Coming Attractions

Hans-Hermann Hoppe’s forecast (you can take it to the bank):

The Western ‘welfare state model’, ‘socialism light’, will collapse just like ‘classical’ socialism – of course, I can’t say whether in five, ten or 15 years. The key words are: state bankruptcy, hyperinflation, currency reform and violent distribution battles. Then it will either come to a call for a ‘strong man’ or – hopefully – a massive secession movement.

Division within the ‘lunatic far-right’ will be the only difference that matters.

March 21, 2013admin 32 Comments »
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32 Responses to this entry

  • campofthesaints Says:

    Lots of wine-sipping status posturing Liberal Leftoids like to say that in the event of secession, the unionist Amerikans will again demand a war.

    HAH. Ameriburgers are so apathetic, politically exhausted and weak willed that any secession movement that WILLS itself to actually secede, will be universally successful.

    But you first need to wait for conditions to be right i.e. collapse but first happen.

    [Reply]

    admin Reply:

    The smoothest solution would have the “wine-sipping status posturing Liberal Leftoids” convinced that they could have a free hand to build their egalitarian utopia if they’d cooperate with the geographical disintegration of the West. Unfortunately, I don’t think they’d readily surrender the delights of universalist coercion or redistributive parasitism.

    [Reply]

    Vladimir Reply:

    Come on. They’re not stupid. Any status-posturing leftist that’s sufficiently smart to be successful enough in the status game to get to a position that really matters is ipso facto smart enough to have a strategically sound attitude (i.e. absolute and uncompromising hostility) towards any attempt at secession from the Cathedral’s authority. The moment you open your mouth to argue anything like you propose, they’ll understand exactly where you’re coming from.

    [Reply]

    Mike Reply:

    In other words, shooting “racist” southerners is hip.

    admin Reply:

    Agreed.

    Posted on March 21st, 2013 at 4:07 pm Reply | Quote
  • Vladimir Says:

    Hoppe doesn’t realize that Soviet bloc socialism collapsed only because its elites lost the monopoly on bestowing status and prestige in their own societies. They lost it because immediately next door there were obviously superior Western societies, whose superiority was so vast and blatant that the Western elites’ approval was increasingly perceived as a higher status marker than anything the domestic socialist elites could offer. Humans being status-driven as always, this eventually led to the socialist elites themselves competing for the Western elites’ approval, to the point of inexorably driving internal reforms to make their system more like the West. (Thus eventually a few years of modest American self-assertion under Reagan were enough to induce the Soviet bloc to collapse.)

    In contrast, the Cathedral has no such external status attractor. It keeps absolute monopoly and control on all channels through which anyone in Western societies can rise in status. As long as it keeps this monopoly, it will be perfectly stable, no matter how bad the situation gets in any absolute terms. (For one, it can certainly laugh off any problems of mere economics and finance.)

    [Reply]

    admin Reply:

    “… it can certainly laugh off any problems of mere economics and finance.” — Whilst capping a very engaging argument, I think this goes way too far.

    [Reply]

    Vladimir Reply:

    Does it? When has any regime fallen due to mere economic problems? Of course, economic problems can be an indirect cause of collapse, making the regime too poor to fight off its external enemies. But all human history uniformly shows that regimes will remain perfectly stable indefinitely even as their subjects are massively starving to death. The only conditions are that they’re not conquered or subverted from abroad, that the elites have some barest minimum of competence in running internal security, and that they’re not torn and dragged into civil war by internal conflict.

    If sneering in the face of economic reality were fatal for regimes, North Korea would have collapsed long ago. What advantage in terms of stability does its regime have relative to the Cathedral?

    [Reply]

    admin Reply:

    “What advantage in terms of stability does [the North Korean] regime have relative to the Cathedral?” — No exit, minimal capitalism, docile ignorant slaves.

    Federico Reply:

    The Cathedral is the legacy of a constitutional system. No member of the Western elite can violate certain organising principles, any more than he can (for now) violate progressivism. The North Korea regime can torture and enslave troublesome citizens; the Cathedral has no such political property right or custom. I don’t believe Matt Yglesias could get away with it.

