Twisted Times (Part 1)

Abe: “You should go to China.”

Joe: “I’m going to France.”

Abe: “I’m from the future. You should go to China.”
Looper

In Rian Johnson’s Looper (2012), the city of Shanghai reaches back across 30 years to draw people in. Over these decades it feeds itself based on what it is to become: the city of the future. When compared to this, everything else that happens in the movie is mere distraction, but we won’t get there for a while.

Strangely enough, ‘everything else’ was to have been simply everything. Joe was going to Paris, and Shanghai wasn’t even in the picture. That was before Chinese authorities told Johnson that they would cover the cost of the Shanghai shoot, making the film a co-production, with convenient access to the Chinese cinema market. The Old World stood no chance.

For American audiences, Looper played into the trend of opinion, through its contrasting urban visions of a grim, deteriorated, crime-wracked Kansas City and the splendors of a ‘futuristic’ Shanghai. The movie doesn’t answer the question: How did America lose the future? It nevertheless accepts the premise, as something close to a pre-installed fact.

Yet if Looper confirmed the direction of American popular attitudes, it marked a shift on the Chinese side. Only a few years before, Western media reported with amusement that the Chinese broadcast authorities had banned time-travel fictions from the nation’s airwaves, apparently concerned that the country’s citizens were defecting into a pre-republican past, under the influence of narratives that “casually make up myths, have monstrous and weird plots, use absurd tactics, and even promote feudalism, superstition, fatalism and reincarnation.” Now a time-travel story was being actively recruited to close an urban promotion loop, linking Shanghai’s international image to a portrayal of retro-chronic anomaly. The Shanghai time-travel industry had arrived.

Before proceeding to a multi-installment investigation of Topological Meta-History tangled time-circuitry, which ‘time-travel’ illustrates only as a crude dramatization, it is worth pausing over Looper’s ‘monstrous and weird plot’. Time-travel has a uniquely intimate, and seductively morbid, relationship to both fiction and history, because it scrambles the very principle of narrative order in profundity. If Western media authorities assumed the same role of cultural custodianship that has been traditional among their Chinese peers, they too might have been compelled to denounce a genre that flagrantly subverted the foundational principle of Aristotelian poetics: that any story worthy of veneration should have a beginning, a middle, and an end. If time-travel can occur, it seems (at least initially) that order is an illusion, so that fiction and reality switch places.

From a conservative perspective, therefore, comfort is to be found in the blatant absurdity of time-travel stories (insofar as this can be confined to a reductio ad absurdam of the time-loop structure itself, rather than spreading outwards as the index of primordial cosmic disorder). In this respect, Looper is a model of tranquillization.

The Looper time-travel procedure is monopolized by a criminal syndicate, which utilizes it exclusively for one purpose: the disposal of awkward individuals, who are returned 30 years in time to be murdered, execution-style, by professional killers (yes: “This sounds pretty stupid”). The exorbitant absurdity of this scenario might exempt it from further critical attention, were it not the symptom of more interesting things, and the doorway onto others.

The symptom first: Non-linear time-structures are shaken to pieces almost immediately, once they allow for the transportation of stuff backwards in time. Looper economics exposes this with particular clarity. The killers of 2044 are paid in bars of silver for ‘ordinary’ hits, and in gold for ‘closing loops’ or executing their retro-deposited older selves. The bars are sent back from 2074, and circulated through an internal exchange operation, which swaps bullion for (Chinese) paper currency. Whilst this crude time-circuit is presented as a payments system, the process described actually functions as an under-performing money-making machine. By using it, one realizes the ultimate Austrian economic nightmare by printing precious metals, because an ingot sent backwards in time is doubled, or added to its ‘previous’ instance (which already exists in the past). Mechanical re-iteration of the process would guarantee exponential growth for free. We’re not told what the 2074 criminal organization sees as its core business, but it must be seriously lucrative — exciting enough, in any case, to distract them from the fact that their murder-fodder machine is really a bullion fast-breeder. They could have shoveled it full of diamonds, doubling their fortune each ‘time’, but they decided instead to duplicate human nuisances in 2044. The movie asks us quietly to suspend our impertinent disbelief, and trust that they know what they’re doing.

Mike Dickison’s excellent Looper commentary succinctly describes this implicit procedure for unlimited wealth, among other incredibly missed opportunities. It surely has to count as a criticism of the movie that its rickety framework of plot coherence is dependent upon the imbecility of its significant agents, who stumble blindly past the prospect of total power in their ruthless pursuit of a miserable racket. This absurdity, as already noted, serves a conservative purpose: The potential of the loop has to be suppressed to sustain narrative drama and intelligibility. The basic flaw of the movie is that far too much was given, before most of it was clumsily taken away.

In the absence of controlling censors, Johnson’s story represses itself, messily, comically, and unconvincingly. “This time travel crap, just fries your brain like a egg,” the elder Joe (Bruce Willis) confesses on Johnson’s behalf. Unleashed time-travel is an anti-plot, inconsistent with dramatic presentation. (If you’re not willing to take Aristotle’s word for that, watching Primer a few dozen times should sort you out.) Narrative wreckage is what time-travel does.

Time-travel absurdity is a choice. It is a decision taken, at least semi-deliberately, for conservative or protective reasons, because the alternative would be ruin. Even the representation of (radically nonlinear) time anomaly by ‘time-travel’ is indicative of this, since it is programmed by the preservation of a narrative function (the ‘time-traveler’), regardless of conceptual expense. Far rather the incoherent jumble of matter duplication, time-line proliferation, immunized strands of personal memory, and the arbitrary inhibition of potentialities, than utter narrative disorder, fate loops, the annihilation of agency, and the emergence of an alien consistency, subverting all historical meaning.

If the mask of time-travel has slipped enough to expose some hint of the intolerable tangle beneath, we’re ready to take the next step …

(This will help.)

[Tomb]

What We Deserve

Good? Probably not. But hard – oh yes (oh yes!)

Obama got what he wanted — a second term. Now the people who voted for him are going to get what they voted for… and what they deserve — a financial collapse that makes 2008 seem like the good ‘ol days.– ‘libertarianNYC

Because when Maistre says that every nation gets the government it deserves, I believe him. Maistre didn’t think his great law was a law of physics. He thought it was a law of God. I am not a religious person, but I agree. History has convinced me that when laws of God are broken, bad shit happens. – Mencius Moldbug

Deserving’ must be the most useless and obfuscating word in the dictionary.Maurice Spandrell

The mysteries of the ideological spectrum are deep enough to absorb endless exploration. Why, for instance, should there be an ideological spectrum at all? Are not human disagreements over social decisions naturally multi-dimensional? How can opinions about the optimum scale of government statistically predict attitudes to affirmative action, immigration, gun control, drug prohibition, abortion, gay marriage, climate change, and foreign policy? Does it not seem near-magical that the seating arrangements of the late-18th century French National Assembly continue to organize the terminology of ideological orientation up to the present day?

