This has a distinctly Chinese authoritarian tone to it. And that’s OK. If we can admire the Chinese for their current economy we can admire the rest of their political edicts too:

Economists, social scientists, public intellectuals and politicians all use the Nordic Fallacy: the goal of making every country like Denmark. ie: a small homogenous germanic protestant country surrounded by other germanic protestants, with no exterior enemies and no need for self defense, and no strategic resources. We might ask, why we don’t ‘get to Switzerland’ which as a country has a far harder political problem.

That said, here is how the average country can Get To Denmark:

1. Any state larger than 10M must secede a territory sufficient to reduce it to 10M.
2. Outlaw Consanguineous marriages out to three generations (This is the most important tactic one can take.)
3. Outlaw non-english foreign web access, video, television channels, and literature. (english is Lingua Franca of business and science, that’s the only reason to grant it an exception.)
4. Outlaw and eliminate non christian and or non-secular religious buildings, businesses, and associations.
5. Raise the age of consent to 21, and the age of marriage to 25 with severe penalties, including prison or permanent deportation and tattooing.
6. Require proof of sustainable income in order to have a child, with loss of the child, permanent imprisonment or deportation as the consequence.
7. Enumerate all Property Rights within an immutable constitution, and require all legislation passed to demonstrate why it is permitted by the constitution.
8. Use lottocracy rather than democracy to rotate political positions every two years.
9. Outlaw job protection for anyone who directly or indirectly serves the government.
10. Get a king and queen. The nordics have them. Monarchs are the only form of government people understand and the most common in history – and the tend to stop people from seeking too much political power, or being too ridiculously ambitious.
11. Mandatory eduction in the western cannon for all citizens regardless of their age at immigration. Religion doesn’t matter as much as the western cannon does. It’s secular but the moral christian values are pervasive and unavoidable.
12. Mandatory use of single language. Period. No exceptions. Give tickets for it if you have to.
13. Mandatory civil service for women (delay marriage, and forcibly indoctrinate into cultural norms, with extended work, loss of fertility, and prison for abdication.)
14. Mandatory military service for males (Forcible cultural indoctrination with physical punishment and loss of fertility for abdication.)
15. Zero Tolerance Policy with 3 strikes life prison sentences. (Harsh prison sentences have been successful in the USA as a deterrent.)

That’s what it will take to get to ‘Denmark’. Twenty years of that and you’ll have a solid polity with redistsrbutive instincts. That’s exactly what the european monarchies and nation states did. It’s what the Chinese are doing. And that’s why no one will get there.

And in case find that list objectionable, I don’t usually do this but I’ll quote Rand:

“It’s only human,” you cry in defense of any depravity, reaching the stage of self-abasement where you seek to make the concept “human” mean the weakling, the fool, the rotter, the liar, the failure, the coward, the fraud, and to exile from the human race the hero, the thinker, the producer, the inventor, the strong, the purposeful, the pure–as if “to feel” were human, but to think were not, as if to fail were human, but to succeed were not, as if corruption were human, but virtue were not–as if the premise of death were proper to man, but the premise of life were not.

In other words, the progressives forgive all possible depravity and call the coward, lazy and fools heroic. While those of us who work daily with discipline and courage are called selfish and inhuman.

Nonsense. Time to be done with the cult of guilt: No guilt. No white guilt, no christian guilt, no colonial guilt, no male guilt. Take it back. Take it back now. We did the world the greatest favor since the domestication of plants and animals. Ask for respect not forgiveness.

USEFUL IDEAS FOR DEFENSE OF CONSERVATIVE IDEAS

On [online magazine] Counterpunch today, Paul Craig Roberts asks Is Western Democracy Real or a Facade?

He starts with:

The United States government and its NATO puppets have been killing Muslim men, women and children for a decade in the name of bringing them democracy. But is the West itself a bastion of democracy?

He then goes on to list a number of American sins that broadcast to the world our hypocrisy.

