Capitalism on the Spectrum

Prospects for the new administration.

Political economics can be seen as a spectrum from anarchic gangsterism (Haiti) to total top down control such as in communism (Cuba, North Korea). Neither works well. Each end of this spectrum ends up in a state of terror, because each is unworkable on its own terms. Capitalism, in its modern form, is a compromise between these extremes, where free initiative, competition, and hierarchical relations (such within corporations) are allowed, while regulation (via the state and unions) makes humane what would otherwise a cutthroat system of gangsterism and corruption. The organization and stability allowed by state-sponsored legal systems raises system productivity far above that of the primeval free-for-all, while the regulatory rules also make it bearable to its participants- principally the workers. The magic comes from a dynamic balance between competition and guardrails to keep that competition focused on productive ends (that is, economic/business competition), rather than unproductive ones (war, assassination, corruption, capture of the state, etc.)

The new Trump administration promises to tear up this compromise, slash regulations, and cut government. That means that the workers that voted for this administration, and who are the primary beneficiaries of the regulatory state, will be hurt in countless ways. The grifting nature of so many in this incoming administration is a blazing alarm to anyone who pays attention. Whether it is stiffing workers, bloviating on FOX, hawking gold sneakers, making a buck off of anti-vax gullibility, defrauding the government of taxes, promoting crypto, or frankly asking for money in return for political favors like petroleum deregulation, the stench of corruption and bad faith is overwhelming. Many of them, starting from the top, see capitalism as a string of scams and frauds, not exactly Milton Friedman's vision of capitalism. An administration of grifty billionaires is unlikely to rebuild US manufacturing, help workers afford housing, or fulfill any of the other dreams of their voters. Indeed, a massive economic collapse, on the heels of bad policy such as crypto deregulation, or a world-spanning trade war, is more likely, and degraded conditions for workers all but certain.

Freedom for capitalists means permission for companies to abuse workers, customers, the environment, the law, and whatever else stands in the way of profit. We have been through this many times, especially in the gilded age. It can spiral into anarchy and violence when business owners are sufficiently "free" from the fetters of norms and laws. When the most powerful entities in the economy have only one purpose- to make money- all other values are trampled. That is, unless a stronger entity makes some rules. That entity can only be the government. It has been the role of governments from time immemorial to look to the long term interests of the collective, and organize the inherent competition within society into benign and productive pursuits.

OK, more than a little ironic, but you get the idea.

On the other hand, there is a problem even at the golden mean of governmental rule-making over the capitalistic free-for-all, which is that the quality of the rule makers and their rules, their attention to real conditions, and their prompt decision making, all can decline into bureaucratic inertia. While this may not be a Stalinist system of top-down planning and terror, it still can sap the productive energies of the system. And that is what we have been facing over the last few decades. For instance, there is the housing crisis, where home construction has not kept up with demand, mostly due to zoning stasis in most desirable places in the US, in addition to lagging construction after the 2008 financial and real estate crisis. Another example is public infrastructure, which has become increasingly difficult to build due to ever-mounting bureaucratic complexity and numbers of stakeholders. The California high speed rail system faces mountainous costs and a bogged-down legal environment, and is on the edge of complete inviability.

Putting rich, corrupt, and occasionally criminal capitalists at the head of this system is not, one must say, the most obvious way to fix it. Ideally, the Democrats would have put forward more innovative candidates in better touch with the problems voters were evidently concerned with. Then we could have forged ahead with policies oriented to the public good, (such as planetary sustainability and worker rights), as has been the practice through the Biden administration. But the election came up with a different solution, one that we will be paying for for decades. And possibly far worse, since there are worse fates than being at a well-meaning, if sclerotic, golden mean of governmental regulation over a largely free capitalist system. Hungary and Russia show the way to "managed democracy" and eventual autocracy. Our own history, and that of Dickensian Britain, show the way of uncontrolled capitalism, which took decades of progressivism, and a great depression, to finally tame. It would be nice to not have to repeat that history.

• Daniel P. Moynihan was for the job guarantee.
• Housing in New Zealand.
• Nature's key scientists of 2024.
• A grumpy Krugman signs off.
• Notes on crypto and its grifting community.
• Who is for workers?
• MAGA to kill off the greatest public health advance, ever.

