You should familiarise yourself with the law of conservation of matter and the law of conservation of energy.
Both of these scientific ‘laws’ express the same basic idea:
That the amount of inputs in any given reaction and the amount of outputs from that given reaction, must balance. In other words, every element of a given reaction or process must be accounted for.
Although these ‘laws’ are often characterised as being ‘scientific’ in nature, in fact they come from a much older intellectual tradition; that of Christianity.
The entire concept of Christianity is based on two central core principles.
The first principle is that any particular incident can only ever occur once and is therefore unique.
The second principle is that every incident, process and event that has ever occurred is recorded down to the most infinitesimal detail and that the totality of calculation involving all this detail will be taken to be the final meaning/accounting of everything. Everything can and will be accounted for.
These are two foundational concepts that science directly stole from Christianity. (Although scientists would have you believe they ‘created’ them!). Together they make up the philosophy of rational accounting. This philosophy of rational accounting presents a fundamental problem for the creators and propagandists of the Germanic cult of capitalism.
It means that matter or ‘wealth’ cannot be created or destroyed in the sense of being brought into, or taken out of, any given process or reaction. Everything on the left hand of the equation must be accounted for on the right hand of the equation. If it is missing it is because you failed to account for it.
This means that ‘wealth creation’ in the sense of creating something cannot rationally exist. If wealth is present on the right hand of an equation it must have been present on the left hand of the equation. If wealth creation cannot exist, then ‘wealth creators’ cannot exist. So there cannot be any such thing as capitalism or any justification for capitalism.
By way of a simple example:
An iron smelting plant is in operation and claims to transform iron ore into usable steel and therefore ‘create wealth’. If we take into account the pollution and destruction of environment involved in the smelting process and we adequately account for this and other left hand costs, we find that in fact this melting plant has not created any wealth or any matter of any kind, but in fact simply transformed parts of the existing environment into something else. No wealth has been created.
The trick behind this, is to undervalue the preliminary imports – the land, the environment, the labour et cetera and to correspondingly overvalue the output: the ‘wealth’ that has been created. Turning healthy useful corn into ‘Cheetos’ counts as wealth production!!
The Whole World Similies With You
Let us look more closely at the value of inputs, for instance the value of iron ore. The value of any particular portion of iron ore can only be rationally valued in comparison with the total amount of all iron ore.
If you were to say that 1 pound of iron ore is as valuable as six eggs you are making a poetic comparison, expressing a SIMILIE not an accurate fact. There is no rational relationship between a lump of iron and an egg and there never can be any rational relationship between a lump of iron and an egg because there is no rational point of comparison.
(This is an indicator of the value problem which comprises the third part of my general theory of money. I will return to this later).
There is no rational relationship between a lump of iron and an egg but there is a rational relationship between a lump of iron and the totality of all iron available. We can say that any one piece of iron represents a proportion of all total iron.
If there were 100 tons of iron available on earth, then one ton of iron would represent 1% of all the available iron and this would be its true demonstrable, rational, proportionate value.
But this presents an immediate and obvious problem: we have no idea of how much iron is actually available and can only provide a an estimate. It follows that we can only present an estimate of the value of any given piece of iron. Since it is only an estimate, is open to a bit of ‘creative accounting’…
But although creative accounting can paper over some of the more obvious gaps in the capitalist fraud, the more intelligent Germans realised that this could not form the basis for a long term strategy.
They realised that they were playing a game of cat and mouse they were bound to lose in the end. The longer the game went on, and the more information that became available, the more clearly people would begin to see that the estimates of value that were given to steel and wheat and air were clearly fraudulent.
The more clearly people began to get an idea of the TOTAL amount of any given thing, the more clearly they would realise that the present valuation of it was undervalued and just as importantly the previous estimates were even more fraudulent!
This is the true meaning behind the battle between environmentalism and its opponents…
And then Germanic capitalists had a stroke of ‘genius’. Which actually means they simply reverted to their fundamental nature. They decided to turn everything back to front, inside out and upside down.
Why wait for the inevitable exposure and condemnation when the accounts became due? Why not instead START with the accounts and work backwards??!! And this is exactly and precisely how capitalism and capitalist democracy was brought into being.
A capitalist corporation first produces a final profit and then promises to work towards it. Of course, it usually fails and resolving the consequences of this failure is called capitalist economics.
A capitalist political party first produces a set of intended results and then promises to work towards it. Of course it usually fails and resolving the consequences of this failure is called capitalist politics.
But the key advantage of this process, insane as it seems, is that there is no point where the capitalist corporation or the capitalist economic party is actually HELD TO ACCOUNT in the literal sense of the word.
Because they persuaded the investors and the voters to endorse the accounts they were given before the process even began. They made you just as culpable as they are.
Underpinning Einstein’s theory of relativity is the philosophical argument that it is both possible and desirable to view a particular event from a multiplicity of points of view to gain a comprehensive understanding of the processes embodied in that event.
If this is the case, then it might also be argued that it is both possible and desirable to view any particular historical and economic event from a multiplicity of points of view. This would be as revolutionary a development in economics as Einstein’s theory was in physics.
Both classic economics and the Marxist variant, promote a singular subjective perspective on structure and meaning of economic systems. Their purpose, openly stated or covertly implied, is to promote the political, moral and cultural system they are representative of.
The formal purpose of capitalist economics is to run the system at its most efficient , it’s covert aim to justify capitalism as the dominant system. The overt purpose of Marxism is to produce a critique of capitalism that will lead to its being abandoned as a consequence of its internal contradictions. Its covert aim is to justify historical attempts to create alternatives to capitalism.
In order to work, both capitalist economics and Marxism need a protagonist, an archetypal hero from whose singular perspective we can see the world and whose actions we can subjectively identify with. This is the real identity politics.
For capitalists the hero of the story is well ,.. The Capitalist who daringly risks all to bring wealth up from the depths of the darkness -a variation on the Prometheus narrative. For Marxists the hero of the story is The Worker whose toil in the mines is the real producer of wealth.
Effectively, both socialism and capitalism are operatic arias in the Wagnerian mode, with two main characters competing for The Ring of Wealth, claim and counter-claim, war, deception and betrayal all part of the story…
In a small accommodation with reality there has been a recognition of this subjective limitation and attempts to modify both classic and Marxist economics. Keynesianism explicitly criticised classic economy from the perspective that it had no macro economic analysis, that it was limited and partial. Marxism also criticised classical economics from the same perspective.
In turn, classical economics responded by broadening the fields of economic activity that it covered and even integrated elements of both Marxism and Keynesianism to produce the modern hybrid that passes for mainstream economics today. At the same time neo liberalism explicitly critiqued Marxist planned economy for offering a limited and distorted perspective on the real world. Only the market was capable of gathering and processing enough information to make the system work it claimed.
Classic economics and Marxism have historically attempted to compensate for narrowness of vision by reaching for an ever more comprehensive breadth of subject matter. Their final strategic purpose is to claim that the point of view they represent is capable of encompassing all of experience. In other words, both capitalism and socialism claim to be universal theories.
This strategy really amounts to nothing more than a form of semantic trickery that exploits the confusion between taking something into account and adequately accounting for something. An analysis undertaken on this basis degenerates into nothing more than description in the form of an ever expanding list of complaints that classic economics makes about Marxist economics and Marxism makes about classic economics.
But neither capitalist economics or Marxism can overcome the fundamental problem that they are subjective in both analysis and purpose- they are in essence particular points of view.
In the back and forth diatribe of mutual complaint each philosophy implicitly recognises the value and need for the other as each seeks new territory to colonise at the expense of the other. Both competing analyses move from old to new battlefields as they become available for domination, seeking both to justify their own existence and to nullify the existence of their opponents.
This is the operation of a dialectic; the domination of thought through the application of a controlled conflict- a drama- a demi-urge.
The last major episode in this opera was the credit crunch. Marxist economics went on the offensive, seeking to gain advantage in this period of capitalism’s distress. In response neo- Classic economy sought to spin events in such a way as to justify itself. Perhaps unsurprisingly classic and Marxist have managed to fight each other to what is effectively a stalemate. Both boxers now winded and bloody, have retired to corners for a chest rub and a pep talk from their respective managers…
The central question now is: Do we wish to invite both protagonists back for a further round of conflict? Would there be any purpose, political or intellectual, in continuing a boxing bout that seems to have stalled in mutual exhaustion? If subjective political economy has nowhere left to go, what can emerge to take its place?
The economic model I propose does not rely on a representation of any particular group as the main protagonist in history and economy. I don’t seek to make The Capitalist the hero of history or The Worker either. On the contrary I am now arguing that there is no such thing as The Capitalist as a concrete economic agent. There is no such thing as The Worker either. They are both literary inventions of Germanic culture. This is where culture meets economics.
Nobody ever in the history of the world ever created capitalist wealth through undertaking risk. Nobody ever in the history of the world ever created capitalist wealth through undertaking labour. Both these ideas are literary fictions.
Instead I am arguing that the only way that capitalist wealth is created is that it is extracted and accrued through the operation of money forms, that is denuded versions of money. These money forms create and operate their own distribution networks within society and economy that allow the extraction of wealth.
Individual or group economic power and significance comes from the extent to which one has access to one or more money forms and is able to utilise them to extract wealth.
This analysis seeks to represent Germanic capitalism from a multiplicity of perspectives to show both action and reaction in any given transaction. We no longer need to be bound to this or that heroic perspective or this or that litany of complaint and counter-complaint.
But there is a price to be paid for this insight. Because in such a model the struggle for economic power becomes a zero sum game. Power is fixed in quantity and quality. If power accrues to one then it necessarily is taken from to another. Wealth cannot be created as in a Germanic literary fantasy.
Just as Einstein’s theory was able to capture the multiplicity of relative motion through the adoption of a constant the speed of light so this model of money requires a constant – that of wealth. Wealth in this model is not created, that is the absolute barrier that cannot be broken through.
The American health care system clearly needs to be rationalised. It is inefficient, with multiple competing bureaucracies, high costs and poor outcomes. many people cannot understand how it has continued to develop in what appears to be such a dysfunctional way.
But what if the size and shape of American health care is entirely rational if you understand the parameters that it operates within?
In my general theory of money I argue that the fundamental structure of capitalist economies is a broad alliance of competing money forms, (partial money), that act as a means of extracting wealth from society as a whole for their respective constituencies and through this process money forms divide up the economy.
Under this model INSURANCE is a money form, whose purpose is to allow its issuers and users (constituency) to extract wealth protected by its representatives among the elite: FACTIONINSURANCE.
You might imagine that because ‘healthcare’ is the subject of insurance that ‘health’ is somehow integral to this insurance business. It is not. ‘Health’ is no more integral to health insurance than birds are integral to ‘Dove’ shower creme.