    The Cathedral can’t use hard means to break rival status-communities, although its soft means, etatist persuasion, have been effective until now. It probably—and hopefully—lacks a path from here to there, which doesn’t result in loss of power to another entity, i.e. defection of natural aristocrats.

    In theory, if the ruling class mismanages the economy, concerned citizens are free to build a new, rival power base and assume command. We know that this is somewhat fraudulent, but is it fraudulent in the extreme—is there really no prospect of an incompetent ruling class and set of norms being reshuffled into a better configuration? Bear in mind that more than 50% of the existing elite would find a place in the new elite.

    In short, do the very brief annals of human history generalise to the most liberal of modern societies, in which civil war is conducted by proxy?

    spandrell Reply:

    North Korea is a Chinese satellite. It would have collapsed a while ago if not for free goodies the Chinese are sending them to prop up the regime so that the US marines don’t show up at the border.

    Economic collapse gets you invaded or your people leave; not even the Cathedral can withstand it.

    Federico Reply:

    Status is grounded in the capacity to wield violence.

    By the 80s, Western elites had decided that communism is incompatible with their progressive values. It is “oppressive”. So the socialist elites, militarily weak, collectively realised the need to compete for Western approval, and Western approval consequently became a status-marker. The Soviet bloc would still have collapsed, had its elites obstinately kept status in the family: the West would have sanctioned and undermined them.

    The Cathedral has no external military threat, but it is committed to an ideal of civility which socialist elites were not, so its grip on power is tenuous. The Tea Party ought to fund an alternative academe. Academics are not entirely status-driven, but it is a strong urge; if one were to perceive an opportunity to practice sincere (Austrian) economics, in a local status-community with tenure, one might discount global status. For now the choice is absolute, in which case status does tend to win.

    The Cathedral would respond with shaming and imprecations, but surely this will be less effective as our economies decline, as Asia becomes more desirable, and as more young people’s minds are expanded by the internet. Ron Paul is wildly popular on YouTube, of all places.

    It might also respond by co-opting the movement. That is the particular dirty trick which reactionary contrarians, armed with new insights, could help the Tea Party to thwart.

    [Reply]

    Posted on March 22nd, 2013 at 5:02 am Reply | Quote
  • Handle Says:

    Recently, from Arnold Kling

    The pundits who tell us not to worry about short-term fiscal policy think that those of us who are worried about it are nutters. I hope they are right. If the progressives are sober, and I am a nutter, then the country is in good shape. If it’s the other way around, then heaven help us.

    Personally, I think it is pointless to worry about short-term fiscal policy. It is obvious that the U.S. is going to stay in the deficits of 5-10% NGDP range for some time to come until forced by events, (by which I mean reality, not politics), to change course.

    But you can’t use reality as an argument, because the progressives have basically said, “impossible for countries who borrow in their own fiat currencies.” Which excludes all Europe. The nations of which are supposed to be most predictive of out future circumstances, but which, as examples, have been taken off the conversational table.

    So, only when Britain and Japan go Greek and Cypriot (and other PIIGS) might we allowed to comment that the dominoes ahead of us in line are falling. But even then, they will be argued as especially distinctive and incomparable. Oranges to apples, etc.

    My personal prediction is that, if we don’t get a technological bailout of some kind, that the form of correction will be the banana-republic favorite of replacing the old dying currency with a “new strong dollar” – wiping out the old debts and savings and starting fresh (albeit with a slightly diminished “credibility”) to buy some extra time to begin the cycle anew.

    [Reply]

    spandrell Reply:

    Redenomination is not the end of the world, it’s crappy for creditors, but even they have most of the money well parked. It’s not collapse.

    What is collapse is that the low birth rates have run long enough that the productive workforce is already decreasing. As cool and useful as computing power is, the fact is that less people are having to feed and service ever growing amounts of elderly people, and in the West, harmful NAMs.

    In this circumstances aggregate GDP growth is materially impossible. Not that there’s anything wrong with that. AlthoughI’m starting to see the point in ramping up inflation so you can have “growth”, nominal growth as a sort of totem to keep people upbeat.

