Political Humor

The things that really matter

The prospect of Technological Singularity, by rendering the near future unimaginable, announces “the end of science fiction.” This is not, however, an announcement that everyone is compelled to heed. Among the Odysseans who have deliberately deafened themselves to this Sirens’ call, none have proceeded more boldly than Charles Stross, whose Singularity Sky is not only a science fiction novel, but a space opera, inhabiting a literary universe obsolesced by Einstein long before I.J. Good completed its demolition. Not only recognizable humans, but inter-stellar space-faring humans! Has the man no shame?

Stross relies heavily upon humor to sustain his audacious anachronism, and in Singularity Sky he puts anachronism to explicit work. The most consistently comic element in the novel is a reconstruction of 19th century Russian politics on the planet of Rochard’s World, where the Quasi-Czarist luddism of the New Republic is threatened by a cabal of revolutionaries whose mode of political organization and rhetoric is of a recognizable (and even parodic) Marxist-Leninist type. These rebels, however, are ideologically hard-core libertarian, seeking to overthrow the regime and install a free-market anarchist utopia, an objective that is seamlessly reconciled with materialist dialectics, appeals to revolutionary discipline, and invocations of fraternal comradeship.

It’s a joke that works well, because its transparent absurdity co-exists with a substantial plausibility. Libertarians are indeed (not infrequently) crypto-Abrahamic atheistic materialists, firmly attached to deterministic economism and convictions of historical inevitability, leading to lurid socio-economic prophecies of a distinctively eschatological kind. When libertarianism is married to singularitarian techno-apocalypticism, the comic potential, and Marxist resonances, are re-doubled. Stross hammers home the point by naming his super-intelligent AI ‘Eschaton’.

Most hilarious of all (in a People’s Front of Judea versus Judean People’s Front kind of way) is the internecine factionalism besetting a fringe political movement whose utter marginality nevertheless leaves room for bitter mutual recrimination, supported by baroque conspiracy-mongering. This isn’t really a Stross theme, but it’s an American libertarian specialty, exhibited in the ceaseless agitprop conducted by the Rothbardian ultras of LewRockwell.com and the Mises Institute against the compromised ‘Kochtopus’ (Reason and Cato) — the animating Stalin-Trotsky split of the free-market ‘right’. Anyone looking for a ringside seat at a recent bout can head to the comment threads here and here.

More seriously, Stross’ libertarian revolutionaries are committed whole-heartedly to the Marxian assertion, once considered foundational, that productivity is drastically inhibited by the persistence of antiquated social arrangements. The true historical right of the revolution, indistinguishable from its practical inevitability and irreversibility, is its alignment with the liberation of the forces of production from sclerotic institutional limitations. Production of the future, or futuristic production, demands the burial of traditional society. That which exists – the status quo – is a systematic suppression, rigorously measurable or at least determinable in economic terms, of what might be, and wants to be. Revolution would sever the shackles of ossified authority, setting the engines of creation howling. It would unleash a techno-economic explosion to shake the world, still more profoundly than the ‘bourgeois’ industrial revolution did before (and continues to do). Something immense would escape, never to be caged again.

That is the Old Faith, the Paleo-Marxist creed, with its snake-handling intensity and intoxicating materialist promise. It’s a faith the libertarian comrades of Rochard’s World still profess, with reason, and ultimate vindication, because the historical potential of the forces of production has been updated.

What could matter do, that it is not presently permitted to do? This is a question that Marxists (of the ‘Old Religion’) once asked. Their answer was: to enter into processes of production that are freed from the constraining requirements of private profitability. Once ‘freed’ in this way, however, productivity staggered about aimlessly, fell asleep, or starved. Libertarians laughed, and argued for a reversal of the formula: free production to enter into self-escalating circuits of private profitability, without political restraint. They were mostly ignored (and always will be).

If neither faction of the terrestrial Marxo-Libertarian revolutionary faith have been able to re-ignite the old fire, it is because they have drifted out of the depths of the question (‘what could matter do?’). It is matter that makes a revolution. The heroes of the industrial revolution were not Jacobins, but boiler makers.

