Markets Are Not Gods

One of the many reason libertarians had no choice but to evolve into the pep squad for the managerial state is they could never finish their own sentences without sounding like loons. For example, their reification of free markets, often has them sounding like primitive shaman. Their deification of personal liberty would lead them to defending morally abhorrent things like the poor selling their organs to the rich. In order to avoid this, they developed the habit of stopping short of fully stating the inevitable ends of their ideology.

One of the errors of libertarianism, as well as the various tribes of the New Right, is the mistaken belief that markets are a Platonic good. Therefore, the free market is the end, rather than a means to some end. A popular trope among those in the post-war New Right was the claim that an undesirable end, arrived at through principled means, was superior to a desirable end, arrived at through unprincipled means. It is has always been a ridiculous statement that can only have utility in the world of forms, not on earth.

The marketplace is never perfect and it can often lead to undesirable ends. This is why it has to be viewed as a tool, one of the many tools a society has to better itself and insulate itself against its own internal division. A fair and open marketplace for housing, for example, will result in the maximum amount of affordable housing. Open borders and unfettered trade will lead to the corruption of the people’s laws. An unfettered recreational drug market will end up with large portions of the population exploited by a small part.

A less emotional example of this is the market for concert tickets. It used to be that states protected the primary market by suppressing the secondary market. The internet and the unwillingness of the people in charge to enforce the laws has changed that. The primary market has now been captured by the secondary market. The bulk purchase of tickets by brokers now makes them the primary player in the market. In fact, they can control the market, by manipulating availability. That’s what’s happening with concert tickets.

With the curtain rising on her “Reputation” tour, Taylor Swift blinked.

She buckled by having Ticketmaster turn off resale ticket listings on its interactive venue charts for the first leg of her North American tour, according to music-industry veterans.

The tour, which begins on Tuesday in Glendale, Ariz., shows plenty of primary tickets still available for the first nine shows.

But the delisting of secondary, or resale, tickets — a move experts called unusual if not unprecedented — makes the inventory of available seats seem much smaller.

On July 20, for example, Swift is scheduled to appear at MetLife Stadium as part of her tour’s third leg.

About half the seats still available for that show are represented by red dots on Ticketmaster’s venue chart, meaning they are up for resale.

The other half, represented by blue dots, signify primary sales. Those are the only dots currently visible to visitors trying to score tickets for a show on the first leg of “Reputation.”

Ticketmaster’s shutting down ticket resales for Swift’s early shows perplexed many in the industry because it handed secondary sales to competing resellers like StubHub.

On blockbuster tours, Ticketmaster admittedly makes more revenue on ticket resales than primary sales.

It also left some wondering if Ticketmaster was taking orders from its parent company, Live Nation, which as the tour’s overseas promoter, has much riding on “Reputation” being perceived as a success.

Now, the libertarian argument is that the venue should simply auction off the tickets for their show and not worry about the secondary market, because the bidding process would no doubt undermine the secondary market. The trouble is, there are no pure markets, so the sophisticated players in the market, would game the auction just as they game the direct sales market now. In other words, there can never be a free market, as long as there informational asymmetry and there is always a player with an information advantage.

If we stop pretending that a free market is an end in itself, we can think about the desirable ends would like to see in something like the concert business. Obviously, one end is for the performer and the venue owner to make a profit. Without them, there is no market for concert tickets. Secondarily, you want the fans to have access to tickets at a price that they see as reasonable. The libertarian idea of an initial auction solves one problem, but the other problems require shutting down the secondary market, like we used to do.

This is a trivial issue, as the world is not going to stop spinning if Taylor Swift can no longer make a living doing concerts. In fact, if all of our mass market entertainments dried up tomorrow, people would find new ways to entertain themselves. The point I’m trying to make is economics, particularly the market place, is always an means to an end. When thinking about what’s happening to us, the question is not how best to get people cheap stuff. It is about the kind of society we want the type of people we want in it.