    [Reply]

    Posted on March 22nd, 2013 at 11:15 am Reply | Quote
  • Vladimir Says:

    Spandrell,

    Economic collapse gets you invaded or your people leave; not even the Cathedral can withstand it.

    And the Cathedral-run “free world” can get invaded by… whom exactly? As long as USG has a nuclear arsenal, it can’t get invaded even by a hypothetical enemy that could crush it in conventional warfare. (And who would that be in any case?)

    As for “people leaving,” the elimination of any exit option is a fundamental guiding principle of the Cathedral. Where exactly could Americans start leaving in any significant numbers?

    BTW, I don’t think North Korean regime would be endangered without Chinese support, as long as it wouldn’t mean invasion from abroad. After all, it did withstand easily the 1990s crisis when its inhabitants were starving to death in droves. And contrary to the modern-day political myth, can you even think of any actual historical regimes that collapsed just because the situation got bad for their domestic subjects?

    [Reply]

    spandrell Reply:

    We’re playing with words. All regimes fall by internal collapse, not because of the situation of the peasantry. Agreed. But of course when the peasantry has nothing to eat, it’s exponentially harder to run the status assignment game for the elites, so there is a greater danger of defection and regime fall. See every single Chinese dynasty. It starts with famine, small peasant revolt, charismatic leader who leads peasant revolt ever bigger, etc.

    If the economy were to collapse big time, the Cathedral wouldn’t be able to maintain it’s military, you’d see bands of armed people around, etc. Collapse is always a complex process, often long-winded.

    [Reply]

    Posted on March 23rd, 2013 at 2:16 am Reply | Quote
  • Vladimir Says:

    admin,

    No exit, minimal capitalism, docile ignorant slaves.

    And how is the Cathedral disadvantaged in any of these respects? It has had all capitalists eating out of its hand for generations, and it also has a completely docile population that will cower before any threat issued by the state authority. (Even the criminal underclass exists only because the Cathedral goes out of its way to nurture it, and would instantly fall in line if any credible authority was asserted in its face.)

    Exit might be a problem if there were any realistic exit options — but what are they? China and Russia?

    [Reply]

    admin Reply:

    The difference between the Cathedral’s global order and totalitarian communism (a pleonasm, of course) is nowhere near as large as might be reasonably desired, but it is also not nothing. There are numerous exit options, at many different levels — from expatriation, to buying precious metals, to hiding in the hills, to imaginative off-shore investing. All of these constrain government behavior. They mean, for instance, that the US federal government tax take cannot rise above 20%, whatever it does. Of course, it might — and does — pursue surplus ‘revenue raising’ measures for purely punitive reasons, but it’s quite evident that the bulk of the economy (i.e. people’s real lives) is simply beyond its control.

    [Reply]

    Vladimir Reply:

    How realistic and appealing are these exit options?

    Buying and holding gold seems like a certain losing bet in the medium- to long-run. The Cathedral will definitely never permit re-monetization of gold, and it has many tools to prevent it from happening. (It’s also smart enough to figure out that it’s happening well in time to prevent it.) And without that, gold will eventually turn out to be just another speculative bubble, like it did in the 1980s.

    Hiding in the hills won’t get you any freedom, unless you plan to go completely off the grid and live off the land. But if you plan to remain economically active in any way, the Cathedral’s regulators and revenuers will reach you even on top of the highest mountain.

    Expatriation — to where exactly? Yes, the lingering remnants of national sovereignty are still providing for some inter-government competition driven by exit even among Cathedral-run governments. But the Cathedral’s transnational web, both formal and informal, is becoming ever tighter, and they know exactly what they want and how to get it: a world without any exit options, but rich in the sorts of voice they like and agree with.

    (Or are you hoping that Russia and China will resist and become significant exit destinations, whose presence will keep the Cathedral in check? That seems uncertain at best, and even if they do resist, how better will they actually be, and for how many of Cathedral’s subjects could they be a realistic exit option?)

    Regarding off-shoring, similar argument applies as with expatriation. Also, there certainly are, and will likely always be, exit options for people cunning and talented enough to do their business invisible to the powers-that-be. (There were underground capitalists even in the USSR, after all.) But for the overwhelming majority, this is something completely beyond their ability and understanding.