It’s a straw man argument that seeks to reframe historical American strategic policy into current populist jargon for what must be purely political reasons. I have only met Paul once, quite a few years ago, and only for a few minutes of discusion at a conference, but he appears to be an honest man, and I can only attribute this article to the effects of accumulated frustration. Which I can understand. But a questionable portrayal of events hinging upon a specious moral argument does nothing to improve matters at all. It’s much more helpful to deal with the facts and determine where we go from there:

GEOPOLITICAL STRATEGY REGARDING THE MUSLIM WORLD
1) The United states government has been attempting to contain the Muslim world since the fall of the British Empire for the following reasons:

a) To prevent the spread of world Marxism and Communism to the Islamic world. This effort was largely successful. We can take credit for saving millions of lives by preventing the Soviet and Chinese deaths, as well as preventing Hindu suffering. Containment has worked for us. And the world has adopted Consumer Capitalism. And in doing so, lifted billions out of permanent poverty.

b) To prevent ideologically and commercially competing countries from gaining control over middle eastern oil, and therefore endangering American (and Western) economies by using oil as a strategic and military threat.

c) To contain militant expansionist Islam that is exporting terror, and that is able to spread under the support and funding of local governments.

d) To allow popular commercial capitalist revolutions to take place when the society had matured enough that they could no longer tolerate their poverty, in the hope that like many other countries we can encourage them to join the modern world of consumer capitalism.

e) To disallow the development of a militant ‘core state’ such as iran or iraq, that is able to unite a block such as syria, lebanon, iraq, iran, and pakistan, which would be both nuclear and would create the basis for a third world war funded by our dependence upon oil.

f) To assuage our Christian guilt over the extermination of jews by protecting Israel and Israelis despite the constant irritation cause by a successful and prosperous middle eastern country that daily demonstrates the failure of Islamic civilization causes to Muslims and confirms their feelings of inadequacy and failure.

Americans are pragmatic. They ally with successful states and not with failed or failing states. The determine failed or failing by the level of internal conflict. As the world’s policemen Americans see conflict as requiring their involvement, and at great cost. So they are simply pragmatic in seeking to support ‘successful’ states: those without violent conflict.

THE WORLD’S POLICEMEN
America has assumed the role of the world’s policemen for two reasons:

a) The assumption of the international system of finance, law, shipping and trade after the fall of the british empire. An assumption that was necessary for the preservation of the american economy, and second only to the Louisiana Purchase (land at 42 cents an acre in today’s terms). The assumption of that trade allowed us to replace the pound with the dollar as the reserve currency and to force oil to be traded in dollars – thereby giving us an invaluable economic advantage that persists to this day.

b) The necessity of providing an alternative to World Communism that was more attractive and more supportive of ‘the people’ of the world.

Both the assumption of the system of trade, and the the desire to provide an alternative to world communism, are pragmatic choices, not ideological choices. For some reason americans are comfortable criticizing a political ideology like communism that is little more than a religion wrapped in pseudo economic dogma, than they are in criticizing a religion that is little more than a political movement. If americans would correct this error in their ‘talking points’ the battle against Islam would be much easier. Islam is not a religion. It is a political system, and a religion in name only.

AMERICAN STRATEGIC ERRORS

American errors over the past decades have been the following:

a) A naive belief that it is possible to transform paternal, tribal, consanguineous, anti-rational, illiterate, pre-modern societies into modern consumer capitalist republics. The interior social and political structure of these societies will not tolerate the dramatic change for a single reason: the near total disruption of their status-signaling economy. The concept of ‘common good’ does not exist as we understand it outside of the familial and tribal order. (The same is true for the Mediterranean cultures.) Extra-familial trust is almost impossible to build and is effectively unique to the germanic northern european and international anglo germanic cultures. We call these ‘high trust societies’ without understanding just WHY they are high trust societies. Nor understanding that the germanized christian west we have been building a high trust society arguably for thousands of years, and only succeeded a thousand years ago. (I’ll tell you a very valuable secret that has eluded philosophers, historians and economists: it’s because of corporatism. The manorial system, the aristocratic church, as well as the modern corporate system encourage commercial corporeal loyalty not familial, consanguineous, or tribal loyalties.)