Jews Demand Signs and Greeks Look for Wisdom, but We Preach Christ Crucified

Review of God of the Mind, by Rob Haskell

This blog had its start in a religious discussion, pitting a Christian perspective against an atheist one. That discussion never ended because these viewpoints inevitably talk past each other, based as they are on fundamentally different epistemologies and axioms. Is truth facts, or is it a person? Does it have a capital "T", or a little "t"? Does reality come first, or does faith? With this election, this conflict, usually politely ignorable at the cultural sidelines, has come front and center, as half the country has transferred a Christian style of reasoning to politics, with catastrophic consequences.

I very much wish I had had this book by Rob Haskell back in the day. It lays out in a concise and thorough way all (well, let's say many of) the philosophical and psychological deficiencies of god-belief. It is hands-down the best discussion I have ever read on the subject- well-written, with humor and incisive insight. For example, he provides the bible quote that I have used to title this post, in a discussion of Christianity's approach to reason and intellect. While reams of theology support Christianity with reasons, at the end of the day, any honest theologian and Christian thinker will say that reason doesn't get you there. Faith needs to come first. Only then does all else follow. And this "all" is laced with superstition, suspension of normal rules of evidence, submission to authority, and a need to convert the whole world to the same system of belief. It is, implicitly, a preference for unity and power over truth. No wonder they were marks for the charismatic authority of Donald Trump.

One of the most disturbing aspects of the whole debate is the moralism that creeps into what is ostensibly a reasoned discussion of viewpoints and philosophy. If one does not accept god, Christians have been taught to believe that there is a reason. Not a logical reason, but a moral reason. Depravity is a word that comes up. Lack of belief betrays a moral failure, because god is the foundation of all moral law (those twelve commandments!). Those outside the fold merely want their false freedom to enjoy debauchery and crime, without the nagging conscience, which is apparently implanted not by god at birth, (let alone by evolution, or by moral reasoning), but by regular sermons, loudly professed faith, and bible reading. A bible, we might note, that is full of militarism, sexual abuse, deceit, and political authoritarianism. The whole proposition is absurd, from the ground up, unless, of course, you are of the religious tribe, in which case it has an irresistible logic and allure.

No wonder Christians feel good, right, and justified. And feel a birthright to rule over all, to claim that the US is (or should be) a Christian nation. One where resistance to its moral imperatives would, at last, be futile.

But here we are, getting off track! Rob Haskell is a former protestant missionary and minister, graduate of Regent College, and came to his new positions through deep personal engagement and turmoil. He knows intimately of which he speaks. An interesting aspect of his book is that he is almost more focused on psychology than on philosophy. For it is psychology that drives religious conversion, drives people to prostrate themselves before the void, and drives a faith that calls itself truth. Without the indoctrination by families, for example, no religion would amount to much- certainly not Christianity. And indoctrination of the young is obviously a highly irrational process, combining the most powerful psychological forces known- peer pressure, parental pressure, authority, tradition, community, repetition, fancy costumes. Who could resist? And yet Christians have no problem claiming that the result of all this is belief in truth, with a capital T. 

Haskell recounts an educational experience he had inviting Mormon missionaries to an extended discussion of why he should take up Mormonism. They tout the book of Mormon, which Haskell knows very well is a absurd fabric of early nineteenth century prejudices and speculations. They tout the archeological work a few believers have undertaken to prove their scripture, which is highly dubious, to say the least. But at last, when reason fails and argument slackens, Haskell is urged to pray. Pray hard enough, and the light is sure to shine. And for Mormons, brought up with all the pressures and templates ready-made for their belief, such prayer is very likely to work, activating the archetypes and feelings conducive to agreement with their culture. Will the story or the prayer work for others? Rarely, but occasionally it does strike a nerve, especially in the psychologically vulnerable. Haskell recognizes, uncomfortably, that while the stories are different, the psychological methods used by the Mormons and by him as a missionary are eerily similar.