    Now, I’m certainly not motivated by the desire to spread doom and gloom. What motivates me is the desire to move smart, independent-minded people away from useless and fantastic ideas, and towards taking a realistic look at the situation and considering the only possible way to undermine the Cathedral’s power. That way is to understand and hopefully undermine the mechanisms by which it maintains its iron monopoly on bestowing social status and membership in the influential social elites.

    [Reply]

    admin Reply:

    OK, but what about the (roughly) 20% central government taxation maximum? That provides hard quantitative evidence that, whatever the seeming inadequacy of particular exit options — considered one at a time — in aggregate they rigorously constrain the economic latitude of the state. The economy simply refuses to comply with government resource extractions, beyond a fairly specific point. It does no good throwing anecdotal objections at this — if politics really was effectively sovereign, then the Cathedral state’s resource absorption limit would approach 100% (rather than roughly 1/5th of that).

    [Government, at all levels, manages to burn its way through vastly more than 20% of society’s productive capacity, for sure, and it destroys far more besides, but only by sinking ever deeper into unsustainable indebtedness and ‘extraordinary’ financial measures. That’s the real executioner’s axe … but this controversy is too important to hustle to a conclusion.]

    Posted on March 23rd, 2013 at 2:56 am Reply | Quote
  • Vladimir Says:

    Why single out the federal government? The U.S. states were effectively turned from semi-sovereign entities into mere administrative divisions of USG in the period from the New Deal to the 1960s. Furthermore, income tax is not the only form of taxation. (If anything, there’s the inflation tax taken directly by the federal government.) Certainly, any individual anywhere in the Western world who does something productive (and who isn’t guilty of tax avoidance) will be taxed in various ways at rates far beyond 20%.

    But in any case, the level of taxation and government spending is not that important. The modern-day Cathedral is not interested in formal confiscation of wealth and nationalization of capital, except insofar as it dislikes attempts by its opponents to meddle with its smooth functioning by rousing the voters into passing “starve the beast” tax cuts. It is far more interested in co-opting nominally private institutions into becoming loyal propagandists and enforcers of its ideology, and it has been spectacularly successful in this regard.

    When you sum up the wealth and influence commanded by all nominally private organizations that are operating as Cathedral organs and add that to its de jure state organs, the result is mind-boggling. Here I don’t have in mind just the NGOs, mainstream media, academia, liberal churches, etc., but also for-profit businesses whose profit-maximizing imperative has led them to internalize the Cathedral’s ideology as the optimal course of action in a Cathedral-run world. (The skill with which Cathedral’s ideologues have managed to shape a myriad of legal incentives in this regard is just stunning.)

    So, no, the fact that the majority of human activity still takes place in nominally private institutions is no consolation at all.

    Re: “unsustainable indebtedness”, surely you must consider the fact that this whole debt is in fiat money. I think it was you who once wrote a series of posts titled “Suspended Animation,” about the way this system of permanent sovereign insolvency perpetuates itself. I didn’t get the impression back then that you though this state of affairs was going towards some predictable final collapse. (Or maybe I just didn’t read carefully, or I misremember what I read.) To me it seems that with skilled-enough management this process can go on as an indefinite path of slow decadence.

    [Reply]

    Posted on March 24th, 2013 at 7:19 am Reply | Quote
  • admin Says:

    My first response to this is to say: it’s crucial that this discussion is taking place. I think the argument here cuts through the dark heart of reaction, and thus through the controversies that really matter. The consequences for tilting one way or the other are enormous, and I hope you’d agree the way this goes is not at all straightforward.

    If you are right on this, it means that the final discussion has to take place between ‘Mannian’ reaction (as Spandrell tags it) and the post-economistic left, based on the understanding that the political is the supremely dominant social instance, and economics has to fall into line with it. My intuitions, as you know, are quite different, primarily because I think economic systems incarnate intelligence at a far higher level than any political order can match. I realize, however, that this case remains to be convincingly made.