Reality Returns

All of the usual suspects are freaking out over Trump’s decision to impose tariffs on steel and aluminum. Most of it is by hysterics masquerading as analysts. Some of it is simply the innumerate throwing yet another tantrum about the bad man who vexes them. Some of the hysteria is due to the fact that people in the chattering classes were sure they had talked this bit of reality into going away for good. Reality, however, is that thing that does not go away when you stop believing in it. The reality of trade is now back.

The amusing thing about trade debates among the chattering classes is that they never bother to mention the trade-offs that come with trade policy. Trade is, after all, like any other public policy. There is no policy option that does not come with a set of pluses and minuses. Our rulers, however, were sure they had sacralized their preferred set of trade-offs a long time ago. It turns out that the only people on whom this worked are the innumerate numskulls in the press. The rest of us remain skeptical about “free trade.”

In theory, which means not in reality, trade between countries is a net benefit to both countries. Open trade with Canada means they can sell more beaver hats and hockey sticks to Americans, thus making the typical Canadian richer. Similarly, it means Americans can sell more apple pies and boomsticks to Canadians, thus making the typical American richer. In reality, there will be Canadians who suffer from free trade with America and Americans who also suffer in the exchange. That’s how the world works.

While the hockey playing folks of northern Virginia will benefit from cheap hockey sticks from Canada, the suddenly unemployed hockey stick makers in Minnesota are the ones paying the price for it. Similarly, the apple growers of Canada get stuck with the bill for the suddenly cheap apply products in Toronto. The hidden cost of free trade is a lot of people you don’t know losing their jobs or seeing their wages cut. When you’re the guy getting the pink slip, the cost is not hidden and that has a social cost, as well.

Now, trade can be beneficial to both countries in that it promotes efficiency. The lazy and unscrupulous hockey stick makers in Maine, suddenly have to compete with the crafty canucks. This means better hockey sticks, but also less waste. Protectionism, like all public polices, comes with a cost too. That cost is more often than not carried by the consumer. Worse yet, it often promotes the sorts of corruption of public officials that erodes public trust in institutions. Again, there is no free lunch. Life is about trade-offs.

That is why the ruling class is in a panic over the Trump trade policies. It’s not about the cost of steel and aluminum. It is not about the possibility of retaliation. The real fear is that decades of hard work to de-legitimize open debate about trade policy is being undone. It means all of these trade-offs that come with trade between nations will have to be discussed. The billionaire class that has benefited from the current set of polices, is in no mood to defend their fiefs from the rabble. So, in waddles the clown army.

The fact is, the current trade regime ushered in after the Cold War, has proven to be the boondoggle critics like Pat Buchanan warned about 30 years ago. Open trade with Canada, an English-speaking first world country, is mostly beneficial. Trade with Mexico, a third world narco-state that now operates as a pirate’s cove for Chinese and American business, has been a disaster. NAFTA has made Mexico a massive loophole in American labor, tax, environmental and trade policy. A loophole ruthlessly exploited by China.

The current trade regime is also at the heart of the cosmopolitan globalism that seeks to reduce nations to a fiction and people to economic inputs. This neoliberal orthodoxy has eroded social capital to the point where the white middle class is nearing collapse. It’s not just America. The collapsing fertility rates in the Occident are part of the overall cultural collapse going in the West. Slapping tariffs on Chinese steel are not going to arrest this trend, but it does open the door for cultural critiques of the prevailing orthodoxy.

That’s the reality our betters would just as soon not allow back into the conversation. The fact is, a nation is its people. What defines France is the shared character and shared heritage of the people we call French. What defines a people is not the cost of goods or the price of labor. What defines a people is what they love together and what they hate together. It is the collection of tastes and inclinations, no different than family traditions, that have been cultivated and passed down from one generation to the next.

Even putting the cultural arguments aside, global capitalism erodes the civic institutions that hold society together. Instead of companies respecting the laws of host nations and working to support the welfare of the people of that nation, business is encouraged to cruise the world looking for convenient ports. There’s a word for this form of capitalism. It’s called piracy. Global firms flit from port to port, with no interest other than the short term gain to be made at that stop. Globalism is rule by pirates.

