Finance is interested in you

You may not be interested in finance, to paraphrase Trotsky, but finance is interested in you, Mencius Moldbug notes:

1. We do not have a free-market financial system.

2. We have never had a free-market financial system.

3. Leaving the financial system to "work things out on its own" will not produce a free-market financial system. It will produce a smoking heap of rubble.

4. Paulson's bailout is, if anything, far too weak. Our financial system is part of the government. The proper first step is to stop lying about this. This means nationalizing the banks. This is not an expansion of government, but a recognition of its actual size. It is not an expenditure, but a revision of accounting to reflect reality.

5. A free-market financial system would be way cool. More important, it would be extremely stable. But the only way to create one is to build it right from the start. If you have a car and you want a motorcycle, sell your car and buy a motorcycle. Don't decide to call your car a "four-wheeled motorcycle," and don't think unscrewing two of the wheels will solve the problem.

6. Therefore, the government should close down the financial system we have now and replace it with one that doesn't suck. What is the probability that this will happen? Zero. But at least you know.

How many dollars are there in the world?

How many dollars are there in the world?:

There is a nice official answer to this question. The figure is known as M0, the monetary base, and its current value is about 825 billion.

So, we know that n, the number of dollars, is 825 billion, M0, right?

Wrong. The problem is that this assignment, n = M0, simply does not make sense. It is not consistent with economic reality. Of course USG can enforce it, as it can enforce anything, but the result will be social and economic disaster. North America will become a burned-out Mad Max wasteland, patrolled by marauding gangs and packs of radioactive mutant wolves.

The US governemtn has a national debt of roughly $10 trillion, not counting unfunded entitlements:

Moreover, this debt is not even discounted. Quite the contrary: it is considered "risk-free."

Question: how, exactly, in a world that contains only 825 billion dollars, can a debt of $10 trillion be risk-free?

Moreover, USG runs an annual trade deficit of $750 billion. Even if it started each January 1 with all 825 billion of these dollars in the country, which it most certainly didn't, its subjects should be feeling pretty impoverished by Christmas. But no. They run the same trade deficit, year after year after year. Perhaps the dollars are being lent back to them — but why?

There can only be one answer: this $825 billion number is just plain wrong.

825 billion is the number of formal dollars outstanding. It is not the droid we are looking for, though.

A clean-slate accounting of the dollar

Mencius Moldbug attempts to offer up a clean-slate accounting of the dollar "with no assumptions about economics, finance, or accounting":

Think of it as rather like analyzing a Soviet nickel company in 1991. Does the company even exist? Does it even produce nickel? Does it own any mineral rights of any sort? If we buy it, do we really own it? Etc.

He shares a short history of money:

Perhaps you think of the dollar as "money" or "currency," and you are very confused by all this. "Money" and "currency" are nice words, but they have no precise accounting definition. They just refer to a good or security commonly held for the purpose of savings and/or exchange. Historically, we can identify four classes of currency:

(1) Direct goods, such as coins of a standardized weight of precious metal.
(2) Titles or warehouse receipts to (1).
(3) Obligations to pay (1) or (2), or redeemable currency.
(4) Mere equity, or fiat currency.

These are (excluding the common 4-to-1 transition) in order of historical evolution. Explaining the evolution is not of direct assistance in analyzing the dollar, but it helps us get our bearings — and it defines terms which will be useful later on.

Class 1 currency (standardized metal) evolves into class 2 currency (titles) because titles are more portable, secure and convenient. Digital gold is a modern class 2 currency.

Class 2 currency (titles) evolves into class 3 currency (redeemable notes), because the change is generally profitable for the currency issuer, and the marks are too dumb to know the difference. A title or warehouse receipt is a title because the issuer holds goods that match it; otherwise, he is a thief. A redeemable note is a mere debt, and does not default until redemption fails. And even then, the issuer is only bankrupt, not in jail.

Suppose I have 100 ounces of gold, and issue 100 titles against it, each title stating that the bearer owns one ounce of gold. This makes me a respectable issuer of class 2 currency.

Suppose I have 100 ounces of gold, and issue 200 redeemable notes against it, each note stating that I will issue the bearer one ounce of gold on demand. This makes me a scoundrel.

However, it also makes me wealthier than I was before, at least until more than 100 bearers show up to claim their gold at the same time. Will my notes trade at par? Ie: will people accept them as equivalent to the class 2 titles? Well, every time someone starts to get suspicious and tries to redeem one, it works. So I don't see why they shouldn't. We have just reinvented the wildcat bank — a staple of early American finance.

There is a cure for wildcat banking: those who accept class 3 notes should ensure that the issuer is solvent. A financial institution is solvent if and only if the sum of all the payments it is obligated to make equals or exceeds the total price of all the assets it holds. So our Scoundrel Bank above is not solvent, because it is obligated to pay 200 ounces and it only has 100 ounces.

One way to see a redeemable note is to see it as a very short-term loan from the noteholder to the bank, which is automatically renewed or "rolled over" when the noteholder does not redeem. If the term of the loan is an hour, a minute or even a second, the effect is redeemability. And note that when making a loan, what you want to know is whether the loan will be paid back. And collectively, what all loanholders want to know is that they all can be paid back. First come, first served, is not solvency.

Scoundrel Bank can redeem for some of its noteholders. But not all of them. Therefore, all unfortunate holders of its notes can agree on a fair — or "equitable" — bankruptcy restructuring: every holder of a Scoundrel ounce note should receive half an ounce of gold. As for the scoundrel himself, trees abound, and perhaps the noteholders can pitch in for a rope.

But there is a tricky intermediate case — call it Questionable Bank — between Respectable Warehouse and Scoundrel Bank. Respectable Warehouse issued 100 one-ounce titles. It has 100 ounces. Verifying the quality of the titles is as easy as verifying these facts. Scoundrel Bank issued 200 one-ounce notes. It does not have 200 ounces. Verifying its insolvency is just as easy.

Questionable Bank also issued 200 ounce notes. It also has only 100 ounces. But it also has 100 old pianos. Each piano, it asserts, is worth an ounce of gold. "Easily. Easily. No sweat, man. These are fine pianos. Here, play this one. Hear that sound? That's a sweet tone. Check out the action on the keys. Totally smooth. You could move this piano for an ounce fifty, no problem.")

Suddenly our noteholder, or at least the accountant he hires, is required to be a piano appraiser. Should you trade a Respectable title to one ounce, for a Questionable note paying one ounce? It depends on the quality of the pianos. Obviously, every piano is different. You can't just play the one up front in Questionable's office. You need to go into the back room and tinkle away.

Moreover, even if each piano could be sold on the piano market for an ounce or more, it is hard to know that all the pianos could be sold at once. Since price is set by supply and demand, the appearance of a large splodge of pianos, even fine pianos, on the market all at once, is liable to depress the piano price. And "at once," let's not forget, is the term of the Questionable notes.

In real life, of course, the good in question is typically not pianos but loans. Usually long-term loans. Pricing a piano is difficult, but it is nothing on pricing a loan. And the result of dropping a glut of loans on the market all at once is even more astonishing and disastrous.

Colonel House and Philip Dru

Mencius Moldbug recently cited Walter Millis's Road To War: America 1914-1917, which offhandedly refers to one Colonel House, a figure I don't think I could make up:

Edward Mandell House (July 26, 1858–March 28, 1938) was an American diplomat, politician, and presidential advisor. Commonly known by the purely honorific title of Colonel House, although he had no military experience, he had enormous personal influence with U.S. President Woodrow Wilson as his foreign policy advisor until Wilson removed him in 1919.

This is the especially good part:

In 1912, House published anonymously a novel called Philip Dru: Administrator, in which the title character, Dru, leads the democratic western U.S. in a civil war against the plutocratic East, becoming the dictator of America. Dru as dictator imposes a series of reforms which resemble the Bull Moose platform of 1912 and then vanishes.

