What Democracy Can’t Do

An Outside in stab at (tech-comm) NRx in a nutshell: If economically optimal labor pricing is ‘politically impossible’ you’re doing politics wrong.

(‘Wage-stickiness’ defenses of inflationary macro were the immediate context, but the application seems far broader.)

OK, some carbs (for anyone dissatisfied by raw gristle):

Europeans liked their welfare state regardless of where they stood on the political spectrum. The roots of “social democracy” lie on the left, but by the 1980s the preference for a mixed economy, generous health and pension benefits, and regulated markets had become, on the European continent at least, what Antonio Gramsci called a “hegemonic ideology.” These preferences were embraced by parties of the center-right as well as the center-left, compatible with capital yet acceptable to democratic majorities, and rejected principally by the extremes — and British Tories [sic]. The idea that this well-liked welfare state, deemed by many to be indispensable to social peace, might soon prove unviable in the globalized economy of the late twentieth century hence became a source of great anxiety.

June 19, 2015admin 17 Comments »
FILED UNDER :Neoreaction


17 Responses to this entry

  • What Democracy Can’t Do | Neoreactive Says:

    […] What Democracy Can’t Do […]

    Posted on June 19th, 2015 at 3:10 pm Reply | Quote
  • Chris B Says:

    “If economically optimal labor pricing is ‘politically impossible’ you’re doing politics wrong.”

    I prefer ‘if your encouraging economic activity for the sake of economic activity and do not possess a robust moral and ethical system which limits economic activity for the sake of juicing economic production to buy off the population’ you’re doing politics wrong.


    admin Reply:

    I can’t even parse your sentence (but suspect I disagree with it).


    E. Antony Gray (@RiverC) Reply:

    The problem comes down to this. In a ‘free market’ system, a lot of players will have free funds from profit. Those free funds can go to charity, to purchases, or into capital (investments, savings towards future investments, savings towards formation of capital in the form of patrimony, etc.) All socialist policies must by definition function (inasmuch as they are using actual wealth that exists) by capturing a certain percentage of these free funds and diverting them to programs.

    Now, realizing that a certain percentage of these free funds go into purchases, it’s noted that increasing programs and thus capture of free funds into social programs for the ‘greater good’ that economic activity, and thus the amount of free funds generated, is suppressed because free funds that would go to purchases are now diverted into programs. So things are introduced to push monies back into purchases to keep the economy fueled. One way to do this is to jack up minimum wage. (Side effects often ignored.)

    However, in the end, this always results in a slow degeneration even if all of the bills are paid, as capital is getting starved and will eventually flee. A society where all of the books are balanced and all money is diverted to ‘charity’ or ‘necessary for survival and a level of happiness purchases’ – a moral society in perhaps that continental reactionary sense – is a society in decay from whom patrimony is fleeing even if slowly.

    In this context history must vacillate between periods of plunder in which patrimony can be built without moral restraint due to war and general disorder, by the victors of such trials (whomever they may be, consider WWII) and other periods of varying levels of decay.

    This does not constitute economic advice for a sovereign.


    E. Antony Gray (@RiverC) Reply:

    Further, it seems that democratic politics in general increase the perceived cost of externalities (say, someone dying in a fire) due to the excessive boosting of voice. In the democratic system, it is in theory possible that I, say my name is Brady, can get a law that inflicts costs upon all members of society for the sake of a problem I, of about ten or twelve people out of a million, experienced.

    Now to divert funds in some form into any kind of socialization – let us present law as a socialization of order – is a form of insurance. By restricting certain guns I am paying a premium against economic growth from selling those weapons and costs of enforcing this restriction, for insurance against loss of life to a particular type of shooting. Inasmuch as this remains a moral issue, it is like leaving a person in a burning building – would you do a cost/benefit analysis on saving your child from a burning house? Aside from determining whether it was possible to do, no. Thus the ‘moral equivalent of war’ is shorthand for ‘slow motion potlatch.’

    Could we look at something like the Brady Bill and quantify the costs versus the benefits and determine if even post-facto the law was just? Or did we defraud, using pathos and ethos, the society for insurance against events at an exorbitant rate that diverts funds from other more pertinent risks that could be insured against, such as death by automobile, or death from heart disease? Even our socialism is shit for brains.