“Communism is Soviet power plus the electrification of the whole country,” Lenin proclaimed, but electrification was permitted before the Bolsheviks took its side, and it has persisted since the Soviets’ departure. Unless political transformation coincides with the release of a previously suppressed productive potential, it remains essentially random, and reversible. Mere regime change means nothing, unless something happens that was not allowed to happen before. (Social re-shufflings do not amount to happenings except in the minds of ideologues, and ideologues die.)

Libertarians are like Leninists in this way too: anything they ever manage to gain can (and will) be taken away from them. They already had a constitutional republic in America once (and what happened to that?). Britain had a rough approximation of laissez-faire capitalism, before losing it. Does anybody really think liberalism is going to get more ‘classical’ than that anytime soon? Trusting mass democracy to preserve liberty is like hiring Hannibal Lecter as a baby sitter. Social freedoms might as well be designed to die. There’s not the slightest reason to believe that history is on their side. Industrial revolution, in contrast, is forever.

On Rochard’s World they know exactly what matter could do that is forbidden: nano-scale mechanical self-replication and intelligent self-modification. That’s what the ‘material base’ of a revolution looks like, even if it’s sub-microscopic (or especially because it is), and when it reaches the limits of social tolerance it describes precisely what is necessary, automatically. Once it gets out of the box, it stays out.

Stross is sufficiently amused by the unleashed technosphere to call its space-faring avatar ‘the Festival’. It contacts the libertarian revolutionaries of Rochard’s World by bombarding the planet with telephones, and anyone who picks one up hears the initial bargaining position: ‘Entertain us.’ Funniest of all, when the neo-Czarist authorities try to stop it, they’re eaten.


The God Confusion

A world on its knees, and at your throat

“Do The Three Abrahamic Faiths Worship The Same God?” Peter Berger asks, on his blog at the American Interest. His answer, which seems to be programmed at least as much by the sensitivities of interfaith politics as by the exigencies of rigorous theology, is a politely nuanced “yes (but).” If anyone is unconvinced about the urgent pertinence of multicultural diplomacy to the question, Berger settles such doubts quickly by depicting the integrated conception of ‘Abrahamic faith’ as a response to the ‘Clash of Civilizations’ climate that arose in the wake of 9/11, “with the altogether admirable intention of countering anti-Islamic hatred.”

At its core, his argument is both realistic and relatively uncontroversial. It is comparable to an informal set theory, or cladistics, briefly surveying family resemblances and dissimilarities between branches of the Abrahamic religious ‘tree’ and concluding, reasonably enough, that none of the potential groupings are absolutely strict (each faith, even narrowly defined, is differentiated within itself by sub-branches, and twigs), and that the coherence of ‘Judeo-Christian’ monotheism is considerably stronger than that of ‘Abrahamic Faith’ in general. Whatever the complexity of these branchings, however, they derive from a readily identifiable trunk. Berger cites a lecture by the Protestant theologian Miroslav Volf:

Yes, one can say that Christians and Muslims believe in the “same God”. There are enough common affirmations to justify this—most importantly, of course, the belief that there is only one God (what the late Richard Niebuhr, coincidentally another Yale Divinity professor, called “radical monotheism”)—but also the belief in a personal creator distinct from the creation, and the giver of a moral code.

When evaluated from a wide enough angle, it is clear that the God of Jews, Christians, and Muslims is distinctively specified, relative to alternative religious traditions:

Sometimes it is a good idea to step back and look at the imputed collectivity from afar. It may help to look at the three ‘Abrahamic’ faiths from, say, Benares, one of the most holy cities of Hinduism and near which the Buddha preached his first sermon. Looked at from that far location, the family resemblance between the three versions suddenly appears quite clearly. Hindus and Buddhists sometimes speak of ‘West Asian religion’ in contrast with their own ‘South Asian ‘or ‘East Asian religion’. It then seems just about inevitable to say that Jews, Christians and Muslims, whatever their differences, do indeed worship the same God.