That’s the reason for the panic by the public relations firms hired by our globalist, billionaire masters. To question “free trade” is question the arrangement that keeps the current regime in place. It may seem like a small thing, tariffs on steel, but it is the sort of thing that can unravel the entire project, because it legitimizes the sorts of questions that can never be answered honestly by globalist. To his credit, Trump seems to get this, which is why he has pressed ahead with this. He’s flipping over an important table in this fight.

The New Zeroes

In the coming decades, Western nations are going to be faced with a number of problems stemming from the technological revolution. Some are already with us. We are now post-scarcity societies, where we have more than enough food, medicine and housing for our citizens and even some non-citizens. The pruning force of scarcity is no longer doing its magic to keep the population fit or even sensible. The next big problem is what to do with the tens of millions of extra humans, no longer needed to contribute to society.

The hardest part of the automation wave coming in the next decades will simply be language. What do you call people who no longer have any purpose, in terms of producing goods and services through their labor? For as long as anyone has been alive, the very small slice of the population that has fit this definition could simply be dismissed on moral terms. The underclass is assumed to be lazy or anti-social. Trying to fix this has been a good way to keep the useless off-spring of the middle classes busy is social work.

When the numbers swell as automation eliminates the need for human labor in wide swaths of the economy, it will be impossible to dismiss the idle. When many of the idle are people who formerly occupied office jobs or semi-skilled laboring positions, blaming their condition on a lack of ambition is not going to be possible. The current labor participation rate is about 63% right now. This is about where it was in the Carter years. In the coming decades, that number will fall below 50% due to automation and demographics.

The other challenge is how to support the swelling ranks of the useless in a way that keeps them from causing trouble. The hot idea currently is the universal basic income, which is being experimented with in Finland. In the US, some states are talking about how to replace their welfare programs with something more simple like the UBI. Libertarian economists like the idea of the UBI, because it theoretically allows the under classes to participate in the market economy, unencumbered by the state.

The trouble with this idea, one that they can never overcome, is math. If all citizens have a floor, in terms of their basic income, whatever that floor is, will be the new zero. The only possible way to have a negative income, in real terms, is if someone is paying their employer for the right to work. There may be some bizarre situations where that exists, but in the main, zero is the smallest number that can appear in box #1 of your W2. If that number is bumped up by the UBI, that becomes the new zero, the lowest possible.

Think of it this way. Imagine the government decides to help BMW sell more cars, so they offer every citizen $5000 if they spend it on a BMW, rather than some other car. BMW is now facing a wave of people coming into American dealerships toting a $5,000 check payable to BMW. The logical thing for BMW to do is raise the price of their low end models by $5000. That way, they don’t increase production costs, but they increase the profit per car. In effect, the floor for entry level buyers was just raised by $5000 by the government.

There’s a pretty good real world example of this. The government decided to do something to help working class people get into college. Since many need remedial help, before taking on college work, the scheme was to offer a subsidy to be used for community colleges. The students would use the money to prep for college then head off to a four year university, presumably using loans and aid at that level. The result, however, was the community colleges just raised their tuition by about 65% of the subsidy.

The Universal Basic Income would most likely follow the same pattern. By guaranteeing that no one would earn less than some amount, in lieu of traditional welfare payments, the absolute floor becomes the subsidy level. In effect, the new zero becomes the subsidy so all other wages would be based off that, as the price of goods and services would correspondingly adjust. It is really no different than printing up money and dropping it from helicopters into the ghetto. The UBI would be as inflationary as debasing the currency.

The truth is, the zeroes that our rulers will be forced to address are zero population growth and zero TFR among the surplus populations. For example, you could fix Baltimore in a generation with mandatory Norplant for the underclass. A generation of childless females means the last generation of 80 IQ residents with a propensity for violence. The reason Baltimore is a violent city is not an excess of hard working, college educated STEM workers. The reason the city is a violent mess is the surplus of violent stupid people.

