Wednesday, December 17, 2014

5 Years On, The Flow History

When I began this blog, my second post was an outline of how I understood the civilizational competition I saw in the world around me. In the intervening half decade, the world has begun to move decisively on. The PRC has changed the most, Russia and India are increasingly dynamic and even Iran appears to be evolving beneath it's conservative-ism. In my analysis then, these competing systems were all hobbled to varying extents by internal corruption that prevented them from economically empowering their citizens. This domestic social policy failure robbed them of the power to compete with an American system where a residue of the New Deal still promised, if reinforced, to sustain the economic freedom that drove the productive growth of the US centered system.

In 2009 we in the US were in the depths of a financial crisis and had just elected a decisive majority of Democrats to resolve it: it looked for all the world like a replay of the Roosevelt election of 1932. The optimism was euphoric, to the extent that even the Nobel Committee bit on its "hope" rather than the unfolding reality of no "change" when it gave our new President a Nobel Peace Prize. I closed that essay with this, to my eyes at least, accurate statement: "The last thirty years, with the enfranchisement of cash by the Supreme Court in Buckley v Valeo, our system has converged to a dangerous extent with these competing systems. While I can vote, I can not get my representatives attention. I have a formal political power that has been robbed of substance by money. In the Peoples Republic of China, what the Party wants the Party gets. In the United States, the Republic of Cash, what money wants money gets." 

Money indeed got what money wanted. With control of both houses of Congress and the Presidency, had the Democrats really wanted to reform our financial system, all of the tools were in hand and the industry so profoundly disgraced any serious reform proposed would have had massive popular

Saturday, November 29, 2014

For A Public Conspiracy To Restore The Constitution

Sitting hear listening to the construction noise from the nearby work at Hudson Yards the energetic density of this human coral we call New York fills the lower half of my field of vision. A giant human reef, the city embodies technologies embedded in culture, animated by people who pass their wisdom, or lack of it, from generation to generation expanding or conserving or bleaching that coral. In Aurora of Empire, I tried to understand the political economy of this great city and map certain salient points about how those people have interacted with their artifact and the culture that channels their volition. My point of view there was focused on the evolution of the physical artifact of the city as technology and culture interacting through New Yorkers to create this present on which I now look.  Seeing what the thing has become, and living that becoming these last thirty years, direct experience of a corroding of culture has me concerned about the bleaching burn of Mammon's glow as it leafs the city to it's golden taste.

In Shadows On Liberty, when I was just beginning to write, I laid out my thoughts on how our intentions as embodied in the founding documents of this erstwhile Republic have always been more aspirational than their author's practical intent. An affect has been that these idealized notions sit out there generation after generation reinforcing their simple moral clarity in the minds of succeeding generations who, in venerating their predecessors tend to credit them more than history warrants. This salutary process results, however or has until recently, in these successors struggling to live up to ideals whose creators honored more in the breach. In How We Got Here I talked about how the visionary leadership of the New Deal and America's war effort in Europe created the conditions in which the "promissory note" M. L. King saw in the Declaration of Independence, endorsed by Lincoln with the Emancipation Proclamation was, in part finally redeemed with the Civil Rights Amendments of the late sixties.

As a child of the Jim Crow South and beneficiary of court ordered desegregation in the Austin of my childhood, the perverse values of the likes of Robert McCulloch sear my soul both with their reptile hate and their familiarity. Jim Crow consisted in a nutshell of this: employ a select class of people too little and for inadequate wages and then call them criminals when they try to survive. It was a stratagem to do with economic power what was prohibited politically. Our Kurrent Konservative Khristians, now

Sunday, October 19, 2014

Ebola, NSA & Porn

While our "markets" based "health care system" has roundly flubbed it's first encounter with Ebola, it may have offered the serial liars and megalomaniacs at the NSA the best chance they're likely to get to redeem themselves. It's become clear in the last year the NSA pretty much stores and sorts data on all of us. If that information is in any way useful in our ostensible "War On Terror", it should be in the field of quickly tracking connections between people associated with some interest of the Agency.