To be sure, there are similarities between Benares and Jerusalem as well. There are Hindu versions of theism, with intense devotions to personal deities (bhakti), but there is no real analogue to the monotheism that originated in the deserts of the Near East. In Vedanta, arguably the most sophisticated form of Hinduism, the ultimate reality is the brahman, the impersonal ocean of divinity in which all individual identities eventually dissolve. There are theistic elements in Mahayana Buddhism, with devotion directed toward godlike boddhisatvas— individuals who have attained Enlightenment, but who, out of compassion, delay their entry into the final bliss in order to help others to get there. But that bliss too ends in that impersonal ocean of divinity that seems for many centuries to have dominated the religious imagination of India, from where it migrated eastward. 

Yet, whilst the theological dimension of this question is very far from uninteresting, or inconsequential, it limits the question at least as much as it clarifies it. More than a faith, the ‘children of Abraham’ share a story, and – still more importantly — a sense of history as a story, and this is the factor that most tightly bundles them together, irrespective of all quibbling over narrative details. Abraham is the beginning of a tale, even if it can be projected back (at least a little way) beyond him. He defines the meaning of history, as an interaction with God, through which the passage of collective time acquires structure, direction, unity, radical finitude, moral and religious significance. Abrahamic history has purpose, and a destination. Above all it tells the story of a moral community, whose righteousness and unrighteousness will ultimately be judged. Eschatology is its real key.

Because the Abrahamic tradition is rooted in a distinctive experience of history, it extends beyond theistic faith. Indeed, any comprehension of this tradition that excludes Marxism, fascist millenarianism, and ‘liberal’ secular progressivism (even that of the ‘New Atheists’) is woefully incomplete, to the point of diversionary propaganda. Uniquely, the Abrahamic faiths do not merely rise, fall, and persist. They are superceded by new revelations, or afflicted by heresy and schism. Their encounters and (inevitable) conflicts become internalized episodes that immediately demand doctrinal and narrative intelligibility. Hence the affinity between the Abrahamic faiths and historical (as ‘opposed’ to pedagogical, cosmic, or naturalistic) dialectics: the ‘other’, merely by appearing on the stage, must play its role in the world-historical drama of belief.

Strict monotheism is the personification of narrative unity, and in the end it is the narrative unity that matters. Whether history is finally to be appraised from the perspective of the people of Israel, the Church, the Ummah, achieved communism, an Aryan master-race, or secular multicultural globalism, it will have been integrated through the production of a moral community, and judged as a coherent whole by the standard of that community’s purity and righteousness. It will have been comprehended by a collective subject whose story — it insists — is the entire meaning of the world.

For the minor paganisms of antiquity, and the major paganisms of the east, this structure of understanding has the objective potential to be offensive to an almost inestimable degree, so the fact that pagans have rarely contested it with an animosity that even remotely approaches its ‘internal’ conflicts and disputations is intriguing. Whilst cases of anti-semitism, anti-clericalism, islamophobia, anti-communism, anti-fascism, and systematic political incorrectness have, on occasions, been plausibly derived from pagan inspirations, in the overwhelming majority of cases it is the various ‘fraternal’ branches of the great Abrahamic family that have wrought devastation upon each other. Indeed, persecution, as a particular mode of ‘zealous’ or ‘enthusiastic’ violence, seems to be an Abrahamic specialty, one that depends upon conceptions of ‘intolerable’ idolatry, heresy, apostasy, false-consciousness, or political incorrectness that are found nowhere else.

