Friday, August 25, 2017

Race Baiting, Hippy Punching Ron Unz Links

Once you're over the punch (which hurts his argument more than his target), his points are very good:
American Pravda and the KKK
American Pravda

The embedded stories of Emmett Till and Harry Dexter White are much more ambiguously complex than Unz re-telling. I suppose this is framing to draw in more conservative readers... He's arrived at the same understanding I cover in American Samizdat,  6/11/14,  8/15/16,  8/20/16,  9/21/16, 10/4/1610/10/16, 10/18/16, 10/20/16.


Southern Racists: Jane Daily: Huffington Post
Northern Liberals: Purnell & Theoharis: BezosBlog
Speaking Of Which: Olivia Nuzzi: The Cut
E (Federal) U: NEOnline: NewEurope
Apogee MIC: Andre Damon: WSWS
The Result: Tom Engelhardt: Lobelog

Wednesday, July 19, 2017

A Faith or a Theory? Your Money or Your Life?

In the eye of Sandy
View from Joralemon St at Furman St on October 29th, 2012 with Brooklyn Bridge Park flooded.

The idea of adaptive markets in the title of Andrew W. Lo's recent Evonomics post, while interesting, confuses causality by placing agency in markets rather than in some living thing: markets don't adapt, living things do. When after his prologue he says, "the short answer is that financial markets don’t follow economic laws. Financial markets are a product of human evolution, and follow biological laws instead," he is on the right track but then blows it all half way through with this: "in fact, investors would be wise to adopt the Efficient Markets Hypothesis as the starting point of any business decision."

That a market, a particular configuration of human relations, can for short periods produce mutually beneficial distributions of real wealth while encouraging technological innovations that with sustained effort can be held in a beneficial relationship to this outcome has to do with people deliberately creating and maintaining these conditions, it has nothing to do with any property inherent to "markets." Such outcomes have occasionally been a goal, often as now claimed as a goal, more talking point than policy, they are certainly not an inherent property. To say, as Mr. Lo does, "investors would be wise to adopt the Efficient Markets Hypothesis as the starting point of any business decision," after conceding, "financial markets are a product of human evolution, and follow biological laws instead," is in the spirit of Paul Samuelson who, in conceding Joan Robinson did in fact fundamentally subvert his hypothesis with her deeper extrapolations into the historical and sociological roots of real wealth creation, grounding all present wealth in what came before both physically and culturally, because of the difficulty of the math none the less decided he'd just ignore all that and go on assuming utility maximizing universal agents with perfect predictive powers and perfect information, an act of faith. So bolstered he Fama's Efficient Markets Hypothesis. So does Lo.

For a theory to replace Efficient Markets, it must dispose of the counterproductive underlying assumptions of that theology: hypothesize instead that economics is simply the sociology of the credit relationship. Money is of our making, not the reverse and economics is the study of how the human animal engages with this thing its made. While innumerable mythologies have organized human societies since time immemorial, the most decisive of them all, the most orderly, predictable and consistent over the millennia has mostly eluded perception in its central generative role. It has aggregated civilizations into a collective, an interlocked historically coherent unit more visible on balance sheets than in words and is as a result mostly invisible in written history. It captures every individual who lives in a civilization, anywhere in the world, in a set of social and material relations that have a coherence across civilizations unlike any other collective feature. From the moment credit was first accounted for with math, a logical abstraction has, more or less unobserved, gone about structuring productive human relations to its form without any but a small minority of the people thus coerced by its beguiling logic actually understanding the force acting on them, the force of money. We all now march to money's beat and increasingly have for five thousand years: our material lives take the form dictated by the credit relationship despite our having dreamt up the relationship in the first place, we have let ourselves become subject to our tool.

At its base that relationship is one of trust. As Minsky said, "anyone can 'make' money, the trick is getting it accepted." Trust is what does that trick. Trust is a relationship found in all social animals, one that culture, by refining perceptions through our symbolic meaning systems, makes uniquely human. Our nature is animal nature, it is our culture that makes us human primarily through our two dominant symbolic systems: language and mathematics. Social animals of all kinds have power and reciprocity dynamics based on a binary between animal trust and animal violence mediated by animal emotions, humans, by applying language and math mediate these emotions through infinitely expandable channels of verbal and symbolic culture, imagining both ethical and engineered systems to collectively shape emotional meanings to social purpose. 

But these abstracting systems denature trust, mathematics in particular idealizes it, which is to say, turns it into something else: trust is something we feel, it is not subject to accurate measure and as such inappropriate for use as a variable in any kind of symbolic logic or math. The abstracting of trust from the credit relationship is what converts poverty from a medieval virtue into a contemporary vice. A moral value, idealized numerically into money and thereby transubstantiated, has been elevated over all other social values and made into an absolute. It presents itself that way as a platonic object and requires a high degree of self consciousness to resist the transitive impulse to port this idealism back into our social heuristics. This intuitive primacy of the ideal, the clarity of the symbolic over the often shambolic nature of our human social relationships, engages with heuristics tuned by evolution to address individuals as such, not as properties in an equation. When it does, it casts an irrelevant moral weight on simple, abstract, symbolic measures. Succumbing as we frequently do to this heuristic impulse, once mediated through the filter of the ideal, money rationalizes all manner of degradation of the real on its Procrustean bed.

