Libya, Wisconsin, Watson

A Recap of February 2011

This short month has seen a number of revolutionary developments:

1) A poorly carried out American engineered betrayal and removal of an old puppet and secular friend Hosni Mubarak (showing to the world the growing incompetence of CIA at getting rid of even so called dependents)
2) A wealthy, growing, and secular Libya exploding (oil blessed 6 million Libyans are more comfortable than Russians on average)
3) Scott Walker, an incompetent Koch brothers puppet overreaching and finding that even American workers are refusing to roll over and die
4) Unveiling of a rather remarkable intuition software by IMB corporation via successfully promoting itself (second most highly watched Jeopardy game of all time)

Libya

Muammar al-Gaddafi is an example of an extraordinary and very powerful human animal. At roughly the same very young age that Castro took Cuba, Gaddafi took a much larger piece of territory that was, in many ways (proximity to Europe and oil), in a lot more danger from imperial powers. He managed to remove the old Anglo-American corporate puppets and then turned his energies into forceful transformation of his herd. We see this pattern again and again with many high spirited historic individuals. After they take care of domestic or imperial powers they proceed to exert their thought on repeated domestic top down restructuring.

In the process, Libyans not only became wealthy but continued wealth generation to the moment of recent protests. This country is a perfect demonstration of a political science proposition that revolutions mostly happen not when the economy is contracting but when economy is expanding but is perceived to not be expanding fast enough and/or equitably enough. Libya demonstrates to elites everywhere that very gradual shrinking of the economic pie (see Western world in last 40 years), lack of college education, and birth control are THE essential tools to prevent revolutions. The rapid generation of wealth creates too many expectations in the minds of the peasants, expectations that are vulnerable to even small shocks and outrages. Much easier to create fatalistic pessimistic cattle that viciously fights each other over ever smaller crumbs falling from rich man's table (see Americans).

Gaddafi, just as Gulgencio Batista had, grew soft and less competent in his old age. This age old problem is completely understandable if you lead a rich and productive life as they had. One slides into incompetence very very gradually to notice by introspection. But that often beats handing everything over to spoiled rich playboy children, to an elderly right hand man, or to some feisty 30 year old who hasn't similarly tested himself in battle. It appears that for this reason, real social progress can almost never be fully evolutionary but manifest itself in revolutionary jumps. For evolutionary growth, a faction of elites should at the very least attempt forceful visionary top down restructuring every 1-2 generations to capture the imagination of youthful human animals.

Gaddafi did the best he could and attempted a number of top down shake ups after taking power (a.k.a. real changes people could believe in). His green book provides a number of ideas for people across the political spectrum (yes there are even ideas for Tea Partiers on running multiethnic societies on a local decentralized level). Lets give a few examples:


"Domestic servants, paid or unpaid, are a type of slave. Indeed, they are the slaves of the modern age."

"The freedom of a human being is lacking if his or her needs are controlled by others, for need may lead to the enslavement of one person by another. Furthermore, exploitation is caused by need. Need is an intrinsic problem and conflict is initiated by the control of one's needs by another."
 
"Housing is an essential need for both the individual and the family and should not be owned by others. Living in another's house, whether paying rent or not, compromises freedom. Attempts made by various countries to solve the housing problem did not provide a definite solution because such attempts did not target the ultimate solution - the necessity that people own their dwellings - but rather offered the reduction, increase, or standardization of rent, whether it went to privately or publicly-owned enterprise."

Woah! Slow down Gaddafi you make too much sense, you must be insane. Somebody call the Zeitgeist movement, this guy is improving peoples lives with interesting new attempts. Coo-Coo for Cocoa Puffs material right here y'all.

The tragedy of Libya is that their leadership waited too long to engage in another wave of perestroika and that it is now too late (considering the alleged mass butchering of protesters). Gaddaffi's son gave a rather reasonable speech about dangers of a violent Yugoslav style splintering and subsequent occupation by Western powers. Of course Western media labeled the speech as "rambling" (it was short) and dismissed its points right away. If this socioeconomically interesting and different country (and completely ignored due to that) descends into Somalia style chaos followed by pathetic attempts to ape the Western oligarchies to "attract investment", then it'll be a sad end to current Libyan calls for freedom.

Wisconsin

Well, the above entry got longer than planned, lets touch upon a take over of Wisconsin state capitol building. Why hasn't this happened sooner? What a wonderful idea. Every state capitol and major city hall should be occupied at this point in time. Demands should be nothing short of return to FDR era 90% taxes on the richest, a new Constitutional Convention (to get sympathy and link up with poor rural people whose anger is skillfully redirected by elites onto unions), reintroduction of Glass-Steagall, impeachment of every union busting governor, and most importantly, impeachment of president Obama for complete betrayal of the working people. If they link up (energetically and hatefully) Obama, Wall-Street, and corporate controlled union bashers, it may just be possible to sway the seething countryside and some elites via a solid narrative.

We've yet to see how far AFL-CIO will go to nationally back Wisconsin uprising but all energies ought to be poured to support it. Time for crippling national full spectrum strikes is long overdue. It is either that or the whole country rapidly becoming Camden, New Jersey with heavily armed gated community islands (even more so than now :/).