So, Wilson's foreign policy advisor was a colonel with no military experience, who wrote a novel about a progressive dictator saving America. Hmm...

The Flag of Humanity

When you claim that yours is the The Flag of Humanity, well, that's not necessarily good news for everyone else:

If you heard a Hitler say: "the swastika is the flag not only of Germany, but of the world," you would doubtless be a little concerned. You might think, gee, this Mr. Hitler doesn't mind sounding like he wants to conquer the entire friggin' planet.

But when you hear that the Stars and Stripes "is the flag not only of America, but of humanity," you have a slightly different reaction. And not because you're a gun-totin', God-lovin', truck-drivin' red-state American. Quite the contrary, in fact.

That's Mencius Moldbug talking, and he goes on to cite Woodrow Wilson, from July 4, 1914, describing the policy that now bears his name:

My dream is that as the years go on and the world knows more and more of America it will also drink at these fountains of youth and renewal; that it also will turn to America for those moral inspirations which lie at the basis of all freedom; that the world will never fear America unless it feels that it is engaged in some enterprise which is inconsistent with the rights of humanity; and that America will come into the full light of the day when all shall know that she puts human rights above all other rights and that her flag is the flag not only of America but of humanity.

What other great people has devoted itself to this exalted ideal? To what other nation in the world can all eyes look for an instant sympathy that thrills the whole body politic when men anywhere are fighting for their rights?

Mencius adds his thoughts:

Note the particularly charming phrase "unless it feels that it is engaged in..." What Wilson really means is that [no government] will ever fear America unless [America] feels that [that government] is engaged in some enterprise which violates the rights of humanity.

In other words, [the US government] will judge the world. In other words, [the US government] will govern the world. In other words, [the US government] will rule the world. In other words, [the US government] will dominate the world.

The belief that judging is distinct from ruling, that one can "provide global governance" without "grasping world domination," is not a Wilsonian invention. It is a fundamental part of the American political tradition — the separation of powers. In this case, the separation of executive and judicial authority. One can be an honest broker, without being an imperial overlord.

Rationally — if the term applies — this depends on the concept of "natural law," ie, a theory of right and wrong which is self-evident to everyone honest. Since [the US government] is always honest, being democratic, it and and any other honest, enterprising government will always agree on whether the latter is "violating the rights of humanity." And if they don't, it is. Ergo, [the US government] is always right.

Thus, it is clear that when Serbia wishes to recover a seceded province, it is violating the rights of humanity, whereas when Georgia does the same it is defending them. The former fears America, and rightly so. The latter is helping it support democracy.

So [the US government], the universal democratic nation, may, indeed must, assert its jurisdiction over all. Which it just happens to have the military and financial power to enforce. And is this in the interest of America or Americans? Heaven forfend!
[...]
Lest the odor of cynicism become overpowering, let's pause for a minute, and admit that there is evil in the world. More specifically, there are evil people. And it is a glorious thing, and good for all and sundry, to wrap a rope around their necks and pull the chair away.

The trouble is that if we truly despise evil, we hope to minimize the amount of it in the world. Wilsonism is not inherently evil. A Petri dish is not inherently bacteria-infested. There is such a thing as a sterile Petri dish. But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found. And bacteria are not in short supply.

Why would evil not go abroad in the mask of good? Satan has no fear of masks. Wilson, a deeply mystical man, thought of democracy as a sort of antibiotic which ensured that his Petri dish would always remain pristine. It has not, in my opinion, worked out that way.

But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found.

The US government supports Israel, right?

The US government supports Israel, right? Mencius Moldbug isn't so sure:

At present, however — that is, in the real world, where [the US government] supports Israel — the expectation appears to be that all disputes will be resolved via Israeli concessions. The only dispute appears to be on the magnitude of these concessions. "Land for peace" is a fairly normal way to end a war — for example, France in 1870 accepted the proposition of "land for peace," ceding Alsace-Lorraine to Germany. On the other hand, France in 1870 had been defeated. Whereas Israel in 1967 was, at least according to all reliable experts, victorious.

So we arrive at a peculiar conclusion. On the one hand, [the US government] supports Israel. On the other hand, if [the US government] ceased to exist, at least for the purposes of the Middle East, Israel's position seems as if it would become much stronger. A conclusion that would seem to indicate that [the US government] opposes Israel. But then, why would it give Israel billions of dollars and fancy weapons?

We are left to conclude that (a) [the US government] both supports and opposes Israel; (b) the magnitude of the opposition exceeds the magnitude of the support (implying net opposition); and (c) the support is overt and obvious, whereas the opposition is somehow... more subtle.

In other words, we are in the position of an astronomer who sees light being bent away from a large visible object. The astronomer must conclude that unless the laws of gravity are reversed in the vicinity of this object, there is an even larger non-visible object on the other side of the light. The latter can be detected only by inference, but the detection remains unambiguous.

Israel makes a great pons asinorum because in this case, the diplomatic dark matter is not at all hard to find. Perhaps it is best explained by the title of this book, which I saw in a window somewhere. According to the author or at least his title, [the US government] is acting as a "dishonest broker" in the Arab-Israeli conflict.

Ie: "justice" in the conflict favors the Palestinians more than [the US government]'s actions today reflect. Ie: [the US government] is pro-Israel, but not in the sense that [the US government]'s interventions in the Middle East are a net positive for Israel. Actually, they are detrimental to Israel. But if "justice" were served, they would be even more detrimental.

So if I sue you for $100,000 and the judge awards me $20,000, I might say that the judge is biased in favor of you. Because you still have $80,000 that is rightfully mine. On the other hand, it's difficult to avoid the conclusion that the judge forced you to pay me $20,000. Which is $20,000 you'd have and I wouldn't, if there was no judge at all. An interesting kind of support.

America, you see, is not really the vampire of the world. The analogy is inexact in two ways. One, a vampire is nourished by the blood of his victims. They grow weak and sickly, while he thrives in ruddy good health. Two, it is always easy to know that a vampire has been eatin' on you, because there are fang-marks on your neck.

America is more the arsonist of the world. As well as the fireman. Wherever fires break out, Uncle Sam is there to pour gasoline on them. The fireman assures us, of course, that he is only setting a backfire to defeat the main blaze. But why is this always the right strategy? Why was he the first one on the scene? Why do his hoses always seem to get tangled, whereas his gas can never runs dry? And why have there been so many more fires since he came to town? But the TV audience sees none of this. All they see is the fireman, fighting the fires.

It's not an accident

In explaining how to occupy and govern a foreign country, Mencius Moldbug notes that military malpractice is often not an accident:

So a Western government that uses its military as an occupying force in a foreign country, without a strong occupation based on the principle of mixed authority, without suppressing competing political and military activity, and with rules of engagement that mimic criminal-justice procedures designed for a civilized Western society, is abusing said military. I find this imprudent. You can kick a poodle. You can own a wolf. But if you own a wolf, don't kick it.

Worse, while Professor Luttwak's concept of "military malpractice" is technically accurate, it makes the situation sound like an accident. It is actually much worse than that.

A failed occupation, like that in Afghanistan, or a Pyrrhic half-success such as Iraq or Vietnam, is of considerable political utility to those whose theory of government predicts that military occupation of a hostile population can never succeed. This would be the "democratic," or "progressive," or simply "left," side of your radio dial. Not coincidentally, this is also the side which is vending the "hearts and minds" theory, and doing its best to eradicate the "grasp the nettle" theory from human memory.

And the cycle works. When an occupation fails, it is because it failed to win "hearts and minds." And the next occupation will be even more tender-handed. It will cower even more abjectly before the delicate flutter of the native heart. It will completely forget the fact that the native has a mind, too, and it is far easier to communicate with a mind than with a heart. It will kill more and more American soldiers, and devastate more and more foreign countries. (And other foreign countries will be devastated not by occupation, but by the lack of it — in the person of a Mugabe, a Saddam, an Idi Amin.)