For Karl Polanyi, money was the final of his "three fictitious commodities" after land and labor. His point in so defining these was that every example of each in its unique, individual, manifestation is, well, unique. But, to make them serviceable in the Utilitarian Utopia his book "The Great Transformation" was critiquing the Utopians had to commoditize each, to make them fungible so they could be subject to the mathematical abstraction that was the organizing vision of the utopia: that making money was making wealth. Ever since money was first idealized, its value system has been entangling itself with all of our prior conceptions of real wealth and worth, corrupting our entire prior value system. The genetic heuristics that drive consciousness sympathize with and gravitate to the quick numeric measure money affords and reflexively deploy what Daniel Kahneman calls "the illusion of understanding" to save us from having to shift into "slow thinking" to comprehend the simple instrumentality and moral neutrality of our material relations as described with this abstraction. The heuristic uptake of a product of "slow thinking", money, a logical abstraction, confounds our understanding unless we willfully override our genetic tendencies. The triple abstractions of the 18th Century Utilitarians, the commoditizing of land (the environment generally), labor (people with nought to sell but time and and their bodies) and money, now a thing denatured of trust, through "the illusion of understanding" has perverted our "rational behavior" to more or less dictate the calamity which the NeoLiberal implementation of the Utilitarian Utopia has bequeathed us: dead oceans, melting ice-caps, erratic weather, desertification of land; a burgeoning population the Utopians increasingly see as "useless eaters"; an unprecedented global super-surfeit of fiat money.

Among the bitter ironies of this awful situation is that money has been the first of the three fictitious commodities to be de-commoditized. The MMT community has been the first to realize this: that while credit remained denatured of trust in our current financial system, it has been freed of real material constraint in its quantity by no longer being tied to an external commodity, gold, for its valuation. This liberated the monetary system to pursue "public goods" which if truly conceived publicly would be a restoration of trust to the credit system. We find we have a powerful tool with which to pursue solutions to NeoLiberalism's disasters at just the moment when NeoLiberals have succeeded in baffling the political institutions that could implement such solutions. They have built a Library of Babel stacked with counter factual "economics", "history" and ideology deliberately sponsored, over the last forty years, by plutocrats hellbent on reshaping culture to institutionalize themselves at its top. But culture is a living thing, and like all living things has a will to live that is already nurturing antibodies to the dead hand of money.

Even at the dawn of Civilization, mathematicization of a key section of culture concomitant with the monetization of the credit relationship created an economic sub-culture even if it was not understood as such at the time. This is what had Jesus upending the tables of the money changers in the Temple thousands of years after Deuteronomy codified seven year debt jubilees to contain the obvious, predictable, recurring social deformations caused by the sociology of the credit relationship: peoples moral heuristics interfere with proper application of logic to the credit relationship once debt detaches from individual relations and is socialized as money. Mathematicians and psychopaths are the two obvious subsets of humanity for whom this heuristic failure is most easily overcome. The respective value sets of these two human types suggest the latter is most likely to exploit the misalignment between our genetic gifts and our rational constructs for pure power. Plu ca change, it has ever been thus, at least since the dawn of accounting. If economics is to be useful to most people, it will become so by taking seriously the sociology of money. We have the technology now to map how people deploy their monetary resources, to monitor the monetary and material flows of subsistence, of comfort and of luxury and to track the ecological, social and monetary effects.

It may be that we live now in a brief interlude of digital transparency where our sectorially competing digital monopolies have windows into the realities of the sociology of the credit relationship. Maybe because of the diminishing "energy return on energy invested" this window will close when the power fails which it surely will if we continue on the centralizing, real wealth destroying path we are on. We should be availing ourselves as a "public" to these databases, we should be converting these vast, networked information systems into public utilities for this purpose. Our best hope for keeping the power on is in breaking up our IT monopolies and re-structuring the networked infrastructure they are built on as the public utilities they should be. With intellectual property law returned to what it was initially imagined for, a short term incentive to innovate, rather than the permanent toll both its been allowed to become, the data mining underlying the fortunes of Google, Facebook, Amazon and Apple would manifest in the real wealth of massively improved efficiencies in the distribution of goods and transportation of people rather than being used as at present to husband real inefficiency into massive monetary profits. In addition, with the right privacy protections public purpose mining of the newly massive data sets could establish a real science of economics based on the real world decisions made by every individual now tracked in secrete by Corporations and Governments for their own private or secrete ends.

For something like this to become feasible, we must first reestablish that individuals own the things they purchase and that the data produced by those things, by extension, are the property of individuals. Like all of our other rights, these too would be subject to being overridden by supervening public rights, but the default setting would again be individual privacy with demonstrated public good being the criterion for the breach of this principal. In such a world, a real sociology of the credit relationship could flourish in real time and inform public debates. The degree to which this inverts our current legal, political and economic structure is the degree to which that current structure eschews any concern for real public goods and the creation of real wealth. The "Adaptive Market Hypothesis" Mr. Lo proposes at the top would melt into total irrelevance with the recognition that people make markets and the purpose of markets is to make the material world better for people, which by extension requires a survivable, indeed rather a flourishing biosphere. We have been subjected in the last forty years, the NeoLiberal era, to a worldview that stands reason on its head through a love of money that is turning into a global suicide pact. It's time for a fundamental change.