To make it absolutely clear: ‘Insurance’ does not exist as a consequence of the social need for ‘Healthcare’ rather ‘Healthcare’ exists as a consequence of the economic need for ‘Insurance’. Who has an economic need for insurance? The faction that creates, buys, sells and uses it.
An easy way to understand it is to look back at the development of both rail and then car travel. First trains were invented and then the marketing department for the rail companies had to think of somewhere desirable to go on them. The same applies to the motor car. First the car was invented and then a desirable destination had to be invented. In this way first the ‘seaside’ and then the ‘countryside’ were invented…as well as the suburbs.
Insurance was invented as a money form. Then the insurers had to find something desirable to insure- enter healthcare.
I will build on this insight:
There are a number of competing money factions of which FACTIONINSURANCE is one and FACTIONDERIVATIVE is another; the latest edition to the elite power structure.
I have previously explained how QE was specifically an economic and political arrangement to protect and regularise emergent derivatives in the wake of the crash they caused.
If we accept that there are a number of money factions competing for economic and political primacy and we accept that derivatives have been inducted into the elite club, we can surmise that the derivative share of power must have been allocated at the expense of another competing money faction.
In other words someone must have been made to move over to make room for derivatives at the money table. Which brings us to the following intriguing anomaly:
In both Britain and America the newly elected post credit crunch administrations undertook ambitious and far ranging ‘reforms’ of their respective health care systems, despite the fact that many observers noted that the administrations had far more pressing concerns that they appeared reluctant to confront.
It does seem odd that a Conservative a government in Britain and a Democrat government in America should go out of their way to look for trouble when they had so much of it already.
But what if, in line with my model, they had to rejig the position of FACTIONINSURANCE within the system as a whole to accommodate FACTIONDERIVATIVE?
To put it another way, to get the support of FACTIONINSURANCE they had to get something in return for what they were losing to FACTIONDERIVATIVE
Then the actions of both Anglo Saxon elites would entirely make sense.’ Healthcare reform’ can now be seen for what it is- a central ECONOMIC part of the QE programme.
If my model of how the system operates is correct- how would that be reflected in what we actually observe? We would expect to see an increase in health insurance without a corresponding increase in health. Sound familiar?
All of which brings me to my E=MC2 moment. This is a simple formulation which is the basis for explaining all economic and political history over the past hundred years. It supersedes and clarifies all other economic theory. (Is that all, Andy ?)
Among other startling things my theory makes it possible to calculate to 2 decimal places the Socialism of any individual in comparison to any other individual on the planet.
The Credit Crunch and subsequent QE heralded the formal acceptance of derivatives into the elite money pantheon.
I explained how FACTIONINSURANCE got paid off to allow this to go ahead. But what about FACTIONEQUITY, FACTIONBOND etc?
Well they all got paid off too. In fact everybody seems to have got paid off, except one faction, and you know who that is don’t you?
Yup,
FACTIONCASH got shafted on all sides.
And what happened as FACTIONCASH had its political and economic power stripped away?
Why, Socialism evaporated into the air as though it had never existed!!
Surely this is the time above all others when people would have turned to Socialism. But they can’t turn to socialism because it doesn’t exist as a real separate political force.
Which leads me to my central formulation:
CASH=SOCIALISM
SOCIALISM=CASH
Want to know exactly to two decimal places how socialist any particular person is?
Find out what percentage of their wealth is held in cash and how much cash they carry around..
I have prepared the following graphic for you to approximate just how Socialist you and your friends and colleagues are…
If you doubt my analysis ask yourself:
What would the world be like if there was only one money form and it was cash?
Socialism, no?
Why were elites all over the Saxon Axis so desperate to get welfare recipients onto digital payments?
Because it is bad enough if some members of society are socialist, but it really would be too much if the poor were as well…
I have been working towards finishing Crackernomics 2: The Structure Of Money for a couple of years.
When I first began writing about the credit crunch in 2010 I described the form of the crisis and recovery process the same way one might describe the appearance of a conjurors illusion without actually understanding how the trick works. I had the form of what was happening but not the underlying content.
After further observation I began to realise the significance of the specific case of derivatives- that they were in fact a form of money and that QE had the overall purpose of regulating and guaranteeing them as such.
Over the next year or so I extended this understanding of money issuance with my analysis of Bitcoin and other crypto currencies.
However, it turned out to be another six years or so before I understood the general rule and I could produce a comprehensive general analysis and monetary theory…There are two parts to the general theory.
Here are the bones of the first half of that General Money Theory.
Under the cult of Capitalism the state has an effective political monopoly on the creation of money.
This leads people to erroneously presume that since there is only one state operating within each nation state territory that each individual state only allows the production of one kind of money.
In fact capitalist states directly and indirectly sponsor various types of privately issued money including bonds, equities and some forms of insurance. State sponsorship of these other forms of money takes the form of guarantees and regulation. These sponsored other forms of money allow the extraction of wealth from and the regulation of, the capitalist economy.
In the nineties one faction within the American state began to sponsor and promote a new form of privately issued money. This form became generally known as derivatives. Because of the scale and novelty of this form of money issuance it inevitably led to destabilisation and a crisis that is referred to as the Credit Crunch.
The broad idea is the same as the CIA, Kennedy and the Bay of Pigs. The CIA started a crisis by invading Cuba and then tried to force Kennedy to back them up. Kennedy refused and you know what happened as a consequence.
In the immediate aftermath of the credit crunch Bush and Obama accepted the fait accompli offered to them by the derivatives faction and used the state to back up the new form of privately issued money.
Under the cult of capitalism Germanic elites established an effective political monopoly over the production of money BUT actually produce more than one kind of money through the sponsorship of bonds, equities, forms of insurance and unmentioned till now; BANK CREDIT which leads to the following central idea:
The history of money production under Capitalism follows this pattern:
A particular political/economic faction in a given society petitions to join the elite and create its own form of money.
It begins to manufacture and use this form of money.
The production of this novel form of money creates a social and economic crisis.
The existing elite either agrees to accept the new form of money and collectively guarantee and regulate it or it does not.
This is how paper cash came to be a form of money- crisis and then acceptance
This is how insurance came to be a form of money- crisis and then acceptance.
This is how bonds came to be accepted crisis and then acceptance
This is how equities came to be accepted -crisis and then acceptance
This is how bank credit came to be accepted crisis and then acceptance
THIS IS HOW DERIVATIVES ARE COMING TO BE ACCEPTED -CRISIS AND THEN ACCEPTANCE.
What do we call this process of collective acceptance of derivatives; their regulation and guarantee by the elite?
We call it QE.
Sometimes this process fails. The Dutch tulip bubble is a good example. The tulip faction failed to get bulbs accepted as a form of currency!!
Here is a fundamental insight:
When a faction bid to create a new form of currency fails it is referred to pejoratively as a bubble. The wealth accrued to that new form of currency is redistributed among its competitor currencies.
The Significance of Gold
The creation of the Federal Reserve was the crisis and acceptance of bank credit as a sponsored money form.
The Wall Street Crash and its resolution was crisis and acceptance of equities as a sponsored money form but;
But the withdrawal of the gold standard was EXACTLY THIS PROCESS IN REVERSE. The original and founding member faction- the GOLD MONEY FACTION was blackballed and EXCOMMUNICATED from the Germanic money elite like the founding CEO of a company being turfed out by other board members!!
This is the significance of going off the gold standard. The original founding faction reduced to penury and obscurity, the plaything of the very factions that it originally allowed into the gang!!
There are money factions operating within Germanic societies which sometimes successfully petition and join the elite. But the end of the gold standard was historically unique in the history of capitalism since it was the first time a money faction was DE-LISTED and DELEGITIMISED.
Next we can identify the money factions. The basic money factions at present are
FactionInsurance
FactionBond
Faction Credit
FactionEquity
FactionDerivative
and last but not least ,(not yet anyway),
Factioncash (which is supposed to be the pre-eminent faction but we all know about the war on cash).
After some consideration I believe there is only room for a LIMITED NUMBER OF FACTIONS at the top table.
Here is my prediction:
It is very possible that FactionInsurance or FactionBond will be delegitimised and expelled by Trump in this administration just like Nixon did to Factiongold!! (Actually on further consideration I think it might very well be Factioncash that is for the high jump..)
Notes On Factioncrypto
Presenters of The Keiser Report Max Keiser and Stacy Herbert are good exemplars of Factioncrypto. They are Pro gold-Anti derivatives- Pro Bitcoin because:
They want the FactionGold to be re-admitted to the monetary elite but this is not going to happen. (I suspect they know this and their support for Factiongold is only rhetorical.)
They want to prevent the legal and political legitimisation of derivatives and Factionderivative, which is why they always refer to derivatives as ‘fraud’. But derivatives are more or less entirely legitimised. Only a major overturn can prevent the successful finalisation of this process.
Factioncrypto want Bitcoin to be accepted as part of the Germanic money elite. But to do this they have to do what every petitioning faction has done before them- they have to use MONETARY TERRORISM tactics- just as they rightly accuse the derivatives faction of doing.. to provoke a crisis, then bargain for acceptance and regulation.
How this general theory of money can explain Real political parties
I have argued that the actual history of politics and economy is not a duopoly/dichotomy of left or right or working class or capitalist or nationalist and globalist but rather a number of competing factions that use money forms to extract wealth and regulate and divide up the economy. This is the true underlying form of politics under capitalism.
But we can take this further and argue that each faction has its supporters in wider society and that this is the actual way we can understand how society is divided up and operates. Each faction has a broader money constituency within society that supports it. This constituency uses their specific money form to extract wealth from the general economy.
Factioncash has a corresponding cash constituency. Factioncash is the REAL PARTY of Cash constituency.
Factioncredit has a corresponding credit constituency Factioncredit is the REAL PARTY of Credit constituency.
Factionbond has a corresponding bond constituency Factionbond is the REAL PARTY of bond constituency.
Factionequity has a corresponding equity constituency Factionequity is the REAL PARTY of equity constituency.
FactionInsurance has a corresponding insurance constituency FactionInsurance is the REAL PARTY of insurance constituency.
Factionderivative has a corresponding derivative constituency Factionderivative is the REAL PARTY of derivative constituency.
Factiongold has a corresponding gold constituency .Factiongold is the REAL PARTY of gold constituency.
Factioncrypto has a corresponding crypto constituency Factioncrypto is the REAL PARTY of crypto constituency.
Actual political identity; that which determines what any individual or group within capitalism will do is determined by the form of money each faction uses.
From this we can observe that some factions have a greater or lesser constituency than others to the extent that some constituencies have little or no faction representing them in the elite and some factions have little or no constituency on the ground.
This exactly and specifically determines how each faction/constituency will act politically. It means we can begin to predict with an unprecedented degree of precision what each grouping will do.
These degrees of constituency can be arranged and compared in a PERIODIC TABLE OF MONETARY FORMS.