    “To me it seems that with skilled-enough management this process can go on as an indefinite path of slow decadence.” — This hypothesis could be our empirically sensitive prediction, were we able to fix the time horizon for the ‘durably unsustainable’ with more confidence. I have no idea how to do this. One factor that makes me stubbornly lean against it, though, is the type of curve it traces, which is not at all ‘slow’ but rather exponential, or even hyper-exponential (hyperbolic?). The rise of public debt looks like the ugly sister of a Kurzweilian intelligence explosion, rather than a workable, incremental solution to a tough but manageable problem. The blown-out time preference that characterizes degenerate democratic administration means that there simply aren’t any Cathedral managers who sincerely care about anything but the near-immediate future. Can-kicking is the ever more dominant mode, so that — even as the Cathedral power consolidates — the dominant problem-solving agency is disintegrated in time, fragmenting into a staccato series of emergency measures structured by election schedules. As the trend is projected forward, the probability that they foul up terminally approaches 1.

    [Reply]

    Vladimir Reply:

    I have no idea which Mann Spandrell has in mind here. (Thomas? Heinrich? Horace? I can’t think of any good match.) But it does seem like there’s some commonality between our views here. Ultimately, the battle is ideological and it’s about fundamental values and fundamental visions of what the world and humanity should be like (including what limits to these values and visions are imposed by reality). Economics is just a second-order issue where, whatever happens, any side can present it as a vindication of their position in a way plausible enough for mass consumption.

    Now, the Cathedral’s economic management is the domain of a permanent expert bureaucracy of academia and government agencies, which of course blends into the nominally private-sector finance. I don’t think this particular structure has much concern for electoral politics in general, and it certainly doesn’t give much weight to the transient concerns of who will win the next election. Like the entire Cathedral bureaucracy, it operates largely autonomously and without significant public scrutiny — and if something really can’t be done without making a lot of fuss in the political circus, they can easily get press coverage that will present is a plainly necessary course of action to which no sensible mainstream politician could object.

    So, I think you’re wrong when you say that “there simply aren’t any Cathedral managers who sincerely care about anything but the near-immediate future” and describe their actions as a “staccato series of emergency measures structured by election schedules.” This would be so if the Cathedral really were a bona fide democratic regime — your observations would then be an unavoidable implication of the well-known objections to democracy from classical political philosophy (which Hoppe has neatly re-formulated in our time). But these criticisms don’t apply to the Cathedral, and nowadays we need entirely new political theory that will enlighten us about the peculiar and historically unprecedented aspects of the system that we live under.

    One of these aspects is that the Cathedral in pursuit of its ideological goals, and despite its insistence on democracy and evidently pseudo-scientific official economic theories, displays far more prudence and long-term planning than a democratic demagogue worrying about the next election, or a crackpot socialist or Keynesian economic planner from Austro-libertarian imagination. (Insightful as they are, Austrian economists have a long embarrassing track record of predicting doom and gloom with their simplistic models of official Cathedral economics as either rampant pseudo-scientific craziness or irresponsible following of short-term political expediency.) In fact, I’m increasingly convinced that the real insiders of the Cathedral’s economic management have a much more clear and coherent vision of what they’re doing than what one would assume by taking their official crackpot “science” at face value.

    Moreover, even if the situation goes really bad, don’t forget about the power of the official press. One of the benefits that the Cathedral has reaped from its abandonment of out-and-out socialism and central planning is that it makes propaganda far easier. The propaganda of the Soviet regime, with its official total control over the economy, could only resort to downright lying and bullying when things went bad. (Not that this wouldn’t suffice if they had been free of subversion from abroad, of course.) But the Cathedral intellectuals and press can always find a ready scapegoat for all economic ills in whatever remains of the private capitalism. So even if they foul up big time, they can easily do a propagandistic judo move and use this opportunity only to double down on their ideological goals. (After all, they’ve been doing that with every economic crisis at least since the Depression.)

    Or maybe I’m wrong. Maybe we’re really heading for the cliff, the people in charge are lacking either awareness of incentives necessary to stop it, and all bets are off once we fall off from it. But the dissidents from the broad Cathedral consensus have been prophesying this for many decades, and yet the suspended animation continues without much disturbance.