Watson on Jeopardy

Well this is a bit out of place but very important to the debate on consciousness. It was truly fascinating to see two people with exceptional intuitive neural hardware go head to head with a computer and even hold their own at times. The next step in Watson's evolution would be to have the computer use audio to text conversion to listen in on thousands and thousands of conversations of intelligent people in order to get more prepped up for the Turing test. IBM's partnership with a major TV program was a great move on their part to get the maximum amount of people excited about our future software companions (and IBM's products). In due time small children will be talking to their teddy bears and barbie dolls and having very interesting and educational conversations.

This warrants an article of its own.

Egypt Protests and United States

Starting a chain reaction via Egypt may backfire on Washington as the dollar and US treasuries are not outcompeting the eurozone and gold. Investor capital and revolutionary fervor may not flow where desired.


In June of 2009, I hypothesized that Obama's speech at Cairo university was an opening shot towards an effort to destabilize the Middle East. Such a move would serve not only to deny the area to Chinese and Russians as US turns inward and spends next 10-20 years economically reorganizing (harder for influence of major players to expand into a region engulfed by chaos) but it would potentially allow such reorganization. That is of course due to chaos supposedly bolstering the image of US as a fortress of investment safety via propping up the worth of US bonds and the dominance of the dollar as reserve currency. In theory, this in turn would allow continuation of funding for US dominated imperial framework. When you owe money in a reserve currency that you print and have the muscle to wage inflationary currency wars, such an insane strategy may even appear sensible at first glance.

Since the Cairo speech, US has also tried to destabilize the Eurozone via informational warfare and by using its best tools for such tasks, the credit rating agency attack dogs. Obviously there is no point in creating chaos along swaths of the globe if capital moves to competing areas of perceived safety. It is no surprise that as thousands of people went into the streets of Cairo, Standard & Poor's downgraded Japan's credit rating from AA to AA-. Today, 01/28/11, we saw a typical reaction of the dollar and US treasuries gaining as investors moved out of a relatively strong regional stock market in Egypt (that sparked sell offs in stock markets around the world) and into US treasuries. The biggest mouthpiece of the American oligarchy, the New York Times, had the timing to chip in about the Eurozone not being a good place to move one's money. American elites saw how the stock market implosions around the world in 2008 had fed the US bond market. Considering the desperate measures of quantitative easing and the federal reserve now being the biggest buyer of US debt, nothing is off the table to allow debt based funding to continue a while longer.

However, there are signs that US is not getting the timing right with its full spectrum chaos stirring. At the same time as the Tunisian revolt occurred (its people greatly helped and inspired by a wiki"leak" of US being against the former Tunisian dictator), the Euro was fighting off an incredible amount of concentrated short positions against it. Those shorting it lost and had to buy back the Euro making it rise against the dollar even quicker just as Egyptians were catching the Tunisian fever. Therefore, today's violence on the streets of Egypt (with corresponding pressure on Mubarak by the White House) occurred when not all of dollar's competitors were suppressed.

Interestingly enough, throughout January, gold and silver backed ETFs experienced a massive sell off (even as physical demand remained at an all time high) thus driving down the price of precious metals in a way that couldn't be done by shorting any longer. It is possible that even with the history of major financial structures shorting and thus suppressing the price of precious metals, the ETF sell off was just innocently due to paper holders moving into physical. Having said that, the timing is very suspicious for dollar dominated Wall Street players to be dumping gold/silver backed paper and lowering the market price just as the euro and 2 fire starter nations were being pressured as well.

Egyptian unrest was a mixed bag with dollar edging higher but gold/silver and other commodities like oil spiking up even faster. Since buying commodities currently works as a de facto bet against the future of the dollar, Washington seems to have lost with both the timing (Euro not being down and out as Cairo was burning) and commodities continuing to be seen as competitors to the dollar as a safety destination.

It is rather hilarious how smug the US political and financial class is, thinking that they can stir social unrest abroad and be immune from it at home. Gorbachev also actually seemed to have thought that he'd manage to remain in control if hardliners in satellite nations were overthrown and perestroika minded leaderships took over in their place. The sheer pathological arrogance and hypocrisy of the Obama administration (note how protesters were dispelled near G20 meeting in Pittsburgh) has no limits. Egyptians and Tunisians are protesting the same exact things that Americans are suffering from. There is little guarantee that in the future, Tunis or Cairo will not dump the dollar completely and move into the orbit of Berlin, Moscow, and Beijing.

The good news is that China and Russia are now acting as stabilizers and firemen. Throughout 2010, every time the US based credit rating agencies attacked the vulnerable Euro states, China seemed to step in and help Europe out. They invested heavily in Greece and recently began to launder their dollars by buying Spanish debt. People's Daily, the official mouthpiece of Chinese communist party, kept reaffirming the importance and health of the E.U. We also had a tit for tat move of a Chinese credit rating agency downgrading US credit rating in November, claiming 'that the U.S. government's solvency is "on the brink of collapse"'. Additionally, Russian Federation's prime minister Putin went as far as saying Russia may adopt the euro in the future.

Next few weeks will definitely be interesting. US propaganda organs are now saturating with Egypt coverage. Maybe they can attach some spiffy color to the unrest as well. I will leave with a quote from the above mentioned Cairo speech article:

"If Obama is able to utilize human rights pressure and universalist respect to destabilize Egypt, the potential chain reaction would keep Muslims busy for a while while US deals with its economic depression. By pressuring Israel and stagnant Arab Republican governments on human rights, it is theoretically possible to cheaply accomplish a chain reaction of liberalization that Bush tried to do by force. The splash damage can conceivably reach Iranian and Syrian middle classes as well."