    Chris B Reply:

    There are times when MM does not go far enough as I am coming to the conclusion on with regard to his influence from the Scots enlightenment and Hume and his ”Is’ and Ought’, but at others he does go far enough, and utterly rejects modernity’s psychosis. Rejection of statistics and economic growth for the sake of economic growth with reference to what the hell is actually happening is one. At this point it leaves the neo-liberalism and anarcho-capitalism in the dust looking like the gibbering nonsensical wrecks they are.

    You want this to be the time in which MM is restored as a central influence? Then we could begin with this – http://unqualified-reservations.blogspot.tw/search?q=artisan

    “I like this approach because it reduces the veiled mystery of “growth” to a crass urban reality that everyone can understand. What does “growth” mean? It means: “spend more, comrades!” If growth is good by definition, spending is good by definition. Because the amount of water that runs off the ground is the same as the amount of rain that falls from the sky. Aggregate demand is your friend. Spend more, comrades! It’s good for the economy.”

    “There are two answers to this question, corresponding to your understanding of the purpose of an economy. The first is the false position held by Austrians, and by Keynesians when they want to confuse you: the belief that the purpose of economic activity is the satisfaction of human desires. More spending means more production, and more production means more satisfaction. This perspective, of course, originates with 18th- and 19th-century liberals and utilitarians. You can see it all over Sam Altman’s hedonic treadmill.”

    “Why the fudge factor? Because our goal is not to merely assess the price of all goods produced, a mere number which can be measured by mundane if fallible techniques, and still worse can actually be defined – but their value, that is, hedonic utility. This is an almost spiritual and essentially qualitative and personal assessment. In usual 20C style, we damn the torpedoes and jam this subjective quality into an objective quantity by any means necessary. Otherwise, how would we model it?”

    “A financial system is a central planning mechanism. To the extent that a planning mechanism, whether automatic or bureaucratic, is sane, it instructs economic actors to make sane and rational decisions, like investing in productive assets. To the extent that it instructs economic actors to do insane things, like building empty cities in the middle of Mongolia, its automatic and supposedly free-market nature is no different from the bureaucratic insanity of a Gosplan, or the autocratic insanity of a Houphouet-Boigny. Of course, it still fulfills its actual mission of creating jobs. But not without significant and unnecessary financial weirdness, whose only purpose is to pretend that the machine is not in fact a makework scheme.

    and the money shots –

    “I am not suggesting across-the-board technology restriction, general medieval stasis, low-res iPads, banning Google Glass, or anything of the kind. My idea of Solution F involves targeted technology controls designed to create market demand for the type of unskilled human laborers that modern industry has made obsolete, but that we are politically unwilling to kill and sell as organ meat. Being so unwilling, we have no choice but to provide these people with a way to survive as human beings – preferably as human as possible.”


    “Or take agricultural labor, for which an arbitrary level of demand can be created simply by banning industrial farming techniques. Every ghetto rat in America today could find employment as an organic slow-food artisan. Crap – even a 10th Street zombie can milk cows. We’d have to pay them for their work, of course. We already pay them for not working. Is this better for us? For them? WTF, America?”

    Unfortunately, a lot of the times when MM goes full reaction, he gets dismissed as a thought experiment because of the embarrassing and difficult to digest distance between what he is postulating and the central (and very) modern aspects of the various parts of the ‘trike’


    admin Reply:

    Growth is capital formation. Getting distracted by idiotic macroeconomic demand-based models is completely unnecessary.

    MM’s rare moments of regressive humanism seem to thrill you far more than they should.

    Hurlock Reply:

    Prime example of selective reading. You read 5% of what Moldbug has written on economics and you think you have a full grasp of his economics view.

    Go back to school!
    Moldbug repeatedly through the years, whenever he has written on economic subjects has pointed out, that yes, the major modern popular economic schools are all charlatans, while the austrians are the only one who do sound economics.

    Also, Moldbug’s “dire problem” has been debated time and time again, and I do not understand why we still continue to chew on it.

    admin Reply:

    Foregrounding the ‘dire problem’ is exactly what we should expect as the end-point of democratic degeneration. (Loser-centric socio-economics.)

    Posted on June 19th, 2015 at 4:59 pm Reply | Quote
  • Henk Says:

    Hmm. To me, this reads as either tautology or falsehood, depending on the definition of “economically optimal”. What’s yours?