    [Reply]

    admin Reply:

    This is crazily good, although I have to hope you’re wrong. The time point is crucial, and brutal, but on the other side of the ledger: the Soviet Union took seven decades to crash, despite being far more economically incompetent (market suppressive) than Cathedral-Keynesianism — and you’ve argued that it could have hung on for even longer than that. The time-scale of Austrian nemesis (revenge of the market) is quite clearly out of proportion with human expectations, and more in keeping with long historical rhythms (multi-decade to centuries) — with the result that its strongest advocates often sound like impatient Christian end-timers, bemused by the slow unfolding of things.

    If you are right, and systematic crash can be dismissed as a relevant factor, what then? It seems to me that neo-reaction has been assembled with implicit reference to an impending Cathedral catastrophe, which has allowed it to strip away (and denounce) all revolutionary ambition. But if the Cathedral is never to be brought to an end by its internal characteristics? Doesn’t it then have to be overthrown?

    [Reply]

    fotrkd Reply:

    Following this is fascinating and really informative… I’m going to briefly be really simplistic (I have no economic background), miss subtleties and apologise in advance if it’s of little value. So look at this:

    http://en.wikipedia.org/wiki/File:Public_debt_percent_gdp_world_map.PNG

    So it’s from 2007 and an updated version would be great, but anomalies aside developed economies are indebted economies. How do you dominate a new industry? Invest heavy (take on debt) to corner the market. How do you maintain position? Regulation (think Kyoto etc.) to maintain the gap. Debt itself is not a problem so long as you can maintain market position as this generates market confidence (low interest rates), keeps the talent flowing in and ‘guarantees’ growth etc etc (vodafone has always been a good example in the uk… not sure what the equivalent would be). It’s always seemed to me that the big myth of the global financial crisis was the global (as opposed to Western) aspect (at least relatively) – maybe someone over ‘there’ could correct me on that? – Southern Europe is collapsing because it is in direct competition with Germany and therefore ‘unsustainable’ (not because its debt to GDP is, for instance, higher than Japan’s) and the Euro maintains the gap, denying S. Europe the opportunity to absorb additional debt when the shit hits the fan. The US is at the top of the Western tree… That’s why the rise of China (connected to Russia; the rest of Asia; Australia; Iran; Pakistan, Africa etc…) is so significant… At some point, potentially, China will be able to pull the plug/accelerate away and that’s when a financial cliff becomes a real issue for the US… Until then I’m inclined to agree with Vladimir “that with skilled-enough management this process can go on as an indefinite path of slow decadence”.

    Vladimir Reply:

    admin,

    The revenge of the market does come in regular intervals. But markets are extremely resilient — they can take a lot of abuse, and even when they’re saddled with extravagant perverse incentives, distorted price signals, and subsequent artificial malinvestments, exacerbated panics, and painful readjustment hangovers, they eventually recover. So the Cathedral economic managers can happily go on and induce and exacerbate panics and crashes, each time using them as a “teaching moments” about how capitalism is unstable without their wise guidance and how they’ve again saved it from the brink of cataclysm.

    Of course, the quadrillion dollar question is whether they can keep on doing this indefinitely — or if they are each time destroying more of the diminishing institutional and cultural capital that enables the modern markets to be so resilient and fruitful in the first place. Judging by the Soviet example however, it seems like they still have a very long way to go before they get to something that would look like a real cataclysm. (Plus, the Cathedral does seem smart enough to back off from blatantly destructive ideas in matters of economics when they are clearly demonstrated as such — they did back off from their former orthodoxy of gradually moving towards an out-and-out command economy. Of course, in other matters that they care about much more, such as e.g. issues related to sex or race, no such compromise with reality can be expected.)

    Meanwhile, the Austro-libertarian prophets of doom are necessarily unable to give any accurate timing for these crashes and panics, even when they unfold exactly according to their theory. The reason is simple: the obvious truth of the weak efficient markets hypothesis. (This, by the way, is the easiest way to debunk any “science” of macroeconomics: if anyone ever made a genuine original contribution to this purported science, this would give him the ability to second-guess the market and get rich by deriving more accurate predictions about future prices. So why do economists pass this opportunity and rush to publish their findings instead? But this also means that an Austrian correctly diagnosing the malady can never tell whether the crash will come tomorrow or at some arbitrarily far point in the future.)