Economic Development Alternatives for United States

The swelling dissident movement in United States will have to start shopping for ideas concerning socioeconomic alternatives in order to make itself viable. What does it have to work with?




The global financial crisis has clearly illustrated that there is a serious vacuum of ideas on what to do next as a civilization. Majority of the public senses (on various levels) that key leaderships of many Western states do not offer much more beyond printing more money, socially brutal austerity, etc. Playing for time and looting are not solid ideas and everybody knows it. This inevitably opens up society to ideas from below which will eventually result in part of the elite siding with these ideas to co-opt them and ride them to power.

In United States, we saw the libertarian critique meme and the reactionary "going back to FDR policies" meme rapidly become dominant online over the last 2 years. Collapsist and neofeudalism memes are also about to become dominant. Collapsism in particular forces future oriented thought. The non-Internet world is quickly following behind since it took researchers a year or so to educate themselves about the fraud that caused the crisis, to put their books out, and then another few months for people to read the books. Various socially visible pundits can now defer to books as authoritative sources in speaking up. The market for new type of demagogy (talk radio being the old type) is nowhere near to being saturated.

This awakening resembles a sort of a popular front in the making since people from diverse ideological backgrounds are creating a consensus of what they are against (federal reserve corruption, military eating most resources, financial oligarchy and its personal lawyer/butler [US congress]). A marriage of convenience of this sort is usually created when all other options are exhausted and it will split into petty infighting once the current regime is changed.

All the accelerating muckraking and massive corruption exposures going on currently will begin to create a dissident critical mass in the near future. This is due to the gently exponential curve that is word of mouth communication and most importantly due to some elites sensing that popular sentiment now allows certain things to be safely discussed on a national level. Like in a jury herd dynamic, a minority of consistent and tireless individuals can swing the entire group whether at elite level, the level of a bar or church, or national level. The vacuum of workable ideas in leadership allows such informational waves to spread and take hold rapidly. It may have taken Christianity 300 years to become a dominant meme but with present communication technology, informational "viruses" can do the trick in just years.

In interesting times like these, small but very narrative consistent groups have disproportionate amount of influence. Notice how quickly Ron Paul's faction went from being an ignored laughing stock to being a respected dissident movement (the mere fact that some oligarchs partially co-opted it with funding demonstrates level of genuine popular support). The great budding coalition of groups who usually don't want anything to do with one another (but who realize they got a common enemy) is gaining strength by the week. The awakening process does not even need to take hold of most people. A society historically needs maybe 1/4 to 1/3 of people to substantially switch their world view in order for real transition to start happening. 1/3 of the population can always be counted on to defend status quo to the last while 1/3 can be counted on to be an apathetic mushy middle that joins whoever seems to be winning or is more popular.

How will ideas be judged, what determines which will win out?

Market of ideas is limited by two things. 

1) Practicality of an idea. This means the degree to which an idea is compatible with unfolding social and physical dynamics of human civilization (can't have genuine feudalism, monarchies, or theocracies in 21st century with hundreds of millions of educated people). In a way, the strongest idea is one which is predictive of where we're pretty much headed anyway. This criteria can be said to be desirability of the good (functionality determining desirability).

2) How quickly it can be internalized by the public at large. If one needs to read too many books to understand and accept an idea, then it really is not that great. An idea having been popular previously at some point in history greatly helps with this. This criteria can be said to be the knowledgeableness of the buyer to determine which good is desirable.

So what's on the market presently?

I am going to focus on United States since in many ways the problems of United States show to the world the problems that they themselves will face very soon. The ideas that the American people adapt to resurrect themselves will eventually (if not immediately) be influential on a planetary scale after a couple of decades. The following are listed in no particular order of importance.

a) Reactionary "going back to FDR style" Keynesian monetarism, sound money, and rapid infrastructural development

b) Reactionary "going back to the John Quincy Adams style" American credit system, sound money, and rapid infrastructural development

c) Reactionary "going back to industrial robber baron style" brief and unstable period of something resembling what the libertarian faction wants. Some haphazard and rapid ego driven infrastructural development.

d) American version of Leninist New Economic Policy and very rapid infrastructural development

e) Emulation of Chinese style oligarchic dictatorship and rapid infrastructural development

f) Post-monetarist energy accounting Technocracy and very rapid infrastructural development


SPOILER ALERT:

It'll end up being f) eventually but not before one or more of the others are torturously tried, muddled through, combined, and recombined. In effect, a)-e) are a connecting bridge of experimentation that will make f) possible in due time. Some areas of the country and the world may experience de facto libertarian c) environment due to only the local oligarchs having developmental resources (see Abramovich in his post as governor of Chukotka). Such frightful old school oligarchy should not really spread too quickly before rapid backlash into other choices. There is also the matter of deflation stifling its development. Therefore the libertarian faction is primarily useful as a vibrant "rural power" part of the popular front. They will quickly fade as America's socioeconomic failure discredits capitalism (fairly or unfairly) in the eyes of humanity at large.

Emulation of Chinese police state e) and industrial worker exploitation may be preferred by one wing of American oligarchy (while the other wing seems to want perpetual banana republic style oligarchic military dictatorship with sprinkles of c)). This is due to China already combining various structural characteristics of a)-d) in one package. American version of Putinism is the other "softer" alternative to this. Neither are sustainable long term since they do not address the problem of exponential progress of technology consistently increasing planetary unemployment. There will also be the issue of China entering it's "America in the 1930s" period of industrial depression and crisis of overproduction (which in turn stands to discredit that country briefly in the eyes of the world).