b) We are still ‘talking democracy’ not ‘talking consumer capitalism’ as if we’re fighting World Communism. Democracy is a luxury available to a small homogenous high trust society. It is a means of peacefully transitioning power. It is a means of limiting corruption. (The greeks used Lottocracy, which is clearly superior to Democracy in preventing corruption.) Democracy is not a means of enacting good economic policy. It is not a means of raising people out of illiteracy, ignorance and poverty. Paul is right in criticizing us for ‘talking democracy’. We should be talking consumer capitalism. The world has abandoned communism. What we do not understand yet, is that from academics to politicians worldwide, the world began abandoning democracy in academica in the 1990′s, and in the world political elite by 2000. Our failure to transform our ‘talking points’ from democracy to ‘consumer capitalism – regardless of political system’ — is what has caused the problems Paul refers to in his article.

Historian Oswald Spengler called western civilization Faustian: westerners keep pursuing this ideological view of human nature despite the obvious fact that we are making a deal with the devil in order to achieve the impossible. The west is exceptional. Our culture can never be universal. Criticisms of the NeoCons are correct in that they assume human consensus with western values and where they attempt nation building. Criticisms of the NeoCon’s are wrong where they seek to contain islamic civilization by military means. Islam is far worse a threat than marxism. At least marxism was subject to rational criticism. Muslims appear entirely happy to think themselves self righteous and holy as they descend into permanent ignorant illiterate abject poverty and vent their failure outward as terrorism.

THE COMMERCIAL SOCIETY
2) The US does not support Democracy. It supports success. Americans are a commercial people. Much more commercial even than Europeans (which is why they don’t understand Americans at times.) In fact, the only thing Americans have in common is their commercial sentiments.

CONSUMER CAPITALISM NOT DEMOCRACY
3) The US advances “Consumer Capitalism” not Democracy. Democracy is a code word for “Consumer Capitalism”.

a) Consumer Capitalism is apolitical – it can be enacted by a authoritarian individual or a democratic house. It is blind to race, blind to religion, blind to gender. It is unforgiving. It is a purely meritocratic system. As a purely meritocratic system it favors people with both genetic and cultural advantages: Asians and Indo-Europeans. It puts the less literate and more magian people at a distinct disadvantage — something which all of Islam understands. And this is born out by the data: Muslims are 1/10th as productive as westerners. They are uncompetitive with the rest of the world. Without oil, they are no better off than sub-saharan Africans.

b) Consumer Capitalism is a threat to the paternalistic, hierarchical, non-meritocratic, social status of almost every single male in Islamic society. And that’s something that must be understood. A male does not have to earn his position in the tribal society. He must earn it under consumer capitalism and he must compete with women under consumer capitalism. And each and every man in the society will take a dramatic ‘status discount’. Which they understandably find untenable. It is irrational to expect otherwise. Consumer Capitalism must grow organically from a slowly percolating middle class which creates new materialistic status signals that the lower classes can imitate by working hard and accumulating ‘things’ and experiences. A new ‘status economy’ must form.

POLITICAL COMPATIBILITY OF CONSUMER CAPITALISM
4) Consumer Capitalism is not incompatible with what we popularly call Social Democracy: Redistributive Social Democracy. Under Redistributive Social Democracy, profits are captured through taxation and redistributed, allowing the market system to function using both incentives and the information embodied in prices. Consumer capitalism is incompatible with Socialism and Communism, both of which destroy incentives and the information embodied in prices. Consumer capitalism is compatible with libertarianism, conservative classical liberalism, and progressive social democracy – all of which interfere in the economy to varying degrees. Consumer Capitalism is just not compatible with a managed economy. Americans are exporting social democracy and consumer capitalism. But they’ll take consumer capitalism alone if they can get it. Why? Because it decreases the cost of policing and decreases the risk to the average American (Canadian, Brit, German, Belgian, Italian, Australian.)