Moreover, who are the soldiers who are dying in these theatrical exercises? Overwhelmingly, Amerikaners. Whose political fortunes are advanced by the repeated demonstration that "war never solves anything?" Certainly not the Amerikaners.

Thus these sabotaged occupations are revealed in their true nature: they are civil wars by proxy. The goal of war is political power. In a sabotaged occupation, the left gains political power, not in Iran or Iraq or Vietnam, but in America, by using the deaths of thousands of American soldiers to prove to the TV audience that reality and progressive reality are the same thing.

The fact that no one is thinking this consciously — progressives are overwhelmingly sincere — does not change the fact that it works.

How to occupy and govern a foreign country

Mencius Moldbug explains how to occupy and govern a foreign country:

[Grasping the nettle] is an old English metaphor known to all colonialists. As the rhyme goes:

Tender-handed, grasp the nettle, and it stings you for your pains.
Grasp it like a man of mettle, and it soft as silk remains.

(Supposedly the toxin injectors of the stinging nettle are activated by a light brush but deactivated by firm pressure. I have not tested this personally.)

The substance of the nettle metaphor comes from a theory of civil war that is the polar opposite of the "hearts and minds" theory. Under the nettle theory, insurgencies happen because, and only because, the insurgents perceive a chance of winning.

Like all men, they fight for glory, power, and plunder. Any government can prevent and/or terminate all internal violence by making it clear to its opponents that victory is impossible, and the only results of any struggle will be ignominy and imprisonment at best, mutilation and death at worst. To convey this message is to grasp the nettle "like a man of mettle."

The solution to the problem of colonial government, then, is to govern: to enforce order instantly, completely and without compromise, tolerating no challenge to the occupying authority whether military or political, religious or criminal. Lord Cromer, for instance, would have been simply aghast at the fact that the US occupation authorities tolerated not only native political parties, but parties with armed paramilitary wings. It has taken five years to mostly, sort of, pretty much correct this amazing elementary howler.
[...]
In summary: the theory that it is impossible, in the 20th century, for an effective modern military to occupy and govern a foreign country is simply not tenable. This illusion has been fostered by a pattern of "tender-handed" occupations, combined with a "hearts and minds" theory of insurgency that prescribes more tenderness as soon as the nettle starts to sting. Unsurprisingly, this prescription does not work. By sustaining the illusion that the quack medicine of "hearts and minds" is effective, military experts sustain the illusion that no other medicine exists and no occupation can be successful.

This is not a novel observation. My point is the same as Professor Luttwak's: trying to run an occupation without "grasping the nettle" is military malpractice.

Amerikaners

Mencius Moldbug reserves the right to refer to red-staters, collectively, as Amerikaners:

Like their lexical analogues, the Amerikaners are a cultural group of European stock, but their present-day traditions cannot be easily connected with any group in modern Europe. We cannot say this of the Universalist Eloi of the coasts, whose connection to the English Dissenters and their secular, liberal heirs has been continuous since day one. For example, American traditionalist or "fundamentalist" Christianity, which is nominally Protestant but seems almost Catholic next to the thoroughly Quakerized blue states, has historical roots which are quite obscure and thoroughly American.

His question is, When will the Amerikaners decide that they've had enough?

Sixty (60) percent of American voters call themselves "conservative." Voting as an organized, disciplined bloc, it should be straightforward for them to defeat and destroy the remaining 40 — let's say 20% Eloi, 20% Morlock. Moreover, if such a majority demands a comprehensive reconstruction of government, not just a cosmetic change among a few ceremonial officials who have no real executive authority, the Eloi and Morlocks can hardly resist them. Especially since the American military class is, almost by definition, Amerikaner.

In retrospect, any such reconstruction would be accepted by all, of whatever caste. The Eloi will see the light, as they always do. As Osama put it: they like the strong horse. In an Amerikaner republic, Eloi will elbow each other out of the way to eat overpriced American food, wear marked-up knockoffs of American prole clothes, live in actual old American buildings, etc, etc.

Of course the Eloi already do these things. But in our New Albion, they will do them with flags, God and guns. (Possibly even Confederate flags.) And the Morlocks will be forced to deal — as they already are. (Although once the bar is reset, I suspect that less force will be required.) [...] And Sarah Palin will put together a small edition of her family's wise old Alaska sayings, bound in red, white and blue, which fits nicely in the lapel of your blazer.

You may, or may not, be thankful that this is not going to happen. It is not going to happen because the Amerikaners are not organized enough to make it happen. Given infinite time, they will certainly get organized, which is why I say "when" rather than "if." But time is not on the Amerikaners' side. Their horse has been weakening for the last century.

The Amerikaners' problem is that they're governed by their enemies, the progressives, who have converted democratic politics into a reality show and rule through the extended civil service. The civil service is nominally responsible to the elected arms, but the latter would have to put up a terrible fight to even touch them. And progressives fight the peril of a "populist" democratic reaction with two slow, but inevitably lethal, strangulation tactics: subsidized progressive education, and Morlock voter importation.

The last quasi-successful Amerikaner reaction was the "Return to Normalcy" of the 1920s. Considering the royal ass-whupping the Amerikaners have been taking since then, "normalcy" (which, in classic Amerikaner style, is not even a word) is an awful mild description of the converse. But not even a gentle, Harding-Coolidge style restoration is a real possibility today.

The fatal flaw in the democratic mind of the Amerikaner, or "conservative," is that he believes that his country's political system basically works and is the best in the world. It has just gone slightly off the rails in the last few decades. But it can be set right with a minor corrective operation, ie, replacing a few ceremonial officials with good, clean-minded, child-bearing Amerikaners.

This belief system, which has no correlation with reality, is at the heart of "conservatism." It shows no sign of going away. The fatal allure of insisting that right-wing conservatism is really the true democratic liberalism, the other having strayed, is an irresistible anglerfish lure. (The Rev. Dabney will set you straight.)

Therefore, the Amerikaners are unlikely to organize and act effectively until their electoral position has declined to the point at which a democratic restoration is not only nontrivial, but in fact impossible. At this point, USG [the US government] will have imported tens if not hundreds of millions of new Third World residents. It will be obvious that military government is the only route to any kind of American restoration. The inevitable alternative is a North America indistinguishable from the rest of the Third World.

Have you been to the Third World? The armed forces will have to act. Let's hope they can all get it together to be on the same side.

Sarah Palin: the proletarian candidate

Mencius Moldbug has refined his previous five-caste definition of the American social spectrum down to three castes — Eloi, Morlocks, and Proles — and has declared Sarah Palin the proletarian candidate:

You see, the so-called "Democrats" (whom, here at UR, we call the Inner Party) and their purported opposition, the supposed "Republicans" (or Outer Party) have completely different beliefs about the nature, purpose, and function of the office known as the "Presidency," for which they appear to contend. As usual, the IP is right and the OP is wrong.

To the IP (obviously, also the Eloi-Morlock Party), the so-called "President," ie, the player whom callers help select in USG's quadrennial reality show, is hardly a temporal position at all. It is really more of a spiritual office. The Roman pontifex maximus is a fine analogy. I also admire the phrase "bully pulpit," which I feel could be used a good bit more.

For the IP, for example, the ideal "President" would be Nelson Mandela. But there are obstacles — St. Mandela, for instance, is not an American citizen. At least not in the strict technical sense of the law. Fortunately, our evolving standards of justice may at some point in the future, when we are more spiritually advanced, enable us to overcome this barbarous discrimination. When Archbishop Obama says that "the walls between the countries with the most and the countries with the least cannot stand," perhaps he actually means it. Who knows, with such a great man? Certainly a good first step would be for a Federal court to realize that Mexicans are actually, in fact, Americans. (It's not like they were born in Europe, Asia, Africa, Australia or Antarctica.)