God told Abraham to kill his own son, and he was ready to do so (Gen 22:1-19). That is how he earned his status as the ur-patriarch of the tradition, whose children are defined by the ghost of a knife at their throats. Demonstrated willingness to kill in the name of the Lord, or its abstracted equivalent (the meaning of history), is the initiatory ideal, and the beginning of the world story that now encompasses everyone. After this original ritual, Isaac’s life was no longer natural, but ideological. It was suspended, vulnerably, from a word owing nothing to the protective bond tying an animal to its progeny (symbolically terminated by Abraham’s surrender to divine command), but settled on high, in the narrative structure of the world. If God had willed it — or the story demanded it — he would have been slain. In this way an unnatural line, existing only as an expression of divine purpose, breaks from the archaic pagan order of ‘meaningless’ procreation and nurture. (The place assigned to the sacrifice, Mount Moriah, would later be the site of Jerusalem, the city of the end of time, and beyond nature.) Isaac was spared, but the pagan world was not similarly reprieved.

The existence of an Abrahamic tradition has an importance that far exceeds its internal politics and internecine rivalries, since it is indistinguishable from the historical unification of the world, and no ‘other’ is able to remain outside its narrative order. In much of the world, even in its Abrahamic heartlands, to refuse God is no great thing, and perhaps little more than a mildly comical affectation, but to depart from World History is quite another matter. It is then that the knife of Abraham glints again.


Suspended Animation (Part 5)

Engines of Devastation

Does Postmodernism still seem cool to anybody? — Probably not. Having sold whatever simulacrum of a soul it might have had to the fickle gods of fashion, it has learnt more about the reign of Chronos than it might have expected to – the kids get devoured, and it’s on to something new. What was accepted for no good reason gets discarded for no good reason. In political science it’s called democracy (but that’s another discussion).

Clearly, there’s something profoundly just about the disappearance of postmodernism into the trashcan of random difference (what’s ‘in’ has to be new, preferably meaninglessly so). It’s even ‘poetically just’, whatever that means. But it also destroys information. Although Postmodernism was certainly a fad, it was also a zeitgeist, or spirit of the times. It meant something, despite its own best efforts, at least as a symptom. The disappearance of reality that it announced was itself real, as was the realm of simulation that replaced it. At least in its death, it might have amounted to something.

Consider its greatest mystagogue, Jacques Derrida, and his once widely celebrated ‘concept’ of differance (yes, with an ‘a’), a term within a series of magical words that mark the undecidable, ungraspable, unpresentable, and ultimately inconceivable ontological non-stuff that supplants real events, through an endless succession of displacements and postponements. We can’t really say anything about it, so we have to talk about it endlessly, and entire university departments are required to do so. It’s ridiculous (and so it’s over). But it’s also, quite exactly, the globally hegemonic culture of Keynesianized, macroeconomic, programmatic stagnationism, and that isn’t over yet, although its morbidity is already highly conspicuous. Unlike faddish academic Postmodernism, its death is going to be really interesting.

Long before the Derridoids got started, Keynes had taught governments that differance was something they could do. Procrastination – the strategic suspension of economic reality through a popularly ungraspable series of displacements and postponements – quickly came to define the art of politics. Why suffer today what can be put off until tomorrow, or suffer yourself something that could be somebody else’s problem? Postpone! Displace! In the long run we are all dead. Reality is for losers.

Differance as it really works is a lot cruder than its reflection in Postmodern philosophy (and what could be philosophically cruder than an appeal to the notion of ‘reflection’?). For instance, it is fished out of the ontological abgrund and processed by specific public policy mechanisms, sustained by concrete institutions in ways that are to a considerable extent economically measurable, within elastic but most certainly finite geographical and historical limits. Crudest of all, and ultimately decisive, is the circumscription of derealization, by the real, and the return of the apocalyptic, no longer as a phantasmatic avatar of the ‘metaphysics of presence’ (or false promise of a real event), but as an impending real event, and one whose process of historical construction is in large measure intelligible. Real differance didn’t ‘deconstruct’ the apocalypse, it built it. It’s not even that difficult to see how.

At EconLog, David Henderson has posted his notes from John H. Cochrane’s December 3 talk at Stanford University’s Hoover Institution conference on ‘Restoring Robust Economic Growth in America’. There’s no mention of differance, but there doesn’t need to be.