Lets say, for the sake of argument, that Ebola is Terrifying. Further lets stipulate that a "health care system" designed to maximize revenue streams for its institutions and practitioners is likely to send people with symptoms of the common cold or flue out to propagate their various bugs to the benefit of sellers of treatments, whether lab tests, doctors visits or the spectrum of pharmaceutical products. That these symptoms happen to also include the early markers of our "Terrorist" threat has already confounded CDC, systematically enervated by de-funding low these last 40 years, and our above mentioned "health care system".

But! Since it's Terrifying, our serial liars and megalomaniacs are now well positioned to actually demonstrate the public service focus they claim as justification for their extra-constitutional intrusions into our communications. If their data sets have value, it should be in the sphere of tracking connections between people, a problem given new urgency in light of the CDC sending an Ebola infected nurse,

Thursday, October 16, 2014

Exorbitant Privilege Or Burden?

In order to be a reserve currency a currency must be broadly distributed and broadly circulated. To be broadly distributed and broadly circulated there must be enough currency in circulation to satisfy demand. In our world, as it stands, that demand includes the needs of global financial markets. Yesterday according to the New York Times something like $680 billion in US Treasuries were traded: currency adequate to support this volume must both exist and be sufficiently distributed.

In order for these conditions to be met, by definition the US must have spent abroad that volume of dollars, and US and other nations dollar denominated transactions must have provided adequate distribution. Once these conditions are met, other nations who hold our currency discover that when we sneeze they get a cold: when we have a financial ruction it tends to draw down their reserves. Should they run out of reserves, in the post New Deal world, they have discovered US sponsored institutions like the IMF and World Bank pauperize their populations and devastate their financial markets to preserve stability in the US economy.

This experience has encouraged all of our trading partners to accumulate vast dollar reserves: this, again by definition, requires the US to have first spent the desired sums. Ipso facto, the "trade deficit" and accumulated "National Debt", the first in order that our trading partners have our currency and the second in order that there is enough of it to satisfy the requirements of the two paragraphs above.

Once these conditions are met, our trading partners discover that by repressing the wage income of their populations they can force the US to continue to fund the accumulations they need both for hedges against the IMF and World Bank and whatever demand they may choose to import from the US. Once your population can't afford to purchase the stuff they make you can export that stuff to the US, who's currency is relatively strong because you keep purchasing Treasuries with that portion of your import earnings you have withheld from the workers who actually made the stuff. This decouples your economy from the US at the decisive point of savings accumulation. Savings in your country accumulates to owners of capital rather than workers and can be deployed to manage the local economy.

Thus our trading partners indirectly manage US demand through their purchases of Treasuries to sustain their domestic employment at the expense of US employment. This puts pressure on US workers who can't get jobs but must none the less meet their rent/mortgage etc obligations at the same time it puts downward pressure on interest rates. These combine to create a wonderfully usurious opportunity for creditors here in the US who have exploited it to the hilt, first with sub-prime mortgages and extortionate credit card practices and now with student debt and various new forms of sub-prime consumer finance. This is the Exorbitant Privilege: the US worker is pauperized by a convenient collusion between American financiers and repressive foreign regimes. Exorbitant Privilege indeed.

Sunday, October 5, 2014

The Exorbitant Privilege

"The Exorbitant Privilege" of reserve currency status, while a wonderful rhetorical trope, is more a hindrance than help to non-specialists understanding of the political role of a reserve currency. The layers of abstract function embedded in a cross border currency system compound confusion over counter intuitive complexity.

First obscurity comes from the dual nature of money as both asset and liability. Because we handle it as cash we intuitively understand certain analogue properties it appears to manifest relative to our exchange of other valuables. But this obscures the essential property that sets money apart from other valuable objects: it has no intrinsic value itself, really never has, and exists always and everywhere as both an asset and liability. What is the intrinsic value of gold, a form of cash frequently misunderstood as sin qua non money? It does not oxidize, holds its luster, is easily malleable, is fairly dense and conducts electricity. It's hard to say, but it appears aesthetic properties of weightiness, malleability  and shininess recommended it as a medium of exchange, but this function in no way encompasses what is interesting about money with regard to power, which is the essentially interesting thing about a reserve currency. While cash money has properties that can be aesthetically embodied in gold, it is the liability side of money at scale, money in quantities not easily handled in cash, that ultimately creates the "Exorbitant Privilege".

