Join economist @RebelEconProf, policy leader @Avik, and myself on November 20 at the George W. Bush Presidential Library in Dallas for a spirited panel discussion about the past and future of the U.S. #dollar and U.S. #Treasurys.
We will discuss America’s evolving role in the world and prospects for a brighter domestic fiscal future.
All panelists are contributors to the upcoming book, “The Satoshi Papers: Reflections on Political Economy after #Bitcoin.” Soon to be published by the @btcpolicyorg.
satoshipapers.org
"The hypotheses [are] not beginnings but really hypotheses – that is, steppingstones and springboards – in order to reach what is free from hypothesis at the beginning of the whole."
- Plato, The Republic
One of the bases of Western anti-semitism (which used to mean hatred of “Semites”—that is, both Jews and Muslims) was the strong moral aversion in Medieval Western societies to commercial activity. The Church and the aristocracy believed that there was a natural class order, where benevolent aristocrats ruled over a dependent peasantry. Trafficking in commerce and money was seen as “dirty.” This is in part why Medieval European princes often had to invite immigrants—Jewish merchants—to kickstart economic growth in their domains. These immigrants were segregated from the rest of the population in order to avoid disrupting the feudal balance of power in the majority Christian population. This segregation and the perception that Jews had privileges that Christian peasants didn’t have of course nurtured a lot of prejudice and resentment. Simultaneously, Jews were often barred from owning land or working in agriculture—activities that were designated for Christian landlords and serfs, the classes who were supposedly part of the “natural order.”
The “bourgeois revolution” in Europe—the commercial revolution that generated capitalism, beginning in the Renaissance—was in this sense a genuine cultural revolution against the static and segregated worldview of feudalism. The European merchant classes needed to fight to emancipate themselves from both Church and State. This was not the case in Islamic-majority societies, where commercial activity was already well established, extending back to ancient Mesopotamian and Levantine commercial traditions.
Hayek and Whitehead on institutions:
"The [planning] problem which we meet here is by no means peculiar to economics but arises in connection with nearly all truly social phenomena, with language and most of our cultural inheritance, and constitutes really the central theoretical problem of all social science. As Alfred Whitehead has said in another connection, "It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them." This is of profound significance in the social field. We make constant use of formulas, symbols and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess. We have developed these practices and institutions by building upon habits and institutions which have proved successful in their own sphere and which have in turn become the foundation of the civilization we have built up."
In "The Use of Knowledge in Society" (1945)
Technological innovation is what enables greater productivity and growth from limited (scarce) “material and energy throughput.”
The de-growth movement has no concept of innovation. Which is baffling, because the prosperity of their societies—the fact that they themselves are not dying from malnutrition, preventable diseases, or childbirth, but are able to write books about “degrowth”—is entirely a function of the raised floor created for them by centuries of technological innovation.
.@PaulLew16394851 speaks about the conditions for self-governance as described in the work of James Buchanan and Vincent Ostrom at #MAS2024.
“Self-governing societies exist only under conditions in which individuals become their own masters and become capable of governing their own affairs and working with others in mutually productive relationships.”
- Vincent Ostrom
A clinical psychologist with decades of experience treating people suffering from the depths of psychosis once described the reason that many clinicians cannot help their patients:
They function from the doctrine of “Reality with a Capital R,” that is, the belief that they, the clinician, understand the world “as it really is,” while their patients are simply insane. These doctors refuse to listen to their patients, refuse to empathize with them, and dismiss their delusions without asking what truth or reality the patient is trying to express through their madness. Indeed, in some cases, the patient may not be “mad” at all; they may be accurately describing the toxicity and failure of the social institutions that have harmed them but may have rewarded the doctor. As a result, the patient can see a reality that the doctor’s self-interest prevents him from seeing.
The imbalance of power between a doctor and his patient means that a doctor’s misunderstanding can have devastating consequences for the patient. The patient may be misdiagnosed, mismedicated, but above all subjected to the compounding trauma that in seeking help for a harm that has been done to them, they are met only with further harm and careless misunderstanding. This can result in what is called “iatrogenic” illness—or illness that is the *result* of medical treatment. “Psychiatric illnesses” are often exacerbated or even generated by the clinician’s unwillingness to care about or understand their patients’ life experiences.
The hysteria around “misinformation” as expressed by someone like @cwarzel resembles a clinician operating from the doctrine or “Reality with a Capital R.” In Charlie’s view, he is one of the “experts;” one of the people who “operate in reality” and “describe the world as it is.” It is crazy conspiracy theorists who, through their willful delusions, menace the republic with violence. Warzel does not pause for a moment to ask what potential malpractice the government and the media, the Fourth Estate, could have perpetrated on the American people such that they no longer believe them. What truths are “conspiracists” seeing—perhaps hastily and inaccurately expressed in the details, but thematically true—which need acknowledging in our present moment so that we can heal as a people and make our institutions more resilient for the future?