We can draw an analogy with the model of an atom. Factions represent the nucleus and constituencies represent the electron configuration outside the nucleus. CONSTITUENCIES therefore influence the relatively trivial domain- the physics and chemistry of the economy and factions influence the profound- the atomic power of the economy.
While the specific balance of components varies from nation state to nation state the basic relationship can be described thus
From top to bottom these are the money forms with the largest real parties (constituencies)
(Largest constituency):
FactionInsurance
Faction Credit
Factioncash
FactionEquity
FactionBond
FactionDerivative
FactionCrypto
(Smallest constituency)
I will apply my model to two well known historical anomalies to illustrate how effective it is:
The mystery collapse of ‘left wing’ working class politics and
The mystery of Quantitive Easing:
1:The mystery collapse of ‘left wing’ ‘working class’ politics
Each monetary faction has a constituency. This is the real nature of societal division. In Britain up until the 1980’s the vast majority of what is called the ‘working class’ were represented by Factioncash and were therefore members of Cashconstitiuency. They were paid in cash. They purchased in cash. They lent and borrowed in cash. They relied on cash as the means to extract their share of society’s wealth.
But as you know in from the 1980’s through massive economic reprogramming the majority of ‘working class’ was forcibly transferred from Factioncash to Factioncredit. They were relocated in Creditconstituency. And so their priorities and allegiances accordingly changed.They were paid in credit. They purchased on credit. They lent and borrowed in credit. They relied on credit as the means to extract their share of society’s wealth.
It is this which explains the collapse of ‘working class’ left wing politics. In essence it was the forcible transfer of political allegiance of the ‘working class’ from Factioncash to Factioncredit.
The mystery of Quantitive Easing
We are familiar with the immediate aftermath of the initial credit crunch. There were a number of meetings between Obama and the bankers. The story goes that the bankers issued Obama with an ultimatum: back us and back derivatives or we will bring the system down. Why did the administration go along with this demand? Was it because they are all Wall Street stooges etc?
Consider the reality of the situation from a faction perspective.
Derivativeconstiuency (DerC) was effectively bankrupt. That ‘s what the Credit Crunch crisis was effectively all about; are derivatives to be accepted and protected or are they to be refused protection are therefore be deemed to be worthless – a bubble?
Factionderivative (FacD) the political representatives of DerC went to bat in a do or die situation. But this was not something new it had been the same for every successful faction since capitalism began.
And FacD had an ace in the hole. The administration was Monetarist and as you probably know Monetarists ABSOLUTELY HATE cash more than anything else on the planet. So the FacD play was simple: Let’s use this opportunity to get together to f*ck cash for once and for all. That was the true nature of the play. And it has worked. Derivatives were preserved at the expense of cash.
Authors note:
I know this is all a bit scrappy and in semi-note form but it is covering a lot of territory and I want to get as much of it as possible down as quickly as possible. I will return to the themes and ideas I have outlined here at a later date.
By the way I am in the faction of the one in whose image I am created
When I first began writing about the Credit Crunch and its consequences I said that the defining moment in this cycle will come when the decision is made to re-introduce aspects of the pre-Monetarist economic system to a greater or lesser extent.
I argued that the Credit Crunch was not a ‘natural’ crisis in the sense that it arose out of production and trade processes like previous crises in the last century. I described how the Credit Crunch was instead the consequence of the solution implemented to combat inflation and stagnation of the 1970’s. The Credit Crunch was the product of past medicine not contemporary illness.
Monetarism was created to cure the problem of inflation, specifically wage inflation, for once and for all. Effectively, it removed the possibility of workers being able to directly influence the economy through collective wage demands. From now on workers as a group would have to accept whatever was offered by the economy instead of visa versa.
This was achieved by a combination of suppressing trades unions, dismantling of work place legal rights and the introduction of truly large scale mass immigration. These had the effect of permanently altering the supply of labour available.
In tandem with supply side reforms to the labour market Monetarism advocated a move towards a mass credit economy and most crucially the introduction of democratised money through financialisation. This combination of measures in total produced a low-wage, low discretionary spend and low growth economy in the aftermath of the Credit Crunch.
To reiterate the point: In the sense that Monetarism was a planned attack on the post war political and economic settlement, the Credit Crunch that followed from it was entirely voluntary and entirely avoidable.
But if pundits are to be believed all this is to be overturned- or at least corrected to some extent in a kind of counter reformation to Monetarism. We are told that under Donald Trump America, (and Britain under the Brexit regime), will return to the old style ‘great again’ economy .
Inflation will arise from the dead and interest rates will lift in response. We are told that as part of this cycle of cause/effect, real wages will also begin seriously rising after decades of stagnation.
I understand now that my initial analysis of the Credit Crunch was incorrect in that it did not take into account the significance of derivatives and the permanent effect they would have on the global economy. It was only after I began to write about the central bank response to the credit crunch in the form of Quantitive Easing that I realised that derivatives were entirely novel in the effect they would have on structures within developed economies.
Derivatives are a new privately issued form of money. As such, they have colonised sections of global economic activity. As a consequence of this colonisation derivatives permanently distort the total global economy to the extent that they are allowed to operate within it.
The mistake I initially made was not to realise that even if the old world was to some extent allowed to be re-introduced into the new world, it would not be on the same terms as previously. History is one way street. This brings us to the central theme of this piece which is the new shrunken environment into which Donald Trump will birth his new great America.
You will probably have heard of ‘shrinkflation’ in which the packaging of a commodity remains more or less the same but the actual product within the package shrinks. For example look inside a bag of potato crisps and you find it will now be less than a third full- the bag is mostly air. A bar of Toblerone chocolate has famously shrunk to the size of the foothills of Wales instead of the mighty Alps it was supposed to represent.
In terms of commodities, the sound of the future seems to be a ‘capitalist rattle’ where shrunken products jiggle around in their oversized packaging. Something similar has happened in the world of politics producing ‘wiggle room’.
Wiggle room is the phenomena whereby it becomes increasingly difficult to attribute any given outcome to any particular cause. (See what I have written on the ‘Secret Economy’)
I have referred to sawing the lady in half on more than one occasion as a metaphor for the new politics and economics.The key to this trick is understanding that there is a lot more room in the box the lady goes into than you might suppose. The wiggling fingers and the wiggling toes that you can see do not actually belong to the same person inside the box but instead to 2 separate people.
Something a lot like the sawn lady has recently been happening in the world of Anglo-Saxon politics and goes directly to the question of the nature of the new political movement that has given rise to both Brexit and the election of Donald Trump as president of the United States of America.
I have characterised this movement as Anglo Saxon nationalism as distinct from those on the liberal left who regard it as a form of white nationalism with its concomitant implications of racism.
The standard Trumpist retort to accusations of racism has been to argue that the same public that elected Donald Trump is the same public that elected Barack Obama on two occasions previously. If these people were prepared to let Obama rule they can hardly be regarded as being racist –can they?
But this overlooks the fact that there is a large amount of ‘wiggle room’ within the American electorate. Only half the potential voters in America actually bother to turn out for elections generally and of that half, only half again actually voted for Donald Trump. Which means Trump was actually selected by a quarter of the electorate.
Following from this it is entirely possible that both Trump and Obama were actually elected by two more or less entirely separate and different constituencies that have enough spare room within the electorate to hardly overlap at all.
In other words it is entirely possible that the vast majority of those who voted for Trump would never in any circumstances vote for Obama or any other black man. They are in large part an entirely different constituency from the liberals. If you look at the sawn lady’s wiggling fingers and then at her wiggling toes you might start to notice that they are a slightly different colour…
The same is equally true in the case of Brexit. Only around a quarter of the available population actually voted to leave the European Union. So the idea that the leave voters represent a disillusioned previously semi liberal strand of mainstream British society is at least questionable.
This ‘bagginess’, this loose fitting wiggle room system, is one that tends to lend itself to the performance of conjuring acts such as sawing the lady in half. Given that this is the case, it seems hardly remarkable, in fact entirely predictable, that such a system would attract a showman like Donald Trump.
I have described the electoral space that allows Trump and Brexit to rise to prominence. But underlying this there is an economic hollowing out that provides the basis of these political phenomena.
The creation of privately issued democratised money in the form of derivatives effectively gives us an economic version of two magician’s assistants within the same box. The wiggling toes and fingers that you see do not belong to the same body. That is why inflation and deflation, labour participation rates and unemployment, equity and bond prices all seem to be sending conflicting signals that we know simply can’t be possible in the real world.
If money can be described as an information signalling system then two forms of money privately issued and government issued, existing side-by-side and sending out coterminous signals can only result in increasing confusion.
Inflation signals or deflation signals, or growth signals or shrinkage signals are being sent out by either privately issued derivatives economy or the government issued general money economy. It is virtually impossible to say which is which. But the point is that this is not one information system but two systems existing side by side.
I have previously argued that the endpoint of this phase of democratised money will result in roughly half the worlds economy being colonised by derivatives. This is not a general guess, a number of pundits have previously indicated that the long term average interest is expected (required), to be 2 1/2 to 3 % .In consequence, Donald Trump’s claim to make America Great again can only really mean making half of America great again or America half great again.
In a world where half the economy is colonised by democratised money derivatives interest rates can only rise to half their potential maximum. By the same token real inflation can only rise to half its potential maximum. The state sponsored economy can only grow at half its potential rate at maximum. In other words, every and all aspect of the system can only operate and exist at half the previous level if there is only half the economy to operate within.
So when I say that resolution of the credit crunch crisis is dependent upon how much of the old world the elite is prepared to allow to re-emerge, from the perspective of democratised money, the maximum amount that can be allowed to emerge is 50%, if that is indeed the level at which derivatives will be allowed to colonise the world economy.
From this perspective it is possible to make some specific predictions as to the numbers behind Trump’s make America great again strategy.
The long-term average underlying interest rate in the developed economies is around 5%. I have for a long time predicted that the long-term normative interest rate post credit crunch will be 2 1/2 to 3%.
From what I have said it should also follow that the long-term average normative inflation rate will settle at around 1 1/2– 2 % and that the growth in GDP rate and growth in employment rate should also settle at around half their historical real average in the post Credit Crunch world.
But they won’t of course, for the very straightforward reason that they are made up figures…
However there are a number of real life indicators that we can say will be restricted to half their previous level of growth under the half and half economy.
Growth in life expectancy will be cut to half its post war average rate in the developed world.
Growth in home ownership will also be cut to half.
The average fall in the rate of poverty will also fall to half its previous post war average.
So now we know that Donald Trump is going to end up being round about half as frightening as the liberals thought he was going to be..
Extra Information
Theresa May is set to announce revolutionary social reform policies – this could be the moment she silences her critics
She insists that the state has a significant role to play in alleviating the everyday injustices faced by people who do not qualify for benefits. Announcing shiny new policies is the temptingly easy part of governing. Much more difficult is delivering the same
The recent spat between alt right news outlet Breitbart and capitalist breakfast combine Kellogg is indicative of a new cultural media reality in the Saxon axis. (What a sentence!)