At times, however, perplexity recedes, and certain basic patterns emerge with startling clarity. This is evident today in the United States – the world’s great circus of ideological antagonism — in the wake of its latest, spectacular performance.

As polarization intensifies – which it does – the essential is expressed through the extremes, and the alternatives are simplified. Which is it to be: politics or economics? There can be no sustainable co-existence. One must utterly eradicate the other.

Either politics, or economics, deserves to be completely destroyed — politics for its incontinent lust for absolute power, or economics for its icy indifference to public concerns. The conflict of visions is irreconcilable. From the pure perspective of terminal politics, all market rewards are arbitrary and illegitimate, whilst from that of economics, people are entitled to precisely nothing.

Speaking on behalf of the political losers, Russ Roberts (at Cafe Hayek) adopts a light-hearted approach:

Talking about the election to many friends and family who had been rooting for Romney, I found their emotions ran the entire gamut from despair to despondency. Everybody was way down. I found myself unexpectedly blue as well. Our emotions were not so much caused by the Romney defeat. Few of us were particularly excited about him. It was the Obama victory that concerned us. … There was plenty to be discouraged about before this election. I’m not sure the election provides much new information.

The despair of the Right is not the product of a single lamentable election result, but is grounded in the relentlessly gathering realization that it is inherently maladapted to politics. When the Right attains power, it is by becoming something other than itself, betraying its partisans not only incidentally and peripherally, through timidity or incompetence, but centrally and fundamentally, by practically advancing an agenda that almost perfectly negates its supposed ideological commitments. It builds that which it had promised to destroy, and further enthralls that which it had promised to liberate. Its victories mean ever less, its defeats ever more. To win is at most a lesser evil, whilst to lose opens new, unprecedented horizons of calamity, initiating previously unimagined adventures in horror.

Dean Kalahar captures the mood:

The electorates’ decision once and for all confirms a definition of America that values hopes, feelings and equality of results over the realities of human nature, history, and the foundational principles that hold western civilization together. There is now no doubt that the tipping point of geometrically increasing cultural decline has been crossed. … Our economic system has lost the culture war.

The left has its own frustrations, which its ever-greater approximation to total political dominion cannot appease, and in fact exacerbate. The more that it subordinates its enemies to its will, the more its will conforms to the image of its enemies – not the economy as it was, evasive and morally disinterested, but the economy as it was caricatured and denounced: narrowly and brutally self-interested, sublime in its gargantuan greed, radically corrupt, and irreparably dysfunctional. The cartoon plutocrat re-appears as the consummate political insider in a shot-silk Che Guevara tee-shirt, minutely dictating the content of legislation, and pursuing a career trajectory that smoothly alternates between the chairs of regulatory agencies and Wall Street boardrooms. Through a perverse, ineliminable double-entry book-keeping, the fiscal mountains of government largesse are registered, simultaneously, as an orgiastic feast of crony capitalist money creation. Public altruism and private avarice lock into exact logico-mathematical identity.

The gyre turns. ‘Right’ administrations become sclerotic big government bureaucracies, whilst ‘Left’ administrations become the cynical public relations façade for rapacious banking cartels. In either case, government equates to treachery, executed by a party that necessarily abuses its own political partisans. Since politics is ever-increasingly the preserve of the Left, this is not an oscillator, but a ratchet, with a predictable direction (into Left Singularity, “moving the electorate ever leftwards by making it ever more dysfunctional”).

The Right, the party of the economy, is losing all credibility as a Party, especially to itself. In the war of annihilation that contemporary ideological schism has become, the substitute, characteristic battle-cry could be confidently anticipated, even were it not already so distinctly heard: the market will avenge these offenses. Nemesis. Let the temple crash.

Expect to hear much more of this, however much it revolts you.

Things will fall apart (even more, far more …), or not, but in either case we will know what we really deserve. Reality is God, but which is the true religion?

In the immortal words of HL Mencken: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”

[Tomb]

Regime Redecoration Randoms

Which lucky guy gets to take the blame?

Here in Shanghai, we receive the US presidential election results on Wednesday morning, making this the last chance to venture reckless predictions. Who gets to seize the poisoned chalice and assume responsibility for the financial collapse of the United States of America?

Feel the hate. Negativity reigns supreme in this election, with oppositional or defensive motivations almost wholly purified of positive contamination. According to The Economist, negative political ads have accounted for an unprecedented 90% of the total. The words of PJ Media commenter Subotai Bahadur distill the sentiment perfectly: “Romney was not my first, second, or third choice, but I will crawl over ground glass to vote for him.” To be fondly remembered as ‘the ground-glass election.’

Way of the Salamander. Urban Future isn’t inclined to deride Mormonism as weird (being weird is what religions are for), but there are bound to be significant cultural implications to the inauguration of a Mormon president in an unusually apocalyptic time. The Mormon faith is the science fiction version of Abrahamic religion extending an evolutionary bridge from man to God – a path of practical divinization. No surprise, then, to discover that there’s a Mormon Transhumanist Association. When combined with the irreverence that latches onto any decaying, chaos-wracked administration it could get seriously entertaining …but then we’d miss the classic version of Cathedral II (Return of the Clerisy), replaced by a strange re-make. Voters need to choose their flavor of ground glass carefully.

Prophet motive. At Zero Hedge, Strauss & Howe generational cycle-theorist Jim Quinn hangs on to the apocalyptic theme. He argues that – at the brink of the ‘Fourth Turning’ – Mitt Romney’s age, which places him in the ‘prophet generation’, makes him odds on favorite to lead the global superpower into Armageddon (so we have that to look forward to).

Reckless predictions?

(1) Discounting systematic media dishonesty points to a substantial Romney victory.

(2) Winning this one is going to have been the most stupid thing that the stupid party ever did.

[Tomb]

Bonfire of the Vanities

The road to hell is paved with good intentions

As an ideological mantra, ‘Never Again’ is associated primarily with the genocide politics of the 1940s, and in this context its effectiveness has been questionable, at best. As a dominating imperative, it has been vastly more consequential within the economic sphere, as a response to the Great Depression of the 1930s. Whilst ethnically selective mass killing is widely frowned upon, its attractions have been difficult to suppress. Deflationary depression, on the other hand, is simply not allowed to happen. This has been the supreme axiom of practical morality for almost a century, uniquely and distinctively shaping our age. We can call it the Prime Directive.