We can begin to see how process of elimination reduces the extent to which the current ideas on the market will be utilized. For the older generation, some elements of a) can be used to provide them peace of mind, continuity towards the end of life, and as marketing to politically sell rapid increase in state intervention. Then, for the younger generations, the mythical elements of b) combined with the edginess of d) may follow to demonstrate that rapid infrastructural progress really is occurring and to provide the future American regime with legitimacy (it'll definitely be needing it). Transition period of the next 30 years will definitely be turbulent and interesting for all involved. We must consistently remain vigilant throughout the process to make sure the rich do not derail the experimentation into something truly frightening (which would make us wish for the old USA back).

The current projected neofeudalism is to be avoided at all costs

                                                                            VS

Return of Class Warfare

The super rich suffer from acute nihilism and are vastly outnumbered by newly Internet literate aggressive personality types. They will lose badly if they don't preemptively and radically modify present socioeconomics

Considering all the negative attention that the global oligarchy has been getting recently, one interesting fact often left unmentioned is that the super rich are outnumbered 9,999 to 1. Let's briefly define what we're dealing with.

When one really filters rich people overall, it's evident that the number of decision makers is actually rather small. Out of 7 billion people on earth in the near future (6.8+ billion now), less than 1% are trend setters within social hierarchies. This is the socially visible merchant class that makes money purely off capital investments. That is less than 70 million capitalists scattered about. Majority of this group have relatively insignificant pools of investment money which doesn't expand much (mom and pop small business owners who may have some political pull locally but not too much nationally and internationally).

Within this group, there is 1% (<700,000) that makes the rest look like paupers. Here is a detailed article showing the sheer inequality among the capitalists in United States. These are the people so far removed from the rest of the world materially that they usually end up oppressing the lesser capitalists (through stock market swindles, cartels, and disproportionate buy outs of political lapdogs). In other words, majority of those within richest 1% are fighting their own battle against the 1% in their ranks.

The 700,000 super rich are trend settlers among trend setters. At this point real oligarchic activities become possible. An oligarch is simply anybody with enough disposable wealth to influence politics. Although actions (like paying 2 thousand dollar ticket at a candidate's fund raiser and donations to think tanks of one's choice) technically qualify, in the international arena influence really requires funding/owning think tanks with a global reach.

Finally, perhaps around 50,000 individuals (a few thousand families really) within the 700,000 have the power to culturally pull the rest of the international oligarchy behind them through role modeling and proactive moves. This small number of key oligarchs makes it very easy to hound them politically. Conceivably, people can protest in front of rich people's gatherings rather than in front of gatherings of politicians in the future.

The 700,000 are buffered by millions of loyal and very well paid proletariat patsies. They are the cream of the crop of the wage laborers who often defend the caste above them to the bitter end. One can compare them to house slaves who got it pretty good (200,000 - 600,000 a year paychecks). They can be found writing state propaganda articles for such oligarchic mouthpieces as the Harvard Business Review, The Economist, The Atlantic, and similar rags. This richest proletariat caste appears the most brainwashed due to its complete adoration of the ruling caste (desire to mingle and get interviews) and contempt for the caste right below them. Here is a good example of the type of apologist garbage they tend to write. It pretends to be a serious criticism on the surface while actually being staunchly defensive (avoid if you have a weak stomach).

The good news.

Out of 7 billion people on the planet, almost 500 million people are ENTJs and ENTPs, many of whom are getting Internet for the first time. If you include all relatively unemotional and intuitive homo sapiens such as INTPs and INTJs (perhaps even more dangerous to the rich through behind the scenes work), then the number goes to 700 million uppity proletariat. These 700 million people are the most likely to self educate themselves by utilizing new informational technology and to subsequently find out about their exploitation at the hands of the 700,000. Now, they cannot all be bought off, suppressed, and co-opted. There just isn't enough room in the upper circles for so many comfortable house slaves. Even if 20% of them are co-opted into status-quo hierarchies worldwide, that leaves over 500 million on the outside looking in. This means that the enemies of humanity at large are outnumbered roughly 500-1000 to one (by people who got the drive and the oversized ego to try to bring them down).

The richest 0.01% cannot always count on the loyalty and constant support of the 10% of the population internationally (those who are assumed to have too much invested in the system and who are "too comfortable" to rebel). As much as petty capitalists and top notch white collar professionals defend the oligarchy on a day to day basis, as much as they want to be the people above them, their adoration can nevertheless rapidly transform into burning resentment and jealousy (since they realize that there are tangible limits to meritocracy and social mobility even in the upper circles). Therefore, roughly half a billion energetic, excitable, self educated, and newly politically aware individuals on the "outside" got people and supporters on the "inside" who can sabotage the oligarchs up close and feed valuable information (leak data, provide whereabouts of gatherings, provide funding, and share strategic input).

Besides being outnumbered they are also overcome with nihilism which can be exploited

Just as was the case over 100 years ago (when Nietzsche first described the phenomenon in detail), it appears that the most powerful individuals on the planet have not developed a common and coherent moral system for themselves and their offspring. Even as the elites are becoming increasingly culturally homogenized via cosmopolitan modes of consumption, Internet communication, international think tanks, common ivy league education, and jet travel allowing frequent dinners together, the majority of them have not officially agreed upon a life expanding moral framework of the future.