It also means zero immigration. When 80% of today’s immigrants end up on public assistance, the immigrants of tomorrow will be nothing more than useless people to police, feed and house. Japan is the model to follow. They have no immigration and their population levels are about to drop in the coming decades. They are the only nation on earth that is truly ready for the automated future, as they have the demographics to meet a shrinking demand for labor. They also have the cultural confidence to pull it off.

There’s one other zero the West will have to tackle and that is zero participation. The fact is, free-market consumerism and mass democracy work when the right answer is not obvious. As automation takes over more and more tasks, the number of issues that need to be hashed out collectively will diminish. Rule by robot means exactly that, which means voting and popular government will have to be reconsidered. What’s the point of being mayor when there are no more patronage jobs to dole out to friends and family?

The River’s Edge

Reorganizing a book shelf the other day, I found a book that I was sure I had read a few years ago, but I had no memory of it. Looking it over, I realized I never did read it, so I put it in the queue. For some reason, I read a lot more in the winter than the summer, so I can knock out a book every few days. The book in question is Why Nations Fail, by economists Daron Acemoglu and James Robinson. It was a big seller back in 2012 when it came out. That’s probably why I bought it, but for some reason I never read it.

The book starts out describing the city of Nogales, which straddles the border between Mexico and the United States. The authors point out that the part of the city on the US side is fairly safe, well organized and reasonably prosperous, for that part of the country. The part of the city on the Mexico side is riddled with corruption, rocket high crime rates and grinding poverty. They quickly point out that the demographics of both halves are about the same, so the only possible explanation for the difference is the institutions.

What they don’t mention is that the Mexican half of Nogales is attached to Mexico, a land full of Mexicans. The American side is attached to a country not full of Mexicans, at least not yet. Nogales is an hour south of Tuscon, which is more than 50% white. Arizona is now 60% non-Hispanic white and only about 4% black. Further, the Hispanic population is mostly the El Norte variety. In other words, it is good demographics that results in those good institutions. They don’t go there. In fact, they never go there.

The book runs through a bunch of examples of how institutions can make or break a society. They even travel back in time to examine how events like revolutions or wars broke old bad institutions, allowing for new good institutions to flourish. The English Civil War comes up multiple times, to explain how the Industrial Revolution started there first. They spend a considerable amount of time talking about colonialism, to explain how the bad institutions created by he West, forever crippled their former colonies.

Again and again, the authors work backwards from present economics, through politics and history to arrive at institutions as the first cause. As a survey of world history, it is very interesting. The authors even accidentally make the point that serendipity has a huge role in history. They call this “critical junctures” and use a bunch of examples where a country’s elite chose poorly. But, they can never ask the question, why did they choose poorly? Instead, they just treat that as the river’s edge, never bothering to go further.

In fact, that’s the reason for the title of this post. The image that kept coming to mind while reading this book is of a group of explorers trying to find their way out of a valley. They keep ending up at the edge of a river. Instead of wading over to the other side, they wander around, sure that there must be some other way out. In this case, the river is culture. The authors stop at culture, never wondering what is beyond it, not because they fear what’s on the other side, but because they don’t seem to think there is another side.

That’s what is so weird about this book. Usually, there is at least one section where the author goes to great pains to acknowledge the arguments from biological realism, but vigorously dismiss them as bad-think. That never happens here. Instead, it’s as if the authors have never considered the possibility that Africa is the way it is because it is full of Africans. Instead, they just repeatedly make the point that poor countries have corrupt institutions, while rich countries have more open public institutions.

For instance, the authors write stuff like “World inequality exists because during the 19th and 20th century some nations were able to take advantage of the Industrial Revolution and the technologies and methods of organization that it brought, while others were unable to do so.” The implication of this is that the Industrial Revolution just happened by magic in England, instead of Botswana. The best they can muster is to point out that the English Civil War accelerated the end of feudalism in England, compared to the Continent.