    Regarding the “impending Cathedral catastrophe,” the reactionary blogosphere is a mixed bag. One often sees childishly naive expectations that major Cathedral institutions and ideological projects are about to collapse due to the current financial troubles. One also often sees an immature and morbid wish for a total economic and social collapse, as if something better is likely to come out of it. My opinion — which I readily admit to be a speculative and unreliable product of a mind struggling to comprehend an extremely complicated and mendacious world — is that the Cathedral will remain extremely stable as long as it keeps a monopoly of status, prestige, and sanctimony. Whether someone will somehow manage to undermine it, remains to be seen. (Of course, here I’m setting aside the possibility of some external factor that would put an end to the whole system, or even humanity as we know it, like technological singularity or world-ending disasters.)

    Posted on March 24th, 2013 at 8:40 am Reply | Quote
  • Federico Says:

    Vladimir, excuse me for intruding—this is extremely relevant to my interests.

    I desire to know which class of person is a Cathedral insider, and which clueless. Of Elizabeth Warren, Ben Bernanke, Matt Yglesias, Brad DeLong, Timothy Burke (owner of this blog—Moldbug pointed us to his “manipulating procedural outcomes”) which do you believe to be close to the action?

    My own rough guess is that Warren is a naive outsider; Bernanke and DeLong are insiders who lie through their teeth, fully aware that the Austrian Business Cycle Theory and its implications are true; Yglesias is from a less “privileged” background and therefore further out than the other two, being a talented social climber; Burke is a true insider like Bernanke and DeLong. I formed this impression partly from YouTube videos. Bernanke, in debate with Ron Paul, reminds me of Amfortas from Parsifal—dutiful and burdened by sin. In a video from 2006, Yglesias was teed off about having been asked to prove his identity at a convention.

    I am partial to the idea of Cathedral as spontaneous order, in which case the optimisation power to which you refer is not entirely a matter of human intelligence. The price system, for example, evinces apparent intelligence that exceeds its constituent human decisions.

    My only experience of the Cathedral’s inner action was in following the SOPA controversy. There was a point at which all sorts of internet-related legislation spontaneously popped up, such that blogs like Techdirt had difficulty keeping track. This betrays, to my mind, legitimate intent in addition to the spontaneous order. A detailed view of the legislative process would be most valuable.

    The relative importance of calculated decisions, made by a few individuals in freedom, compared to blind conformity to organising principles of the spontaneous order, is significant. If it be skewed towards the latter, the task of distributing status away from the Cathedral seems relatively easy: a matter of breaking a power-opinion feedback loop that traps innocent people in questionable behaviour patterns.

    There may be a history of failed attempts to thwart the Cathedral of which I am unaware. Otherwise, is not the metastasis and centralisation of USG mostly a matter of ignorance—of political science, catallaxy and human nature—and laziness, combined with a plethora of petty incentives, rather than design?

    I think, now, that Nick Szabo and to a lesser extent David Friedman have correct notions, and crucially there is an incremental path between USG and a soundly constitutional state. Desirable historic constitutions have formed without rational constructivist design. The precursor to such a change is the formation of a robust academic and status-community that is deliberately, fiercely and hermetically sealed from state funding and state involvement. Uberfact, but in meatspace and staffed by fully-funded scholars—and protected by the same latent pluralism that permits the internet to remain free.

    [Reply]

    admin Reply:

    @ Federico
    Without having anything cogent to add at this point, I’d just like to express extreme sympathy for the points you’re making here, and on your blog.

    [Reply]

    Vladimir Reply:

    Federico,

    That’s a fascinating question — and my browser unfortunately just destroyed the response I was about to finish typing. I have to go to sleep now, so I’ll post a new one tomorrow.

    [Reply]

    Vladimir Reply:

    Federico,

    Obviously I have no way to obtain any reliable knowledge about this. To get a feeling for how difficult this question is, it’s enough for me to reflect on how ignorant I am in fact about what happens among top-level insiders in my own (abstrusely technical and completely non-ideological) profession — a question where I’m privy to far more relevant information, and where I also have far stronger incentives to form an informed and correct view.