For the Western world, the 1930s were a near-death experience, an intimate encounter with the abyss, recalled with religious intensity. Because the threat was ‘existential’ – or unsurpassable – the remedy was invested with the absolute passion of a faith. The Prime Directive was adopted as a basic and final law, to which all social institutions and interests were subordinated without reservation. To question or resist it was to invite comprehensive disaster, and only a radically uninformed or criminally reckless heretic – a ‘crank’ – would do that. Anything is better than deflationary depression. That is the New Deal Law.

The consolidation of financial central planning, based on central banking and fiat currencies, provided the priesthood of the Prime Directive with everything it needed to ensure collective obedience: No deflationary depression without deflation, and no deflation with a well-oiled printing press. ‘Counter-cyclical’ inflation was always an option, and the hegemony of Anglophone economic-historical experience within the flourishing American century marginalized the memory of inflationary traumas to global backwaters of limited influence. Beside the moral grandeur of the Prime Directive, monetary integrity counted for nothing (only a crank, or a German, could argue otherwise).

The Prime Directive defines a regime that is both historically concrete and systemically generalizable. As Ashwin Parameswaran explains on his Macroeconomic Resilience blog, this type of regime is expressed with equal clarity in projects to manage a variety of other (non-economic) complex systems, including rivers and forests. Modern forestry, dominated by an imperative to fire suppression, provides an especially illuminating example. He notes:

The impetus for both fire suppression and macroeconomic stabilisation came from a crisis. In economics, this crisis was the Great Depression which highlighted the need for stabilising fiscal and monetary policy during a crisis. Out of all the initiatives, the most crucial from a systems viewpoint was the expansion of lender-of-last-resort operations and bank bailouts which tried to eliminate all disturbances at their source. In [Hyram] Minsky’s words: “The need for lender-of-Iast-resort operations will often occur before income falls steeply and before the well nigh automatic income and financial stabilizing effects of Big Government come into play.” (Stabilizing an Unstable Economy pg 46)

Similarly, the battle for complete fire suppression was won after the Great Idaho Fires of 1910. “The Great Idaho Fires of August 1910 were a defining event for fire policy and management, indeed for the policy and management of all natural resources in the United States. Often called the Big Blowup, the complex of fires consumed 3 million acres of valuable timber in northern Idaho and western Montana…..The battle cry of foresters and philosophers that year was simple and compelling: fires are evil, and they must be banished from the earth. The federal Weeks Act, which had been stalled in Congress for years, passed in February 1911. This law drastically expanded the Forest Service and established cooperative federal-state programs in fire control. It marked the beginning of federal fire-suppression efforts and effectively brought an end to light burning practices across most of the country. The prompt suppression of wildland fires by government agencies became a national paradigm and a national policy” (Sara Jensen and Guy McPherson). In 1935, the Forest Service implemented the ‘10 AM policy’, a goal to extinguish every new fire by 10 AM the day after it was reported.

In both cases, the trauma of a catastrophic disaster triggered a new policy that would try to stamp out all disturbances at the source, no matter how small.

At Zerohedge, The World Complex elaborates on the history of fire suppression in the United States:

The forests of the southwestern United States were subjected to a lengthy dry season, quite unlike the forests of the northeast. The northeastern forests were humid enough that decomposition of dead material would replenish the soils; but in the southwest, the climate was too dry in the summer and too cool in the winter for decomposition to be effective. Fire was needed to ensure healthy forests. Apart from replenishing the soils, fire was needed to reduce flammable litter, and the heat or smoke was required to germinate seeds.

In the late 19th century, light burning — setting small surface fires episodically to clear underbrush and keep the forests open — was a common practice in the western United States. So long as the fires remained small they tended to burn out undergrowth while leaving the older growth of the forests unscathed. The settlers who followed this practice recognized its native heritage; just as its opponents called it “Paiute forestry” as an expression of scorn (Pyne, 1982).

Supporters of burning did so for both philosophical and practical reasons — burning being the “Indian way” as well as expanding pasture and reducing fuels for forest fires. The detractors argued that small fires destroyed young trees, depleted soils, made the forest more susceptible to insects and disease, and were economically damaging. But the critical argument put forth by the opponents of burning was that it was inimical to the Progressive Spirit of Conservation. As a modern people, Americans should use the superior, scientific approaches of forest management that were now available to them, and which had not been available to the natives. Worse than being wrong, accepting native forest management methods would be primitive.

Spelling out the eventual consequences of the ‘progressive’ reformation of forest management practices probably isn’t necessary, since – in striking contrast to its economic analog – its lessons have been quite thoroughly absorbed, widely and frequently referenced. Ecologically-sophisticated environmentalists, in particular, have become attached to it as a deterrent model of arrogant intervention, and its perverse consequences. Everybody knows that the attempt to eliminate forest fires, rather than extinguishing risk, merely displaced, and even accentuated it, as the accumulation of tinder transformed a regime punctuated by comparatively frequent fires of moderate scale with one episodically devastated by massive, all-consuming conflagrations.

Parameswaran explains that the absence of fires leads to fuel build-up, ecological drift towards less fire-resistant species, reduction in diversity, and increased connectivity. The ‘protected’ or ‘stabilized’ forest changes in nature, from a cleared, robust, mixed, and patch-worked system, to a fuel-cluttered, fragile, increasingly mono-cultural and tightly interconnected mass, amounting almost to an explosive device. Stability degrades resilience, and preventing the catastrophe-to-come becomes increasingly expensive and uncertain, even as the importance of prevention rises. By the penultimate stage of this process, crisis management has engineered an impending apocalypse: a disastrous event that simply cannot possibly be allowed to happen (although it surely will).

Parameswaran calls this apocalyptic development sequence The Pathology of Stabilisation in Complex Adaptive Systems. It’s what the Prime Directive inevitably leads to. Unfortunately, diagnosis contains no hint of remedy. Every step up the road makes escape more improbable, as the scale of potential calamity rises. Few will find much comfort in the realization that taking this path was insane.

‘Black-boxes’ (or flight recorders) retrieved from air disasters are informative in this respect. With surprising regularity, the last words of the pilot, announced to no one in particular, eloquently express an acknowledgment of unattractive but unmistakable reality: “Oh $#it!” Less common – in fact, unheard of – is any honest address to the passengers: “Ladies and gentlemen, this is your captain speaking. We are all about to die.” What would be the point?

Everything to be realistically expected from our ruling political and financial elites can be predicted by rigorous analogy. This flight doesn’t end anywhere good, but it would be foolish to await an announcement.

Unencumbered by official position in the Cathedral of the Prime Directive, ‘Mickeyman’ at World Complex is free to sum things up with brutal honesty:

We have lived through a long period of financial management, in which failing financial institutions have been propped up by emergency intervention (applied somewhat selectively). Defaults have not been permitted. The result has been a tremendous build-up of paper ripe for burning. Had the fires of default been allowed to burn freely in the past we may well have healthier financial institutions. Instead we find our banks loaded up with all kinds of flammable paper products; their basements stuffed with barrels of black powder. Trails of black powder run from bank to bank, and it’s raining matches.