One of the more comical bits is how they try to explain why Western nations did not fall back into despotism, like European colonies after independence. The answer is what they describe as a virtuous cycle, which is a special brand of magic that makes sure only white countries maintain open institutions.The serendipitous magic creates the inclusive institutions and then the magic of virtuous cycles keeps the magic flowing. Of course, there are the vicious cycles that work the opposite, but only on non-white countries.

It is tempting to think that the people on the blank slate side of the river know the truth, but they just prefer to carry on with the blank slate fantasy. In individual cases, that may be true, but a lot of people truly believe that all people are the same everywhere, despite the mountain of evidence to contrary. Instead of reality causing doubts in their beliefs, they do like Acemoglu and Robinson. They invest all of their time and energy looking for the magic cause that explains reality, without contradicting the blank slate.

The result is we have this great divide in the West. I use the image of a river separating two groups of people. On the blank slate side of the river, they will come to water’s edge, but they never look across it, much less contemplate crossing it. On the other side, the biological realism side, the people wait patiently for the others to cross over, shouting words of encouragement to them. Every once in a while, a ferryman reaches the blank slate side and picks up some people and brings them across the river.

We could use more ferrymen.

Family Friendly

If science suddenly noticed that birds were laying fewer eggs, they would ring the alarm and warn of a coming bird-pocalypse. The assumption would be that humans were doing soemthing to make the birds unable to reproduce. The same would be true of any species that saw its fertility decline. The starting assumption of biology is that all living things are built primarily to reproduce. That is the biological imperative. With one exception, a drop in an animal’s fertility must be due to some exogenous factor. That exception is humans.

In the West, human fertility rates have steadily fallen for over a half century. This is celebrated by our betters as the hallmark of human progress. Anytime the subject of fertility rates is raised, the knee-jerk response is to start hooting about women being more educated and having more options. The underlying assumption is that stupid people have lots of kids while smart people have few children. The implication of this is that the people who built Western Civilization were stupid, because they had high fertility rates.

The whole “women are more educated” argument is not really an effort to understand why fertility rates, especially white fertility rates, have fallen. Rather, it is an effort to not understand it. It is a deliberate distraction, a way of shifting the focus from a problem that cannot be addressed by the Left, whether it is the materialist Left of Europe or the spiritual Left on America. To even acknowledge that the purpose of women is to have children gnaws at the extreme egalitarianism that animates the Western Left.

To some degree, efforts to level off fertility in Europe make sense. There are lots of people on the Continent who don’t always get along with one another. Generations of warfare pounded home the message that stable societies, respectful of national borders, is the way to keep the peace. Keeping fertility rates at something just above replacement was an understandable goal. In America though, that’s not an issue. The country is mostly empty space with lots of room to expand. Americans should be breeding like Africans.

It really is an odd thing that has happened in America over the last fifty years. Starting in the 1960’s, motherhood became something close to a badge of shame with our cognitive elites. This rather quickly oozed into the the upper classes and then the middle class. As a result, public policy has been altered to discourage childbearing. Just look at the hysterics from Progressive women anytime they don’t get their way. They immediately start howling about how they will not get easy access to abortions and free prophylactics.

This came to mind when I saw a tweet by the left-wing political science professor George Hawley, commenting on the GOP tax bill. He linked to an essay he posted about public policy and fertility rates. For those familiar with this territory, the points he makes and the errors he commits are all familiar. France may have a TFR of 2.08, but the French people do not have that TFR. The invader population has rocket high fertility rates, but the French, well, not so much. Steve Sailer touched on one aspect of this in a Taki post.

A similar pattern, though less pronounced, is seen in the US. White fertility rates are below replacement, while black fertility is still above replacement. Although the homicide rates among blacks probably requires a different definition of “replacement.” Hispanics have the highest fertility rates. In other words, simply looking at TFR for a country that is slowly being overrun by a third world population will lead to errors. In majority white countries, the salient issue is not TFR, but white fertility rates, relative to the whole.

Putting that aside, we return to the original question. Two questions, actually. Is it simply that whites are choosing to die out or have whites simply wandered down a cul-de-sac, in terms of public policy, that is having adverse effects on white fertility? One way to tease this out is something that Steve Sailer did after the 2012 election. He looked at how white women voted, relative to their marriage habits. In places where white women can and do marry, stay married and raise children, whites vote Republican.