    But if I were to speculate, I’d say that the very highest insiders probably can’t be found among people who go out of their way to participate in public debates about everyday controversies on the internet and in the mass media. This seems to me indicative of intellectual vanity, uncontrolled ideological passion, and willingness to descend to the level of mass-consumption discourse, which is psychologically incompatible with the role of a confident expert who is in charge of running important things. So this would exclude pretty much all of these professors who get a kick from blogging and punditry.

    Furthermore, I don’t think people whose primary occupation is in journalism and punditry are real top insiders, with maybe a few exceptions. A real insider may occasionally address the public through mass media in an aloof way, but people for whom the thrill of propaganda and ideological warfare is strong enough that they’d make it their full-time job are, in my opinion, almost always zealous true believers who take the public face of the hegemonic ideology at face value or (possibly at the same time) sleazy and ruthless climbers on the status pole. (Consequently, unlike the top insiders, their worldview is highly incoherent and detached from reality, and they’d be easy to defeat in a truly free and open debate — but their role is to yell propaganda for mass consumpton through the big mass media megaphones and bully and drown out the opposition, not to win fair and honest debates.)

    So, I think the real influential insiders of the Cathedral’s economic management are the sorts of people who have high non-political bureaucratic posts in the government (Fed, Treasury, etc.) and their tightly-knit social network that extends into the finance industry — and who would’t ever descent to the level of enthusiastic participation in everyday mass ideological warfare. To apply this heuristic to your list (or rather its subset about which I know enough to try to apply it), it would seem that only Bernanke passes the test.

    All this, of course, is highly speculative — for all I know, I may have completely false ideas about how status and influence work in these exalted cirles, which are like a different world for ordinary mortals.

    [Reply]

    Federico Reply:

    This is more convincing than my own guess.

    [Reply]

    Posted on March 24th, 2013 at 2:41 pm Reply | Quote
  • admin Says:

    @ Vladimir
    Each fresh installment of this argument is more magnificent than the last — the usage of the EMH in this one is simply brilliant for instance. By this point, a sufficient response would, of necessity, be an answer to everything, in the entire range from historical economics to political philosophy, so a manifestly insufficient rejoinder is the best that can be hoped for.

    As might be anticipated, I don’t think it is really possible to make solid progress on these questions without simultaneously revising basic intuitions about time and history. That is because the critical phenomenon — the ‘model’ Cathedral-Keynesian response to economic threat — is postponement, or the strategic usage of the future to relieve a problem in the present. ‘Can-kicking’ is perfectly acceptable shorthand for this, and the postmodern ‘concept’ of differance (delay-displacement) is an accurate, if pretentious, alternative.

    The postmodernists (taking Derrida as their exemplar), were consistently counter-apocalyptic,and in this respect they captured the Keynesian Zeitgeist as a general cultural syndrome — can-kicking as an interminable, ‘ontological’ condition. Because their assumption was that the revenge of the market could always be parried by State-bureaucratic action, ‘the Real’ was systematically denigrated, as a toothless relic from the dead age of consequences (before the unconstrained play of the libidinized signifier was discovered by the Parisian New Left). Backing out hard from this freak-show is the primary and most attractive meaning of Reaction to me.

    Among the stakes of this argument, therefore, is whether generic ‘postmodernism’ is to be vindicated by the terminal disappearance of an effective economic ‘reality principle’. This can be conceived, with equal validity, in terms of the negative — fascist — eskhaton: Triumph of the Will. Can a sufficiently determined politics impose itself upon the future, without encountering insurmountable obstacles, by molding its environment in accordance with sovereign popular will (as represented by its elite administrative proxy)? If it is politics — social power — that in the end decides, then there can be no doubt that fascism, in its essentials, is correct. That would explain its status as the general form of mature modernist political organization. The fact that Austrianism offers the only consistent intellectual resistance to this conclusion is not, in itself, an argument, but only an appeal.

    [Reply]

    Posted on March 25th, 2013 at 6:10 am Reply | Quote

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