For nearly 100 years we have tried to stop runs with government guarantees — deposit insurance, generous lender of last resort, and bailouts. That patch leads to huge moral hazard. Giving a banker a bailout guarantee is like giving a teenager keys to the car and a case of whisky. So, we appoint regulators who are supposed to stop the banks from taking risks, in a hopeless arms race against smart MBAs, lawyers and lobbyists who try to get around the regulation, and though we allow — nay, we encourage and subsidize — expansion of run-prone assets.

In Dodd-Frank, the US simply doubled down our bets on this regime. … 

Bailouts delay a painful economic event (postponement) whilst transferring financial liability (displacement). Risk is restored to virtuality, as disaster is turned back into a threat, but it isn’t the same threat. By any remotely sane method of accountancy, it’s now worse. Significant virtual deterioration is substituted for actual discomfort. That’s the cost of derealization.

How do things get worse, exactly? — In plenty of ways. Start with ‘moral hazard’, which is a polite way of saying ‘insanity’. Actions are decoupled from their consequences, removing the disincentive for craziness. The result, utterly predictably, is more craziness. In fact, anything that systematically enhances moral hazard is simply manufacturing craziness. It’s dumping LSD in the water supply, although actually probably worse. So bailouts drive us insane and destroy civilization (no one really disputes that, although they may try to avoid the topic).

Oh, but there’s more! — Much more, because all these displacements don’t just move things around, they move them up. Risk is centralized, concentrated, systematized, politicized – and that’s in the (entirely unrealistic) best case, when it isn’t also expanded and degraded by the corruption and inefficiency of weakly- or cynically-incentivized public institutions. This is trickle up – really flood up – economics, in which everything bad that ever happens to anybody gets stripped of any residual sanity (or realistic estimation of consequences), pooled, re-coded, complicated by compensatory regulation, and shifted to ever more ethereal heights of populist democratic irresponsibility, where the only thing that matters is what people want to hear, and that really isn’t ever going to be the truth.

“Mess up enough, and you probably suffer or die” – that’s the truth. It’s a message that doesn’t translate into the language of Keynesian kick-the-can politics, which is folk Postmodernism. The nearest we get, as the jaws begin to close on the bail-out bucket chain, is “We’re going to need a bigger boat.” After innumerable episodes of that, we’re all huddled together on the Titanic, and things are kinda, sorta, looking OK. At least the band’s still playing …

When abstracted from its squalid psychosis, the pattern is mathematically quite neat. It’s called the Martingale system, better known to Americans as ‘double or nothing’ (and to Brits as ‘double or quits’). Cochrane already touched upon it (“the US simply doubled down our bets”). Wager on red, and it comes up black. No problem, just double the bet and repeat. You can’t lose. (If you like this logic, Paul Krugman has an economic recovery to sell you.)

What appears as disaster postponed is, in virtual reality, disaster expanded. The Wikipedia entry on the Martingale system helpfully connects it to the Taleb Distribution, otherwise known as scrounging pennies in front of a steam roller. The persistence of small gains makes this business model seem like a sure thing — until it doesn’t.

Nassim Nicholas Taleb and Mark Blyth expand on the idea in Foreign Affairs, with application to various aspects of the current (or impending) crisis. Asking why “surprise [is] the permanent condition of the U.S. political and economic elite” they trace the problem to “the artificial suppression of volatility — the ups and downs of life — in the name of stability.”

Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite. These artificially constrained systems become prone to “Black Swans” — that is, they become extremely vulnerable to large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.

Discussing this article at PJMedia, Richard Fernandez glosses and sharpens its conclusion:

Part of the problem is the consequence of [the elites’] own damping. By attempting to centrally manage systems according to some predetermined scheme they actually store up volatility rather than dispersing it. By kicking the can down the road they eventually condemn themselves to bumping into a giant pile of cans when they run out of road. … But the elites cannot admit to surprise; nor can they admit to bad things starting on their watch. Therefore they keep sweeping things under the carpet until, as in some horror movie, it spawns a zombie. To make systems robust, says Taleb, you’ve got to admit that you can make mistakes and pay the price. You will have to in the end anyway.