WE’RE A DEMOCRATIC REPUBLIC NOT A DEMOCRACY
5) Technically speaking, the USA is not a democracy. It’s a representative republic. That’s why we have the Senate and the Electoral College: to inhibit the dangers of democracy. In particular, our political system is organized to prevent democratic ‘fashionability’ with a hard constitution (that the progressives have effectively ruined via the commerce clause, and through judicial activism rather than calling for a constitutional convention) a high-turnover house, and a longer turnover senate (that was originally appointed not directly elected). So technically, we’re exporting “Social Democratic Republican Consumer Capitalism.”

ECONOMIC IMPACT AND ANALYSIS
6) If America loses its military power, its control over oil, or the dollar’s status as a reserve currency, then the ‘average’ American, if there even is such a thing, will experience a drastic reduction in standard of living. We complain about our national debt and our military expense. But really, this is how it all works out: We spend a lot of money policing the world. We export debt to pay for it. The debt encourages the world to support our policing activities. We inflate the debt away. And we obtain economic advantage that directly benefits the average American raising his or her economic class by something on the order of 50%. If you travel the world, and then come back to the states,its blatantly obvious the average person can consume vastly more as an American than anyone else on earth: more living space, more heat and air conditioning, more varieties of food, more kinds of entertainment, more information, and more air travel, more car travel, more free time. More everything. So, the pure COST of our military activity is a cheap return. It costs $700B this year, and our entire interest burden is $227B. Over the next three years alone, the American government will inflate 30% of that debt away.  We do not directly bill the world for our services, but we DO INDIRECTLY charge them for it, and it is our MOST PROFITABLE export.  There is a difference between wasting money and putting it to good use. Our military is not a poor use of funds. BUT the cost of nation building is impossible to bear. If we must bomb a country into submission that’s one thing. In many cases — preventing communism, preventing a nuclear Iran — its the lesser of two evils. But we cannot transform its culture or its economy. We can’t. That cost is infinite. And it’s futile.

Thanks
Curt Doolittle

On Modeled Behavior, a commenter pulls an ad hominem:

Karl, I won’t call you a hack–you aren’t, but the first part of that post contained breathtaking partisan quackery.

And I replied:

Jon.

Karl is not a quack. He honestly holds his positions and he can articulate why he holds them. He may be the only top blogger I can say that of. I know. I monitor the entire ecosystem.

The truth is that none of us are certain. Economics and sociology are immature fields with a short history and insufficient data. We’re all trying to figure out the human race. And we’re all claiming that our preferences are somehow scientific, and independent of our underlying sentiments both paternal and maternal, and are ultimate truths rather than cognitive biases in a fragile equilibrium. They are not. It is the equilibrium that we don’t know how to measure, not our paternal and maternal sentiments.

I disagree with Karl on the consequences of progressive Keynesian policy (spending). I don’t disagree with him on its operating principles. I think we just don’t know the answers yet, and that we shouldn’t create fragility in our very unique society until we do know.

It is not useful to debate with foolish or deceitful people. Deception is eristic. Foolish is a waste of time.

Karl Smith is the real thing. He may be the only top blogger that I can say that of.

(And I can go through probably the top hundred bloggers and enumerate the irrational tactics that each of the others relies upon for no other reason than to avoid exposing the sentimental rather than rational basis of his arguments.)

I should follow up on my last post with this thought:

1) For the fist time in western history, military leadership has been effectively denuded of political power. Our politicians are not only not required to have demonstrated military experience, but our generals are conspicuously absent from the political stage. Their departure is partly due to the change of the military’s focus from competition between tribes and states to the battle between consumer capitalism and world communism. A conflict which instead of pitting a group of classes against another group of classes, pitted classes within groups against one another. The pervasive fear of the military caused by the strategy of mutually assured destruction didn’t help reform military perception. And the cultural, regional, racial and religious factionalization of the USA combined with the leftist conquest of academia (sometimes by physical force)¹ rendered the anti-martial sentiment a persistent property of the populist cultural norms. ALthough one feature of this change is interesting: The military as an institution has largely succeeded in maintaining the respect of the populace. The politicians are blamed for the misuse of military force.