A dollar is a liability to the US Government and an asset to anyone who holds it. It entitles its bearer to a dollars worth of whatever goods and services she may choose to exchange it for within the dollar denominated economy. There is a lot in those two sentences that we need to be clear about before moving on. Every dollar that exists anywhere in the world, in whatever form it is held from cash to bonds to keystroke records in a banks IT system, exists as a result of having first been spent by the US Government (or having been recorded as a bank asset/depositor liability as a loan on a Govt. chartered bank's books). If it was not first spent by the US Government or logged as an asset by a Govt. chartered bank it is at very best counterfeit: being issued and spent by the US Government is the only legitimate way dollars can come into being. It is an IOU of the US Government with which that government purchases things it determines to purchase. Politically,


Character: Ian Welsh
Buffalo Wind: John Michael Greer: Archdruid Report
Dollar Carnage: Raul Illargi: The Automatic Earth
Exorbitant Burden: Michael Pettis
Appeasement: Doug Muder: Weekly Sift

Friday, August 22, 2014


1234, 5, 6
Words perfect the illusion of communication. Language defines a metaphorical alternative to the reality we experience through our senses. The seminal advantage of the linguistic alternative is its apparent communicability; that others seem to understand as we do. The more specific the subject the more precise language can be in representing it, but it is always a representation. A representation twice removed: all sensory experience is first mediated through the inherited prism of our ancient nervous system and its’ accumulated accidents, it is only beyond these filters that auditory or visual stimuli can enter into the form of language to be cast back into the world as representations. The filters are not neutral, they are driven both by mind and instinct and color our perceptions with motives, with emotions, even down to the words we hear and the words we choose to speak, or just find ourselves speaking.

Language changes everything. First, nominative words for actions or things; then phrases with action content; then simple syntax and within 18 months of the first word, complex, complete, though not yet perfect, grammar. Possibly our most powerful and productive aptitude, our shot at language is almost entirely lost by age seven where if lack of culture has robbed us of exposure we will never fully recover. For our purposes, how language evolved is interesting but not essential: how it now works on and in our minds is.

Wresting our kids from the feral pit of pre-linguistic solipsism that is infancy into the flowering of humanity we call childhood, as my father succinctly put it, “you’ll take bullshit from baby you’ll never take from anyone else.” From a certain distance and perspective, those formative years can be looked at as each succeeding generations introductory clinic on the ascent of man. So much that for the rest of our lives looks like determinism is in fact framed in those years. But an equal amount is not. The form and reach of each individuals final mastery of language determines their point of entry, trajectory and speed into the majority of the proliferating subcultures of civilization, but in no way predicts the actual journey.

At our first introduction to the use of words, we are entering into what will likely be the most coercive contract of our lives: the agreement of linguistic meaning. In ignorance we submit to its’ immense and obvious utility. We fail to understand its’ treachery until

Sunday, April 13, 2014


1, 2, 3, 4, 5, 6
We'll look deeper into the roots and history of Western technological development in future posts, this essay looks to position the last several posts in a cultural narrative I imagine about the world I've found myself in. It is not an academic world although the products of academia feature prominently in it. Careful thinking and the clear communication of ideas are among my most avid tastes and I find them there and in certain books and blogs. My own lack of clarity is a sort of public airing of my intellectual disorganization, and for that I apologize. Reality is infinitely granular and, constrained as we are by the filter of our own senses and consciousness, not particularly available to us. So all history is in some ways potted, and I make no secrete here of my abuse of it to frame some larger points I've thought more carefully about.

As Ian Morris posits in "Why the West Rules for Now", Europe has been at the center of one of the two dominant competing world civilizations for five or six thousand years now. If you haven't read his book, I highly recommend it. The late Renaissance European world of proto-capitalism is where I'll start my story. It really begins with the Magna Carta wherein through direct contests of power an English King acquiesced to certain textually specified rights amongst his "subjects", conditions delimiting their scope of subjugation. This process of establishing by written record highly specific agreements on highly specific limits to highly specified powers has been a sort of background radiation underpinning what has actually been progressive in our bloody last eight hundred years.