But obviously the most sacrilegious possible desecration is one in which an actual, practicing Prole is appointed, by some awful cosmic mistake, to the hallowed post of "President." It's basically like having a porn star elected Pope. Even as candidate vice-Pope, it's way too far. The purpose of the White House is to teach the Proles that it's wrong to be a Prole, and they need to stop. Now. I mean, duh. Ideally, the LORD would let America know at once of her mistake, and send Hurricane Gustav straight up the Mississippi to demolish the polyester-Americans and their so-called "convention." (Which, frankly, could be mistaken for a multi-level marketing conference. At least if all you look at is the hair.)

Meanwhile, the OP (or Prole Party) has a completely different view of the "White House." To the PP, the "President" is the CEO of America.

This illusion can only be sustained by people who either (a) have no idea what Washington is or how it works, or (b) do, but conceal it for their own political benefit. Collectively these individuals are known as "conservatives," and they make up the right side of your radio dial.

(The radio cannot be adjusted beyond this built-in band. But it can be turned off. Please do not vote for, contribute to, or otherwise support the Outer Party. Outer Party politics is not effective against the Inner Party. Please forward this message to all your Avon subscribers.)

The truth is that the White House changes its entire nature as an organ of government when it changes between Inner and Outer Party control. An Inner Party presidency is simply a different institution from an Outer Party presidency. They are apples and oranges.

When the Inner Party is in, the Presidency is a vestigial organ. It would be a fun experiment to actually abolish the White House for four years. The results would be more or less the same. Every agency in Washington would function not only just as well without the existence of the President, but in fact much better.

For example, my mother was at DOE in the Clinton era. In the renewables area — she did a good bit of work for Joe Romm. Once I asked her what Sched Cs (political appointees) did under Clinton, and she said: "they got a nice office, and they were told to work on whatever they liked." Indeed the main difference between Inner Party candidates is (a) whether or not they can win, and (b) the set of people among whom they will distribute the Plum Book.

A ceremonial presidency is perfectly consistent with Inner Party values, which stress that "politics" is bad and "public policy" is good, and the two should be stored separately — for more or less the same reason that sewage and wine are not shipped in the same tanker truck. As so often, the IP is exactly right about this. Except for the fact that the word "democracy" occupies the highest possible position on the mental totem pole of the Inner Party mind. If I could explain this, I might still be a believer.

(Moreover, the contradiction itself is a nice bit of misdirection. It points the marks away from inquiring into the nature, ingredients, and origins of the sausage called "policy." But I digress.)

When an Outer Party man becomes "President," he soon finds that all his efforts are devoted to solving the essentially unsolvable problem of preventing his name from becoming a historic byword for pure, infamous villainy. Maybe not quite like Hitler or Attila the Hun. But certainly like Mussolini, Richard II, Nixon or Ivan the Terrible.

The basic problem of the Outer Party in the White House is that, with minor exceptions such as the Pentagon, its mission is essentially one of preventing the rest of Washington from doing its job. Or at least what it thinks its job is. The military, of course, is an Outer Party shop, and can always be sent on bloody, expensive and counterproductive ticket-punching adventures. The rest of our permanent government, the civil service proper, is Inner Party to the bone. In fact, perhaps the best way to describe the Inner Party is as the party of the permanent civil service.

Which holds far more power than the White House. The While House can prevail or even contend only in the vast minority of conflicts with the permanent civil service. It is not good for the polls. When an Outer Party presidency's approval sinks below 40% or so, it is defeated, and the agencies he supposedly "leads" ignore the "President" and all his handlers, cronies and contributors. Since polls are a function of public opinion, public opinion is fabricated by the press, schools and universities, and the latter are perma-pwned by the Inner Party, the resulting barbecue is too inevitable to be really entertaining. It's best just to play along.

Example: for most of 2008, GWB might as well have been the prime minister of Namibia for all the influence he's exerted over US foreign policy. Cheney probably wishes he was the prime minister of Namibia.

Economics needs a divorce

Economics needs a divorce from itself — one half from the other — Mencius Moldbug argues:

Most people believe that there is something called "economics." But this is just not so.

When we use the word "economics," we are conflating two completely distinct disciplines. Worse, at most one of these disciplines is right — each despises and condemns the other. It's as if English had one word stellatry, which meant both astronomy and astrology.

Our first discipline is literary economics. Literary economics is what the word economics meant in English until the 1870s or so. It is Carlyle's dismal science. It was also practiced in the 20th century, under the name Austrian economics, by figures such as Mises, Rothbard and Hazlitt. Our second is quantitative economics. Quantitative economics was invented in the late 19th century and early 20th century, by figures such as Walras, Marshall, Fisher, Keynes and Friedman. It is also practiced today, under the name economics.

Observe, for a moment, the suspicious evolution of this terminology. Astrology and astronomy have a similar temporal relationship — as do alchemy and chemistry. Ie: astronomy replaced astrology, and made it clear that its predecessor was nonsense. Chemistry replaced alchemy, and made it clear that its predecessor was nonsense.

But when Robert Boyle replaced alchemy with chemistry, he chose a new name to make it clear that he was separating the sheep from the goats and classifying himself among the former. Astronomy is separate from astrology for much the same reason, and in much the same way.

Whereas in economics it's the other way around. The new name has replaced the old one in situ, forcing its predecessor to decamp to a label which, like all labels, was originally pejorative. It's as if chemistry had decided that it was the only true alchemy, and forced the original alchemists to rebrand their field as, I don't know, Swedish alchemy.

Of course, this doesn't prove anything at all. But isn't it slightly weird? You'd think that if you discover that Field A, which has been taught in all the best schools and universities since Jesus was a little boy, was so misguided in its methodology that it is useless to continue its work, and instead people should study the far superior Field B, you'd call your glorious new B a B, rather than insisting that you had discovered the one true A.

I'd say this anomaly is, if nothing else, a reason to investigate the obvious alternative that this question suggests. Which is that it's actually the new field, Field B, which is a crock. And which has chosen to hitch a ride on the good name of Field A, devouring it in classic parasitic style. In other words, it is actually the Swedish alchemists who are the real chemists, and whose field has been invaded and annexed by a horde of canting, zodiac-wielding transmutationists. Oops.

You may or may not agree with this proposition. But it is surely prudent to consider it fairly. And the only way to do so is to hold the disputed marital property, economics, in escrow, leaving the respondents with their own separate and equal names. Ideally, the noun would be estopped from both parties, giving us not literary economics but something like econography, and not quantitative economics but something like economodeling. (Or perhaps, if you want to be nasty, econogy — practitioners, econogers.) However, some may be too conservative for these bold linguistic innovations.

Let's briefly establish the distinction between these fields. It should be obvious that whatever their respective merits, they are different things and should not be conflated under one name. To indulge in a little Procrustean generalization:

The method of quantitative economics — including both econometrics and neoclassical macroeconomics — is to construct mathematical models of economic systems, ie, systems of independent, utility-maximizing agents. The purpose of quantitative economics is to predict the behavior of these systems, so that central planners can manage them intelligently.

The method of literary economics is to reason clearly and deductively in English about the behavior of economic agents. The purpose of literary economics is to construct and convey an intuitive understanding of causal relationships in economic systems.

Clearly, these fields have nothing in common, either in methodology or purpose. It is true that some quantitative models can be explained in literary terms. However, they cannot be justified in literary terms. And if they can, no quantitative methods are necessary. Indeed, successful quantitative methods often hold up quite poorly when judged by literary standards. Two good examples of this phenomenon are Henry Hazlitt's Failure of the New Economics — a line-by-line response to Keynes' General Theory — or Murray Rothbard's abusive treatment of Irving Fisher's equation of exchange.