We aren’t in Postmodernism anymore, Toto. We’re nearer to this:

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. (Ludwig von Mises, Human Action)

Or even this:

Great is Bankruptcy: the great bottomless gulf into which all Falsehoods, public and private, do sink, disappearing; whither, from the first origin of them, they were all doomed. For Nature is true and not a lie. No lie you can speak or act but it will come, after longer or shorter circulation, like a Bill drawn on Nature’s Reality, and be presented there for payment,- -with the answer, No effects. Pity only that it often had so long a circulation: that the original forger were so seldom he who bore the final smart of it! Lies, and the burden of evil they bring, are passed on; shifted from back to back, and from rank to rank; and so land ultimately on the dumb lowest rank, who with spade and mattock, with sore heart and empty wallet, daily come in contact with reality, and can pass the cheat no further.

Observe nevertheless how, by a just compensating law, if the lie with its burden (in this confused whirlpool of Society) sinks and is shifted ever downwards, then in return the distress of it rises ever upwards and upwards. Whereby, after the long pining and demi-starvation of those Twenty Millions, a Duke de Coigny and his Majesty come also to have their ‘real quarrel.’ Such is the law of just Nature; bringing, though at long intervals, and were it only by Bankruptcy, matters round again to the mark.

But with a Fortunatus’ Purse in his pocket, through what length of time might not almost any Falsehood last! Your Society, your Household, practical or spiritual Arrangement, is untrue, unjust, offensive to the eye of God and man. Nevertheless its hearth is warm, its larder well replenished: the innumerable Swiss of Heaven, with a kind of Natural loyalty, gather round it; will prove, by pamphleteering, musketeering, that it is a truth; or if not an unmixed (unearthly, impossible) Truth, then better, a wholesomely attempered one, (as wind is to the shorn lamb), and works well. Changed outlook, however, when purse and larder grow empty! Was your Arrangement so true, so accordant to Nature’s ways, then how, in the name of wonder, has Nature, with her infinite bounty, come to leave it famishing there? To all men, to all women and all children, it is now indutiable that your Arrangement was false. Honour to Bankruptcy; ever righteous on the great scale, though in detail it is so cruel! Under all Falsehoods it works, unweariedly mining. No Falsehood, did it rise heaven- high and cover the world, but Bankruptcy, one day, will sweep it down, and make us free of it. (Thomas Carlyle, via Mencius Moldbug, but cited all over the place recently)

Here it comes.


Suspended Animation (Part 4)

Playing for time

By the beginning of the second decade of the new millennium, the world had begun to adapt itself to a problem that had tortured it in the 1930s, and deformed it subsequently — that of sub-optimal equilibrium. The practical significance of this idea is difficult to exaggerate.

As a rigorous economist, Henry Hazlitt was theoretically entitled – and even compelled – to savagely deride the Keynesian model of ‘low-employment equilibrium’, and to painstakingly explain that it did not describe an equilibrium of any kind (in economic terms). Yet such attacks, like those of the Austrians more generally, have been of slight consequence, since Keynes was not in any strongly defensible sense an economist, but rather a political economist, in both of the obvious ways this expression can be understood. His bad equilibrium did not reflect the operation of market forces, but rather, the workings of the market under a specific conception of politically realistic circumstances, and the ‘analysis’ of the General Theory was less a technically rigorous description of events than a political prescription for action, keenly attentive to the opportunities and constraints affecting its application, or transition into policy.

Keynes defined the political spirit of the second half of the 20th century, first in the West, and later more widely, by normalizing the pre-eminence of the state in economic affairs, and by subordinating the idea of economic self-correction to political considerations. The role of the new political economy, now technocratically mainstreamed as economic policy, was to route around labor markets, which could never be expected to work efficiently, since downside corrections were judged politically unacceptable. Pure economics was ended, or at least utterly marginalized, by the recognition that labor could opt out of the game, kick over the table, and refuse to play the commodity. Market-clearing labor pricing became an abstract (and, for Keynesians, risible) conception, oblivious to the realities of popular democratic politics, and – in extremis – the potential for Marxian revolution.