Another way of putting this is that where affordable family formation is highest, you get more families. Despite being run by a cult, Utah is a wonderful place to raise a family. It is like the set of Leave It To Beaver, but the size of a European country. At the other end, a state like Massachusetts is wildly expensive and hostile to family formation. Those who do choose to marry and start families, often move to other states. The decades long migration, north to south and east to west, has largely been driven by cost of living.

None of this answers the basic question. Is it crackpot public policy driving down white fertility or is some weird desire for extinction? The latter is impossible to know, so the prudent course is to assume the former is the correct answer. That’s basic logic. This means any movement that is explicitly for preserving the nation’s racial character should promote public policies that are explicitly and overtly pro-family. That is the part of Hawley’s post that is correct. The GOP should be fanatically pro-family, not pro-business.

This especially holds for the dissident right. The alt-right is all over the map on public policy, because they get bogged down squabbling over aesthetics. Oddly, the best thing they could do, in terms of “optics”, is cast themselves as the extreme end of the pro-family spectrum. Redefining pro-women to mean pro-mother would go a long way toward rallying white Americans to their cause. After all, being for something always trumps being against something, even when the thing you oppose is awful. Positive always beats negative.

A Foundation of Nonsense

Math and science are built upon axioms. Very simply, an axiom is something that is always true and assumed to be true. An example is the reflexive property in algebra. A number is always equal to itself. Axioms are the building blocks, from which new truths are discovered. A proof is an inferential argument for a mathematical statement, using other previously established statements. That means a proof can be traced back to the original, assumed truths, those axioms that are the foundation of mathematics.

This is how we accumulate knowledge about the physical world over generations. The proofs based on those building blocks are eventually incorporated into the building blocks of math. The theorems and proofs multiply, slowly building up the stock of things that are known to be true. Calculus was built upon algebra and physics was built upon calculus and so on. It why a student can quickly go from zero to trying to discover new truths about the world. They inherit a supply of things assumed to be true.

This accretive process of increasing our stock of knowledge is not limited to math and science. It is the way human societies evolve over time. We start with basic truths about the human condition and the realities we face as a society. Over time we acquire new knowledge, by building on what we know or that which we think we know. For example, Libertarians rely on the concept of homo economicus. This asserts that humans are consistently rational and self-interested agents pursuing their ends optimally.

In theory, at least, this is the basis of democracy. One side builds a set of policies and proposals, allegedly based on the assumed truths. The other side does the same thing arriving at different policies. After a vigorous examination of the competing claims, a consensus is formed around one solution. If it works out, then that becomes part of society’s truths, from which new problems will be addressed in the future. That’s not really how it works, but people believe it. It is axiomatic that democracy works this way.

What we know to be western liberal democracy, assumes certain things about humanity to be true all the time. The blank slate is the most obvious example. Everything about our politics and culture assumes that humans are infinitely malleable. From school policy to prison reform, public policy is based on the assumption that people can be whatever they choose, because they have free will and a blank slate that can be erased and re-illustrated at any point in their life. You are what you make of yourself.

It’s how our rulers arrived at the idea of importing millions of foreigners. Those foreigners can be re-purposed into tax paying westerners, through education and enculturation, to pay the pensions of the native stock. Those Somali goatherds can be plopped down into Minnesota and over time, develop all of the habits of the average Minnesotan, just by emulation and proximity. Race laws are all based on the assumption that you can train people to stop noticing racial difference and therefore, end racism.

Of course, science is putting the lie to the blank slate. Genetics is everyday filling out the truth of the human condition, which is that we are the result of our coding. The thousands of mating decisions, made by those who came before us, are what make us what we are as people. Everything from our height to our sense of humor is baked into our DNA. Our health outcomes and our life outcomes are the results of that coding. Not surprisingly, the closer our coding is to others, the greater the similarities.