The future necessity and inevitability of some centralized governance on a planetary scale combined with the psychological need of rulers to overcome nihilism in a permanently atheistic world (when hedonism, Buddhism, socioeconomic ideology, and attainment of power to highest offices in the land fail to provide psychological comfort), will lead to such moral concoction eventually. However in the meantime, the lack of a relatively uniform belief system to indoctrinate elite's children (future planetary leadership) into is leading to severe infighting when it comes to paths towards planetary unification. This in turn allows for international paralysis and deference to the default mode of predatory corporate globalization overlapped with petty nationalisms.

Out of 700,000 super rich, the combination of thirst for both knowledge and power over others is mostly prominent among the NTs in the Myers Briggs typology. That leaves us with roughly 70,000 individuals who'd like to tinker with humans in new ways on a global scale and who have the financial means to do so. The ESTJs, who are 10% of the population, can add people to this group but only for managerial non-productive (in terms of building a new system) positions. Oligarch ESTJ spawn is likely to engage in something seemingly unnecessary considering their money such as military service. ESTP ofspring would get their kicks from flying balloons around the world or hunting lions (the traditional venues). Other personality types would not really be interested in possibilities of planetary governance. Many would consider politics in general beneath them (since politicians are just butlers) and boring. Even fame loses its appeal since it is not a means to get ahead and brings attention of the peasants to the wealth. If politically engaged at all, their donations would just go towards supporting the status quo of current predatory globalization.

Most of the world's proletariat are so busy just trying to survive that they have overestimated the potential of psychological fulfillment that hedonism can bring. For children of the oligarchy, sex, travel, and partying stop providing the same kick when they reach their late 20s. That's when they go their separate ways as determined by what neural breed they are. The financial means of the oligarchic NTs do a number on their egos (and the egos of the clinical psychopathic minority most likely overly represented within the ENT group) as a type of world conquest becomes possible.

One may argue that power may be sufficient to fill that void but only a minority of elites have the extroverted and emotionless traits to be inclined towards active involvement in politics. Even if they attain positions in high office, the satisfaction from power gained is not great considering most modern legislative and executive branches in the Western world are trapped within crushing interconnected oligarchic corporate power networks. Thus, even if a son from the capitalist class gets into high public office, his real satisfaction will stem mostly from drinking, talking, and dining with fellow political junkies rather than remolding the world with his will. If some legislation does get passed, it'll mostly benefit his fellow top 1% peers and have a less than pleasant feel that he is their secretary. It could very well be that political backers who actually try to get the poor peasantry educated are doing so out of resentment against their overbearing aristocratic fathers and/or their more extroverted political friends. This certainly has happened before when some children of the aristocracy in imperial Russia and Britain flirted with communism.

Conclusion:

They are much weaker and more psychologically paralyzed than they appear. Their patsies can be turned against them and millions of people throughout the world will go about doing just that. The goal is to target key oligarchic financial structures (federal reserve and various major banks) and create informational critical mass in the minds of the wage laborers at large. The super rich have grown too soft and comfortable and the intellectual oligarch strategists among them are overwhelmed by group think and cultural inertia of their peers. As this brilliant article suggests, sociologists should refocus from studying the least well off members of society to those best off in order to properly analyze what we're up against. To understand it is to find ever better ways to fight it. In the near future, the political class can be made to serve the general population again. Politicians are notorious for being able to smell blood in the water and the oligarchs present very juicy cows from which to milk political capital and fame (those politicians who stand up to the robber barons tend to get into history books).

Sound Money and Deflation

"With the enormous leaps in industrial productivity over the 20th century, shouldn't a penny now buy me at least 10 Snickers bars instead of nothing?" 

(Or how fiat money serves to prolong the life of capitalism while libertarians are ironically fighting to make capitalism disappear)


A great question, considering world's population rose 4.2 times from 1900-2010, annual copper mining output rose 30 times in same time period, and industrial/agricultural mass production technology (for making candy) has made exponential efficiency leaps. To investigate this serious matter lets look beyond the screams of "federal reserve and fractional lending robbed us all with depreciating overprinted fiat currency!" and delve into the underlining physical dynamics.

A one ounce Hershey's bar cost 3 cents (9 grams of copper) in 1918 whereas a 1.45 oz Hershey's bar in 1982 (last year to have 95% copper pennies) was 20.6 cents/62 copper grams per chocolate ounce. As of 2010, the Hershey's bar approximates 65 fiat cents an ounce but since the imperial authorities diluted the penny with mostly zinc (making current pennies a harder to quantify mix of zinc and copper), I'll use the 1918-1982 period for simplicity.

If one adjusts for inflation, 3 cents in 1918 is 19 cents in 1982 (539% depreciation in purchasing power). An 80 year old, lets call him Bob, getting his favorite childhood candy treat would have seen his under the mattress savings buy 6.3 less Hershey's chocolate. Now this may not seem too bad IF Bob was in a theoretical situation where his real income growth was pegged to inflation the entire life and his fiat currency grew in a bank under inflation pegged interest throughout the 20th century. Considering the candy's probable mild price buoyancy due to brand recognition, on the surface it looks like the company is only charging Bob 8% more than they did in 1918 (20.6 cents to 19).