And by the standards of quantitative economics, which considers itself a predictive, falsifiable, inductive science, literary economics is simply a nothing. At best, a popularization. It makes no testable predictions. Why anyone would study it in the 21st century is a mystery.

Ergo: there is no possibility of reconciliation. Papers should issue. Custody of that little brat, economics, should be delayed for further consideration.

Historiographic triangulation

Historiographic triangulation, Mencius Moldbug explains, is the art of taking two or more opposing positions from the past, and using hindsight to decide who was right and who was wrong:

The wonderful kids at Google, who are all diehard progressives and whom I'm sure would be horrified by the uses I'm making of their services, have done something that I can only compare to Lenin's old saying about the capitalists: that they would sell the rope that was used to hang them. Likewise, progressives seem determined to publish the books that will discredit them. As in the case of the capitalists, this is because they are good, not because they are evil. But unlike Lenin, we are good as well, and we welcome these accidental forced errors.

I refer, of course, not to any new books. It is very difficult to get reactionary writing published anywhere, even (in fact, especially, because they are so sensitive on the subject) by the conservative presses. However, as UR readers know, the majority of work published before 1922 is on-line at Google. It is often hard to read, missing for bizarre reasons that make no sense (why scan a book from 1881 and then not put the scans online?), badly scanned, etc, etc. But it is there, and as we've seen it is quite usable.

And there are two things about the pre-1922 corpus. One, it is far, far to the right of the consensus reality that we now know and love. Just the fact that people in 1922 believed X, while today we believe Y, has to shake your faith in democracy. Was the world of 1922 massively deluded? Or is it ours? It could be both, but it can't be neither. Indeed, even the progressives of the Belle Epoque often turn out to be far to the right of our conservatives. WTF?

Two, you can use this corpus to conduct a very interesting exercise: you can triangulate. This is an essential skill in defensive historiography. If you like UR, you like defensive historiography.

Historiographic triangulation is the art of taking two or more opposing positions from the past, and using hindsight to decide who was right and who was wrong. The simplest way to play the game is to imagine that the opponents in the debate were reanimated in 2008, informed of present conditions, and reunited for a friendly panel discussion. I'm afraid often the only conceivable result is that one side simply surrenders to the other.

For example, one fun exercise, which you can perform safely for no cost in the privacy of your own home, is to read the following early 20th-century books on the "Negro Question": The Negro: The Southerner's Problem, by Thomas Nelson Page (racist, 1904); Following the Color Line, by Ray Stannard Baker (progressive, 1908); and Race Adjustment: Essays on the Negro in America, by Kelly Miller (Negro, 1909). Each of these books is (a) by a forgotten author, (b) far more interesting and well-written than the pseudoscientific schlock that comes off the presses these days, and (c) a picture of a vanished world. Imagine assembling Page, Baker and Miller in a hotel room in 2008, with a videocamera and little glasses of water in front of them. What would they agree on? Disagree on? Dear open-minded progressive, if you fail to profit from this exercise, you simply have no interest in the past.
[...]
In general what I find when I perform this exercise, is that — as far to the right of us as 1922 was — the winner of the triangulation tends to be its rightmost vertex. Not on every issue, certainly, but most. (I'm sure that if I was to try the same trick with, say, Torquemada and Spinoza, the results would be different, but I am out of my historical depth much past the late 18C.)

What's wonderful is that if you doubt these results, you can play the game yourself. Bored in your high-school class? Read about the Civil War and Reconstruction and slavery. Unless you're a professional historian, you certainly won't be assigned the primary sources I just linked to. But no one can stop you, either. (At least not until Google adds a "Flag This Book" button.)

I am certainly not claiming that everything you find in Google Books, or even everything I just linked to, is true. It is not. It is a product of its time. What's true, however, is that each book is the book it says it is. Google has not edited it. And if it says it was published in 1881, nothing that happened after 1881 can have affected it.

The only solution is a higher power

If the San Francisco Police Department was as high-handed and above the law as the paramilitary gangs it (in theory) opposes, Mencius Moldbug notes, even an open-minded progressive would agree that the only solution is a higher power: the National Guard:

The reality is that almost every country in the world today — and certainly every major American city — could use a solid dose of martial law.

Because all are beset by criminal paramilitary organizations which (a) are too powerful to be suppressed by the security forces under the legal system as it presently stands, (b) if judged by the same standards as the security forces constitute a gigantic, ongoing human-rights violation, and (c) if associated with the civilian and nongovernmental organizations which protect them from the security forces, implicate the former as major human-rights violators.

A libertarian democracy is simply an engineering contradiction

Mencius Moldbug explains that a libertarian democracy is simply an engineering contradiction:

When you say, I am a libertarian, what you mean is: I, as a customer of government, prefer to live in a state which does not apply non-libertarian policies. The best results in this line will be achieved by capturing a state yourself, and becoming its Supreme Ruler. Then no bureaucrats will bother you! Given that most of us are not capable of this feat, and given that the absence of government is a military impossibility, the libertarian should search for a structure of government in which the state has no incentive to apply non-libertarian policies. Obviously, democracy is not such a structure.

Thus a libertarian democracy is simply an engineering contradiction, like a flying whale or a water-powered car. Water is a lot cheaper than gas, and I think a flying whale would make a wonderful pet — I could tether it to my deck, perhaps. Does it matter? Defeating democracy is difficult; making democracy libertarian is impossible. The difference is subtle, but...

Worse, the most competitive ideas in the democratic feedback loop tend to be policies which are in fact counterproductive — that is, they actually cause the problem they pretend to be curing. They are quack medicines. They keep the patient coming back.

He then cites newspaper articles from Britain now and 50 years ago to demonstrate just how "tolerant" Britain has become — and how counterproductive that tolerance is:

Something is normal here, and it is either 1956 or 2008. It can't be both. If Mr. Justice Donovan, or the Times reporter who considered a mere 60 stitches somehow newsworthy, were to reappear in modern London, their perspective on the art of government in a democratic society unchanged, they would be far to the right not only of Professor Aldridge, but also of the Tories, the BNP, and perhaps even Spearhead. They would not be normal people. But in 1956, their reactions were completely unremarkable.

What's happened is that Britain, which before WWII was still in many respects an aristocracy, became Americanized and democratized after the war. As a democracy, it elected its own people, who now tolerate what their grandparents would have found unimaginable. Of course, many British voters, probably even most, still do believe that burglars should go to prison, etc, etc, but these views are on the way out, and the politics of love is on the way in. Politicians, who are uniformly devoid of character or personality, have the good sense to side with the future electorate rather than with the past electorate.

And why are the studies of Professor Aldridge and her ilk so successful, despite their obvious effects? One: they result in a tremendous level of crime, which generates a tremendous level of funding for "criminologists." Two: they are counterintuitive, ie, obviously wrong. No one would pay a "social scientist" to admit the obvious. Three: as per Noah Webster, they appeal to the ruling class simply because they are so abhorrent to the ruled class.

And four: they are not disprovable, because if pure, undiluted Quaker love ever becomes the only way for British civilization to deal with its ferals, they won't leave much of Professor Aldridge. She might, like Judith Todd, regard her suffering as a Christlike badge of distinction. She would certainly, like Ms. Todd, express no guilt over her actions. But it won't happen, because Britain will retain the unprincipled exceptions and the few rough men it needs to keep it from the abyss for the indefinite future. And for that same future, Professor Aldridge and her like will be able to explain the debacle in terms of the "cycle of violence." As Chesterton put it:

We have actually contrived to invent a new kind of hypocrite. The old hypocrite, Tartuffe or Pecksniff, was a man whose aims were really worldly and practical, while he pretended that they were religious.The new hypocrite is one whose aims are really religious, while he pretends that they are worldly and practical.