    Posted on June 19th, 2015 at 5:59 pm Reply | Quote
  • Brett Stevens Says:

    The best hope of democracy is to neutralize internal conflicts, and paying the poor not to riot is part of this, hence it always drifts toward socialism.


    Posted on June 19th, 2015 at 6:56 pm Reply | Quote
  • What Democracy Can’t Do | Reaction Times Says:

    […] Source: Outside In […]

    Posted on June 19th, 2015 at 6:59 pm Reply | Quote
  • Michael Says:

    triangulating third world misery against first world labor is not a free market its basically crony capitalism. And while eventually the laws of capitalism will catch up with the practice it will be too late for my civilization and people. So while I like capitalism to be as free as possible because it does the most for me that way if it looks like zuckerberg is going to rule over a green skinned population out of an Anthony Burgess novel with no culture beside consumerism Im cool with a little tweaking.There would be no capitalism without my people and its culture and it could not continue to operate without them, I also offer it a market optimized for its exploitation. My legal tradition and rule of law, my infrastructure,the sophistication and wealth of my people, an unmatched military prepared to defend the interests of my strategic partners as well as my own, among other things,So when i negotiate with capitalism I expect a better deal than it gives Nigeria. globalization was the promise of mostly my capitalists branching out obviously I was naive> while globalization is still an inevitability and could be quite a good deal for all its time to negotiate a more adversarial agreement with capitalists that no longer feel any national or ethnic affinity to my market. No this doesn’t mean anything like socialism it means just not being like Nigeria and allowing my corrupt government to sell my nation for pennies on the dollar to enrich and empower themselves. These things I bring to the table are mine not my government employees property.
    But of course that government has disposed through this process of globalization elected a new stupider people who actually come from places like Nigeria and are glad to be bought off for food stamps etc.
    I think if not for that the people of western civilization could have adapted to increased competition easily. what exactly is the difference between obama care and health insurance, social security and an IRA, all these socialist programs leftists love are really nothing more than insurance policies a very capitalist product, the problem is they are not run as such and ought to be and can only be if they are run privately as capitalist enterprises.The wages and other concessions a nation such as mine ought to be able to negotiate from capitalists should easily cover the cost of these. Instead the capitalist is given three low wage low IQ workers who are subsidized to the tune of 30K a year for every relative they bring into my country this debt leads to taxes and inflation and wage deflation that lowers my standard of living further. and my country and civilization are destroyed.


    Posted on June 19th, 2015 at 7:02 pm Reply | Quote
  • peter connor Says:

    All multi-cultural empires collapse, but they collapse much faster if they are subject to powerful bureaucracies who inflict all manner of GDP destroying mandates on their citizens, as Rome, for example, did in later times. The EU, subject to powerful competition from several sources, won’t last long….


    Posted on June 19th, 2015 at 9:04 pm Reply | Quote
  • Mark Warburton Says:


    Relevant – and supportive of your cynicism RE: ‘Neoliberalism’.


    Posted on June 19th, 2015 at 9:04 pm Reply | Quote
  • Michael Says:

    Hood and barrio rats really really have to be repatriated its the only humane solution not that i give a fuck about that but they simply are too much to bear internally externally recolonization on a contractual basis is probably best they want to live under white management we shall trade them for it.
    Our own left half have much value for us and can easily be brought along without socialism or make work jobs. If nothing else they produce the cognitive elites for now.yeah sure a lot of the ones that go to harvard are the product of two elites but these days those parents or grandparents were proles but more importantly the remnant is prole geniuses that are not sought for and do not seek out the Ivy league. A nation would be far more stable using these rather than Chinese nationals to fill our labs.But they also provide us a nation family, they enrich our lives protect our shores and yeah buy our products. Their low taste is more a product of elites failure than their own.Shakespeare was once popular, kings used to enjoy hunting and sports.


    Posted on June 20th, 2015 at 1:17 pm Reply | Quote
  • This Week in Reaction (2015/06/21) | The Reactivity Place Says:

    […] Land notes that there are some things even Democracy Can’t Do. Like make unicorns fart rainbows, or create infinite demand for labor. He also takes note of some […]

    Posted on June 22nd, 2015 at 3:49 pm Reply | Quote

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