Of late there is a big to-do about the imminent collapse of the economy as a result of the collapse of some of the investment firms as a result of "bad paper", as though paper with numbers written on it could be good or bad. We are being daily inundated with heaps of heaps of minutiae and details with so many dead ends and flyspeck-and-pepper analyses that the sheer size and complexity of what we are presented with clogs up the mind with hairballs and the integrating mechanism of the ordinary person goes "on strike"; that is "I'm fed up to here and just don't wanna hear about it any more so effoff". At the same time we are told that the situation is grave and we are one step away from hitting the crapper and the clock is ticking... The two messages are, this reqiures sober thought of both great depth and breadth but we don't have the time so let's leave it to the...(experts [who got us into this], illuminati [who don't seem to be that bright in the first place for getting us into this], Shining People [who seem pretty badly tarnished but does not a dead fish in the noonday sun also shine--and stink!?] or Beautiful People [who look like death warmed over and smell like turds] and each of whom is at the throats of the others). What is a decent person to do? It stands to reason that 98% of this is BS: It's founded on BS (Bad Securities) and since they're all arguiing with each other and only one answer is right then 98% of what is being put down is BS (Bogus Stuff although each of the fighters may have a grain of truth, still most of what each is saying is false as demonstrated by the fact that there are about 4 mutually exclusive "sides").
Who knows the origin of the "laissez-faire" in "laissez-faire captialism"? ANSWER: it was from "Laissez nous faire [let us to do > leave us alone]". What the liberals don't want you to know is that it was the French business establishment's rejection, not of government "interference", but of the offer of government help. Holy I'm-from-the-government-and-I'm-here-to-help-you; Batman!
The bytes haven't been dry for a year on MONEY & POWER (this column; Nov. 2007) when, just like a nasty blow upside the head the "economic meltdown" happens, where 5% of the mortgage market has taken down 6 bigtime companies and all the rats are scrambling to keep from looking like the villains of the piece. Holy comic opera Batman!
The liberals, who have long ago lost touch with reality and who apprently run the Democratic Party, along with Bill O'Reilly call for tighter controls and regulations. Hey guys, if you are not too far out of reality to hear my voice it is precisely because of regulationism that this happened. As I have been saying for decades "It is a lot easier to fool, con or corrupt men than to fool, con or corrupt the marketplace because the marketplace runs on fixed, evidence-based laws". The door of economic control opens both ways; of necessity. Part of my older brother Mike's job was to schmooze tax auditors for a major motel chain back in the 1980's. If Taxman can be schmoozed so can Regulatoarman. Besides which, who would be attracted to this job besides the naive, lunatic or dishonest? The pay sucks, and the pain in the asteroid factor is humongous so only the misled, brain-embalmed or sharpy looking for an angle to make it pay off would put up with it and the naive, getting a whiff of and seeing the size of the pile leaves, either disillusioned, to become a community organizer or wised up and goes elswhere or becomes a poverty pimp/sob sister.
Bear in mind that this whole thing started because of the collapse of a system of fraudulent mortgages. Now the liberal and big business establishments will join fources to see to it that you never learn the nature of capitalism (the former for power the latter for access to government favors or both as the dumbing down process eats its way into the "illuminati"; the self-appointed Beautiful People whose parents thought that they could escape the dog that they let out. The reason that they're all Botox'ed up to here is to remove the deer in the healights look).
Capitalism is a political economic system which is an amalgam of two things. Politics and economics. Politics, in the proper use of the word is about government.
So what is the purpose of government? To bar the initiation of force or fraud in its realm. Well, This whole business was the result of fraud, "no doc" loans and "liar loans". I was approached to participate in this kind of thing and explored it and said "On my income, this will never work" and the person said to me "you never know" to which I said "I know and it smells". !SCAM ALER5: when you hear "You never know" from someone who should know, run like hell, because what's about to hit you weights 434 tons, has teeth like T-Rex, is coming at you at lightspeed and has a cloaking device. DON'T DO IT!. The Big Business types will tell you that any actions to prevent this kind of thing is a violation of capitalist principles and should be avoided and the liberals will tell you that such actions are contrary to capitalistic principles and therefore, ought be gleefully implemented. At one time, the mainstream liberals were not anti-capitalist, merely Keynesians who thought that they could improsve upon capitalism by inserting government action to smooth out the rough spots and make it more robust, durable and user-friendly. That is no longer the case. Both are right in that the byzantine regulatory system is anti-capitalist. Both are wrong because dealing with this matter is a proper use of the police power of governemtnt. Capitalism is the economic result of a system of government who's job is to "....Provide for the common defense [against force and fraud], ensure domestic tranquility [by not being an agent of chaos], promite the general welfare [by] ensuring for ourselves and our posterity, the blessing s of liberty [if you do not know what that means then you 're in deep doo-doo]...", which promotes honesty by banning dishonesty and is a necessary part of the capitalist economic system and a pre-suppostition thereof. Even if that were not done well, the "Regulation by Reality", the fact that to avoid getting shafted means that you've got to be responsible for yourself and be on the ball: "caveat emptor" would have the greatest chilling effect on bad actors. We did not make it to the top of the food chain bey being a species of ninnies: Suckers are made (by lack of education and inexperience, or overprotection; a guitar players fingetips are hardened but not to the point of being unfeeling); not born.