[Tomb]

Signs of Progress

How the modern world lost its senses

The more sophisticated animals become, the worse they get at connecting with reality. As they cephalize, and socialize, stories substitute for reflexes, and the survival value of a story owes almost nothing to its factuality. Believing what everyone else does, or what makes you feel good, counts for vastly more. Wherever it is that discussion leads, it is only very rarely, and accidentally, in the direction of reality.

Science begins with the realization that stories aren’t to be trusted, even – or especially – if they sound credible, conform to prior intuitions, and readily attain social approval. Since narrative satisfaction is the great deceiver, science reaches beyond language into the vast frigid tracts of mathematical signs, stripped clean of all moral and emotional significance. Hardening itself against the temptation to see faces in the clouds, or hear voices from the heavens, it digs determinedly into the test-bed of numbers and quantitative signals, where seductive words are led to die.

Economics has never been a science, but economic behavior, and even theory, has been able to avail itself of a measure of leverage against story-telling. Its great resource in this regard has been the price system, expressed in ‘meaningless’ quantities (without immediate narrative significance) which enable economic calculation to sustain a posture of ideological indifference. An accountant who tells a story is a bad accountant, and most probably a criminal, whilst an entrepreneur fixated upon a story of how things ‘must be’ is subject to market-Darwinian nemesis. That, at least, is how laissez-faire hard money capitalism once roughly worked, as attested for instance by the indignation of Charles Dickens, who insisted upon the right of moral, political, and religious story-telling in the midst of a process that systematically disdained it.

Things have progressed incalculably since then, in a direction that could be confidently described as ‘Dickensian’ if that adjective had not already been settled in its highly-effective polemical purpose. That ‘the Big Story’ (BS) would triumph over calculative Scroogean realism was perhaps entirely predictable, but the near-metaphysical comprehensiveness of its victory – and its revenge — was less easy to anticipate. When attempting to gauge this progress, money is the best indicator, or rather, the destruction of money as an indicator is the most telling sign.

Under the conditions of hard money industrial capitalism, progress follows two, rigorously accounted tracks. Most notoriously, it is measured as a process of accumulation, or the amassing of fortunes through profitable business activity. Economic intelligence is socially dispersed along with the multitude of fortunes, with each unit of capital accompanied by its own (Scroogish) accounting function, weighing revenues against outlays, and estimating the viability of continued operation. This intelligence does not lend itself to convenient or reliable public aggregation.

Accompanying the multiplicity of private progressions (and regressions), there is a second track measuring social advance in strictly quantitative, meaningless, and unambiguous terms. On this track, technical and organizational improvements in business activity overspill private accounts, and take the form of public ‘externalities’. Under any monetary system competent to register reality, such general social advances are expressed as falling prices, cost reduction, or deflation. (A typically insightful Zero Hedge post on the topic can be found here.)

The importance of this point is difficult to over-emphasize, especially since it directly contradicts our carefully fabricated neo-Dickensian common sense: Deflation! Isn’t that kind of like fascism or something?

Deflation can certainly represent a type of socio-economic misfortune, under specific conditions. During business cycle downturns, for instance, it can reflect fire-sale asset or inventory reductions, driven by, and exacerbating, credit crises. The seriousness and typicality of such cases is strongly asserted in the dominant (neo-Dickensian) story of the Great Depression. It is worth noting, however, that even under these circumstances – at the worst – the first-order effect of deflation is to generate a spontaneous increase in affluence, or spending power. When life is at its toughest, it gets cheaper to live.

In the hard money world, chronic mild deflation simply is social progress. The two concepts are effectively indistinguishable. Gentle deflation is the invisible hand out, giving everybody a little more of almost everything, year by year, as it spontaneously distributes a fraction of the ‘social surplus’, or public dividend on rising productivity. Even in today’s radically progressed world of ruined money, the output of the consumer electronics industry still manages to exhibit the deflationary trends that have been obliterated elsewhere (so next time you buy a gizmo, don’t forget to feel appropriately oppressed.)

What the hell in heavens happened? How did modernity’s metallo-monetary senses get turned off, rapturing Scrooge into a Christmas Carol, and eclipsing industrial reality? One obvious neo-Dickensian go-to guy for that is William Jennings Bryan (1860-1925), a politician whose multi-dimensional war against reality – truly astounding in its consistency – represents enthusiasm for the Big Story (or ‘social gospel’) at its most uncompromised. Either Bryan’s anti-Darwinism (the Scopes trial) or his ardent prohibitionism (campaigning for the 18th amendment) would have sufficed to earn him a place in the historical record as a hero of the BS (‘evangelical’ or ‘progressive’) State, but his most enduring legacy rests upon the speech he delivered on July 9, 1896, to the Democratic National Convention in Chicago, in which he declared – as if to Scrooge himself – that “You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.”

This is a declaration that is sublimed to progressive universality through the elimination of context. Embedded within the late 19th century debates on bimetallism (price-fixing of gold-silver exchange rates), its present implications are significantly diluted, or at least complicated, by questions about the financial responsibility of central authorities, creditor-debtor class warfare, global economic integration, agrarian-urban tensions, and (East-West) regional politics in the USA. Yet, fundamentally, it can be recognized as ‘Dickensian’: the passionate denunciation of a neutral criterion for economic reality, precisely for its neutrality, or indifference to Big Story moral-historical narrative. Gold is cold. It measures without judgment. Between damnation and salvation it demonstrates no preference or inclination.

Concretely, gold was registering, in economic terms, the social upheaval of American industrial urbanization. Mechanization of agriculture implied falling food prices, ruination of small farmers, and rural depopulation, during a sustained process of massive disruption whose miseries were only exceeded by the socio-economic revitalization in its wake. In its distribution and in its accounting function, gold facilitated the depreciation of rural labor, the bankruptcy of misallocated businesses, and the empowerment of concentrated industrial capital in the nation’s rising urban centers. Bryan articulated the views of those at the sharpest edge of this shift, who found the messenger culpable for the message, the senses guilty for the scene: “If thine eye offends thee pluck it out” (Matthew 18:9). (Even though Bryan lost all three of his presidential elections bids, we’re all totally plucked.)

To make of money a vehicle of moral purpose, rather than a neutral registry of fact, is to make the crossing from liberalism and progress as they were once understood (dynamic industrialism), to the progressive liberalism of today (political evangelism). If money can save us (through ‘demand management’), as the Keynesians insist, then its politicization is a moral imperative, whose neglect is a sin of omission. The senses are transformed into story-tellers. Shut the windows, and listen to the Christmas Carol. It’s progress (honestly).