From the perspective of the customer of government, however, it is irrelevant why these events happen. What matters is that they do happen, and that they do not have to happen.

A democratic government elects its own people

The second-order problem of democracy, Mencius Moldbug asserts, is that a democratic government elects its own people — please note the witty inversion there — either by importing them or "educating" them:

One way to elect a new people is to import them, of course. For example, to put it bluntly, the Democratic Party has captured California, once a Republican stronghold, by importing arbitrary numbers of Mexicans. Indeed the Third World is stocked with literally billions of potential Democrats, just waiting to come to America so that Washington can buy their votes. Inner Party functionaries cackle gleefully over this achievement.
[...]
But this act of brutal Machiavellian thug politics, larded as usual with the most gushing of sentimental platitudes, is picayune next to the ordinary practice of democratic governments: to elect a new people by re-educating the children of the old. In the long run, power in a democracy belongs to its information organs: the press, the schools, and most of all the universities, who mint the thoughts that the others plant. For simplicity, we have dubbed this complex the Cathedral.

The Cathedral is a feedback loop. It has no center, no master planners. Everyone, even the Sulzbergers, is replaceable. In a democracy, mass opinion creates power. Power diverts funds to the manufacturers of opinion, who manufacture more, etc. Not a terribly complicated cycle.

This feedback loop generates a playing field on which the most competitive ideas are not those which best correspond to reality, but those which produce the strongest feedback. The Cathedral is constantly electing a new people who (a) support the Cathedral more and more, and (b) support a political system which makes the Cathedral stronger and stronger.

For example, libertarian policies are not competitive in the Cathedral, because libertarianism minimizes employment for public-policy experts. Thus we would expect libertarians to come in two flavors: the intellectually marginalized, and the intellectually compromised.

The first-order problem of democracy

Mencius Moldbug describes the first-order problem of democracy:

[S]ince a governed territory is capital, i.e., a valuable asset, it generates revenue. Participation in government is also the definition of power, which all men and quite a few women crave. At its best, democracy is a permanent, gunless civil war for this gigantic pot of money and power. (At its worst, the guns come out.) Any democratic faction has an incentive to mismanage the whole to enlarge its share.

He notes that without quite understanding this problem, Noah Webster, in his 1794 pamphlet on the French Revolution, described the problem of factions perfectly:

My second remark is, that contention between parties is usually violent in proportion to the trifling nature of the point in question; or to the uncertainty of its tendency to promote public happiness. When an object of great magnitude is in question, and its utility obvious, a great majority is usually found in its favor, and vice versa; and a large majority usually quiets all opposition. But when a point is of less magnitude or less visible utility, the parties may be and often are nearly equal. Then it becomes a trial of strength — each party acquires confidence from the very circumstance of equality — both become assured they are right — confidence inspires boldness and expectation of success — pride comes in aid of argument — the passions are inflamed — the merits of the cause become a subordinate consideration — victory is the object and not public good; at length the question is decided by a small majority — success inspires one party with pride, and they assume the airs of conquerors; disappointment sours the minds of the other — and thus the contest ends in creating violent passions, which are always ready to enlist into every other cause. Such is the progress of party spirit; and a single question will often give rise to a party, that will continue for generations; and the same men or their adherents will continue to divide on other questions, that have not the remotest connection with the first point of contention.

The 100,000 most trustworthy and responsible adults in the country

Mencius Moldbug has been promoting the idea that a government is just a corporation, if a poorly run one, and that we really should declare our current state bankrupt, put it into receivorship, and transfer control to the 100,000 most trustworthy and responsible adults in the country:

By what process will we select these individuals? Who shall recruit the recruiters? It is difficult and expensive to find just one individual with these executive qualifications. Moreover, in a sovereign context, the filtering process itself will serve as a political football — many progressives might decide, for example, that only progressives can be trusted. It is impossible to end a fight by starting a new fight.

This insane recruiting process cannot occur either under [the current government] or under [the new sovereign corporation government]. It cannot occur under [the current government], because it will be subject to [current government] politics and will carry those politics, which are uniformly poisonous, forward into [the sovereign corporation]. At this point the reset is not a reset. But it cannot occur under [the sovereign corporation], because the trustees are needed to select the Receiver. And there can be no intervening period of anarchy.

But there is a hack which can work around this obstacle. You might think it's a cute hack, or you might think it's an ugly hack. It probably depends on your taste. I think it's pretty cute.

The hack is a precise heuristic test to select trustees. The result of the test is one bit for every citizen of [the country]: he or she either is or is not a trustee. The test is precise because its result is not a matter of debate — it can be verified trivially. And it is heuristic because it should produce a good result on average, with only occasional horrifying exceptions.

My favorite [precise heuristic test] defines the trustees as the set of all active, certified, nonstudent pilots who accept the responsibility of trusteeship, as of the termination date of [the current government]. The set does not expand — you cannot become a trustee by taking flying lessons, and any rejection or resignation of the responsibility is irreversible. In other words, to paraphrase Lenin: all power to the pilots. (There are about 500,000 of them.)

Let's look at the advantages of this [precise heuristic test]. I am not myself a pilot — I am neither wealthy enough, nor responsible enough. But everyone I've ever met who was a pilot, whether private, military or commercial, has struck me as not only responsible, but also independent-minded, often even adventurous. This is a particularly rare combination. To be precise, it is an aristocratic combination, and the word aristocracy is after all just Greek for good government. Pilots are a fraternity of intelligent, practical, and careful people who are already trusted on a regular basis with the lives of others. What's not to like?

Democoup

When it comes to reactionary restoration, Mencius Moldbug notes, the only alternative to a military coup is a political coup — or to be catchy a democoup:

In a democoup, the government is overthrown by organizing a critical mass of political opposition to which it surrenders, ideally just as the result of overwhelming peer pressure. Certainly the most salient example is the fall of the Soviet Union, including its puppet states and the wonderfully if inaccurately named Velvet Revolution. (Again, a reaction is not a revolution.) Other examples include the Southern Redemption, the Meiji Restoration, and of course the English Restoration.

In each of these events, a broad political coalition deployed more or less nonviolent, if seldom perfectly legal, tactics to replace a failed administration with a new regime which was dedicated to the restoration of responsible and effective government. Note that all of these are real historical events, which actually happened in the real world. I did not just make them up and edit them into Wikipedia. Yes, dear open-minded progressive, change can happen.

If there is one fact to remember about a restoration via democoup, it's that this program has nothing to do with the traditional 11th-grade civics-class notion of democratic participation. Obviously, we are not trying to replace one or two officials whose role is primarily symbolic. We are trying to replace not the current occupants of the temporary and largely-ceremonial "political" offices of [the government], but [the government] itself — lock, stock and barrel. Indeed, we are using democratic tactics to abolish democracy itself. (There is nothing at all ironic in this. Is it ironic when an absolute monarch decrees a democratic constitution?)

Again, this restoration has nothing to do with the traditional 11th-grade civics-class notion of democratic participation:

Our modern democratic elections are an extremely poor substitute for actual regime change. As we've seen, democracy is to government as gray, slimy cancer is to pink and healthy living tissue. It is a degenerate neoplastic form. The only reason America has lasted as long as she has, and even still has more than a few years left, is that this malignancy is at present encysted in a thick husk of sclerotic scar tissue - our permanent civil service. Democracy implies politics, and "political" is a dirty word to the civil-service state. As well it should be. Its job is to resist democracy, and it does it very well.

Therefore, any attempt to defeat the sclerotic Cathedral state by a restoration of representative democracy in the classic sense of the word, in which public policy is actually formulated by elected officials (such as the Leader, Mencius), is a bayonet charge at the Maginot Line. The Mencist Party could go all the way and elect President Mencius, and it would still be shredded into gobbets of meat by presighted bureaucratic machine guns. In short: a total waste of time. Much better to bend over and pretend to enjoy it.