If it’s up to people like Warzel—and there are many such people—we will only see an intensification of so-called “delusions” and conspiracy theories: the iatrogenic “illnesses” of a population subject to experts who don’t care about them and who insist on controlling Reality with a Capital R.
The notion that any company, let alone any government or other organization, could or should “maximize utility for all people” is looney tunes.
“Lawful interception” means “encryption backdoors” which can and will be used by malicious actors.
Any politician who supports encryption backdoors should be laughed out of the room and run out of office.
In a functioning market, businesses don’t have the luxury of not calling out failure. They have to admit failure, cut losses, and move on to survive.
Where are we calling out failure in government? The government response when things go sideways is to demand MORE money to do MORE of the same. Governments act as the ultimate “too-big-to-fail” institutions—and huge companies latch on to them for this very reason, often becoming indistinguishable from the state.
We need to start calling out failure in government. You don’t get another dime to do things that don’t work. No more.
The whole “Iran tried to assassinate Trump” story is the clownworld version of “Saddam Hussein sought yellowcake uranium from Niger.” 🤡
Not even the people saying it believe it is true, but they don’t care, and they know almost nobody else cares, either. The American people no longer have a choice in the matter of war.
That is a collapse of the representative function of government.
As bombs fall on #Beirut, it struck me that perhaps some of my fellow Americans and Westerners would like to know more about the history of Beirut and of #Lebanon. And how Shi'a Islam figures into that history.
In my early days as an anthropologist, I wrote a short article about the role of Shi'a book publishers in the intellectual landscape of Beirut and the wider region (link below). In short, Lebanon's relatively weak state and multi-religious population made it a center for free expression. Many refugees from both #Iran and #Iraq immigrated there during and after the Iran-Iraq war, seeking more stability, opportunity, and even the freedom to criticize the governments of their home countries. For example, some Lebanese religious thinkers imagined Islamic political models that avoided the pitfalls of the Saudi model of shari'a-as-law and the Iranian model of vilayat-i-faqih.
These Islamic thinkers openly called for dialogue with the West and with "the American people." Virtually nobody in our media has reported this; instead, our media and government have frightened us of these people so that we would not listen to them. As a result, Americans are largely unaware of how badly Muslim thinkers in Lebanon, Syria, Iran, Iraq, Saudi Arabia, and many other countries have wanted to talk with us openly about what civilization is and how civilization can progress while staying rooted in its traditions and values. These are conversations we are all having now. We could have been having them with friends and colleagues around the world, but we didn't even know they were there.
I never formally published the article, but I put it online for free. ⬇️ It's just a tiny drop in the scholarship on this topic, but if it helps just one person understand another world, perhaps it was worth it.
Good question. I would say no—the case study suggests that interest groups will inevitably mobilize to capture loci of power (especially the state) for their own ends. This is similar to regulatory capture by established corporations, which is what transforms free markets into crony capitalism.
The main countervailing force to capture of the state by interest groups is the character of the people—the values that they hold dear. It is the people who have to continually be the site of resistance to capture—to say no, to enforce limits on government power, and to remind everyone of the values of nondiscrimination and equality before the law. This means a literate, aware population that does not trust power *as such.* A people who are not asking to be lied to if it means their “tribe” gets to win this time.
Ultimately this comes down to how we raise children—education writ large. The future of a free country is established in families and elementary schools. If those places become sites of tribal indoctrination and culture war, the seeds are sown for a violent and illiberal future.
The point of the American project was to create a larger national identity that superseded people’s tribal (ethnic, religious, racial) affiliations.
Now we have leaders and elites using the fruits of the big-tent, melting-pot American project to advance their tribal agendas. They either laugh at you or are offended if you seriously talk about America being a “melting pot,” or a project that can include people regardless of where their ancestors came from.
American civilians are now just routinely collateral damage in undeclared wars.
Our government has gone from covering it up to pretending to care to openly not caring.
Who represents us?
It’s helpful to understand this election through historian @Peter_Turchin ‘s structural-demographic theory of history.
In short, elites consume vastly more resources than everyone else. In good times, the numbers of elites in a society grow. But the numbers of elites tend to grow faster than the number of high-status positions (jobs, appointments, whatever) in a society. At this point, a game of “musical chairs” sets in—elites start getting pushed out, becoming “downwardly mobile.” If economic growth also stagnates or slows, the problem gets even worse, because new elite positions stop being created and may even be destroyed.