Both are either wrong, or most likely liars! Barring and retaliating against force and fraud are the only proper roles of government and more so in a laissez-faire capitalist ecoonomic system. Were there no regulators to schmooze, the perps would have to try and sell their bill of tainted goods to a market that was not too lulled to sleep to notice that this stuff didn't pass the smell test becuase the persons in the market would be well aware that if the paper goes into the drink, there's nobody to bail them out so they'd damn well better mind the store. BTW of all the parties, the liberals are the worst because it is economic freedom that they hate and will do anything to crush so that they can create misery and be "needed" and given more and more power. And for another reason which will become more apparent.
But why is this kind of thing unavoidable?
It isn't but only under conditions that do not currently exist.
Why?
Not "why" but "how come?": "Why?" implies some motivation, usually to a desired future state of affaires. "How come?" inquires into the origins and processes by which a state of affairs comes to be. Though the two may track, that is not always the case "The best-laid plans of mice and men oft gang aglee [old Scottish for 'hit the crapper at lightspeed']". In this case I am interested (in the full sense of the word; both wanting to know and having a use for) the undelying reasons for this phenomenon.
Two reasons
The two basic economic structures are called in the study of economics "market" and "command". To grasp the differences think of market economics as persons trading or buying and selling goods, what would be the opposite of that? A jack-booted dictator ordering persons around with a whip, a club or a gun. This explains why, prior to shortly after WWII the Keynean economic system so in vogue was called "economic fascism" despite the fact that John Maynard Keynes and his disciples thought that they wer operating as pro-capitalists agains the fabian socialists: Now there's a kick in the left one for you; ouch!! This last is economics by command or a "command economy". Now do you understand why the left is trying to tar the right with the "fascist" label? Psycholigists, when it was a respectable profession, called the attribution of ones own characteristics to others, the "mechanism of projection".
Leftist economics are all built around the command economy structure, with heavy government therefore political involvemnt. In classical political study, Fascism is the typical model of dictatorship. Now which political philosophy is compatible with the image of the dictator with his whip, gun and club? and which kind of economy is compatible with that? So who is the left trying to kid? Well they'd be stopped cold if Big Business didn't create a stake for themselves in the same economic practices and lodge themselves in the Republican party. So they, too need to make sure that people don't wise up: The perfect dog and pony show. The only way that reality has to assert itself is through Murphy's Law.
In any bipolar situation, the only stable points are the two endpoints. In this case, Fascism and liberty. Both of these are, unknown ideals. Fascism, or in modern terms statism would decend into chaos in a generation and liberty has yet to be reached because we are evolving from the more authoritarian political models of the past. Therefore the command economy and the market economy are the only two stable models of labor and trade. History has snown us that the command economy, with its epistemology of faith in the leader/oligarchy decends into chaos with the political system as soon as the principals turn on each other whether Nazi Germany, Fascist Italy or the Soviet Union (once the Reagan Administration declared economic war on them).
However, as I said earlier, the two endpoints are unknown ideals. What we've had is a mixed economy. This is like throwing chunks of matter and anti-matter in a vacuum chamber on random paths; that is, unstable, as the chunks run into (and cataclysmically afoul of) each other. In terms of political economics, these "chunks" are the defining ideas and operational procedures that are incompatable with each other. and that the operating officials are trying to keep in balance.
To understand this in a coherent, reality-based way, you must understand the structure of philosophy and how it plays out in human affairs. There are two irreducuble primaries. That is, philosophical matters that are established outside of and make possible, philosphy. These are at the heart of such things as "worldview" and "mindset". Metaphysics: How the world works. This is gleaned by living and paying attention to the world around you: Wishing does not make things so. belief does not make a thing true. etc. Epsitemology is the science of coming to and vilidating knowledge: factual premises and valid reasoning always yield true conclusions. In terms of philosophy, what are metaphysical and epistemological are pre-conditions for the existence of the rest of philosophy. Now, because we are not born with innate knowledge and yet must act, we need to be able to sort out good from evil (mirroring the metaphysical correct from incorrect and true from false). Ethics is the area of philosophy in which we locate our premises for doing the moral algebra and calculus. Now since we organize ourselves for both work and pleasure; and make no mistake--a true Randite is an extremely social and sociable entity and you would be suprised at the lack of "it's all about me" that such persons have (beig consumed with the real world and the active; i.e. doing aspect of the ego leading to ego transparency: there is a distinct personal style but it shows in the how of doing rather than the parts of what is being done), we need to take the results of that moral algebra/calculus and apply them to social situations. This applies to Politics or our way and pricniples of governance: What we may rightfully restrain persons from doing. Ethics and Politics are derivied subjects or branches of philosophy. In essence, Metaphysicis and Epistemology are the booses and the others get their orders from those two. It might also be understood that Epistemology is Metaphysics as it applies to the human speciality of needing to know in order to act and not having innate knowledge: Just as wishing and believing does not make a thing true, reason and logic will tell you how come a thing is or is not true and what, if anything, is to be done about it. What makes Epistemology different is that you have a choice and can upgrade to a better one. Beyond that, most of us, even the best of us, very seldom bring our metaphysical and epistomological ideas and principles into full, conscious focus. It is usually an unnecessay, time-wasting process, we are not taught to and for most of us.. these are not acquired in a coherent manner and many of the ideas and principles clash with many others so sorting it out is really a difficalt and painful process and we don't unless something psychologically massive--and usually tragic (on the order of "Never again!", "We can rebuild him. We can make him better than he was before" and "Room 101". Not a case of "Will I live?" but "I don't want to live"), happens. This explains how come Aristotle founded not only rational philosophy but also Physics, Psychology, Politcs and "Oeconomics". This is also the stuff I kind of turned my nose up at when I was 18: By the time I was 25, I had it down cold.