[Tomb]

New Year Cheer

There’s a lot of ruin in a global madhouse

2012 is a year that arrives pre-branded. It’s the last opportunity to end the world on schedule. By the end of December the window for apocalyptic profundity will have closed, and it’s back to the hazards of random, meaningless catastrophe.

Perhaps a prophetic consensus will have emerged by the fall, but right now the outlook is foggy at best. Trawling through the Web’s most excitable 2012 sites doesn’t bring anything very definite into focus. Once discussion advances beyond the fairly solid foundation of the Mayan long count, and the Fourth Age of Creation (lasting from August 11, 3114 BC, to December 21, AD 2012), things spin off into chaos with disconcerting rapidity.

Whether the earth is destined to plunge into a black hole is a matter of (at least limited) controversy, but the fact that just about every imaginable species of prospective calamity or transformation is being sucked into the 2012 prophetic vortex is easily confirmed by anybody with a web browser. Even the basic genre remains unsettled, with expectations veering wildly from celestial collisions, solar flares, and super-volcanoes, to spiritual awakenings, cosmic harmonizations, and countless varieties of Messianic fulfillment. According to the sober forecasters at 2012apocalypse.net: “The Mayans, Hopis, Egyptians, Kabbalists, Essenes, Qero elders of Peru, Navajo, Cherokee, Apache, Iroquois confederacy, Dogon Tribe, and Aborigines all believe in an ending to this Great 2012 Apocalyptic Cycle.” They missed out Mother Shipton, Nostradamus, Terence McKenna, Kalki Bagavan, and Web Bot, yet somehow the Cracked crew remain unconvinced.

As an aside, the best line UF has yet seen among the deniers (sorry, couldn’t resist that), is this deliciously self-undermining specimen from Ian O’Neill: “No one has ever predicted the future, and that isn’t about to change.”

In an increasingly desegregated cultural landscape, it’s not easy to separate out secular history and sensible opinion from the orgiastically gathering End Times festival, and – strangely enough – the world process isn’t doing much to oblige. Ritualistic predictions-for-the-year-ahead posts on politics and economics sites are practically indistinguishable from the 2012 Armageddon-is-here prophecies, although the sane side of prognostication is characterized by a greater uniformity of unrelenting bleakness: Comprehensive economic collapse, aggravated by administrative sclerosis, and accompanied by escalating international conflict / social disintegration, amidst the enraged screams of splintering civilizations (and a ‘Happy New Year’ to you, too.)

Goldbug Darryl Robert Schoon demonstrates some professional hedging, but he doesn’t even try to keep impending financial crisis from spilling out into cosmic immensities:

The ending of the Mayan calendar in 2012 is as misunderstood as the interplay between credit and debt and supply and demand; but the coincident collapse of the current economic paradigm and an arcane indicator of change should not be dismissed. … The current great wave [of rising prices] began in 1896. That it could crest and break in 2012 could be a coincidence. Or, it may not.

Science, technology, creative culture, and enterprise are likely to spring some upside surprises, but the degenerative horror of the world’s hegemonic Keynesian political economy – combined with increasingly irresponsible neoconservative democracy-mongering — has ominously synchronized itself with the darkest visions of the 2012 cults. A patently dysfunctional mode of socio-economic organization, based upon fake money, belligerent idiocracy, and electorally-enabled looting scams, is aggressively imposing itself – with an almost incomprehensible absence of self-reflection — upon a world that already has plenty of indigenous pathologies to contend with. The resulting New World Order, entirely predictably, is a lunatic asylum, and even its most functional components (such as Singapore and the Chinese SARs of Hong Kong and Macao) are networked into the collective delirium. When the Euro, Japanese Yen, and US Dollar collapse (probably in that order) the financial and geopolitical tsunami will wash over everybody. If that doesn’t happen in 2012, history has no sense of narrative climax at all.

On the ‘bright’ side – for all the can-kickers out there – the words of Adam Smith that have defined 2011 continue to resonate. “Young man, there’s a lot of ruin in a nation,” and even more in a global system. Perhaps the slow-motion disintegration of hegemonic neo-fascism Keynesian social democracy will spin itself out beyond the horizon of the Mayan calendar, which would really give us something to look forward to …

[Tomb]

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 …

[Tomb]

Suspended Animation (Part 3)

The dead hand of the state

I wish I was saying it’s going to happen soon… this is the longest running crisis in which people have been giving false dates, people turning up for summits saying it has to be resolved, nothing happens and people go away and the sky doesn’t fall in… sooner or later the sky will fall in, I’m just not clever enough to know when it’s going to be.
— Anthony Fry, UK Chairman of Espirito Santo Investment Bank (to CNBC)

Europe will adopt the American solution. The ECB will not allow large banks to default. It will inflate to buy the bad assets or else buy the bonds of the governments, so they can make payments. Then the bankers will put this money into excess reserves. New lending to businesses will cease. The West will go into permanent recession or no-growth stasis. The governments will absorb an ever-larger percentage of the region’s capital: bond sales. Private firms will not be able to borrow at low rates. Capital development will crease.
— Gary North (here)

The new millennium is teaching us vastly more about zombies than anybody could have anticipated. Long gone are the virile, predatory vampires that once populated horror stories about capitalism, sucking out the vital essence of the proletariat in gothic fortresses of ‘dead labor’. Instead, shambling worm-eaten wrecks mill about aimlessly, whilst augmenting their numbers in obscure cannibalistic circuits that defy rational comprehension and which are, in any case, too hideous to steadily contemplate. Fiends have degenerated into ghouls, who do not hunt and feed to strengthen themselves, but only to carry on, prolonging their putrescent decrepitude.

A 2002 Guardian story about “Japan’s zombie economy” prefigures a number of later, and more general, revelations. In particular, it identifies the spreading zombie apocalypse with the slow-motion collapse of Keynesianism, as ‘stimulative’ monetary and fiscal policies (zero interest rates combined with massive government deficit spending) lose their magical powers of revitalization, and instead merely perpetuate an interminable state of undeath. Hyper-stimulation is required just to hang on to the flatline.

Of course, being the Guardian, the solution is obvious: “what the economy needs now is a good dose of inflation.” For undead Keynesians, there’s no malaise too deep for an invigorating wave of currency destruction to solve. This is where the zombie metabolism really gets interesting. By the end of the decade, America had gone full zombie itself, and begun to realize that this wasn’t just some weird Japanese thing it didn’t understand, but an altogether more general and radically mysterious phenomenon. Ben Bernanke’s Federal Reserve pushed US interest rates to the floor (ZIRP) and began to incontinently monetize public debt (QE) whilst nationalizing private debt (TARP), using every available policy instrument to direct the economy in an inflationary direction, at maximum velocity. Nothing much happened. Zombies don’t do fever.