Looking through an Austrian economics lens of inflation being an increase in the money supply, since most people do not have their finances perfectly adjusted to inflation, Bob is being continuously ripped off and impoverished via inflation tax. He may not get exactly 6.3 times less chocolate but even 2-3 less Hershey's towards the end of life is a criminal swindle.

A defender of the socioeconomic status quo in 1982 may partially agree but counter this via a pseudo-Austrian angle, "If anything Bob is lucky to only be paying 62 grams of copper per ounce instead of 9 grams in 1918 since copper is mined faster than people are breeding. He looks like he is getting a deal when using this depreciating physical metal! Copper is as fiat as paper!" (Authorities saw the copper content in penny spike more than a fiat cent in 1980-1981 period and thus changed the content, the price of copper in penny then collapsed to just under 1 fiat cent again in 1982-1984).

This is an interesting response and lets take a look at it without distracting ourselves with multitudes of other serious issues such as the government ending the use of silver in currency, going off the gold standard, stagnation of real incomes, etc. Some of these issues will begin to be resolved indirectly by the end of the article.

If one tries to look at Bob's situation via Marxist economics lens of commodity exchange, then we see that the poor fellow is being swindled in another way. This investigation is a little trickier considering technological productivity cannot be readily quantified and since the concept of productivity itself is culturally determined. What is very safe to say is that mechanical efficiency in producing an ounce of Hershey's has risen a lot more between 1918 and 1982 than the 260% rise of human population in same time period. That is, if copper production/demand magically froze in place, a 1982 Hershey's chocolate ounce should cost not 9 grams but substantially less. Surely, they've figured out ways to stamp out these chocolate treats by the millions in ways not dreamed of before (even taking into account employee salary operating expenses).

Of course copper dynamics were not frozen but they also end up benefiting Bob. If you consider the borderline exponential and evolving industrial demand for copper for electrical/water purposes throughout the 20th century, then it is clear that the 530% rise in copper production in 1918-1982 does NOT devalue 62 grams (needed to buy one 1982 Hershey's ounce) by half.

In other words, even though the copper money supply rose at twice the rate of human population, we did not see 100% inflation of the penny since the industrial demand for copper kept up pace with the human population at the very minimum. Therefore, a Hershey's bar ounce in 1982 should have cost at most 6 cents (1918 price * population growth) instead of 20.6 cents. Therefore, Bob doesn't just get ripped off through expansion of the fiat money supply but by value of goods not reflecting the breakneck pace in development of production and distribution of Hershey's bar. Considering a pre-1982 copper penny is approaching 3 fiat pennies in worth at the end of 2010 (and many countries having pulled copper from their currency in last 30 years), it may well be that a Hershey's bar should cost a lot less than a copper cent today. This makes more sense if one remembers that a silver dime from 1964 is worth over 2 dollars presently (even though annual silver output expanded 35 times in 1900-2010 period).

It appears safe to say that fiat currency was haphazardly introduced by business leaders in first half of the 20th century (via their political appointees) to prolong the life of capitalism via inflation. Ironically, the financial robber barons ended up doing the same thing that rural agricultural interests wanted in late 19th century America. 19th century saw various deflationary collapses and farmers wanted silver/gold bimetallism since rapid mining of silver would have introduced inflationary pressure on the dollar and thus prevented profit loss. Banksters 100 years ago were gold bugs since they made money from loans and deflation benefited the loan sharks. Since financial capitalist take over of industrial/agricultural capitalism was mostly complete by 1900, bankers tended to win political arguments.

During the great depression, there developed a compromise and some convergence of thought between financial, agricultural, and industrial interests concerning the benefits of inflation. Biggest bankers by that time, found a way to profit while expanding the money supply via modern money mechanics and farmers ended up getting governments to pay them to not produce too much and thus prevent deflationary profit loss. FDR managed to reconcile the key parasites, preserve capitalism, and artificially prolong the profit taking of major monopoly industries at the long term expense of the consumer (in a very humane developmental manner). Yes, he also did a lot of great things and is one of the kindest masters people saw in the last century (no sarcasm).

If the price of an 1982 Hershey's bar reflected the real amounts of hard money (commodity) availability PLUS availability of Hershey's ingredients (commodities) PLUS the cutting edge technological ability to produce and distribute the Hershey, then we'd see the company experience the periodic deflation born crisis of overproduction that the communist manifesto summarized. One can imagine what will happen to corporate bottom line if a copper/silver/gold/rare earth metal commodity money coin buys more consumer goods every year than the previous one. On paper, Austrian utopian capitalism is too efficient and benefits the consumer too much (so much in fact that it quickly implodes in deflationary collapse horror show, massive unemployment, and technologically driven socioeconomic evolutionary leap towards post-scarcity society).

It is little wonder that Trotsky sided with Austrian economists when he wrote of pre-requisites of United States going communist. They being commodity backed hard money utilized to barter for consumer goods. This is especially true for gold since gold production only rose 5.5 times in the 1900-2010 period, barely above population growth. Ironically, the current wave of libertarians are fighting to make capitalism disappear (since non-fiat currency would fully unleash the post-scarcity potential of means of production and distribution that have existed around us since at least the 1950s and that Buckminster Fuller and King Hubbert described in detail). I will leave with a few 1934 quotes from Leon Trotsky regarding the absolute necessity of ending the federal reserve. ;)



"-This system will be made to work not by bureaucracy and not by policemen but by cold, hard cash. 
-Your almighty dollar will play a principal part in making your new soviet system work. It is a great mistake to try to mix a “planned economy” with a “managed currency.” 
-Your money must act as regulator with which to measure the success or failure of your planning. 
-Your “radical” professors are dead wrong in their devotion to “managed money.” It is an academic idea that could easily wreck your entire system of distribution and production. That is the great lesson to be derived from the Soviet Union, where bitter necessity has been converted into official virtue in the monetary realm. There the lack of a stable gold ruble is one of the main causes of our many economic troubles and catastrophes. It is impossible to regulate wages, prices and quality of goods without a firm monetary system. An unstable ruble in a Soviet system is like having variable molds in a conveyor-belt factory. It won’t work."

