quickly.  To continue succeeding within the elite stratum, you must conform to expectations (or appear to do so).

The irony is that this practical reality implies that the elite are not elite, that there is a class beyond the elite that rules them, just as the elite rule the masses.

Hatred of Democracy

Today, I received two books written by Jacques Ranciere.

I just started reading the first, Hatred of Democracy, and the first two paragraphs resonate with me.  Here they are:

A young woman keeps France in suspense with her story of a make-believe attack; a few adolescents refuse to take their headscarves off at school; social security is running a deficit; Montesquieu, Voltaire and Baudelaire dethrone Racine and Corneille as texts presented at the baccalaureate; wage earners hold demonstrations to defend their retirement scheme; reality TV, homosexual marriage and artificial insemination increase in popularity.  There is no point looking for what groups together events of such disparate natures.  Book after book, article after article, journalists and writers, have already supplied us with the response.  All these symptoms, they say, are manifestations of the same illness; for all these effects there is only one cause.  The cause is called democracy, that is, the reign of the limitless desire of individuals in modern mass society.

It is imperative to see what constitutes the singularity of this denunciation.  Hatred of democracy is certainly nothing new.  Indeed, it is as old as democracy itself for a simple reason: the word itself is an expression of hatred.  It was, in Ancient Greece, originally used as an insult by those who saw in the unnameable government of the multitude the ruin of any legitimate order.  It remained synonymous with abomination for everyone who thought that power fell by rights to those whose birth predestined them to it or whose capabilities called them to it.  And it still is today for those who construe revelations of divine law as the sole legitimate foundation on which to organize human communities.  The violence of this hatred is certainly on the contemporary agenda.  It is not, though, an objective of this book, for a simple reason: I have nothing in common with those that spread it, and so nothing to discuss with them.

A couple things.  First, the author is French, and so are his examples (for Debra).  Second, in the first paragraph, every example does not in any way implicate democracy, i.e., government action invoked by the will of the people.  Instead, what is implicated (and indicted) is individuals being individuals, something which the modern "market-based" economy requires to continue, as atomization is key to encouraging unnecessary consumption.  Third, in the second paragraph, we see examples of how the very "rugged individualism" that encourages the masses to embrace and speak their individuality, which is horrible, provides the very basis for "elites" to assert their superiority.  The problem is that any "elite" who believes that their capabilities differentiates them is no different than the masses who believe their individuality differentiates them.  Self-described "elites" who think they deserve having more have no clue about the game that is played around them every day.  Therefore, they are not truly elite and will ultimately suffer the same fate as the masses they deride.