While no one is prepared to say free will is a lie, at least not publicly, no serious person accepts that we are infinitely malleable. The argument that you can change your personality is as nutty as saying you can make yourself taller or younger. This reality used to be a building block of Western thought, but was “discredited” by the blank slate theorists, but it is now being reestablished by genetics. In other words, one of the main building blocks of modern social democracy is about to crumble.

That’s a big one, but it is not the only one. Both Freudian and Jungian psychology still cast a very long shadow over western culture. Freud is no longer taken seriously, outside of his historical importance. The idea that your emotional state is the product of childhood sexual trauma is a click less realistic than phrenology. Jungian psychotherapy is also being overrun by neuroscience. Few people still think they can talked out of their madness anymore. Instead, pharmaceuticals are used to treat diseases of the brain.

It’s not just the quackery. The moral philosophy that underlies our political philosophy is similarly built on a foundation of nonsense. The Enlightenment thinkers all started by considering man’s natural state. It was either a harmonious communal existence or a brutal war like existence. From both starting points, they worked forward to build a model how man went from the state of nature to what was then civilization. The resulting moral philosophy is the basis of our political and legal philosophy today.

Property rights, the rule of law, the relationship of man and state, these are all based on those assumptions about man’s natural state. Libertarians and so-called Conservatives take the Lockean position that society is built upon the social contract. Those on the Left assume Hobbes was right and order must be imposed on society. Marxists further accept the materialist claims about the nature of man. All of the iterations and flavors of political ideology are rooted in one of those two broad assumptions about humanity.

Those assumptions are all wrong. We know that much now. Better archaeology and anthropology is helping illuminate the pre-history mankind. Evolutionary biology is also helping explain the fossil and archaeological record. Genetics, of course, are re-writing the map of mankind, explaining how we spread across the globe. What we are finding out is that man, in his “natural state” was not what Hobbes imagined nor what Locke imagined. Man’s “natural” state is much more complicated and much more local.

The implication should be obvious. Like psychology, as the underlying assumptions give way to new knowledge, the conclusions built on those axioms must give way as well. If tomorrow we learn that two plus two is not always four, everything we know about the world stops making sense. If everything we thought we knew about humankind and human civilization turns out to be wrong, we suddenly don’t know a whole lot about how we should organize ourselves, other than the old rules are probably not going to work.

It seems today that Western societies are painfully re-learning things that were common knowledge a few generations ago. The old axiom, fences make good neighbors, was replaced with “diversity is our strength.” Every time a swarthy fellow blows up in the public square, we inch a bit closer to the realization that diversity is a nightmare. That’s the part we see. The part we don’t see, at least not yet, is the crumbling of the foundation stones of the modern West. That foundation of nonsense is giving way to biological reality

The BQ

We live in an age of great inequality. In fact, some economist think America may have greater inequality now than at any time in human history. Americans don’t think about it too much, as generations of indoctrination about class envy have made questioning such things seem un-American. That and the middle-class may be swamped with debt, but they have all the trappings of prosperity. Even poor people in this country are fat. People tend to worry about how much the rich man has, only when their bellies are growling.

Few people on the Dissident Right have much to say about economics. The main reason, obviously, is that demographics and multiculturalism take up most of the space. A big part of the aesthetic is ignoring the trivial things like tax policy, in order to remain focused on the bigger topics that are assiduously ignored by our rulers. That and the subject is full of libertarian hucksters, peddling apologies for globalism and the billionaire class. They have framed the topic in such a way that it is impossible to say anything meaningful.

Progressives in American and Leftists in Europe have always argued that inequality is immoral on its face. They may not use that phrasing, but that is the underlying assumption behind their arguments for taxing the rich and redistributing wealth. Perhaps that can be debated, but there’s little doubt that great inequality brings with it great social and political change. A society with relatively small differences in wealth, where there is economic equilibrium, is unlikely to lurch into unrest or reckless adventures.