After Kellogg decided to pull its advertising spend from Breitbart citing ideological differences, Breitbart responded by ordering a boycott of Kellogg’s breakfast mush by its loyal followers..
In the first instance, it is clear that Kellogg’s decision to put ‘money where mouth ‘ is a straightforward illustration of one of the central principles of cultural constituencies; that in the post free market world commerce follows culture and not the other way round (as free marketers and globalises tried to get you to you believe).
What is also interesting was the response of alt-right media organisation Breitbart by trying to damage Kellogg’s commercial interests. This is an insight into an emergent secondary aspect of post capitalist economy; the subscription model I wrote about last time.
I noted that Saxon nationalist organisations in the media and elsewhere will increasingly demand that their subscribers, (as opposed to consumers or investors), actively avoid supporting organisations that do not adhere to their culture. In other words, if you are not with us then you are actively ‘agin’ us and therefore we are actively ‘agin’ you.
You can bet that this will spread to other cultural constituencies.
The relationship between sponsorship, power, influence and editorial control in capitalist media has long been the source of debate.
In developed capitalist societies it is generally accepted that in media there is a tension between the commercial imperatives of advertising and editorial control. It is accepted that advertisers are allowed to control or influence aspects of what is printed in a newspaper, transmitted on TV or radio in order to maximise the revenue they can receive from advertising in that media. These are accepted parameters of capitalist control over media.
Offset against this is a supposed ‘ethical’ professional code of journalists and editors which means that they are able to some extent to circumvent the commercial pressure to comply with corporate interest.
Increasingly this journalistic ethics code has come under pressure, not least from the explosion of Internet-based alternative media outlets which means that there are now tens if not hundreds of thousands of ‘citizen journalists’ whose relationship to a supposed code of journalistic ethics is undefined.
And this changing relationship illuminates an analogy between the production of news and the production of money. Money production and distribution can be understood as a form of information dissemination just as news media is.
Traditionally newspapers are printed on paper and distributed in the same way that paper Government Issued Money is. The process is that a variety of information brands are delivered to the market to be taken up by different sections of the population at different times in different locations and at different prices.
So a certain section of society would buy broadsheets at a certain price and another section of society would by a tabloid title at another price and so on. Each section of society is not just buying a different news FORMAT but a different news CONTENT. Yet despite this segmentation, the totality of what they are buying is defined as ‘The News’. This implies that there is such a thing as ‘The News’ and various papers print various bits of it.
The same can be said of traditional government issued money, (including GOVERNMENT SPONSORED MONEY such as bank credits). Currency notes, letters of bank credit etc are provided into the market as concrete paper documents which are then taken up by consumers according to price and availability.
Together the totality of different newspapers made up the press and together the totality of different forms of money made up the currency. The NEWS is the TOTALITY of the output of the PRESS. The ECONOMY is the totality of the OUTPUT of MONEY PRODUCERS.
Note that the totality of everything that happens on Earth is not the News. In fact the majority of stuff that happens on the Earth everyday is categorised as NOT newsworthy and not reported on. Likewise the totality of everything that happens on the earth is not the Economy. In fact the majority of human activity is NOT regarded as the economy and not counted as such.
Given the significance of the ‘News’ for controlling any given society it is inevitable that the state will become involved in its production and regulation. In many cases, governments become directly involved in the production of news. State sponsored and controlled media organisations like the BBC are an example of this.
And it follows that given the significance of the economy in controlling any given society, government will be directly involved in the regulation and ultimately the production of money. In developed capitalist societies this is done by government sponsored private organisations like the Federal Reserve or the Bank of England which operate more or less on a BBC model of governmental control.
But if you are supposed to live in a free and open democracy you can hardly have the government clearly controlling what news you have access to . And if you live in a free market economy you can hardly have the government clearly controlling what money or economy you have access to.
It is this tension between the necessity of government control and the ideology of open and free that has shaped the relationship between the various elements in both media and economy in the capitalist world.
Now increasingly, news (as opposed to newspapers), is disseminated by electronic means. Given Marshall McLuhan’s famous dictum that the ‘medium is the message’ the increasing pre-eminence of electronic media is transforming the way that news is disseminated and consumed. This affects what news is, who gets it and where and when they get it. And come to think of it, what they do with the news when they get it.
Digital news production means it is easier for ‘insurgent’ news outlets to appear because costs of production are rapidly falling. But distribution costs are NOT falling. This is extremely important and I will return to it later..
These developments in media have led to the emergence of powerful new media blocks that use the ideological rhetoric of the small producer but are in fact simply competitors to mainstream media. ‘Breitbart’ and ‘Infowars’ are two Saxon Nationalist examples of this.
This process parallels the rhetoric of Protestantism where a plethora of religious ‘start ups’ -the ‘SMRs’ , (Small to Medium Sized Religions), in the Reformation period was rapidly superseded by a relatively restricted number of larger competitors to the Catholic Church, which claimed they were from the ‘volk’ and of the ‘volk’.
Together with the effective collapse of the free market, electronic media has provided the medium for the emergence of cultural constituencies in the field of news .This gives rise to nascent culture, media and subscription wars.
It is not possible for these entirely private media conglomerates to provide news in the ‘public interest’. There can never actually be a free press, (in the real capitalist sense that it does not cost anything), under capitalism. They have to find a way to monetise news production.
In this context the digital distribution service becomes increasingly more significant as an additional cost or barrier to access. (See above) Facebook and Twitter are privately owned news distribution nodes and yet they are expected to act as a public interest conduit for privatised news production sources.
As such they are increasingly becoming the subject of territorial dispute. Are they entirely private? Do they have some kind of public interest mandate? Should they be state controlled in part or wholly?
This is the dynamic underpinning the debate about ‘fake news’. The ‘left’ wants some kind of government control on nodes like Facebook and Twitter in the distribution network, the ‘right’ wants to use commercial pressure (boycotts etc), to control them.
This development process in the media illuminates some of the outcomes that follow from the coming prevalence of electronic money (as opposed to the paper kind). Electronic money is of necessity privatised Democratised money in the same way that electronic news is of necessity privatised Democratised news.
I can confidently predict that just like the media the proliferation of small-scale digital money producers will lead to the emergence of medium to large scale competitors to the mainstream money conglomerates. This has always been a fundamental part of the Crackernomics analysis.
As electronic money is increasingly disseminated by electronic means it will affect what money is, who gets it and where and when they get it. And what they do with the money when they get it.
So lets draw some of the main strands of this argument together.
‘News’ is an abstract metaphysical concept derived from the concrete reality of news production. All the VALID news broadcasters and printers together in aggregate are said to produce the ‘News’.
But the concrete historical reality of news production is NEWSPAPERS which are then superseded by electronic media transmission (radio and television) which is in turn being replaced by electronic media.
Forget talking about ‘News’ as a metaphysical abstract. NEWSPAPERS were and are limited and defined by WHERE and HOW and WHEN they could be produced and distributed. (So are News transmissions and so are News (‘digitations’?)This specific combination of METHOD, TIME and PLACE defines what NEWSPAPERS were and are. NEWS is always a FUNCTION of METHOD, TIME and PLACE.
Here is a simple illustration. A bomb goes off in a city centre. The ‘news’ is that it is a terrorist attack. The news is gathered, processed, edited, printed and distributed in 12 hours. But by the time a customer buys the paper and receives the ‘news’, it turns out it wasn’t a terrorist attack, but a gas leak that caused the explosion.
So what is printed in the paper that the customer holds in his hand? Is it ‘News’ ? It can’t be News because it is not true! There is no metaphysical abstract news outside of the way it is produced and there never can be. Content is determined by form.
A concrete newspaper is concrete evidence of lying or making an error. (see 1984). News transmissions or digitations solve that problem. We have always been at war with Eastasia etc.
This is equally true for paper money. By the time that economic information is created, collected, processed by a central bank and turned into an interest rate that controls the production and distribution of Economy, the information in question may already be proved to be invalid! In fact it usually is….
So is the economy produced on the basis of that ‘counterfeit’ information money invalid?
The answer both in the case of News and Economy is that these are metaphysical abstracts that are accepted as both true and untrue at the same time. (Yet more Orwell)
The known facts and interpretation around any particular news event evolve over time. Interest rates and economic analysis evolve over time. Even though the MAJORITY of what is printed in the name of news and economy can be shown to have been wrong to a greater or lesser extent, this does not diminish the overall faith in the concept of news and economy.
(Note: Paper money hyper inflation is when there are simply too many lies and bad guesses to hide. Note 2: Except in India where they have recently embarked on a wholesale destruction of the paper money evidence)
Or it didn’t till recently anyway.
But that was before the arrival of Fake News.
So what has changed then? What now makes some news providers ‘fake’ and some ‘genuine’? The question might more usefully framed as: What makes a particular news provider VALID OR INVALID?
And the answer might surprise you.
I have explained that NEWS does not exist in the ether as an abstract. It is the concrete result of the production of different news formats. The same way that NEWS does not exist outside of space it also does not exist outside of time.
‘News’ as we see it now is the result of a clear historical process. As I described above this process is intimately linked with the commercial interests of advertisers. And this in turn is intimately linked with the development of capitalism.
The ‘modern’ press did not begin in Africa or India or China. This is not a meaningless observation, it goes to the heart of what ‘Press’ and ‘News’ really is. We can see that the ‘Press’ and ‘News’ is the product of German history and culture just as surely as Protestantism and Capitalism is.
Which brings us to the question of validity-not as some kind of abstract quality belonging to abstract ‘News’ argued about by differing interest groups, but as a concrete historical reality.
Papers that were published in the beginning of the News industry were the newspapers that received the investment necessary for obtaining news print, distribution and news gathering resources etc.
Investment was forthcoming on the basis that newspapers were a viable commercial venture. Newspapers were a viable commercial venture to the extent that they could obtain advertising revenue. They could abstain advertising revenue to the extent that they would comply with the needs and wishes of advertisers.
Simply put, traditional papers were valid to the extent they were given the blessing of commercial interests of advertisers. And that is all. Everything else said about the historical press – all the rhetoric about freedom of speech etc- is just someone trying to blow smoke up your backside!
We can see the accuracy of this observation by considering attitudes to the non commercial press/media. Two good examples of this are RT, the Russian sponsored media outlet and the BBC.
Both RT and BBC are regarded with scepticism or outright mistrust by large sections of the public in developed economies. They are regarded as suspicious (as in fake news) because they are held to have an agenda which comes from their sponsors which are governments..
This agenda is held to be more overt and controlling and less trustworthy than the agenda imposed on commercial press/media outlets by their advertisers. But why should this be so?
Because as I said above there is an accepted degree of commercial control that is allowed from advertisers and offset against this is the supposed journalistic ethics that allow journalists to report despite commercial pressure. This capitalist Germanic concept is embedded in the history and the ideology of ‘News’.