2) If there are only three types of coercive political power: Force (the military and the militia), Moral (priests and public intellectuals), and Exchange (entrepreneurs and financiers), then one third of the balance of power has been removed from our political sphere. I would stipulate this is what instinctively troubles aristocratic conservatives. Not only are Whites becoming a minority, but their martial leadership has been ostracized from power. Social conservatives can still rally around the church for communal confirmation. But aristocratic conservatives cannot – they have no political venue.

From antiquity until 1960, a male could seek status and acceptance through military service (and looting), familial provider-ship (and access to sex), religious conformity (demonstrated commitment to the community), and productive labor (craftsmanship), or at the very least, simply providing the service of his physical strength. Under agrarianism almost all of these venues are open to all men. Under industrialization the set is reduced. Under the information age, the male’s entire existence became materially undesirable. This is why the underclass males are abandoning marriage, religion, work, and even fear of imprisonment – they adopt a new version of mediterranean bravado. Upper class males are abandoning society altogether. The middle class and the upper proletariat fuss with the empire while its natural aristocracy revels in effete consumer decadence.)

3) I do not see a means of developing a natural aristocracy given the decline of agrarian self-sufficiency, the end of the regimental system in favor of conscription and state funding, and the rise of the majority of occupations that no longer participate in the market. Democracy is a slow road to totalitarian communism. And I do not see, absent some sort of extremely disruptive economic and geopolitical event, a way of altering this trend. WE will return to ignorance and poverty – or more likely, a two class system on the order of south america.

1. See Cornell University [↩]

Violence is a virtue not a vice.
Like any resource it is scarce and can be put to good and ill uses.
But try to create property rights without it.
Try to hold your property rights without it.
You can’t. No one has. No one will.
Property is a product of the application of violence.
Property is a minority preference with majority returns.
Liberty is a minority preference with majority returns.
Almost all humans seek to consume products of the market.
Very, very few humans seek to produce products for the market.
The majority of humans seek every possible opportunity to avoid participation in the market.
The only people who participate in the market are the self employed, or the commissioned.
People who sell there services in exchange for wages are avoiding the market.
Government employees are avoiding the market.
Unions members who seek security and wages are avoiding the market. (not safety)
The wealthy and the retired are avoiding the market.
Under agrarianism, everyone was in the market.
Everyone produced for both themselves and the market.
Under consumer capitalism, very few people participate in the market.
Do we wonder why rent seekers are more numerous than producers?

Violence is a form of wealth.
Do not surrender it unless you receive freedom in exchange.
And take back your violence if the warrantee on your freedom is broken.

A letter to HBD_CHICK
RE: “l’explication de l’idéologie”

@HBD_CHICK

First, I meant to write earlier so apologies for the delayed comment

Second, translating your argument into an economist’s language:

1) “Signaling” is the term economists use to describe behavior that demonstrates fitness for mating. Status determines access to mates. Signaling conveys ‘status’. There are, statistically, fewer ‘superior’ male mates than female mates, partly because of the wider distribution of male IQ’s. However, unmarried males are a ‘problem’ and most societies tend to favor norms that ‘civilize’ more males.

(PS: I”m pretty sure we can demonstrate that younger women are attracted to higher testosterone and familiarity and more mature women to status. I can’t prove it but the evolving data from dating sites seems to suggest it. Excess testosterone is positively correlated with impulsivity, unpredictability and risk taking and violence. A woman woman who is familiar with a category of male behavior more easily understands it. But that says nothing about the male’s fitness. Likewise the data shows that ‘crazies’ as men refer to them, who are highly impulsive are demonstrating a successful reproduction strategy — Dawkins’ ‘Selfish Gene’ revisited.)