Time to Ban Advertising to Children

Ads to those below the age of consent are a form of cognitive pollution that adversely affects the developing psyche and endangers society politically



Nothing shows out of control consumerist culture more than scenes of people trampling each other half to death in order to save a few dollars on black friday. Such ghastly herd behavior is just one among many symptoms of allowing corporate structures almost unlimited informational influence on homo sapiens. We're well familiar at this point with other maladaptive behaviors involving:

1) Emotional distress from lacking some non-essential item/service for which the desire was externally implanted (conditioning to want useless junk begins with infants)

2) Definition of the self being partially dependent on concentrated, frequent, and evolving advertising propaganda and priming (100 years of ever more sophisticated efforts to exploit psychological research to influence the human psyche, now going as far as delving into neuroscience and brain scans for brainwashing). Emotional distress and splintered chaotic personality resulting from not keeping up with these directions.

We saw a rather substantial ongoing backlash against consumerism in the last decade but none of the efforts go to the root of the problem. This being the mass scale targeting of children by advertisers. These children then become adults who are much more open to continuing manipulation (and other more hidden materialist priming on how to live/be via movie and TV series characters).

A common and insufficiently thought out reply to this is that people have free will to overcome propaganda and that those with weak wills deserve to become shallow, borderline sociopathic, and financially drained individuals. This is a poor response to the advertising onslaught since (as Aldous Huxley described as early as the 1950s) research shows that 20% of the human herd are very informationally susceptible physiologically, 20% are not really susceptible at all, and 60% are semi susceptible. Free will itself as a concept is very problematic.

This susceptibility applies to everything ranging from hypnosis to criminal swindlers to political statements, etc. We're talking about a fifth of homo sapiens born with severe risk of being manipulated further in life. They need to be protected since the science behind relatively benign corporate messages about what shampoo makes one a real man/woman can and is utilized by politicians, cultists, criminals, etc.

We are all put at risk by a section of very manipulated public especially now that transnational corporations compete with nation states and families for allegiance of individuals (successful corporations have their own origin myths, founding fathers, pseudo-nationalism via brand internalization, office "family" subculture, funding of weddings/funerals in some countries, etc).

We cannot have massive oligarchical structures that often buy out entire governments also have a major role in shaping the young. Family and public/community educators need a child's mind to be less clouded so they can step in.

One of the obvious solutions is a forceful full spectrum ban on advertising that explicitly targets those below the age of consent.

Nope. Not just a ban on ads that promote anything specific to those under 18 but an overall blanket ban on corporate propaganda aimed at the young. This means cereal, toys, sports equipment, etc. In effect this also means disappearance of majority of childrens' television programming (which do their own part to promote hyper materialism and imitation of fake personas). Advanced advertising directed at those below the age of consent can be conceptualized as a form of visual/cognitive pollution that cannot be handled safely by a developing psyche. This is especially true when it comes to young children who are still in a pre-conventional stage of moral development (hyper-egotistic stage that, as The Onion humorously yet truthfully mentioned, shares a lot of traits with psychopathy).

Large scale corporate indoctrination of children through marketing may not appear as harmful as religious or political indoctrination at first sight. However, in some respects it is even worse since it affects a child via a thousand different cuts which are hard to escape and which prepare the person to be more open later to cuts from religious/political entities using similar techniques (see megachurches).

I wont even go into depth about the problems of potential responses to an ad ban such as people who parrot about "parents not doing their jobs" and played out knee jerk reaction against the supposed cliche of any policy that is "for the children". There is also little reason to think exposure to ad pollution creates immunities and that those exposed to ads after the age of 18 will somehow be more affected than presently.

Large swaths of humanity are being subjected to a never before seen global experiment in psychological priming by completely amoral externalizing actors (modern corporations). Banning child specific ads from obvious places like public spaces, television, and printed media is but the first step to push back. To get a foot in the door politically towards the goal of a total ban, the growing memes of child obesity and junk food effect on learning need to be harnessed.

Second and more politically/logistically difficult solution is to create psychological immunities against propaganda in public schools (yes, public schools by well paid and meritocratically selected educators).

But that is an article for another day.

Maximum Wage and the Limits of Human Inequality

Pegging the rise of maximum compensation to the rise in the minimum will go a long way towards avoiding global disruptions





The appropriate maximum wage that society should have will be a critical issue in this century. It is generally agreed upon at this point that a neurosurgeon should get compensated more than a tour guide. The Soviet experience of a relatively narrow gap between highest and lowest compensation (top company manager officially earning 3-5 times the entry level worker) shows that society's progress stagnates if tangibly unequal abilities and contributions are rewarded with compensation that's perceived as relatively equal. Yet various banana republics (United States included) around the world demonstrate that stagnation also sets in when wage inequality gets sufficiently monstrous.