Central to this cult ideology is the concept of plurality of advertisers which works like this: Advertisers sell products into society which has a variety of groupings and individuals that represent a spectrum of thought and opinion on various matters.
The more and varied the advertising corporations are, the more likely they are to represent a variety of opinion which is the supposed endpoint of democracy. The ideal advertising profile of a media organisation would be one that contains a wide variety of large mass producing corporations such as Kellogg.
These corporations then advertise in and validate any given media organisation. If the media organisation produces ‘News’ that is against the tastes of the wide and deep variety of consumers that the advertising corporations represent, the advertisers threaten to withdraw advertising unless editorial policy is altered. We have a self sustaining self regulating commercial capitalist media!
And this brings us to the central problem. In modern digital media production costs are heading towards zero. This means that the potential commercial pressure that advertisers can exert is also heading towards zero. And since advertisers commercial power is heading towards zero, their position as representatives of society through consumption is heading towards zero. Death of capitalism!!
From this perspective we can look again at the story that prompted this piece: The Breitbart/Kellog spat.
Breitbart started out as an insurgent small scale Saxon Nationalist digital media operation with little or no effective media production costs. Under the terms of capitalist cult media it was invalid as it had no plurality of advertisers and therefore no commercial mediation of what it produced.
As it became bigger it attracted a plurality of larger scale advertisers up to the level of mush corporation Kellogg.
Kellogg received feedback that the content of Breitbart is offensive to some of the consumers it is supposed to represent.
Kellog expresses that offense with the threat and then the execution of removal of advertising revenue.
This is supposed to bring Breitbart back in line and serve as a warning to other digital media producers. But it hasn’t worked. Because fundamentally Breitbart’s production costs are close to zero.
So then pressure is applied to Facebook/Twitter etc, the distribution nodes that serve Breitbart because they CAN be controlled by large scale advertising revenue pressure. But even here, production costs are heading towards zero. This has limited effectiveness. So then the state is called in to regulate under the Fake News justification.
But there really is no such thing as FAKE NEWS only INVALID PRODUCTION which is production not regulated by large scale commercial advertising.
Cultural constituencies exploded onto the political scene is what just happened.
I have described cultural constituencies as sub national cultural/moral formations produced by the end of the market economy. I foresaw that as the planned Free Marxet economy became ever more dominant, cultural constituencies would in turn dominate the political sphere-a process that is most advanced in the Saxon Axis. This has proved to be the case in both the Brexit vote and the election of Donald Trump as President of the USA.
Now the argument has increasingly become about how these two events are linked. And if they are in turn somehow also linked to other anti-Globalisation/pro-nationalist movements in France and Italy etc. The outcome of this debate will determine how politics is conducted and understood for years to come.
As a matter of note I foresaw the appearance and rise of transnational cultural parties such as the Sax Pistols/Saxon Nationalists in a post that appeared in ‘Crackernomics’ four years ago. I even managed to predict when these organisations would appear on the political stage with an accuracy of about six months!
Now we hear that Donald Trump openly ‘suggested’ to the British government that Nigel Farrage should be appointed as British ambassador to the USA. An amazingly blatant example of Saxon nationalists on both sides of the Atlantic openly building diplomatic relations between two parts of the Sax Pistols international party within the Saxon Axis!
While I have been busy describing cultural constituencies, parts of the so-called liberal left are desperately trying to reconstruct the argument that the emergence of what they refer to as ‘white nationalism’ is the product of the economically ‘left behind’. This is not too hard to understand as a response by the besieged ‘left’. Without the economic argument you can’t have classes and without classes you can’t have the left. So this is a ‘do or die’ ideological battle.
At the same time the liberal right are going all out to cast their approach as economic nationalism -as opposed to the ‘white’ kind of course. They understand that they have a tiger by the tail in the form of the ‘alt right’ and other disaffected elements. If they were to allow a race narrative to become established on either or both sides, it would dog the entire Trump presidency. It has become ever more clear that Trump only intends to use the Sax Pistols as a stage army if he can and now the Republican establishment wants to do the same.
But both Saxon progressives and neo cons reserve their special venom for any arguments that challenge their narrative on the root cause of what has happened. They refer to this alternative understanding disparagingly as ‘identity politics’ or ‘cultural Marxism’. Why is it so important to attack identity politics on both sides of the Saxon left and right?
Because if a punter within the Saxon Axis can decide about his or her own identity he or she might decide wrong. Might decide that he or she is not a ‘worker’ or a ‘capitalist’ or a ‘loyal American’. And we can’t have that, can we? And if you start thinking about your own identity you also might start thinking about German identities and we DEFINITELY can’t have that.
Is That Even A Thing?
So it seems that we have lots of different kinds of nationalism floating about. We have Anglo Saxon nationalism and we have white nationalism and we have economic nationalism.
Can there be such a thing as ‘white nationalism’?
No, because the Germanic nation state subsumes concepts such as ‘whiteness’ and ‘blackness’. That is the whole point of the Germanic nation state- to subsume ethnic cultural identity underneath an economic identity.
But the concept of White Nationalism points towards a fundamental dynamic within Whiteism. The instability arises from whether ‘Whiteness’ is part of ‘Germanness’ or ‘Germanness’ is part of ‘Whiteness’. The desire to impose Germanic whiteness on all whites is fundamental to understanding the Germanic cult of Capitalism and the Germanic cult of Socialism.
So can there be such a as economic nationalism? Well yes, but only if you can figure out which is most beneficial: Nation subordinated to economy or economy subordinated to nation. No-one has managed to produce a consistent and stable relationship between the two for over two hundred years.
So can there be such a thing as Anglo Saxon nationalism? – after all Anglo Saxon is a sub national grouping as well isn’t it? I’ll get on to this in a moment.
Question 2: What Is Going To Happen Next?
After the election the Democrats/Strangeloves have lost access to all the main bases of political power in the American system. They have lost the Senate, they have lost the House and they have obviously lost the Presidency. And this is not the full extent of the rout.
Forthcoming appointments to the Supreme Court and an ongoing round of elections over the next couple of years will most likely the result in the further decimation of a divided and confused Democratic party. So what will the Democrats do in these difficult circumstances?
The main priority will be to attempt to exacerbate differences within the mainstream Republican/Saxon Nationalist alliance that has formed. And there are clear differences between the priorities of the corporate Republican establishment and Saxon nationalist cultural constituencies.(see above).
Chumponomics
Already Trump rhetoric on New deal government spending, immigration controls etc are coming under a certain amount of pressure. This can only intensify over the coming months. The Democrats hope is that this will result in a wave of disillusion that will isolate Trump and make his political agenda ever more difficult to enact. So you can guarantee that the liberal media will play up these divisions every chance it gets. In particular it will focus on Trump the person because Trump does not represent an ideology, he is like all politicians now, Culturally Specific.
Now We Can Clearly See That Culture Wars Are Media Wars
The only power base that the Strangeloves have left intact is in the mainstream media. So this is where they will base their attack from. At the same time Trump has his base in the alt media. So it is already pretty clear that this will be a battle of media forms.
In July of 2015 I predicted this outcome exactly and explained how control of the media was fundamental to the new political system based on cultural constituencies (‘Money Where Mouth Is’). In passing, note that Virgin mogul Dickie Branson has said he will bankroll a second Brexit referendum to overturn the result. Cue calls for a boycott of all Virgin product by Brexiteers. This is the face of politics in the future.
As it becomes evidently more difficult to undertake the kind of economic reform that Trump has promised, he will be forced to try to find ways to rally the troops. In order to do this he will be looking for a major cultural constituency issue that can coral his own constituency and clearly mark out the opposition. And this is where the significance of the designation ‘Strangelove’ as a cultural constituency is brought into the most intensely sharp focus. Because The Strangeloves are identified as a cultural constituency most significantly by their medicalisation of sexuality. This is a key concept in the coming years..
Since the end of the Second Germanic War, the Strangeloves have propagated the concept of social and sexual ‘freedom’ through the application of scientific management techniques. In particular this has included the popularization of abortion and mass contraception. There have been further developments in this field including state sponsored sexual organ mutilation designated as ‘ gender reassignment’.
Already we have seen that Trump says he intends to attack Roe v Wade -the defining legal case that established the limits of abortion access in America. But the same time Trump has made it clear that he does not intend to overturn same sex marriage. How can this apparent contradiction be explained?
Because abortion is characteristic of the medicalisation of sexuality but same-sex marriage is not. Abortion is indicative of the Strangelove medicalisation of sexuality in a way that same sex ‘marriage’ is not’. If Trump supporters start to get restive expect an attack on ‘gender reassignment’ as well as the already signaled attacks on abortion and contraception. These will be high profile media attacks.
Question 3:What Will The World Do?
It is clear that of all the global settlement in the aftermath of the second Germanic war it is Europe that will be most challenged by events that we have seen on folding over the past months.
Across the nations of Europe there is a question of whether nationalist parties will be able to take advantage of a seeming upturn in nationalist sentiment. Obama visited Angela Merkel to pass on the torch of multi culti democracy as one of the last acts of his presidency. Angela Merkel has confirmed that she will run for the Chancellor ship of Germany for a fourth time.
This will equal the longest run in government in modern history of Germany. But it seems that Merkels reluctance to leave go of the reins of power is not motivated by any genuine desire to implement a programme but rather by a fear of what will come after if she doesn’t.
On the other hand for the moment at least, the world seems to be reacting to the election of Trump and Brext with a kind of guarded optimism. This might seem counter intuitive on the face of it, but it is entirely logical given the historical precedent.
Essentially, the understanding is that if the European Germans and the Saxon Germans are fighting each other, they are likely in the near future to leave everyone else in peace. In the long run however, they are likely to try to drag everyone else into it. The most aware of world leaders are aware of this fact and planning accordingly.
Question 4 : So What Does It All Mean Andy?
The key to understanding this phase of politics is the meaning of Nationalism and nationalist sentiment in the context of cultural constituencies. Most importantly of all, Cultural constituencies are sub national political formations, which means they cannot be characterised as nationalist in any meaningful way.
For example, the French nationalism of Marine Le Pen is actually a French cultural constituency. It is a sub national cultural grouping that seeks to promote a conception of a particular ethnic cultural group. It cannot assume the mantle of a French nation. Because the French nation is by definition made up of more than one ethnic group. That is what a nation is. that is what defines it in difference to an ethnic group.
We can now return to the question of Anglo Saxon nationalism. If the French ‘nationalism’ of the Front Nationale cannot exist, can the Saxon Nationalism of UKIP take power?. The answer is no. UKIP by definition cannot run Britain. The rise of the SNP is straightforward testament to this fact. As UKIP rises, other cultural constituencies will appear to confront it within any given designated geographical area.
So can the Saxon Nationalism behind Trumpism take power in the USA?