That this form of agreement established itself in the particular moment of thirteenth century England was central, I believe to England becoming an early dominant industrial power. The kinds of specific restraints on power and particular institutions built to safeguard them became the backbone on which the powerful built their own rights to manage what we would come to consider "economic" activities, a subset of production regarding the management of surpluses and the benefits accruing from them. These activities developed as a fairly stable infrastructure beneath a superstructure of political power competition concerned with the allocation of lands and the populations they housed viewed primarily as organic bodies from which political heads drew their sustaining blood, whether in war or peace.

Language at this juncture was the primary fissure in otherwise fairly homogeneous populations around the fertile plains and valley's of the continent. The cultural lines thus defined became the increasing focus of aristocrats competitions to ennoble their respective political bodies. The viciousness of the results tended to prepare the way

Saturday, March 8, 2014


123, 4, 56
Wayward beasts of riotous belligerence and, on occasion, rapturous beauty, we are the keystone predators of the present, re-timing nature to the fevered steps of an instinctive tango between our collective id and ego. We flatter ourselves "the rational animal" while diligently destroying our ecological patrimony, slaves to the drives of instincts for habitats we've already eradicated and of who's primacy in our motives we remain oblivious. What we are is the "energy capture" animal: while a great deal now sets us apart from our simian ancestors, it was the energy captured from fire in cooking to pre-digest our food that allowed our genes to re-allocate energy and blood flow from our bellies to our brains delivering to us the illusion of reason. We can be reasonable, but our nature is to be smart leading us to reason only under duress, when our cleverness fails.

And in duress we reason beautifully. Some become enamored with this beauty and commit themselves to lives of reason, but these are Cassandra's mostly in an animal world ruled mostly by the hierarchical impulses bequeathed us by our ancestors on some extinct savanna. While our day to day social relations have likely evolved little from those early post-simian glen dwellers, our habitat has. Particularly, wherever the written word has imposed historical order on societies, burdening them with the institutions and memories of civilization, a systematic re-ordering of the living landscape around us has zoned life and its functions for our conscious predilections imposing ever increasing order on the production, flow and distribution of the necessaries of human life. Here those rational aesthetes, people committed to the beauty of careful thinking, have re-imagined our physical world to better support what we believe we want, or at least what the powerful tell us we want.

While civilization has mostly occupied a stable ecological niche, relying on the living energy of its people, their animals, their plants and the sun, industrialization has introduced an anthropocentric instability. While we burned wood or grass or vegetable oils to fuel our stoves, the carbon emissions thus produced re-cylced into new wood or grass or vegetables for future cycles. The living systems that harvested the suns rays and transubstantiated them into life's essentials remained natural in the sense of relying only on the sun and other living things to sustain the human built systems. It is in our nature to capture external energy and bend it to our will: as for cooking over a wood fire, so with coal and latter oil once their capabilities were understood. Industrialization and its growing dependence on these fossil fuels has disconnected human civilization from the ancient rhythms of life and at the same time precipitated a steady build up of carbon and other products of combustion in the atmosphere. We take now what energy we can from wherever we can find it to try to sustain the growth of our economic system burdening our ecology with evermore chthonic carbon and its resulting heat.

But before that it was the energy of beasts that provided the power with which we molded our habitat. Horses, cattle, elephants, dogs and countless other animals have been recruited into the work of making the human environment since before the dawn of cities. With the phase shift in social order introduced by civilization, beast of burden became a category into which we proved willing to relegate our fellow man. In future I'll write in detail about the mirror relationship between the human institutions of money and slavery, for now it suffices to point out the simultaneity of their invention, their parallel histories and the necessary hierarchy between them: slavery cannot exist without money though money can exist without slavery: dehumanized value as embodied in money creates the space for dehumanized humans in civilization.

Slavery cannot exist without civilization. While civilization can exist without slavery, there's damn little record of it prior to industrialization. Slavery is energy capture for psychopaths, but its long and persistent reality is as clear a statement of the universal psychopathic tendencies in all of us as can be made: that tolerance of slavery has been more the