At this point, the questions come flooding in. For instance: why is anybody still buying Japanese or American government bonds? Isn’t it obvious that this paper represents nothing except a slice of unredeemable debt, promising an insulting return, ‘guaranteed’ by a structurally insolvent entity, and associated with policies more-or-less explicitly oriented towards deliberate currency destruction? What are people thinking? To answer that, it’s necessary to venture a little deeper into the zombie world.

The idea of the US Dollar (or Japanese Yen) as a ‘safe haven’ might sound like a joke, and you’ve probably heard it before:

Joe Dollar and Jacques Euro are camping in the woods, when they suddenly hear the terrifying snuffles of a famished carnivore, getting closer. Joe begins hastily pulling on his running shoes. “What are you doing?” asks Jacques. “You can’t out-run a bear market.”

“I don’t need to outrun the market,” Joe replies. “I just need to outrun you.”

At Asia Times Online, Martin Hutchinson envisages a financial crisis endgame that “eliminat[es] the government debt markets that have formed the centerpiece of the last three centuries,” returning the world to the market-based money and free banking regime of 1693, before the creation of the Bank of England. Paradoxically, however, the prospect of collapse raises the financial potency of the state to an unprecedented level, as the ‘safety’ it promises disconnects from questions of economic competence and reverts to something far more atavistic and Hobbesian. Once everything starts to buckle, credibility attaches to the biggest, meanest, and most ruthless provider of mafia-style ‘protection’. Relativistic (zero- or negative-sum) power politics takes center stage.

A pedestrian but informative financial report from Bloomberg sets it out clearly:

Jim Chanos, founder of the Kynikos Associates Ltd. hedge fund, said that while the chances of a recession may be increasing, the U.S. economy is the “best house in a bad neighborhood”

The US Dollar might be nothing more than the “best looking horse in the glue factory,” but once the financial logic of zombie apocalypse takes over, the implications can be far-reaching. Bloomberg continues:

Ten-year Treasuries erased losses after the U.S. sold $29 billion of seven-year securities at a record low yield of 1.415 percent, wrapping up $99 billion of note sales this week. Ten- year yields fell four basis points to 1.88 percent after climbing as much as four points earlier. The rate is up from a record low of 1.67 percent on Sept. 23.

U.S. Treasuries maturing in seven to 10-years have returned 14 percent this year, outperforming a 9.3 percent return for the broader Treasury market, according to Bank of America Merrill Lynch indexes, as of yesterday [Nov. 23]. 

It’s worth taking a moment to digest these numbers. Nobody expects average US inflation over the next seven years to come in under 1.415% p.a., or under 1.88% over the next ten, so the yield is sheer racketeering. Yet this blatant assault on the lower colon of savers has been compatible with a one-year return of 14% (!) — they’re begging for it. Seriously, who cares if Bernanke is lighting up a fat Cuban with a large bill lifted straight out of their pocket? It just makes him look badder, and that’s what they’re paying for. Gold sounds good in theory, but it doesn’t come with its own attached gangster organization, so hanging onto it through the zombie interlude could be difficult. It’s safer, by far, to invest in the alpha state.

Because this Hobbesian zombinomics is political and relativisitic, there are epsilon states at the other end of the trade, as well as a beta state caught in the middle. Europe isn’t a state at all, of course, which is how the (interminable) final phase of zombinomics got started. Before it changed, however, the EU conjuring act seemed to be going pretty well. Every Eurozone member state issuing government debt in the common currency paid yields that were broadly harmonized, as if Europe was a financially sovereign entity, standing united behind its paper. The realization that economic sovereignty remained national, even after the alienation of monetary sovereignty to the European Central Bank, came as something of a shock, and bond spreads gaped accordingly.

The hallucination of ‘Europe’ as a united, honorary alpha state, rapidly degenerated to reality, recoding government bonds as zombie apocalypse security scrip. Suddenly, Greek bonds stopped having anything much to do with the ECB, and started to mumble promises in Greek – ultimately, that the Greek state would do whatever it took to secure redemption, whilst mobilizing its Olympian powers to maintain social discipline if necessary. A flight for the exits immediately ensued. Ditto, with variations of speed and intensity, for all the epsilons (= PIIGS).

Where to flee? That’s the zombinomic question par excellence (searching for the best looking horse in the glue factory). First choice, for the keenest Hobbes readers, was to head straight to Mr. Big, a.k.a. Benny the Yank, wait politely whilst he finished smoking a mirved nuke, and then beg for protection (that’s your 14% one year jump in the value of a 10-year US Treasury bond, right there). The second choice — more appealing to old-fashioned types who thought economics still counted for something – was to look for comparative financial responsibility closer to home.

Briefly, this route led to genuine quality, but zombinomics quickly resumed its grip:

Switzerland sparked fears of a new currency war on Tuesday [Sept. 6] after it pegged the Swiss franc against the euro in an attempt to protect its economy from the European debt crisis.

The Swiss National Bank in effect devalued the franc, pledging to buy “unlimited quantities” of foreign currencies to force down its value. The SNB warned that it would no longer allow one Swiss franc to be worth more than €0.83 – equivalent to SFr1.20 to the euro – having watched the two currencies move closer to parity as Switzerland became a “safe haven” from the ravages of the eurozone crisis.

… which brings us to Germany, and the latest chapter in the zombie saga — comic or tragic, and probably both, ironic to the point of absurdity in any case. Ruined, shrunken, divided, and traumatized by guilt, post-war Germany sought above all to bury its nationalistic aspirations in Europe. What became the EU was for Germany – as Algeria was for the French foreign legionnaires – a place in which to forget. Now the bond ‘market’, in its increasingly desperate search for a big, tough, disciplinary state (a global beta will do fine), is determined to dig the Teutonic Leviathan from its grave.

With twin memories of Weimar hyper-inflation and statist hyper-assertion still vivid, Germany is stubbornly holding out against the full-zombie option of (monetary and fiscal) financial debauchery counter-balanced by Hobbesian security politics. This reluctance to throw itself into the spirit of the age has, naturally enough, exposed it to relentless international vilification, and the pressure will only increase. It could all get unpleasantly interesting.

[Tomb]

Suspended Animation

Limbo starts to feel like home

According to Herbert Stein’s Law, the signature warning of our age, “If something cannot go on forever, it will stop.” The question is: When?