2) I’m not sure, but are you missing inheritance patterns and property rights as determining access to mates? I think they’re inextricably linked, and mutually dependent but I don’t see you directly addressing it. (Individual property rights vs shareholder “collective” property rights.)

3) I’m pretty sure that the causal difference in the development of western individualism is martial (not marital, but martial): the highest status in society was held by a minority of highly skilled warriors who had to self-finance their equipment, using expensive technology to compensate for their inferior numbers, employing battle tactics that required individual initiative, and to whom fell control of agrarianism’s productive resources: land. In that model, individualism is a necessary consequence because the ‘epistemology’ of war is unforgivingly evolutionary.

Otherwise, I agree with the general trend of your thesis.

In an effort to make sure we’re not reactionaries attempting a form of social Luddism we might argue that evolution of norms progresses unabated: Joel Kotkin and Peter Meyer take the opposite end of the spectrum going forward: that a ‘people’ is a competition between fairly immobile lower castes, and highly mobile diasporic upper castes – of which the English (my tribe) and the Jews are just forming a global upper class with the diasporic hindus, chinese, armenians and others. David Goldman (Spengler) argues that all civilizations that adopt consumer capitalism also commit demographic suicide, thereby leaving us at a crossroads of ideological confusion. We have turned the Manorial system on it’s head, genetically expanding the underclasses and genetically constraining the upper classes – precisely because, under democracy, the natural aristocracy – the upper classes — are no longer responsible for rule.

Possibly covering too much ground here in an vain attempt at brevity but hopefully it makes sense.

Curt

On economics help, we get to see a how political failure is cast as market failure.

Agriculture often appears to be one of the most difficult industries, frequently leading to some form of market failure. In the EU, agriculture is the most heavily subsidised industry, yet despite the cost of the subsidy, it fails to address issues relating to agriculture.

Then the author compounds the error by stating that the volatility of weather creates a volatility in prices:

The problem of volatile prices is that:
1. A sharp drop in price leads to a fall in revenue for farmers. Farmers could easily go out of business if their is a glut in supply because prices can plummet below cost.
2. Cobweb Theory. The cobweb theory suggests prices can become stuck in a cycle of ever-increasing volatility. E.g. if prices fall like in the above example. Many farmers will go out of business. Next year supply will fall. This causes price to increase. However, this higher price acts as incentive for greater supply. Therefore, next year supply increases and prices plummet again!.
3. Consumers can be faced with rapid increase in food prices which reduces their disposable income.

To which I replied:

Fascinating. Fascinating that you would consider any of these properties a market failure.

1) Farming has declined as an employer of people since 1900 to the point where it is now little more than a subsidized hobby industry that we support for purely aesthetic reasons. For that reason alone, it cannot experience ‘market failure’. It’s a commoditized industry. Farming is an industrial occupation for conglomerates. Everyone else in the business is in it out of love or habit not profit.

2) The US western expansion was created in an era of farming, and the land settled by farmers (and ranchers). The era of industrial expansion was created to support the expansion of farming. Now that farming has become mechanized and industrialized, people are leaving the breadbasket for the commercial and technological centers – that’s why those parts of the country are being depopulated.

3) It is impossible for farming to experience ‘market failure’. It is only possible for people to cling to an unproductive means of production, and to fail to develop alternative careers.

The problem is political failure. Not market failure. Markets can’t fail. They can be insufficient to solve certain problems of capital concentration that only governments can accomplish. The political failure of attempting to persist farming is a failure because the market is telling us that farming is no longer valuable as an occupation. The political system is failing because it cannot develop alternatives to farming fast enough.

It’s a problem of political failure not market failure. And it’s human failure. The romantic and luddite desire for antiquated means of production.

There are five competing ideological groups of economists: Modern Monetary Theorists, Monetarists, Keynesians, Neoclassicals and Austrians. These five groups describe a spectrum of policy actions that are available to government because of its ability to print money, borrow money, spend money, lend money, write laws and enforce them. The government can insert money into the economy in a variety of ways using these tools, but the time frame it necessary to produce a result varies from the short term to the long term.