Now just to show how all these things can come together in a person. in 1973, when I got to Providence College as a Junior, I still had to take the second half of the Western Civilization course. Well, on the first day, I reported to class and we got going and then I learned that this would be a 5-day a week course; a 5-credit course that spanned 2 years. I thought "Crabs! this'll take time from my major; psychology: Damn!". then another thought struck me "Hey! I'm an Objectivist [Randite]. Ayn Rand was a history major whose study of history shaped her, and my worldview. This should be right down the middle and belt high for me. I should be able to poon this one out of the park and into the next century". It was and I did. What I did not think of at the time, although I'd seen the term was "psycho-history", nor that I would be later well-equipped to integrate Statistics and Philosophy.
For years, I'd heard Jim Bohannon, who seems to be some kind of conservative when aroused, say many times and ways, but basically the same thing "The free market isn't the only answer [you need governemt intervention, too. as though you can mix liberty and dictatorship]". Finally after my head almost exploded once. WRONG!!! the market is the only answer. In all cases, it will be a market that determines the outcome of economic actions. the only choice is whether it will be a free and therefore honest, transparent and predictable one or a distored, dishonest and all cards wild one. To quote Sir Frances Bacon "Nataure, to be commanded must be obeyed". What kind of self-absorbed hubris makes you think you can repeal the fact that 1+1=2 and not 3, 7.3925 or 0.53 by concoction thousand-parameter schemes called models that are dream-world floating abstractions attached to nothing but the brain cells in your own head (as the song by Buffalo Springfield says: "Well hollo Mr. Soul I dropped by to pick up a reason, for the thought that the thoughts in my head was the event of the season")? This is why we stand at the door of being a space-faring people by the sciences, but kept at the level of a medieval serf and unable to open and pass through that door by the "humanities". We are like a split personality patient (Dissociative Reaction: Multiple Personality Type; NOT Schizophrenia) trying to practice "To thine own self be true"
Now let us look at the two clashing combatants. At the economic level. a market vs a command economy, at the political level liberty vs statism (Fasicism, socialism, Communism; whatever). With which ethics, epistemology and metaphysics are these compatible? Well, our founding document, The Declaration of Independence hold to the inaliable right to "life, liberty and the pursuit of happiness". This points to an ethic of rational self-interest, with the person being considered an end in himself, not the means to the ends of others and looks at man as an indiividual (since we see individual persons) and having a specific identity that is not subject to what we think or feel at any given moment. There is a story told of Abraham Lincoln saying "If you call the tail a leg, how many legs does a dog have?" and someone answered "5" to which the esteemed Mr. Lincoln said "No, just because you call the tail a leg doesn't make it one, it's still a tail. 4". This is the metaphysics of objective reality. What a thing is trumps what we think it is, want it to be or try to make it. Now, in this clash of Objective (the primacy of reality) and Subjective (the primacy of wishes and feelings) Where does the term "market" fall and the term "command" fall?. Well a market is something I observe in the external world (persons going about economic business). "Command" is trying to make things I wish override the world as it is. So a market based economy is based on objective observation and evidence-bsed principles and beliefs. Command economics is based on trying to repeal the laws of reality. Would you go to a doctor who seeks to cure heart disease by having you smoke 5 packs of cigarettes a day or treated your insomnia with 1,000mg of caffein every 5 hours becuase he "feels" that they will work?
There is another reaosn why market economics trumps commend economics. The more a hypothesis is tested and comes up gold, the stronger it is and the more truth it has. The market tests things multiple millions of times over.
To be continued
Whle both of these are metaphysical variables and therefore inextricably built into reality. a body politic can choose which economic structure to enact so that is where I will put my effort of understanding. We cannot, and should not do anything about the adaptability of living things. If in the search for stasis (miscalled "stability") we narrow-band a lifeform to tightly, it perishes.