At the same time, successful people from lower social statuses are seeking to turn their new wealth into elite status as well. But they are finding the path to higher status increasingly blocked.
This sets up the society for a contest between “established elites” (like the Biden, Harris, Cheney, Clinton coalition) and “outsider elites” (like the Trump, Musk, etc. coalition). Outsider elites politically mobilize their grievances—which come down to the fact that establishment elites won’t give them the status and respect they feel they deserve. (It’s really important to understand that wealth and status are not the same thing. They are different kinds of social capital that may or may not be exchanged for each other.)
Both types of elites seek to enlist everyone else in their factional conflict, which may become violent. A period of civil war (or foreign war) may ensue, which reduces the number of elites to a more sustainable level. Eventually, the society stabilizes and whichever elite faction was victorious gets to re-found the political order.
As long as elite overproduction (total number of elites relative to the number of high-status positions) continues, we will likely see this same contest between insider and outsider elites re-hashed, regardless of who the actual candidates are. Our best bet for getting out of this cycle is rapid economic growth, but unfortunately status-seeking elites for the most part don’t understand how to bring that about.
Having a realistic assessment of the motivations of the leadership of another country is not “being afraid.” It is rational statecraft.
Without rational statesmen, the game theoretic conditions of peace through deterrence no longer function.
At the very least, our Cold War-era statesmen understood this. But the system they built, which protected the world from nuclear war, has been inherited by blustering fools who believe they can “win” by ignoring reality.
These are the types of leaders who lose not only wars, but civilizations.
"No End In Sight" is a documentary made in 2007 about the first years of the Iraq War.
It shows with clarity how the top leaders of the Bush Administration ignored and sidelined regional experts and experienced military leaders from their own defense and intelligence communities in order to engage in a slapdash, rushed, sloppy, and criminally negligent occupation of Iraq (where we still have troops, btw).
It should be required viewing for every American. This is conquest without responsibility. It shows an Empire that is both careless and breathtakingly naive in its view of the world and of power.
youtube.com/watch?v=SsDROo…
In a previous life, I wanted to be a journalist. I spoke fluent Arabic but refused to be part of the wars in the Middle East, so instead I largely focused on media coverage of those wars in America.
During the Israel-Lebanon War of 2006, I worked at a local radio station. They asked me to vet a “documentary” made by an older American couple about “Islamic extremism” in Palestine and Lebanon. It quickly became apparent to me that the English-language subtitles they used to translate what people in the region were saying were complete garbage. Like, not even faulty translations—just completely made up statements designed to show how “extreme” these people were and how much they “hated” Israel and the West.
I submitted my opinion that the documentary should not air because it was false propaganda. Fortunately, it was not shown (and the couple who produced it was really upset). But I cannot overstate how often the American people have been lied to, via mainstream news sources, about who “hates” us and why. They know that few people, if anyone, will fact-check them, and by then no one will care. The damage will have been done.
It is we Americans who have been radicalized—by our media and our politicians, who conjure or repeat lies from people who do not care about us or about our country.
We Americans have no fight with the people of Middle Eastern nations. There is no reason that America should not be friends with all nations in the region, working together for mutual prosperity. All of this carnage is unnecessary and manufactured. It takes real work—intent, money, planning, political will—to engineer multiple coups, regime changes, and occupations across an entire region over several generations. Literally, if we had just stepped away from the region and left it alone generations ago, things would be orders of magnitude better today. Instead, we have brought about just about the worst-case scenario: genocide and a regional conflagration threatening to escalate into the next World War.
I agree with Monbiot that both capitalism’s defenders *and* detractors rarely define it.
I find the following definition the most useful: “Capitalism is an economic system in which capital goods are put to work in order to generate more capital goods.” In other words, capitalism is a system in which growing productivity through capital investment is the main aim of economic activity. This is what differentiates capitalist economies from other types of commercial economies, and why it has been such a runaway engine of growth historically.
Importantly, you can have a capitalist economy in which the means of production are either privately or publicly owned. The question then becomes: what structures of ownership create optimal conditions for the generation of capital goods? In other words, what structure of ownership lends itself best to increasing the rate of economic growth in a human society? This is where economists from different schools genuinely disagree, and that disagreement needs to be made explicit and owned in order for political conversations to be actually productive.
Naturally, I agree with economists who have argued that returns on capital are most strongly incentivized under the conditions of private property protected by the rule of law. Societies that prioritize private property ownership will economically outperform societies in which the state is the owner of capital goods. This is what we should be debating, not whether “capitalism” (which is nothing more than a social technology) is “good” or “bad.”