The central concerns of environmentalists and radical market economists are easy to distinguish – when not straightforwardly opposed – yet both groups face a common mental and historical predicament, which might even be considered the outstanding social discovery of recent times: the extraordinary durability of the unsustainable. A pattern of mass behavior is observed that leads transparently to crisis, based on explosive (exponential) trends that are acknowledged without controversy, yet consensus on matters of fact coexists with paralyzing policy disagreements, seemingly interminable procrastination, and irresolution. The looming crisis continues to swell, close, horribly close, but in no way that is persuasively measurable closer, like some grating Godot purgatory: “You must go on; I can’t go on; I’ll go on.”

Urban Future doesn’t do green anguish as well as teeth-grinding Austrolibertarian irritation, so it won’t really try. Suffice to say that being green is about to become almost unimaginably maddening, if it isn’t already. Just as the standard ‘green house’ model insinuates itself, near-universally, into the structure of common sense, the world temperature record has locked into a flatline, with surging CO2 production showing up everywhere except as warming. Worse still, a new wave of energy resources – stubbornly based on satanic hydrocarbons, and of truly stupefying magnitude – is rolling out inertially, with barely a hint of effective obstruction. Tar sands, fracking, and sub-salt deep sea oil deposits are all coming on-stream already, with methane clathrates just up the road. The world’s on a burn, and it can’t go on (but it carries on).

Financial unsustainability is no less blatant, or bizarrely enduring. Since the beginning of the 20th century, once (classically) liberal Western economies have seen government expenditure rise from under 5% to over 40% of total income, with much of Europe crossing the 50% redline (after which nothing remotely familiar as ‘capitalism’ any longer exists). Public debt levels are tracing geometrically elegant exponential curves, chronic dependency is replacing productive social participation, and generalized sovereign insolvency is now a matter of simple and obvious fact. The only thing clearer than the inevitability of systemic bankruptcy is the political impossibility of doing anything about it, so things carry on, even though they really have to stop. Unintelligible multi-trillion magnitudes of impending calamity stack up, and up, and up in a near future which never quite arrives.

The frozen limbo-state of durable unsustainability is the new normal (which will last until it doesn’t). The pop cultural expression is zombie apocalypse, a shambling, undying state of endlessly prolonged decomposition. When translated into economic analysis, the result is epitomized by Tyler Cowen’s influential e-book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. (Yes, Urban Future is arriving incredibly late to this party, but in a frozen limbo that doesn’t matter.)

In a nutshell, Cowen argues that the exhaustion of three principal sources of ‘low-hanging fruit’ has brought the secular trend of American growth to a state of stagnation that high-frequency business cycles have partially obscured. With the consumption of America’s frontier surplus (free land), educational surplus (smart but educationally-unserved population), and — most importantly — technological surplus, from major breakthroughs opening broad avenues of commercial exploitation, growth rates have shriveled to a level that the country’s people are psychologically unprepared to accept as normal.

It fell to Cowen’s GMU colleague Peter Boettke to clearly make the pro-market case for stagnationism that Cowen seems to think he had already persuasively articulated. In an overtly supportive post, Boettke transforms Cowens’ rather elusive argument into a far more pointed anti-government polemic — the discovery of a new depressive equilibrium, in which relentless socio-political degeneration absorbs and neutralizes a decaying trend of techno-economic advance.

An accumulated economic surplus was created by the age of innovation, which the age of economic illusion spent down. We are now coming to the end of that accumulated surplus and thus the full weight of government inefficiencies are starting to be felt throughout the economy.

Perhaps surprisingly, the general tenor of response on the libertarian right was quite different. Rather than celebrating Cowen’s exposure of the statist ruin visited upon Western societies, most of this commentary concentrated upon the stagnationist thesis itself, attacking it from a variety of interlocking angles. David R. Henderson’s Cato review makes stinging economic arguments against Cowen’s claims about land and education. Russ Roberts (at Cafe Hayek) shows how Cowen’s dismal story about stagnant median family incomes draws upon data distorted by historical changes in US family structure and residential patterns. The most common line of resistance, however, instantiated by Don Boudreaux, John Hagel, Steven Horwitz, Bryan Caplan, and Ronald Bailey, among others, rallies in defense of actually existing consumer capitalism. Bailey, for example, notes:

In 1970, a 23-inch color television cost $368 ($2,000 in 2009 dollars). Today, a 22-inch Phillips LCD flat panel TV costs $190. In 1978, an 8-track tape player cost $169 ($550). Today, an iPod Touch with 8 gigabytes of memory costs $204. In 1970, an Olympia adding machine cost $80 ($437 in 2009 dollars). Today, a Canon office calculator costs $6.65. In 1978, a Radio Shack TRS80 computer with 16K of RAM cost $399 ($1300 in 2009 dollars). Today, Costco will sell you an ASUS netbook with 1 gigabyte of RAM for $270. The average car cost $3,900 in 1970 ($21,300 in today’s dollars). A mid-sized 2011 vehicle would cost somewhere around $20,000 and last twice as long.

Another very crude way to look at it is that Americans are four times richer in terms of refrigerators, 10 times richer in terms of TVs, 2.5 times richer when it comes to listening to music on the go, 3,000 times richer in calculators, about 400,000 times richer when it comes to price per kilobyte of computer memory, and two times richer in cars. Cowen dismisses this kind of progress as mere “quality improvements,” but in this case quality becomes it own kind of quantity when it comes to improved living standards.

What seems pretty clear from most of this (and already in Cowen’s account) is that nothing much has been moving forward in the world’s ‘developed’ economies for four decades except for the information technology revolution and its Moore’s Law dynamics. Abstract out the microprocessor, and even the most determinedly optimistic vision of recent trends is gutted to the point of expiration. Without computers, there’s nothing happening, or at least nothing good.

[… still crawling …]

[Tomb]

Re-Animator (Part 4)

What does the world make of Shanghai?

If the deepest traditions of the World Expo are those cemented into its origin, it would be incautious to over-hastily dismiss one prominent feature of its inaugural instance. The Great Exhibition of the Works of Industry of all Nations, held in London, in 1851, was staged in the effective capital of the world. In this case, at least, the defining internationalism of the Expo is difficult to disentangle from the indisputable historical fact that the entire world was rapidly becoming London’s business. In a gesture of reciprocity so perfect that it approached simple identity, London invited the world to itself exactly as – and because – it was inviting itself to the world.

The Great Exhibition made irresistible sense because it put the future of the world on display in the only place that could. To see the concentrated, realistically sifted, programmatically arranged destiny of the earth, it was necessary to visit London, since it was in London that everything came together.

Over its first two decades (and four episodes), World Expo alternated between London (1851, 1862) and Paris (1855, 1867), as if oscillating between the relative historical potencies of maritime and continental power. Yet this apparent hesitation actually compresses and conceals two distinct, complementary, and unambiguous trends. Britain was ascending inexorably to global hegemony, whilst disengaging from World Expo, whilst France was managing equally inexorable comparative decline, as it made World Expo – to a remarkable extent – its special preserve.