"This points back to what I've already described, namely that in evangelical thinking, and possibly in all religious thinking, the acceptance of certain crucial and non-negotiable ideas comes first. Then, after that acceptance comes the search for evidence that supports it. But that evidence always gets the short end of the stick. Evidence is great when it affirms the things that are accepted by faith. But here isn't a lot of interest in evangelical circles in evidence itself, or in thinking clearly about evidence. And when the evidence falls short, the believer goes back to where it all started: not evidence but faith. So, it's really a matter of wanting to have your cake and eat it too. There's a built-in permission to be sloppy. 'We like evidence!' says the evangelical, 'so long as it proves our point. but when the evidence brings up difficult questions, we reserve the right to toss it out and appeal to faith.' ... How can you have a serious conversation with someone who thinks like this? It's like talking with your teenager."

Rationalization and confirmation bias are fundamental aspects of human psychology. Science has developed an organized and reasonably effective way to address it, but other institutions have not, notably the echo chambers of current news and social media. We do it all the time, (I am certainly doing it here), and it is no wonder that Christians do it too. The problem is the lack of humility, where Christians revel in their fantastical story, impugn anyone so dense (if not evil) as to not get it, and twist the very vocabulary of epistemology in order to declare that "Truth" comes, not out of reality, but precisely out of unreality- a faith that is required to believe in things unseen and tales thrice-told.

• And he writes a blog, too.
• Example of typical religious condescension, by J D Vance's mentor, James Orr.
• The Discovery Institute will try anything...
• Then there is the no true Scotsman defense.
• The Supreme Court lowers itself still further.
• What makes a human brain?
• We continue speeding ever faster to disaster.
• Poisonous propaganda + AI = our future.

Who Needs the Fed?

Project 2025 promotes "free" banking, which is to say, no pesky regulations or backstopping from the Federal Reserve. What could go wrong?

Policy wonks can't help themselves- they need to write down their plans so that all the world can see how brilliant they are, and how real they could be, if only others recognized their brilliance. In that way, the project 2025 plans from the Heritage Foundation have been a gold mine, at least for Democrats. And since the Republican Party couldn't be bothered to write down a platform, other than "anything Trump wants", this project serves as the functional platform of the current Republican campaign, written as it was by scores of officials from the first Trump administration, plus many others itching to be appointed to a second. And it is crazy- more like a project 1825 than anything we would want to look forward to.

One of its less publicized planks is its approach to banking. It heaps criticism on the Federal Reserve, and recommends, as the most effective solution, its abolition and a return to "free banking". Which means a world where no regulator controls the banks, and no federal reserve backs it up against panics and crises. And just to complete the return to barbarism, it recommends a return to the gold standard as well.

"In free banking, neither interest rates nor the supply of money is controlled by the government. The Federal Reserve is effectively abolished, and the Department of the Treasury largely limits itself to handling the government’s money. Regions of the U.S. actually had a similar system, known as the “Suffolk System,” from 1824 until the 1850s, and it minimized both inflation and economic disruption while allowing lending to flourish." - From Chapter 4

Needless to say, US history is littered with banking panics, runs, and depressions, usually due to the unregulated nature of this "free" banking and to monetary gold backing. It is hard to express just how absurd and damaging it would be to return to such a world. The Federal Reserve was conjured up after a long history of the establishment of the first national bank, then its destruction by Andrew Jackson, a century of economic instability with particularly damaging panics in 1893 and 1907. By 1913, the US finally had had enough, and set up an updated national bank in the form of the Federal Reserve, to regulate and backstop the banking system. 

Illustration from 1873, portraying "Panic" on Wall Street.

Unfortunately, until the advent of Keynesian economics, it didn't really know what it was doing, and was particularly ineffective during the Great Depression, making things worse instead of better. Even now, it amounts to a cabal of bankers who are more interested in jacking up interest rates than in national prosperity. MMT economists tend to think that interest rates should be kept low, and the functions of the Federal Reserve folded into the Treasury Department, with greater political oversight. The use of interest rates- which are such a blunt tool of economic policy- could then be de-emphasized, in favor of more dynamic fiscal policy to manage inflation and monetary conditions. It is worth noting that over the last eighty years, the Fed has routinely over-shot its mark in raising interest rates, ending up with recessions, and rapid, belated retreats to lower rates. It is only with the current cycle that it has achieved, at least so far, the dream of a soft landing, taming inflation while avoiding recession.