It is not enough to look at relatively egalitarian societies like Japan or Sweden to try to find some golden maximum/minimum ratio. What is needed is a common sense and/or philosophical framework that 1) justifies a certain income ratio
and 2) creates conditions compatible with human nature and self interest that allow the set ratio to be maintained.

1) Justification for capping the difference between top and bottom incomes should be grounded in reality and pragmatism and not idealistic popular desires of how a world should be. Theorists like Nietzsche spent considerable time elaborating that humans aren't equal. Yet in an ironic twist, the same reasons (that he gave for not having a leveling system where everybody is assumed to have the same value) can be used to set limits to difference in valuation.

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Like many characteristics of a population, the natural abilities to be exchanged for money are spread along a bell curve. Natural ability is anything that gives a physiological edge in addition to training. An example would be the hyper sensitive and rare taste buds of a top chef or a fighter pilot with remarkable reflexes and fast twitch muscles. If you take a person with poor taste buds and a person with exceptional ones and provide both with identical intensive high quality training on food preparation, there will be a certain intangible limit to how much better one chef is than the other. This applies to all professions. What is known for sure is that one is not 1000 times better chef after the training (or 100 times). Such numbers are simply ludicrous mathematically.

Napoleon Bonaparte is not 100 times superior person to say, a gas station manager and neither does Napoleon deserve 100 times more cars, 100 times more houses, 100 times better quality food, 100 times the salary, 100 times the size of personal land, etc. Think about it. Even without the leveling of military training, if you take the brain of the gas station manager and multiply its function by 10, the gas station manager would give Napoleon a run for his money in most if not all areas of life. Whether intelligence, speed, personality, patience, if you take an ability on one low end of the bell curve and multiply it by no more than 10, you automatically get to the other end of the bell curve (ex: IQ of 30*10=300).

I am using a multiple of 10 for simplicity here since the actual difference cannot be readily quantified (one perhaps can argue better for 15, 20, or 8). Considering the outrage over the bankster bonuses in the last 2 years, it appears the general public intuitively knows that there are limits to salary compensation. What remains to be done is to draw some line in the sand. A person earning 10 times as much as somebody earning 50 grand a year is getting half a million and automatically gets into top 1% income bracket. 10 times the compensation is an enormous leap. This perhaps sounds shocking, the way explaining that a duke does not have divine right to all the local land might have sounded shocking 300 years ago.

"But isn't compensation also determined by social importance of an ability (usually allocated by market forces)?"

As far as social importance, it is a very valid point. In today's absurd dying socioeconomic system, we don't see prime ministers and military generals receiving the same incomes as Lloyd Blankfein or other wall street criminals. We also don't see the operators of nuclear missile submarines getting 400 times the amount a waitress or a new army recruit gets (the way a modern CEO does compared to entry level workers in his/her organization).

Certainly the argument from social importance would indicate societal leaders, augmenters, and protectors to be the most vital. It is a tricky subject which should be properly studied with in depth examination of what professions benefit society the most (hint: engineers and scientists in political power). There are various ways of determining social importance with length and difficulty of educational training being one of them and critical examination of what makes real physical economy grow being the other (to filter out people who spent 13 years in intensive study of psychoanalysis or Gregorian chant from the top compensations).

This leads us to the idea of a free market competition, a concept as utopian and disconnected from reality as pure communism. The unregulated "market" is and will remain a diverse collection of political power centers that evolve the rules of the global private casino as they see fit. The obvious examples of the market giving top rewards to athletes, pop stars, and organized crime (Citigroup, JP Morgan Chase, etc) shows that it is a very poor determining mechanism of socially important tasks. This is where we see a difficult social divergence happening between perceptions of important jobs (nuclear power plant director) and consumer determined rewards for not-so important jobs (national talk show host). Obviously we'd like for both the public and infrastructural demands (that allow the public to live) to have a say in compensation without too much divergence.

If incomes could be broken into 10 levels, it very well could be that a top entertainer should be a level 7 worker (earning 7 times more than the minimum income of level 1) while the nuclear power plant director gets to be level 8. This will be up to the politicians and the needs of the crowds as long as they maintain the ratio system (in this case, based on maximum wage difference of bottom income multiplied by 10).

2) How does one make the maximum wage system stable and compatible with human nature? The simplest solution is to make the rise in maximum salary dependent on the rise in minimum salary. This means that if level 1 worker earns 100 units a day while the top level 10 worker earns 1000, the level 10 would only be able to get a raise of 10% to 1100 units if the salary of level 1 goes to 110. If you are beginning to suspect we are moving beyond capitalism to a more high tech welfare system of the future, then you are correct. Notice how the maximum salary gets to grow while being tied up to the minimum.

Pegging the material progress of the highest compensated to the material progress of the poorest can easily work within the capitalist system but it begins to work even better in a post-monetarist technocratic system. The strongest and richest must be given a personal incentive to improve the lives of the weakest and poorest through an income peg. They will still remain 10 times better off (10 times the cars, 10 times the living space, 10 times the clothing) but at the same time, if they work in their self-interest they will be lifting all boats. This dynamic inevitably puts more technically oriented people into top positions of society where they are most needed anyway. We're talking people who understand how to improve infrastructure, logistics, and basic structural economic welfare provision.

These matters will continue being a major concern as we gradually transition to a post scarcity transhumanist world of the future. It is important that we start discussing the limits to human inequality early on before social disturbances on a planetary scale have a chance to really develop.