It is tempting to propose a theory of institutional consolation to account for this pattern. Long after Britain had abandoned all claim to Expo leadership, France continued to invest heavily in the event, chalking-up a record of Expo hospitality unmatched by any other country and setting the course to Expo institutionalization through the Bureau of International Exhibitions (BIE). The BIE, established in 1928, has always been based in Paris, and remains a bastion of Anglo-French bilingualism.

French Expo-enthusiasm expresses a more general relationship to the world system of great importance. Having relinquished its (Napoleonic) role as a challenger to the world order in the early 19th century, France has maneuvered, with unique capability and determination, to remain an indispensable secondary power, or – more precisely – a balancer. Its relationship to the successive phases of Anglophone global hegemony has been guided by an extremely consistent deep policy of accommodation without acquiescence, characterized by imaginative and unrelenting, yet restrained rivalry. Close to the core, yet never quite part of it, France has been able to draw sustenance from the world order whilst contesting its cultural meaning (as English-speaking, protestant, and laissez-faire individualist).

World system challengers, it should be clearly noted, never host World Expos. The Expos held in Japan (Osaka 1970, Tsukuba 1985, Aichi 2005) and Germany (Hanover 2000) took place long after their armed resistance to the Anglo-American world order had been broken and both countries had been beaten into docility. Russia has never hosted one. Moscow of the USSR was offered the 1967 World Expo, but declined it (presumably judging it dangerously destabilizing to a closed society).

World Expo has thus acquired a secondary tradition, as a deliberately eccentric platform from which to contest the core future of the world system, and to propose a pluralized (or embryonically multicultural) alternative. Already in 1855 and 1867, and then in 1878, 1889, 1900, and 1937, World Expo staged the view from Paris, one that accepted the global reality of consolidated, revolutionary modernization, whilst systematically de-emphasizing its techno-commercial determinism and its convergence upon Anglophone cultural traits. Industrial globalization was reconfigured as a condition to be critically interrogated, rather than an opportunity to be vigorously promoted.

Between the primary and secondary impulses of the Expo, collision was inevitable. Predictably enough, the occasion was provided by the reconnection of Expo to the global core.

Even given this truncated and radically simplified schema of Expo history, which had been largely settled in its essentials by 1870, the significance of the two New York World Expos, staged in 1939-40 and 1964-5, comes clearly into focus. Mid-20th century New York, like every world systemic capital, represented the leading edge of modernization as a revolutionary global process — emergence and consolidation of a new world order and new age (novus ordo seclorum) – compared to which the authority of established international institutions counted for nothing.

Both New York Expos flagrantly violated BIE regulations in numerous respects, but even after the withdrawal of official sanction, they ahead anyway. These were, non-coincidentally, the first rogue Expos. They were also among the most memorable and influential in World Expo history.

For the first time since the mid-19th century, Expo had found its way back to the capital of the world, in order to provide an uncompromised and unambiguous foretaste of the World of Tomorrow in the place that was orchestrating it. BIE opinion mattered little, because Expo was not being hosted in New York so much as re-invented, echoing the originality of 1851. This was where the future would come from, and everyone knew it. All that was necessary was to tease the city into anticipating itself, and what resulted was a Futurama.

There was an additional message, easily overlooked due to the scarcity of data-points: hosting World Expo is one of the things the world capital has to do — as a kind of ritual responsibility, or a coming-out party. Shanghai has done that now. Precedent suggests that one additional Expo would be appropriate (perhaps in 2025, or 2030), although it might have to be unsanctioned next time.

Of course, Shanghai is not yet the capital of the world, but it is heading there. From the late-1970s, after centuries of exile and denigration, the offshore, diasporic-maritime, capitalistic China of the tianchao qimin — those ‘abandoned by the Celestial Empire’ – has been steadily, and rapidly, re-integrated with the continental mainland and its ‘market socialist’ structures. Floodgates of talent and investment have been opened, and as this scattered, sea-salt scented population has reconnected with the motherland, the ‘Chinese miracle’ of recent decades has taken place. Shanghai is the main-circuit socket that links this other China — oriented to oceanic trade, entrepreneurial opportunity, capital accumulation, international mobility, and a society of flexible networks — to the vast potentialities of the country (and flexible Sino-Marxist state) lying up the Yangzi, and beyond. If the process of reconnection is not interrupted, the next phase of modernity will be centered in this city, where China meets the sea.

Despite its self-identification as the ‘central country’ (or ‘middle kingdom’ – Zhongguo), China has not been at the core of the world process for centuries. Instead it has been a complacently declining legacy power and a badly-treated outsider, then successively a second-tier affiliate, a truculent challenger, and a cautious balancer, until its prospective status as core inheritor (or virtual hegemon) began to percolate into global popular awareness over the final decades of the 20th century. Very little of this is a matter of motivation, or strategic assertion. Quasi-Marxist assumptions of economic inevitability and directional base-superstructure causation come into their own in this respect. Global leadership is nominated by industrial reality, not political will, and hegemony can neither be perpetuated beyond the endurance of its economic foundations, nor long disdained once such foundations have been laid. Eventually a reality check becomes unavoidable, and policy is hammered into compliance with the demands of world system equilibrium. Core-periphery relations are decided by trade and capital flows, not by political declarations. Since comparative success and failure show no sign at all of disappearing, it can confidently be expected that hierarchical geography – however re-arranged – will not be withering away any time soon. Realists will follow the money.

There will be a new world capital (you can count on it), but will it be Shanghai? It would be reckless to presume so. The world system tradition, in its eagerness to anoint Tokyo as the successor to New York (during the 1980s), provides a cautionary lesson. There was no Tokyo World Expo, and it turns out that there was not an urgent or essential need for one.

So, is Shanghai next? That should have been the animating question of Expo 2010, and perhaps it will have been in the future. The whole world has a stake in it, because it tells us what is coming, and that is what World Expo was designed to do. For an emerging world capital to mask itself as a generic city passes beyond modesty into a species of accidental deception, but tact can easily be confused with pretence – especially by those on unfamiliar cultural terrain. It might be that Shanghai said everything that was necessary in 2010, and that what it said will eventually be heard, and understood.

Expo begins again in each new world capital, in 1851, in 1939, and – far more problematically – in 2010 (?). In Shanghai’s case, we are still too close to the event, and too entangled in the current revolution of modernity, to know for sure. What Expo 2010 will have been depends upon what the world becomes, how its center of economic gravity shifts, how its new center condenses, and what it makes of Shanghai.

(final lurch into this fog-bank coming next (yippee!))

[Tomb]