Recessions (gray) have regularly followed interest raising campaigns by the Fed, and not always intentionally.

But note that the word "depression" is no longer in our lexicon. For all its faults, the Fed has kept the economy on a much more even keel than was possible under the wild-west free banking era, when monetary conditions were hostage to whatever Yosemite Sam dug up in the Yukon, or how wildly bankers over-extended their issuance of notes. Banks built impressive buildings to foster the illusion of stability in an environment where stability was impossible, lacking the infinite backstop that the Federal Reserve can now bring to bear during a crisis. Both individual depositors and the population as a whole benefit. It is a classic example of the people of the US coming together to create an institution that makes our lives better, so that we can worry about other things than the next banking panic. 

This economic craziness is just one small example of the fevered imaginations of the right wing in current US politics, which seems to have crawled out from the former fringes of Lyndon Larouche and the Birchers to take over an entire half of our political system. And this is fundamentally thanks to the air given them by an appalling right wing media that cares nothing for truth or civility, rather making its money from button pushing, whining grievance, and reflexive anti-state propaganda. And people complain about social media! Just how long ostensibly reasonable and decent (even Christian(!)) people will wallow in this environment is anyone's guess, but our common, rational, and beneficial institutions will in the mean time be in constant danger.

• Luddites of today.
• We need to win this war.
• Profile in courage.

Correction- The Republican convention did actually come up with a platform.

Welcome to Lubyanka!

Another case of penal systems illuminating their culture.

Most of Aleksandr Solzhenitsyn's In the First Circle is a desultory slog, at least if you have already read the Gulag Archipelago. But there are a few glorious set-pieces. One is the mock trial of Prince Igor of Kiev that the prisoners stage in their free time, a bitter satire of the Soviet judicial system. The second is a meticulous description of how prisoners are brought into and introduced to the Lubyanka prison- the central prison of the KGB/FSB/Cheka/GPU/OGPU/NKVD/NKGB, etc.. the frequently renamed, but never-changing organ of the Russian government.

The character is Innokenty Volodin, a Soviet diplomat who has recently had second thoughts about the rightness of the Soviet system, and has placed a call (around which the book's plot, such as it is, mostly revolves) to the Americans to prevent Russia from obtaining certain critical atomic secrets. Solzhenitsyn carefully prepares the way by portraying Volodin's rarified position and luxurious life. As was customary, Volodin is lured into his arrest under false pretenses, and finds himself driven to the prison almost before he knows what has happened. Then, with almost loving detail, Solzhenitsyn describes the not just systematic, but virtuosic process of degradation, step by step, shred by shred, of Volodin's humanity, as he is inducted into Lubyanka.

One cardinal rule is that prisoners must have no contact with other prisoners. Even to see others is forbidden. As they are conducted from one cell to the next, they are shoved into mini phone-booth cells if another prisoner is being conducted in the opposite direction. Their possessions are gradually taken away, down to buttons, belts, and steel shoe shanks. They are shorn. They are sleep deprived. They are relentlessly illuminated by glaring bulbs. They are spied on constantly. They are moved relentlessly from place to place and disoriented. In the middle of the night, the building is abuzz with activity, as though this were the very nerve center of the Soviet empire. 

While the rest of Russian society is mired, or cowed, in mediocrity, this is a shining point of competence. The purest expression of its obsessive leader, and the product of decades of careful study and accumulated wisdom. It is also a deeper expression of the nature of Russian society- its reflexive despotism and its strange infatuation with suffering. The closest thing we have is mafia culture, with its honor codes, brutality, and constant battle for dominance. Chess, the emblematic game of Russia, expresses this view of life as a pitiless contest to crush one's opponent. There may be a lot of historical reasons for this nature, such as the long centuries of Mongol rule, the many invasions, both ancient and modern, and the perceived success of leaders such as Ivan the Terrible and Stalin, but it is a deep and disturbing aspect of the Russian psyche. 