When we think of a democoup instead of a democratic party, all of these problems disappear. (They are replaced by other problems, but we'll deal with those in their turn.)

The signature performance of the modern revolution

The signature performance of the modern revolution, Mencius Moldbug notes, is the irregular military parade:

Ie: cars or pickup trucks full of well-armed youths in their colorful native attire, driving up and down your street while (a) honking, (b) waving hand-lettered banners, (c) chanting catchy slogans, and (d) discharging their firearms in a vaguely vertical direction. Occasionally one of the vehicles will pull up in front of a house and discharge its occupants, who enter the building and emerge with an infidel, racist, Jew, spy, polluter, Nazi or other criminal. The offender is either restrained for transportation to an educational facility, or enlightened on the spot as an act of radical social justice. Yes, we can!

He plants his tongue even further in cheek when describing its reactionary counterpart:

Whereas in the ideal restoration, the transfer of power from old to new regime is as predictable and seamless as any electoral transition. With all rites, procedures and rituals correct down to the fringe on the Grand Lama's robe, the Armani suits on his Uzi-toting bodyguards, and the scrimshaw on the yak-butter skull-candle he lights and blows out three times while chanting "Obama! Obama! Llama Alpaca Obama!", the Heavenly Grand Council releases itself from the harsh bonds of existence, identifies its successor, asks all employees to remove their personal belongings from their offices, and instructs senior eunuchs to report for temporary detention.

Hitler's Democracy

Anyone interested in overthrowing democracy, Mencius Moldbug notes, desperately needs to read the great memoir of Ernst von Salomon, Der Fragebogen, published in English as The Answers but better translated as The Questionnaire. (The title is a reference to the denazification questionnaires which all Germans seeking any responsible postwar position had to complete.)

Salomon, a strident nationalist but not a Nazi, shares some thoughts on the Nazis:

At that time — it was high summer of 1922 and the Oberammergau Passion Play was being acted — Munich was filled with foreigners. Even the natives had not the time to attend big political rallies. Thus I did not even have a chance to hear Hitler — and now I shall go to my grave without ever having once attended a meeting where I could hear this most remarkable figure of the first half of the twentieth century speak in person.

"What does he actually say?" I asked the Kapitän's adjutant.

"He says more or less this," the adjutant began, and it was significant that he could not help mimicking the throaty voice with the vengeful undertones, "he says, quite calmly: 'My enemies have sneered at me, saying that you can't attack a tank with a walking stick...' Then his voice gets louder and he says: 'But I tell you...' And then he shouts with the utmost intensity: '... that a man who hasn't the guts to attack a tank with a walking stick will achieve nothing!' And then there's tremendous, senseless applause."

The Kapitän said: "Tanks I know nothing about. But I do know that a man who tries to ram an iron-clad with a fishing smack isn't a hero. He's an idiot."

I know not whether the Kapitän, lacking in powers of oratory as he was, found Hitler's methods of influencing the masses as repugnant as I did, but I assumed this to be the case. I also obscurely felt that for the Kapitän, deeply involved in his political concept, to be carried forward on the tide of a mass movement must seem unclean. Policy could only be laid down from 'above,' not from 'below.' The state must always think for the people, never through the people. Again I obscurely felt that there could be no compromise here, that all compromise would mean falsification.

But it was precisely his effect on the masses that led to Hitler's success in Munich. He employed new methods of propaganda, hitherto unthought of. The banners of his party were everywhere to be seen, as was the gesture of recognition, the raised right arm, used by his supporters; the deliberate effort involved in this gesture was in itself indicative of faith. And everywhere was to be heard the greeting, the slogan Heil Hitler! Never before had a man dared to include his essentially private name in an essentially public phrase. It implied among his followers a degree of self-alienation that was perhaps significant; no longer could the individual establish direct contact with his neighbour — this third party was needed as intermediary.

This portion, from ten pages later, may lack colorful anecdotes, but it makes a jarring point:

The word 'democracy' is one that I have only very rarely, and with great reluctance, employed. I do not know what it is and I have never yet met anyone who could explain its meaning to me in terms that I am capable of understanding. But I fear that Hitler's assertion — that his ideological concept was the democratic concept — will prove a hard one to refute. The enlightenment of the world from a single, central position, the winning of mass support through convincing arguments, the legitimate road to power by way of the ballot-box, the legitimisation by the people itself of power achieved — I fear it is hard to deny that these are democratic stigmata, revelatory perhaps of democracy in a decadent and feverish form, but democratic none the less. I further fear that the contrary assertion — that the totalitarian system as set up by Hitler was not democratic — will prove a hard one to justify. The totalitarian state is the exact opposite of the authoritarian state, which latter, of course, bears no democratic stigmata but hierarchical ones instead. Some people seem to believe that forms of government are estimable in accordance with their progressive development; since totalitarianism is certainly more modern than the authoritarian state system, they must logically give Hitler the advantage in the political field.

In case Salomon isn't quite clear, Mencius paraphrases his theory of Hitler and the State:

Salomon, and his hero Kapitän Ehrhardt, were essentially militarists and monarchists, believers in the old Prussian system of government. In 1849 when Friedrich Wilhelm IV refused to "accept a crown from the gutter" (in other words, to become constitutional monarch of Germany under an English-style liberal system created by the Revolutions of 1848), he was expressing much the same philosophy.

While there is more mysticism to it, and anyone raised in a democratic society must cringe instinctively at the militaristic tone, Salomon's philosophy is more or less the same as neocameralism. (Understandably, since after all it was Frederick the Great who gave us cameralism.) Salomon's view of public opinion is mine: that it simply has nothing to do with the difficult craft of state administration, any more than the passengers' views on aerodynamics are relevant to the pilot of a 747. In particular, most Americans today know next to nothing about the reality of Washington, and frankly I don't see why they should have to learn.

In the totalitarian system as practiced by Hitler and the Bolsheviks, public opinion is not irrelevant at all. Oh, no. It is the cement that holds the regime together. Most people do not know, for example, of the frequent plebiscites by which the Nazis validated their power. But they do have a sense that Nazism was broadly popular, at least until the war, and they are right. Moreover, even a totalitarian regime that does not elicit genuine popularity can, like the Bolsheviks, elicit the pretense of popularity, and this has much the same power.

When describing any political design, a good principle to follow is that the weak are never the masters of the strong. If the design presents itself as one in which the weak control the strong, try erasing the arrowhead on the strong end and redrawing it on the weak end. Odds are you will end up with a more realistic picture. Popular sovereignty was a basic precept of both the Nazi and Bolshevik designs, and in both the official story was that the Party expressed the views of the masses. In reality, of course, the Party controlled those views. Thus the link which Salomon draws between democracy and the Orwellian mind-control state, two tropes which we children of progress were raised to imagine as the ultimate opposites.

Salomon is obviously not a libertarian, or at least not as much of a libertarian as me, and I suspect that what disturbs him is less the corruption of public opinion by the German state, than the corruption of the German state by public opinion. Regardless of the direction, the phenomenon was a feedback loop that, in the case of Nazism, led straight to perdition.

Both Pills Claim To Be Red

Mencius Moldbug summarizes the problem of bad government — and progress:

The leading cause of violent death and misery galore in the modern era is bad government. Most of us grew up thinking we live in a time and place in which Science and Democracy, which put a man on the moon and brought him back with Tang, have either cured this ill or reduced it to a manageable and improving condition. That is, most of us grew up believing — and most Americans, whatever their party registration, still believe — in progress.

Both these statements are facts. But there are two ways to interpret the second. Either (a), blue pill, the belief in progress is an accurate assessment of reality, or (b), red pill, it isn't. Our pills correspond to visions of the future, and neither is my invention. The blue pill is marked millennium. The red pill is marked anakyklosis.