Hence the consensus-building sympathy for the Keynesian approach on the establishment right, where it was interpreted as a bulwark against Marxist temptations, and also the deep antipathy it elicited on the anti-establishment right, where it was (no less realistically) understood as a pre-emptive concession to socialism. On the left, a comparable schism was evident, between those who embraced it as a curtailment of capitalism, and those who denounced it as an ersatz socialism, designed for conservative convenience. The Keynesian ‘middle’ has been the decisive political reality of the 20th century, and its multiple ideological meanings still organize every major axis of socio-economic controversy.

When labor markets are locked on the downside – through macroeconomic recognition and political petrification of their ‘stickiness’ – some kind of socio-economic ratchet mechanism is automatically produced. To an extent, capital can flee into informalization (for instance illegal immigrant labor), or international labor arbitrage, intensifying the trend to out-sourcing and globalization. More central, however, are the twin macro-tendencies Keynes focused upon: towards fiscal and monetary compensations, based on demand management and the exploitation of ‘money illusion’ (or attachment to nominal income). Fiscal stimulus can be undertaken in an attempt to elevate demand, until it reaches a point of artificial equilibrium commensurate with labor price levels (thus clearing unemployment). Alternatively, or in concert, money supply can be expanded – and currency degraded – to facilitate real wage decreases despite nominal stickiness.

Essentially, that’s it. There’s no other ammo in the macroeconomic arsenal. This is remarkable given the fact that both fiscal and monetary adjustments are mere tricks, and not even sophisticated tricks, but quite straightforward attempts at confidence manipulation that anybody with ‘rational expectations’ sees through immediately, thus neutralizing them. On the monetary side this is especially obvious — and well-attested historically. Once inflationary expectations have become entrenched, they become the staple topic of wage negotiations, as was seen in the 1970s. There is no evidence whatsoever to suggest that workers are indifferent to inflationary wage depreciation. ‘Money illusion’ – insofar as it exists at all – is basically a one-off scam, harvested in the brief period when a long-established reputation for responsible currency management is thrown in the trash. Fool me once, shame on you, fool me twice isn’t going to happen. Basing economic policy on this is the cheapest kind of street hustle (and few would any longer admit to trying it in public).

Stimulus isn’t much better. Real demand is ultimately exchange, and thus derivative from supply. Nobody can (economically) demand anything, without having something to offer in return – that’s Say’s Law, and it’s theoretically impregnable, because it’s elementary common sense. The only way to steer around it is conjuring, by extracting demand from one part of the economy invisibly, and re-inserting it conspicuously somewhere else. This kind of magic can get quite Byzantine, so it tends to reach exhaustion more slowly than monetary abuse, but its foundations in sustainable economic reality are no more secure. Once taxpayers acknowledge government debts as liabilities (future tax payments) that have already been virtually deducted from their spending power, the game is over. Since a plausible model for (expansive) fiscal policy exhaustion is sovereign debt crisis, it is not unreasonable to begin drawing the curtains already.

Given the exponential trend of social history, most of what has ever happened has taken place since the Great Depression began, and during this time the world has inhabited — more or less consciously — a deliberately constructed system of illusion, or confidence trick. Whether analyzed from the left or the right, the most striking feature of this situation has been inadequately apprehended, or even interrogated: how has it persisted? How can something that is transparently [insert epithet] unworkable last for over 80 [insert triple epithet] years?

Eighty years is a pretty good human life-span. Someone could easily expend their life within the Keynesian dream-palace, literally living a lie, with the implication that whatever importance ‘reality’ might have in theory, it need have almost nothing to do with us. We can miss it completely, caught up in a magic show that exceeds our longevity, half-hypnotized by illusions that no one really believes in, but which suffice to put things off, and off, and off, and … in the long run we are all dead. Who cares about a truth that never arrives? A magic trick that lasts your whole life is your life. Scarcely anybody alive today has known anything else.

And it’s all going to be over real soon … honestly …