Should we have expected anything else, in the long road of declining relations after the cold war? Should the Russian people give thanks to the ruthlessness of their national leadership and psyche for the current position of relative power they wield in the world, far out of proportion to their population or economic strength? Other countries with larger populations peacefully mind their own business, avoid outside entanglements, and eschew invading their neighbors. It is the bullies, the intransigent, and the cruel, who appear to account for most of the drama in the world. Should we understand them, or fight against them?

• Another way to crush spirits.
• It is good to be outside.
• AI is not helping job seekers.
• On paying the devil his due.
• Why have kids anymore?

Hungary for Power

Hungary has become a one-party, authoritarian state, not a democracy.

Victor Orban recently paid a visit to Donald Trump in Florida, with glowing photos and pledges of goodwill. Republicans in the US have nurtured a deep fascination and alliance with Orban and his government, holding several CPAC conventions in Hungary, and hosting Orban and his lieutenants at US events. It is clear that they view Hungary as a shining example and template of where they could take the US. Not the shining city on a hill of Reagan's democratic and anti-authoritarian dreams, but a whole other kind of city, one that never will fall into Democratic hands again.

So it is worth looking in detail at what has happened in Hungary, to observe the ideals of our current Republicans and what is in store for the rest of us from a second Trump term. I was, incidentally, beaten to the punch of this analysis by a recent story in the Atlantic. Orban's party, Fidesz, is very similar to the GOP in its mix of business right-wingery and rural values. Its strength is handing out the red meat of traditional, anti-cosmopolitan values to the rural base, along with helpful economic subsidies. In the pivotal 2018 election, it won all the rural districts, even though the opposition bowed to the logic of re-written (winner-take-all) electoral system and tried to join into a unified party. 

Fidesz came to power originally on an anti-socialist platform, vowing to get rid of the remnant bits of the prior communist system, which had settled into the same kind of semi-kleptocratic mode as in most of the former Soviet states and its satellites. That they did, but not to bring an end to corruption, let alone authoritarianism, but rather to partake themselves instead. After coming into power, Fidesz rewrote the constitution, in ways large and small to entrench their own power, and has since continued a campaign of extremely effective, gradual, and often surreptitious legislation to cement its advantages. Gerrymandering is now standard procedure, which when combined with the winner-take-all districts creates the opportunity to win overwhelming majorities in parliament founded on very thin electoral pluralities. Small parties can not win any more, but are also prohibited from combining with other small parties into election list coalitions.

The courts were remade by putting them under the control of a political appointee- the president of the National Judicial Office. This president is appointed by parliament, and in turn appoints, promotes, and runs the operations and budget of the whole judicial system. Needless to say, it is heavily influenced by the now Fidesz-controlled parliament and executive.

The media has been remade by gradual pressure on independent media owners to sell to Fidesz-friendly interests, which now control 90% of the country's media. Government advertising buys were strategically placed with friendly outlets, and government run media was put under direct political control. A Russian inspired "security" law was passed to outlaw ill-defined criticism of the state, public morality, or "imbalance" of coverage, answerable naturally to a parliamentary-appointed body, rather than the courts. Imagine if in the second Trump administration, PBS and NPR were put under political control and given a "FOX" makeover. 

Hungary is now effectively a one-party authoritarian state with managed elections. We are not far off. To see the battle of titanic interests and billionaires now openly showering money on favored candidates, and extending their tentacles down to the school board level, is sickening. The Republican party has partnered with Heritage foundation to offer an openly Orbanist plan for the second Trump administration. The court system has already re-written our constitution in extensive ways over the last four years, without an amendment being passed, or even proposed. The antics of Judge Eileen Cannon show that very little may remain of the rule of law if it is left in the hands of partisan extremists.

And our media is in even more perilous condition, with the relentless lying of FOX, Sinclair, and their ecosystem. The Republican convention just past was a pageant of lies and grift, betokening the criminal enterprise that party has turned into. Headed by their adored, and now divine, leader who is not just a felon and business fraud, but rapist and insurrectionist as well. But no matter. With enough money, and enough shamelessness, anything is possible.

• Everything is fine!
• Scandals erupt out of a corrupted system.
• The new GOP.
• Which is a blue collar party, right?
• Tom Tomorrow, on last week.
• Historical note on the great California land grab, and the fate of "free" land generally.
• Notes from the early days of life.