And the answer this time is YES.Because the USA- from Constitution to Bill Of Rights is an Anglo Saxon cultural construction. And Anglo Saxon nationalism can exist because the Anglo-Saxon national state does already exist. It is called America. Now the question is’ Will a non Germanic cultural constituency arise in America to challenge the Saxon nationalists. The answer must be yes. And it will provoke a venomous hatred from both Saxon left and right that you have not seen before.
It is possible to envisage a Periodic table of nationalism and culture. Where any given nation lies on the table in relation to the Germanic nation state will predict its degree of reactivity and instability in relation to cultural constituencies and the nation state.
I have described cultural constituencies as sub national cultural/moral formations produced by the end of the market economy. I foresaw that as the planned Free Marxet economy became ever more dominant, cultural constituencies would in turn dominate the political sphere
Right back at the beginning of the United States of Everywhere, over half a decade ago, I specifically said that the nature of the financial crisis and its resolution would depend upon one thing more than any other:
How much of the old world where the monetarists prepared to allow to return. That statement can be seen to be ever more true today than it was when it was written.
But the implications of what I had written then were not clear to me. I implied that in theory it would be possible to return to the pre-Monetarist state of affairs if everything were put back in place. But this is not the case. I have had to learn again the simple lesson that History is a one way street.
Cultural constituencies are created by the collapse of the market system. But as they come to exercise increasing influence over politics and economics they preclude the possibility of returning to that market system.
The ongoing mainstream economic debate is concerned with the effect of globalisation on those who are left behind – specifically the so-called ‘white working class’ in developed economies. It is widely argued on both left and right that this section of society has suffered more than any other the effects of globalisation, the credit crunch, and resulting austerity.
From this starting point the debate moves on to what concessions can be made to the white working class. How much of the pre-Monetarist world, the postwar settlement, can and should be allowed to return to developed economies.
On both the Trumpist style right and the Sanders style liberal left, there is a desire to see the world return to the 1950s with benevolent state intervention in the markets, a strong and comprehensive welfare state, the end of multiculturalism. But the question is: is this desirable and can it be achieved?
We return again to the central problem. The postwar settlement was founded on two primary considerations: One was concessions to the working class. The second was the rehabilitation of Germanic culture internationally through internationalism and multiculturalism. It had initially seemed that internationalism and multiculturalism had won the day. But that was before the ‘white working class backlash’.
Question 5: What Should I Do?
International media parties.
The political landscape will increasingly be dominated by international media parties. As the political party is to the economic constituency so the international media parties will be to the cultural constituency. Culture Wars Are Media Wars
Comments are closed
Because the international media parties is the battleground it follows that the comments section is the trenches. This is where territory is won and lost.
You will have noticed how the comments sections in more publications are being controlled or shut down altogether. There is no percentage in comments for the big mainstream media organisations. They want quality of readers who will spend money over quantity of readers who don’t. (see Money Where Mouth Is)
Invest Becomes Subscribe
Investment is a rational (or otherwise) decision to assign resources to one of a range of options. The investor is in the dominant position. Subscription as the name implies is placing oneself under the imprimatur of another. Placing oneself rather than any particular money or thing under another authority,
The bail in is a classic example of this. The bank is free to change the nature of the depositors relationship with the bank. A deposit is turned into a share if it suits the bank to do so and there is nothing the depositor can do about it.
The age of the investor is over.
The age of the subscriber is here.
The age of the browser is over.
The age of the speculator is over.
The age of the spectator is over.
The age of the public square is over.
The age of the chit chat is over.
The age of the money back guarantee is over.
If you have somewhere to be, you should think about being there as soon as possible.
And follow the United States of Everywhere. If you are one step behind me, you are two steps ahead of everybody else.
‘Money corrupts everything, and it is capitalism that turns everything into a commodity that is bought and sold. In capitalist regimes everything is for sale: honor, integrity, justice, truth. Everything is reduced to the filthy lucre.’
Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West, How America Was Lost, and The Neoconservative Threat to World Order.
‘She spoke of the young black boy who looked up at the president and asked: “Is my hair like yours?” She said: “And make no mistake about it, this November when we go to the polls, that is what we’re deciding’.
I feel this questioning of democracy may be accelerated by first past the post, given that it allows the largest constituency absolute power in a way that isn’t the case for the continental European countries. In terms of the overall registered vote, the Tories only got just under a quarter of the share, once abstention is taken into account.
Do you really think it’s impossible to return to some kind of economic rationale? To be sure, compromise with the ‘1%’ is no longer on the table, but that doesn’t mean that a more radical solution couldn’t gain ground. One involving their destruction as a class.
Thank you Alex. The following is written partly as a result of your comments.
Cultural Constituency is an idea whose time has very definitely come within the Saxon Axis. This simultaneous implosion of every major political party in both Britain and America is unprecedented in centuries of Anglo Saxon politics.
In England a shock victory for Brexit should have put a cabal of Saxon Nationalist Brexiteers in the driving seat. Ex London mayor Boris Johnson looked like a shoo-in for the leadership of the Conservative Party as a consequence of his role in the Brexit campaign. But that didn’t happen. Conservative movers and shakers said: ‘Anyone but Boris!’
Not that the internal strife in Conservative ranks was of any benefit to the English Labour Party. Around the same time that Conservatives held a surprise forced leadership contest, the vast majority of the parliamentary Labour Party came out in open opposition to their nominal leader. And the cry of the opposition to the opposition was: ‘Anyone but Jeremy Corbyn!’
Over in America the Republican establishment unenthusiastically endorsed Trump amidst the roar of his supporters on the RNC convention floor and Hilary has managed to just about steal the Democrat nomination from the vast constituency of ‘Feel The Bern’ers.
What all these shenanigans have in common is that significant sections of the people who matter in each of the mainstream Saxon duopoly parties, (i.e. big money donors and party activists), absolutely hate the candidate that they have ended up with. In fact a lot of them hate their candidate more than they hate the other guy’s candidate..and this is happening in all the main parties at the same time!
So what is going on? Well in order to provide an answer to this question we will have to take a different approach to 99.9% of what has been written on the subject so far. That means relying not on pop psychology but logic and not on description but on analysis.
POTUS Hair
In part, the secret to this spiralling chaos lies in the Michelle Obama quote (unbelievable as it may seem), at the top of this article.
In order to operate in the way intended capitalist democracy requires that we reduce candidates to abstractions. In this capitalism is no different from many other forms of political/cultural organisation. But unlike other political ideology, modern capitalist democracy claims that this reduction can and should be done through the application of ‘reason’.
In ‘feudal’ political systems the individual is subsumed to the office he holds by integrated meaning. In other words the King as an individual is slotted into the position of King as structural element of society.
Whether the King is a ‘good’ or ‘bad’ person,(and by implication a good or bad king), is secondary to the justification of position of King- first and foremost we need a King, so that is that.
Give Me The Boy
As an illustration you can think of pouring liquid jelly into a metal mould. The jelly sets within the mould and takes on its shape. Remove the set jelly from the mould and it still holds that shape. So it is with the person of the King. He is made by his experience in office. He eventually becomes the office he holds. Just as ‘king’ is intrinsic to society so this individual is intrinsic to ‘king’ and ‘king’ is intrinsic to this individual.
The same is true of a carpenter, or a farmer or anyone who holds a position within a ‘feudal’ (an integrated), society. You are what you do. Hence the famous Jesuit dictum: ‘Give me the boy and I will give you the man’. People can be shaped.
Actually Not Anybody Can Be President..
‘Feudal’ societies take whoever is available by birth and make them into the leader. In this sense it is entirely irrelevant how a candidate came to be there, it matters what they are going to be made into.
But how could this understanding of humans as primarily liquid and malleable fit in with the modern Germanic conception of individuality the idea that we are all inherently and intrinsically different?
For devotees of the Germanic Cult of Capitalism this conflict in understanding necessarily creates a problem. Like any other society Germanic capitalism need to select somebody to run the show -a leader- but on what basis can we select that person?
The ideological solution was an ever changing line of temporary rulers REPRESENTING a constant never changing ideal- that of democracy, ‘free markets’ etc. So the office holder and candidate can be reconciled as an individual while still expressing an abstraction.
This solves half of the individualism problem, but there still remains: Which parts of any given politician are the ‘individual’ and unrepresentative bits and which parts are the rational ‘representative’ bits?
That answer would be provided in part by Sigmund Frauds’ idea of an ‘unconscious’ : The ‘subconscious’ bits were the individual unrepresentative bits and the reasoning, conscious bits were the representative bits. So when you clock into work in the morning you are the reasoning, rational POTUS and when you clock off at night you are the unreasoning, subconscious, individual.
And from this perspective we have a direct and illuminating insight into the two centuries long Germanic media cult of Politicians And Their Private Lives. Also ‘unconscious’ racism etc. all runs on this basis.
All Germanic political narrative, from pseudo ‘intellectual’ historical investigation to tabloid reporting, is created around this paradigm; the ‘secret sex life of a Kennedy’ or ‘what a Roosevelt ate for dinner’ etc and how this affected the major decisions he made while in office. Think about it; Isn’t this how all historical and contemporary figures are defined and explained in Germanic capitalism?
But for this version of a political reality show to work in the here and now, both capitalist media and intelligentsia have to be able to demonstrate that any given politician –if he or she is to be regarded as acceptable– is reasoning and conscious while he is working in the office 9-5. And this is achieved in capitalism by demonstrating said politicians adherence to a rationale, specifically Economic Rationale.
It is important to note that Economic Rationale is not actually rational- nor does it need to be! What it is there to do is provide a rhetorical framework, a kabuki show that can convince the population that any given politician is acting in a conscious, rational way while at work. It is a means of demonstrating that a politicians’ actions are based on reason.
Economic rationale is founded on the ideological assertion that society is organised around the economic interests of groups of people generally referred to as ‘classes’. These ‘classes’ use politics as a forum to compete for power which allows access to resources.
The Germanic proponents of economic rationale claim that this is the best way to organise society because it allows for the possibility of compromise. Differing groups within a society can compromise on how much tax an individual will pay, how much welfare he will get and so on…
With any other form of social division compromise becomes much more difficult to achieve. For instance, division on a colonial, racial basis, (such as the apartheid system) found compromise impossible resulting in its destruction.
This gives you the beginnings of an insight into the mainstream attacks on Donald Trump and why proponents of economic rationale want desperately to control the nature of the debate…Not just because they hate Trump but because they genuinely fear the consequences of stepping outside economic rationale.
Obviously classes are fundamental to this narrative. But in order for classes to be credible they have to have social power which means demonstrating that they affect the way things are done.
Unfortunately that can’t happen in a planned society, (and after QE you had better believe we now live in a planned society…)
No doubt you are entirely aware of the effective demise of organised labour and of trades unions in most of the developed world. You may or may not also be aware that the destruction of ‘bosses’ took place at the same time. This is a fundamental part of the Crackernomics argument that I have written about on a number of occasions..