These five competing groups of economists represent ideological schools of thought. For practical purposes they function as political parties within the field of economics. Each of these schools is allied with some combination of political parties in government.

This list summarizes each school’s position, and it has at least the appearance of being funny. The list is ordered shortest to longest time needed for money to work its way into consumer hands:

1) MODERN MONETARY THEORY
Street Description: “Print money by diluting the existing pool of money and dump it directly into consumer’s hands, and it will work its way through the economy from the bottom up.”

Party Afilliation: Extreme Left, Ideological liberals. Ex-communists and their sympathizers.

Code Words: MMT

Slang Words: digital money, no-currency money, post-currency money

Description: In the narrowest terms, MMT means printing as much money as consumers need, and can afford to borrow, and lending it at zero interest. In the widest terms, it means elimination of nearly the entire consumer banking and credit system.

Criticisms: no one has ever tried to create MMT money, but in theory, inflation would rapidly expand making it impossible to plan anything in the future at all, and the entire economy would crash from the effect of the inability of anyone to plan anything.

Positives: As a targeted solution, bypassing the financial system and putting money directly in consumer’s hands isn’t always a bad idea. During the 2008 housing crash, some of us recommended that instead of using the normal channels, we just pay down all homeowner mortgages by 200,000 dollars, and give anyone who has yet to have a home, a 25% deposit against that home, for a period of six years, wherever that home loan is guaranteed by the federal government. (If you loans your kids money that doesn’t count.) There are a lot of little technical rules that have to accompany that legislation, like forcing recalculation of all home loans to a flat 3%. THis would punish the financial system but leave the rest of the economy and the pricing system intact. Because we didn’t do that, the entire world had to recalculate prices, was unable to plan production, and everything came to a halt, resulting in a lot of unemployment.

2) MONETARISTS

Street Description: Make money really cheap to borrow and it will work through the economy from the top down.

Party Affiliation: Mainstream Republicans and Democrats. The moderate right and left.

Code Word: Mainstream Economics. Monetary Policy

Slang Word: Freshwater School (per Krugman)

Description: The government borrows money and then auctions it off to banks. The banks add a few points of profit to it, and then try to lend it. The government constantly adjusts the price of credit while targeting a specific inflation rate. The objective is to allow the private sector to adjust to suppor the changes in the economy.

Criticisms: a) While you can make money cheap, you can’t force people to borrow it, and if people don’t borrow, then it doesn’t matter what you do. This was the problem from 2009-2011.

3) KEYNESIANS

Street Description: Borrow money and have the government spend it. It will work its way through government institutions into the economy through the organizations the feed off the government.

Party Affiliation: Democrats. Mainstream moderate left and right

Code Word:

Slang Word: Tax And Spend Liberals, Statists, Big Government

Description:

Criticisms:

4) NEOCLASSICALS

Street Description: Borrow to Invest in creating and expanding competitive industries and it will work its way through the economy.

Party Affiliation: Republicans. Economic Conservatives in particular. Democrats because of union dependence upon large industries.

Code Word: Mainstream Economics. Industrial Policy

Slang Word: Corporate Subsidy, Corporatism.

Description:

Involuntary Transfers:

Criticisms:

5) AUSTRIANS

Street Description: Borrow to Invest in human skills and knowledge, and people will create productive goods that will work its way through the economy, and create a robust and competitive economy.

Party Affiliation: Libertarians. Conservative libertarians, especially the Rothbardians.

Code Word: Hard Money Advocates

Slang Word: Gold Bugs. (And every other four letter word the other schools can come up with.)

Description:

Accurate Description: the government allows the boom and bust cycle to function without interference, under the assumption that all the government can do is encourage the continued misallocation of capital which will make the bubble larger and the recovery longer.