To choose (b), we have to believe that hundreds of millions of people living in a more or less free society, many of whom are literate and even reasonably knowledgeable, completely misunderstand reality — and more specifically, history. A hard pill to swallow? Not at all, because the blue pill tastes just as big going down. To believe in progress, you have to believe that similar numbers of our ancestors were just as misguided — enthralled by racism, classism, and other nefarious "ideologies," from which humanity is in the progress of cleansing itself.

Both pills, in other words, claim to be red. But when we note that progressive ideas flow freely through the most influential circles in our society, whereas reactionary ideas are scorned, marginalized and often even criminalized, we can tell the difference.

In case you're not familiar with his red- and blue-pill explanations, I've discussed them before.

Anyway, here's a thought experiment on progress:

Imagine that there had been no scientific or technical progress at all during the 20th century. That the government of 2008 had to function with the technical base of 1908. Surely, if the quality of government has increased or even just remained constant, its performance with the same tools should be just as good. And with better technology, it should do even better.

But without computers, cell phones or even motor vehicles, 19th-century America could rebuild destroyed cities instantly — at least, instantly by today's standards. Imagine what this vanished society, which if we could see it with our own eyes would strike us as no less foreign than any country in the world today, could accomplish if it got its hands on 21st-century gadgets — without any of the intervening social and political progress.

When we think of progress we tend to think of two curves summed. X, the change in our understanding and control of nature, slopes upward except in the most dire circumstances — the fall of Rome, for example. But X is a confounding variable. Y, the change in our quality of government, is the matter at hand. Extracting Y from X+Y is not a trivial exercise.

But broad thought-experiments — like imagining what would become of 1908 America, if said continent magically popped up in the mid-Atlantic in 2008, and had to modernize and compete in the global economy — tell a different story. I am very confident that Old America would be the world's leading industrial power within the decade, and I suspect it would attract a lot of immigration from New America. The seeds of decay were there, certainly, but they had hardly begun to sprout. At least by today's standards.

Surely a healthy, stable society should be able to thrive in a steady state without any technical improvements at all. But if we imagine the 20th century without technical progress, we see an almost pure century of disaster. Even when we restrict our imagination to the second half of the twentieth century, to imagine the America of 2008 reduced to the technology of 1950 is a bleak, bleak thought. If you are still taking the blue pills, to what force do you ascribe this anomalous decay?

Whereas the red pill gives us an easy explanation: a decaying system of government has been camouflaged and ameliorated by the advance of technology. Of course, X may overcome Y and lead us to the Singularity, in which misgovernment is no more troublesome than acne. Or Y may overcome X, and produce the Antisingularity — a new fall of Rome. It's a little difficult to invent self-inventing AI when you're eating cold beans behind the perimeter of a refugee camp in Redwood Shores, and Palo Alto is RPG squeals, mortar whumps and puffs of black smoke on the horizon, as the Norteños and the Zetas finally have it out over the charred remains of your old office park. Unlikely, sure, but do you understand the X-Y interaction well enough to preclude this outcome? Because I don't.

Swallowing the red pill leads us, like Neo, into a completely different reality. In reality (b), bad government has not been defeated at all. History is not over. Oh, no. We are still living it. Perhaps we are in the positions of the French of 1780 or the Russians of 1914, who had no idea that the worlds they lived in could degenerate so rapidly into misery and terror.

Is the abyss this close? I don't think so, but surely the materials are present.

Bureaucratic Sclerosis

Most observers interpret bureaucratic sclerosis as a sign of a government which is too powerful, Mencius Moldbug notes:

In fact it is a sign of a government which is too weak. If seventeen officials need to provide signoff for you to repaint the fence in your front yard, this is not because George W. Bush, El Maximo Jefe, was so concerned about the toxicity of red paint that he wants to make seventeen-times-sure that no wandering fruit flies are spattered with the nefarious chemical. It is because a lot of people have succeeded in making work for themselves, and that work has been spread wide and well. They are thriving off tiny pinhole leaks through which power leaks out of the State. A strong [sovereign] would plug the leaks, and retire the officials.

Outside the Communist bloc proper, of course, the ultimate in power leakage and resulting bureaucracy was India's infamous Permit Raj, which still to some extent exists. Needless to say, if the subcontinent was run on a profit basis, the Permit Raj would not be good business. In fact, quite amusingly and with no apparent sense of irony, our favorite newspaper recently printed an article in which the following lines appear:

Vietnam’s biggest selling point for many companies is its political stability. Like China, it has a nominally Communist one-party system that crushes dissent, keeps the military under tight control and changes government policies and leaders slowly.

“Communism means more stability,” Mr. Shu, the chief financial officer of Texhong, said, voicing a common view among Asian executives who make investment decisions. At least a few American executives agree, although they never say so on the record.

Democracies like those in Thailand and the Philippines have proved more vulnerable to military coups and instability. A military coup in Thailand in September 2006 was briefly followed by an attempt, never completed, to impose nationalistic legislation penalizing foreign companies.

“That sent the wrong signal that we would not welcome foreign investment — this has ruined the confidence of investors locally and internationally,” the finance minister Surapong Suebwonglee said in an interview in Bangkok.

The ironies! Of course, perhaps it is not so ironic after all, as perhaps the main reason that the old China Hands, the men (such as Owen Lattimore) who by "manipulating procedural outcomes" gave China to Mao, thought the Communists were the shizzle is that they were obviously so strong. America could really do great things in Asia with the ruthlessly indoctrinated divisions of the PLA on its side, as opposed to Chiang Kai-Shek, who looked like his main interests were opium and little boys.

After fifty million deaths and the annihilation of traditional Chinese culture, what still remains is that strength. There is not much antinomianism in China, which has reduced its totalitarian pretensions to one simple and easily-obeyed rule: do not challenge the Party for power. The result, though profoundly flawed, is the most successful capitalist country in the world. All things considered, it is certainly one of the best to do business in — as the article describes.

The Favorite Sport of Young Aristocrats

Why is antinomianism — clamoring for "change" — so popular?

Because people love power, and any movement with the power to destroy anything, or even just "change" it, has just that: power.

Antinomianism allows young aristocrats to engage in the activity that has been the favorite sport of young aristocrats since Alcibiades was a little boy: scheming for power. According to this article, for example, there are "over 7500 nonprofits" in the Bay Area, "3800 of which deal with sustainability issues." These appear to employ approximately half of our fair city's jeunesse dorée, occupying the best years of their lives and paying them squat. Meanwhile, container ships full of empty boxes thunder out the Golden Gate, along with approximately two trillion dollars a year of little green pieces of paper.

The Simple Anarchist

Mencius Moldbug notes that the most common species of antinomian — his term for Leftist — is the simple anarchist:

The most bloodthirsty and intrusive states of the 20th century were based on a philosophy — Marxism — which saw itself as fundamentally opposed to government. People really did believe that the socialist paradise would be something other than a state.

Near where I live, on one of the most fashionable shopping streets in the world, is an anarchist bookstore. On its side wall is a mural.

The mural contains two slogans:

History remembers 2 kinds of people, those who kill and those who fight back.

Anarchism strives toward a social organization which will establish well-being for all.

I am flabbergasted by how revealing these slogans are. History, at least when written by honest historians, remembers one kind of people: those who kill. It also notes that those who kill always conceive of themselves as "fighting back." As for "a social organization," it is simply our old friend, the State.

Thus, anarchism defines itself: it is an attempt to capture the state, and its juicy revenues, through extortion, robbery and murder. When it succeeds, it will distribute the loot among its accomplices, and "establish well-being for all." At least in theory.

As we've seen, the one thing an antinomian cannot abide is a formal and immutable distribution of the revenues of state. He must constantly redistribute, he must w