We now live in a society that uses the rhetoric of markets while effectively accepting the logic of Marx’s argument that the state must in the end control all economic activity. Welcome to the Free Marxet.
Since we live in a planned economy there is no way for a potential leader to demonstrate his or her commitment to economic rationale and its attendant compromise between classes anymore. There is no economic free market arena where both sides can ‘fight it out’ so there is no need for someone who can compromise. There is only The Plan.
And you can’t compromise with a plan. You either follow it or you don’t. If you don’t follow The Plan you can’t expect it to work… so you are facing a ‘take it or leave it’ situation; This is the actual meaning of the famous Monetarist mantra of TINA- There Is No Alternative.
TINA is not an expression of irrational spite or a dictatorial impulse on the part of Monetarists, no matter what the battered remnants of the liberal left would have you believe. It is simply a sober assessment of the facts as seen from a Monetarist perspective. Monetarists say: ‘All we have is this plan for the Free Marxet. You either follow it and give the remains of capitalism some chance at a future or you do not.’
There are no classes anymore..and there is no way for any candidate to present to public media and intelligentsia as one of a number of credible representatives compromising between competing classes.
Since there is no way to demonstrate that the candidate is employing economic rationale to achieve compromise, there is no way to divide a potential leader up between ‘9-5 rational’ and ‘at home irrational’.
Which brings us to the problem I described at the beginning.
Trump cannot divide himself up between rational and irrational in this situation. Taken as a whole Trump is seen as irrational and unfit by those who are against him.
Boris Johnson cannot divide himself up between rational and irrational in this situation. Taken as a whole Boris Johnson is seen as motivated by an ambitious private vendetta by those who are against him.
Jeremy Corbyn cannot divide himself up between rational and irrational in this situation.Taken as a whole Corbyn is seen as an undercover communist by those who are against him.
Hilary Clinton cannot divide herself up between rational and irrational in this situation.Taken as a whole Hillary is seen as paid for by Wall Street by those who are against her
None of this is the fault of these individuals. Neither is it the fault of those who hate them. It is the collapse of the market system and the political parties it gives rise to that has brought this about ..
No matter which individual politician follows on from what we have now, the essential problem will remain the same. Germanic ideology cannot find a way of understanding and presenting the relationship between political individuals and political offices in this post capitalist situation.
The system now has to find a way to understand any potential leader as a whole. Or at least divided up along non traditional lines. Which brings us to the way that politics is now.
How do we relate to and select individual politicians for positions of power? We cannot go back to saying he or she is moulded into the position as ‘feudal’ societies do, that would be ‘primitive’. It would also mean that we accept that a fundamental precept of capitalism; the concept of Protestant individuality, was void.
The temporary fix is the rise of the Culturally Specific politician as opposed to the Political Representative.
As I said at the beginning Capitalism, like other societies needs to reduce its leaders to a form of abstract. But unlike other societies, capitalism is additionally hamstrung by its need to hang onto the historical cultural creation of the individual.
The hybrid this produces is a new kind of individual politician who is moulded by the ‘Cultural College’ he or she originates from.
Now the politician is an individual in as far as that individuality is the expression of the cultural identity group that formed said individuality. In other words it is an attempt to graft on part of the ‘feudal’ moulding process without admitting as much!
If you accept Barrack Obama as a president, you accept the ‘African American’ middle class liberal intellectual cultural college as a valid origin point for a politician to implement The Plan.
If you accept Hilary Clinton you accept the southern lawyer cultural college as a valid origin point for a politician to implement The Plan.
(This is what the ‘glass ceiling’ spiel is really all about..).
And if you don’t accept Bernie Sanders or Donald Trump it is because you don’t trust the cultural college they come from and represent.
Back to Michelle and POTUS hair. What she is actually saying is that Obama style blacks are in now; That they are trusted to implement the Plan. Now it is time to move onto Democrat women etc..
The description of Cultural Constituencies that I began to develop a couple of years ago was a natural progression from an analysis of the political and economic changes that had occured in the global economy as a consequence of the credit crunch. Economics as we had known it had ceased to exist and been replaced with a hybrid semi- Marxist control and command economy..the Free Marxet.
Marx was absolutely right when he deduced that the political structure within developed societies is a direct consequence of the economic structure of these societies. In order to support our previous form of political democracy it was necessary to have an economic arena wherein two opposing sides could work out a compromise of economic interests. This was a form of market in labour, wherein under controlled circumstances, ‘workers’ and ‘bosses’ could compete to secure relative econmic advantage.
In our present command economy such an arrangement is clearly insupportable. A command economy cannot allow independent institutions such as genuine trades unions that would forcibly prosecute the interests of members to the detriment of the overall planned economy. It follows that the economic and political dichotomy required for traditional political democracy is not viable.
In this altered environment Cultural Constituencies emerge as the only possible vehicle through which differing social groups can identify and pursue their interests. The Brexit vote is the latest and most spectacular evidence of the emergence of Cultural Constituencies as the prime political force at work in the developed economies today.
The Brexit referendum was won by a little over 30% percent of the total population of Britain – a sizeable minority but not by any means a majority of the population. Despite this observation it cannot be argued that Brexit victory is somehow illegitimate. There is no minority within Britain that is greater in size than the Brexit gang so by the terms of formal democracy the vote stands.
Despite this unavoidable truth it is absolutely clear that Remain does not intend to accept the political reality of the Brexit vote or its legitimacy. This clearly brings the entire democratic framework within which the referendum was carried out into question.
Fundamental questioning of the existing democratic system is an inevitable consequence of the emergence of Cultural Constituencies. The reason for this is not complicated. The political system as we know it is designed to service economic constituencies groups who identify themselves and their interests in primarily economic terms.
If economic constituencies are no longer to be the prime building block of the system how can that system remain unaltered?
Imagine a large university building in the process of being constructed over two or three generations. Half way through, the builders find out that the red brick they have been using will no longer be available. The alternative building material they are being offered has a different tensile strength, water absorbance characteristic etc. which means that the structure that had originally been envisioned cannot be supported by this type of brick.
The part of the building that is not already built using the old brick will have to be extensively redesigned if it is to be built using the new brick. This is the political process we are watching being worked out now in Europe and around the globe.
This tension between the old plan and the new is now beginning to make itself felt through the altering structure of political parties. Political parties as we know them represent a hybrid solution to the problem of ‘modernising’ Germanic land democracy.
Germanic Land democracy is based upon the free ownership and transfer of land. In all the Germanic democracies, land ownership was originally the prime requirement for the right to vote- to participate in the democracy. No land, no vote.
However, with the development of the cult of Capitalism and large numbers of landless ‘workers’, who were by definition disenfranchised, it was necessary to develop a hybrid solution. Cities rapidly became large centres of landless people which gave birth to an alternative ideology to Germanic Land Democracy- later identified as Communism.
This Communism would inevitably challenge the existing order and given the superiority of urban areas in numbers and productive capacity would win. The solution was the creation of geographically constructed constituencies that expressed an economic justification for their existence through the party system.
The voting system would formally be based on geographical location, but the motivating political dynamic for taking part in that system, the parties, would be economic in character. This is the basis for so-called modern‘universal sufferage’-the right of everybody to vote.
From the point of view of stabilising Germanic societies this served the dual purpose of avoiding a direct challenge to Germanic land democracy by those who had no land, while at the same time avoiding the obvious conclusion that the political system should be formally organised upon economic or class lines.
Geographic boundaries as the basis for politics and democracy were preserved. And this is fundamental to the continued existence of Germanic Land Demorcacy.
Despite the rhetoric to the contrary, this form of compromise has proved to be inherently UNSTABLE and prone to periodic seismic crisis. Universal suffrage only became widespread in Europe around the turn of the last century and immediately produced a series of political and economic shocks that have increased in severity to the present day.
As a consequence of these shocks, the ideology of welfarism was developed to mitigate the obvious disparities of political and economic power. Welfare is the bounty paid to the landless to prevent their overthrow of land based Germanic Land Democracy.
However, these internal developments in the Germanic economies did not occur in a vacuum. Across the world changes in the balance of power meant that developed nations were having to modernise Germanic Land Democracy against a backdrop of relatively diminishing international power.
In the late 1960’s this reached a point of absolute crisis and the formal intellectual abandonment of the free market economic model in America. The Free Market was replaced by monetarism – continual state control of the economy through the amount of money allowed into the economy by ‘independent’ central banks.
As the effects of Monetarism became apparent, we could see the end of the distribution of wealth and resources through the work and production model and its replacement with the distribution of wealth and resources through a property or asset ownership model.
This intermediate property or asset ownership model reached its own breaking point with the snapping of the link between taxation and asset and property ownership – what has come to be known as Neo Liberalism, and just as significantly, Globalism.
In essence globalism is not the movement of capital around the globe, that has been a greater or lesser feature of economy for thousands of years. It is most significantly the break between wealth generation through asset ownership and taxation by national governments.
This gives rise to the present crisis which is expressing itself at the weakest point of the chain- the joint between economic political parties and geographic political system. In Britian today the political system is physically imploding in front of our very eyes.
The two major parties have no effective leadership and furthermore, they have no prospect of establishing effective leadership in the short to mid term foreseeable future. By this I specifically mean that they have no plan to deal with the consequences of Brexit that will not necessarily entail their own eventual political destruction!
The two opposing sides in the Brexit conflict represent not economic differences, but cultural identity differences. This has become all but impossible to hide.
The Brexit side is perfectly willing to accept any short to mid term financial problems including uncertainty and some degree of isolation so long as it achieves their long term goal of disentangling English politics from Europe. Likewise, the Remain side is entirely comfortable with ongoing hardship,especially for young people, in the form of mass immigration and competition for resources so long as they can stay within the European ideological mindset.
These are political AND personal decisions made by the individuals who have voted for each side. In this new political environment, the existing political parties simply have no way to lead ‘Leave’ and ‘Remain’ to some form of traditional compromise. There are no economic incentives they can offer to achieve compromise.
The following is an excerpt from Crackernomics 2: The Structure Of Money
‘Nowadays people know the price of everything and the value of nothing’.
Oscar Wilde
Modern money operates as a universal Lingua Franca – a common language. It has gained this pre-eminence by promising ordinary people a way of understanding an otherwise incomprehensible world
But the understanding of reality that modern money offers is warped and mutilated. Modern money actually offers a facsimile of knowledge – an hallucination of the way the world is.
The ideology and rhetoric of modern money was created to seal this hallucination off from physical reality. This ideology permanently and irrevocably FRAGMENTS reality so that the cult of modern money cannot be challenged by human experience.
The ideology of modern money exists to mutilate your mind by partitioning it.
Priests of modern money claim that anything outside of their money model world is irrational and essentially meaningless. They insist that everything experienced outside their framework must be disregarded.