Involuntary Transfers: There probably aren’t any. It’s just that this model prevents the government from borrowing on behalf of the working classes in order to invest in businesses and infrastructure that that may employ them. In this sense, the people who have money are constraining the ability of the working classes to organize in such a way that they can invest in their future, and gives a substantial portion of that profit to people who do nothing but save and hold money already. While government abuse and corruption are universal, that’s not to say in principle the end result isn’t positive for labor.

Criticisms: The criticisms of the school are almost endless. However the most common are:

a) it takes a very long time for money to work its way into the economy.

b) the gold standard does not leave governments much borrowing capacity

c) the gold standard constrains growth.

Of course, an Austrian would argue that these are all good things that keep people focused on being competitive while preventing the government from creating an unstable economy and unstable society.

THE CONFLICT BETWEEN THE SCHOOLS OF THOUGHT

It is possible that ALL FOUR ARE RIGHT in their theories of policy recommendations. It is even likely that all four are right. It is simply unlikely that we can create a political system that can implement policy along that spectrum. Not because of the affect each of them has on the economy. But because the affect that each of them has on empowering or disempowering the government to interfere with our social lives. So, it’s possible to CONCEIVE of a political system that will make use of the entire spectrum of tools. It’s just not practically possible to implement it.

Why? Because the short term tactical approach favors consumption and redistribution while the long term favors innovation and concentration. And without a systemic and procedural means of balancing those two political extremes, it is not possible for the different advocates to compromise on policy.

The Propertarian Solution

Propertarianism says it doesn’t matter what levers you pull as long as it’s calculable, and is a voluntary inter temporal exchange. That may sound complicated, but all it means is that if you want to borrow now, you have to create a productive investment later to pay for it. The Keynesian and MMT position is that ‘demand’ only matters, and that production will serve to fulfill the demand.

Each of the different academic political parties represents a different constituency. And by feeding that constituency they transfer wealth from other constituencies to themselves. The solution is to render these transfers visible and calculable, so that inter-temporal transfers are simply loans from one another that help the entire population produce productive ends, rather than scramble steal from one another by way of the state.

Differences Between The Schools

While the terminology used in the field  of economics is absurdly obscure, the differences between the schools are simple:

1) The progressives schools all assume that unemployment is politically and socially unstable, and morally intolerable. Therefore the government should attempt to use its ability to borrow and spend money, or borrow and loan money cheaply, to increase employment. By increasing employment we reduce human discomfort and stress. When people are employed they consume. When the consume business and industry produce. To increase production they hire. And in theory taxes on the increased consumption more than pay for the cost of restarting the economy. That’s the theory. And there is little dispute over whether this process will actually produce the short term consequences that we desire. The dispute is over the long term consequences.

2) Given that a government can borrow money and sell it, borrow money and spend it, or even just print it and either sell or spend it, the government can stimulate buying and selling in the economy. In theory, this spending fools the citizenry into thinking they have more money than they do, and so they start spending and consuming and this activity restores the economy (and forces people with savings to spend it rather than have it destroyed by inflation).

However, there are consequences to borrowing and spending.

a)

b)

c)

A thought experiment

Let’s pretend we have four houses of government that roughly correspond to ‘The Fiscal House (Keynesians)’, ‘The Monetary House’ (Monetarists), ‘The Industrial Policy House’ (neoclassicals), and the ‘Human Capital House’ (Austrians). And then we have an executive branch that can only execute bills that are approved by all four houses. These houses cannot create laws in the sense that they cannot create binding obligations over the long term. They can only ‘print’, borrow, and allocate fixed amounts of money over fixed time periods with defined dates of conclusion. In that model, all four houses would have to compromise with one another in order for policy to be enacted.

The reason the different camps cannot agree on policy is that each side is actually trying to constrain the other’s political not economic preferences and can only do so by advocating the exclusive use of their methodology.

It is often impossible to maintain the perspective that the political battle is between the public intellectuals on the left, and the entrepreneurs on the right, over control of the government. Schumpeter told us this would happen. And he was right.

But we don’t have to control government if takings are prohibited, and exchanges are mandated. Its not hard really.