The priests of modern money claim that their parody of reason is the end point of the search for universal truth. They say that all other conceptions of value, truth and meaning are primitive, parochial and limited and in the end they will be swallowed up by the cult of modern money. They seek to persuade that the rise of this cult is irresistible because it is Progress.
A Kind Of Magic
The modern money knowledge hallucination is predicated on creating a description of the world that does not require any actual understanding of the physical characteristics of this world.
This claim to produce knowledge without understanding is a magical claim. To produce knowledge from nothing is alchemy- as preposterous as the claims of a fairground clairvoyant.
Take a moment to think about this. Across the globe there are vast markets which comprise of commodities being traded by people who in reality know literally nothing about these commodities. The system works because these traders are not required to know anything.
The speculative method of extracting wealth is predicated not upon understanding any particular commodity but upon predicting the prices that markets will create for commodities and reacting to them.
In other words market speculators are not trading on the knowledge they have but rather trading on the knowledge that others do not have!
For instance, a commodity trader is not required to know anything about an actual steak and its physical value to know what it will be ‘valued’ at. If he knows that any particular group of customers only has £5 to spend on steak, then he knows that the price these customers will pay for steak will not and cannot be more than £5. The steak will be ‘valued’ at worth £5 or less, irrespective of any actual physical value and worth.
This is an insight into ‘price discovery’. Prices are created not discovered. Contemporary prices are a consequence of previous prices. Monetarism is predicated on this observation. As such it is a repudiation of classic capitalist ideology.
Price ‘discovery’ is an illusion in the same way a student takes LSD and ‘discovers’ a whole new world previously unseen. But the truth is that he has not discovered anything. He has created this world by means of introducing a chemical into his brain.
Well you might say, how come descriptions of this LSD world seem to be so similar when people recount them? I am afraid the answer is that most people lack the imagination to create anything novel, either under the influence of drugs or not..
The money/price hallucination is another created virtual hallucination. It allows the raw resources of the world to be leveraged to extract value by people who will never actually see anything of these resources and who never have to directly face the consequences of their market manipulation.
This process reaches a new high (or low), point in HFT-high frequency trading. Modern networking computer technology allows analysis and manipulation of the market to be carried out in amounts of a nanosecond. Now no longer even knowledge of the other market participants required, only knowledge of the technical structure of the system expressed through computer code.
Is HFT the end game in the cult of modern money? Or is it possible that money can become even more sealed off from physical reality even as its dictatorship over lives becomes ever more tyrannical? How has money become transported over time from the population to a hermetically sealed dictatorship isolated in an intellectual palace?
The claim is made that the modern money hallucination is based on reason and reality. This is the historical link between the modern world of the money hallucination and the ‘Enlightenment’ which was supposed to be founded on reason.
The religion of Economics preaches the story of progress from the concrete world of the senses to the transcendent heaven of modern money. How is a system that was supposedly based on reason transformed into one openly based on ‘animal spirits’, fear and greed?
Understanding the relationship between the two rests on the difference between a proper description of reality and a money description of reality.
Proper Description
Here ‘proper’ is not intended as some kind of value judgement. It means to describe real artefacts in the real world using real descriptors- a physical description. A proper description of any particular object has two elements.
The first dynamic of proper description defines the commonality of objects. In the case of an apple we can describe an apple as ‘plant’ and then as ‘fruit’. Using the plant…fruit descriptor we associate the apple within an ontology, a systematic description of plants.
The second dynamic of description differentiates an object as different from other objects within a class. e.g. Fruits are consistently different enough from all other plants to be defined in their own right. ‘Apples’ are consistently different enough from all other ‘fruits’ to be seen as something definable in their own right. We can further subdivide ‘apples’ into different varieties and then further refine the subdivision process.
In theory it should be possible to create a description for each individual apple that locates it within the entirety of nature- by which I mean not just an abstract description of type, but to locate a particular apple within time and space.
We start from broad categories:
Plants- subdivided to Fruit – subdivided to Apple- subdivided to Variety- subdivided to Location- subdivided to Farm – subdivided to Tree – subdivided to Time of harvest.
When we carry out this process something peculiar happens along the way. Numbers begin to substitute for names. There are no longer absolute descriptors (names), such as ‘Apple’ only relative ones; weight, colour, sweetness etc. These require relative numeric values.
As we move towards capturing a specific instance the uniqueness we seek becomes lost in relativity. The harder we seek ‘uniqueness’ the more it is revealed to be a chimera. Names are subdivided into numbers. But then numbers are subdivided into codes.
A code is in fact a name constructed from numbers. But where numbers are real e.g. they are descriptors, codes are not real (they are names), and require descriptors!
If I describe an apple as the fifth apple picked from a tree, I am not describing something uniquely real about that apple. I am describing something relative- something that only has meaning in relation to all the other apples on that tree. ‘Five’ is a number and it is real; ‘Fifth’ is a code and it is not.
And once we have allowed the creation of number/code/names all Hell breaks lose shortly after.
The number 400 is divisible by the number two to create the number 200. But the code/name/descriptor 400 is also divisible by the number 2 to create the code/name/descriptor 200. The meaning of this observation is that codes can be made to parallel the logic of mathematics.
In other words CODES can relate to each other numerically and consistently the same way that NUMBERS can. But they are NOT required to be defined and relate to each other LOGICALLY the way that NAMES are. This means that results can be produced from manipulating codes that are consistent but not logical or real.
Codes operate in the gap between names and numbers. This is where the hallucination is situated.
You can numerically binary encode an image (description) of Superman in a Computer Generated Imagery program. And then you can numerically manipulate that code to make him ‘fly’ in encoded space. The description of his flight will be entirely consistent within the encoded universe. But it won’t be real. It will be a model.
When that model is intercut with ‘real’ live action you have real problems telling what is real and what is not. This is how CGI/Live action movies work.
At the moment we are not required to act as though a Superman film is a real documentary. (Well, for now anyway). But we are required to act as though climate change models are real. And climate change models are essentially the same thing as a Superman film, real footage intercut with numerically manipulated code descriptors.
Climate change models take real stuff and code it. Then they produce a film, (a model), based on that manipulation. The film IS consistent. It DOES make numerical sense. But that does not mean it is logical or real.
In order for the climate change ‘model’ to be plausible it has to be cut off from the real physical world so it cannot be challenged by experience. And so it is. It is placed in the future where our real physical world experience cannot go.
Superman lives in Metropolis. Batman lives in Gotham City. Climate change lives in the future.
The same applies to price. Price is code masquerading as number. As a consequence modern money ‘value’ is also code masquerading as number.
Most of the people reading this will be well informed enough to know and understand that the ‘Federal Reserve’ is nothing to do with the Federal Government of America. It is just a name.
But do you also understand that the ‘10’ printed in the corner of a dollar note is not actually a number but also just a code/name? And the ‘$1’ price tag printed on a stick of celery at your local market is also actually a code and not a number?
The implications of this are massive and staggering.
Just as the name ‘apple’ is used in England and ‘pomme’ is used in France and ‘manzana’ is used in Spain, so this artefact is given a different price in all these different territories.
What is the relationship between the different names used in the different territories? Is it logical? It is the same relationship as that between the different ‘prices’ for this artefact. There is no real, logical relationship.
Outrageous nonsense! I hear you cry. There is a real consistent relationship between prices and the value of money notes. They vary but they make sense in national and international markets.
No. There is a consistent real relationship between NUMBERS and codes steal this relationship and use it to masquerade as logical, rational and reasonable under cover of it. It is a parody of reason.
Money value is something that various disparate artefacts are held to have in common. As Oscar Wilde famously said :
‘Nowadays people know the price of everything and the value of nothing’.
It is hard to over emphasise the profound intelligence of this remark.
The deeper truth is that we know the price of everything precisely because we don’t know its value. Price is the only way that the Germanic cult of Capitalism can make practical, intellectual and even moral sense of the world.
We don’t know the actual value relationship between a red pepper and a box of matches. But if the pepper is priced at 50p and the box of matches at £1 we say that the matches are twice as valuable as the pepper. Of course this is absolute gibberish, but the world is made to conform to this madness…
In another example, two things that cost the same are said to be the same. This gives rise to the outrageous example of the inflation substitution calculation in America.
When any particular item in the basket of goods used to calculate the rate of inflation actually inflates in price, it is simply substituted for an alternative at the old price! When steak becomes too expensive to fit the ‘inflation rate’ it is removed as an embarrassment and hamburger is substituted. Quality is not a concern when inflation substitution is made.
This outrageous abuse of reason works on the basis that anything at a given price is the equivalent of anything else at that same price. Reason, life and the world are mutilated so they fit the price hallucination.
I will finish with a broad description of price rhetoric.
Say you wish to buy a vacuum cleaner. You are presented with a list of three possible vacuum cleaners priced at M50, M80 and M600. (M is any standard unit of currency)
The prices given generate two categories of apparent ‘information’:
1.’Information’ about each particular vacuum cleaner in relation to the others and also
2.’Information’ about vacuum cleaners in general as a group of products.
Information about each particular vacuum cleaner in relation to the others
That M50 and M80 are similar but that M600 is considerably superior in some way; as expressed in price. You can understand this as the quantified (of course no actual ‘quantity is identified, just a code name), difference between a standard saloon and luxury sports car.
’Information’ about vacuum cleaners in general.
The value of vacuum cleaners in relationship to boxes of matches or whatever. e.g. all vacuum cleaners as a class of product are more expensive and thus more valuable than all boxes of matches as a class of product.
It follows from this that if we alter the price list relationship between the three vacuum cleaners we say something different about these relationships and generalities. The price mechanism generates a grammar and a logic upon which the rhetoric of marketing is based.
However, the problem is that this information is based upon assumptions about price that are not necessarily true. In order to create a semblance of general logic they assume:
The seller wants to sell at any particular price.
The seller wants to sell as many elements as possible at any particular price
Each price describes an independent entrant into the market
There is a relationship between price and intention
But it is often the case that:
The seller does not want to sell at any particular price.
The seller does not want to sell as many elements as possible at any particular price
Each price does not describe an independent entrant into the market
There is no relationship between price and intention
In other words the market cannot really capture the reality of intentions: Sometimes the market is ‘rigged’, which really means sometimes market participants do not act in the way that the priests of the ‘free’ market claim they should act.
And so the free marketers relaxed laissez faire attitude is transformed into rage and they rush to pass laws to protect free markets from… freedom. The free market always becomes a dictatorship of rules to make sure it remains free.
At the conclusion of the Matrix the ‘Neo’ Man discovers that the whole universe he has been living in is the expression of code. It has consistency but it is not real. Once he sees the world as merely code he can manipulate it in any way he wishes.
The Matrix was all about financialisation.
It was made in 1999, just when financialisation was really getting going.
You should familiarise yourself with the law of conservation of matter and the law of conservation of energy.
United States of Everywhere 