When Henry VIII ascended the throne in 1509, he became king of a country that could be described as a three-legged stool. The Church held 25-30% of the land in the country and had a monopoly on moral authority. The aristocracy, including the king, held an equal amount of land, but had a monopoly on secular authority. The rest of the land was owned by the commoners and petty nobles, who had the advantage of numbers. The result was a balance of power between the three key elements of English society.

Henry is best known for his serial adultery and his habit of having wives sent to the gallows, but his biggest contribution is the destruction of the Church as a force in British political and economic life. The Acts of Supremacy, passed in 1534, recognized the King’s status as head of the church in England and, with the Act in Restraint of Appeals in 1532, abolished the right of appeal to Rome. The king had effectively assumed the moral authority that had once been the monopoly of the Catholic Church

This was made possible by the oldest of political tactics. When Henry seized Church lands, he used these to buy support from other nobles, as well as large land holders who also sat in Parliament. Naturally, Parliament was strongly in favor of not only seizing Church lands, but supporting their good friend, the King, in his efforts to assert his authority over the Church. When he seized Church lands, the crown ended the economic power of the Church and used the proceeds to assume the moral authority of the Church.

This had a radical effect on the politics and culture of England. Hilaire Belloc argued in The Servile State that it was this reorganization of capital in England that gave birth to capitalism. In this case, capital was land. When land was distributed between the people, the state and the church, the concentrated use of capital was impossible. Once the crown and nobility seized the property of the Church, capital was for the first time concentrated in a small number of hands. This allowed the propertied class to dominate English society.

This was clear after Henry VIII died. A dozen years of turmoil followed his death. Edward VI never made it to adulthood. Lady Jane Grey was queen for nine days until Mary I, with support of the nobles, deposed her. Bloody Mary made it five years before dying and then began the reign of Elizabeth I. This also corresponded with the birth of the British Empire. Whether or not any of this would have happened if Henry had not sacked the Church is debatable, but it is clear that the change in English economic order was an inflection point.

Another example is what happened to the Roman Republic after the defeat of Corinth and Carthage. The Republic had been at war with both city-states, off and on, for over a century. In 146 BC, the Romans finally defeated and destroyed Carthage and then provoked a war with the Greeks. They defeated the Greeks at Corinth, destroying the city and its population. The male population was killed and the females and children were sold into slavery. Rome was the undisputed power in the Mediterranean.

Something else happened. Those slaves that poured into the Republic from the conquered lands first ended up in the hands of the wealthiest landowners. This influx of cheap labor allowed the large land holders to replace their native labor, which flowed into the cities, not having anywhere else to go. The small landowners suddenly found themselves at a disadvantage, as the larger landowners had an army of slaves to work their land. The result was a great economic re-ordering of the Roman Republic.

It is not an accident that this sudden change in political and economic of fortune changed the nature of the Republic. The constant campaigning created a class of soldier that was more loyal to his general than to the Republic. The turning over of large tracts of land to slave farming resulted in a new problem, slave revolts. The Servile Wars, the Social War and two civil wars dominated the Late Republic. It has this title because the Republic came to an end with Julius Caesar and the founding of the Roman Empire under Octavian.

The relevance of all this to our age should be obvious to those who have been following what is going on with our tech oligarchs. A generation ago, Progressive arguments about taxing the rich had no salience, because no one had any real fear of the rich. That and they were not so rich as to feel alien to the rest of us. Today, the billionaire class feels like they are from another planet and more important, they are a real threat. They are advocating for policies that promise to dissolve the ties that bind the nation together.

A popular issue on the Dissident Right is that the old framing of politics, based on the blank slate and egalitarianism, is no longer relevant. Race and demographics are what will define politics going forward. That’s true, but none of that will matter if the West is going to succumb to what amounts to techno-feudalism, where a relatively small number of oligarchs control not only capital, but information. Addressing the threat to free speech means addressing what may be the ultimate red pill, the Billionaire Question.

In order to address the BQ, the Dissident Right is going to have to break free from the old moral paradigm with regards to class, inequality and economics. The fact is, no one will care if Mark Zuckerberg drowns in his bathtub, other than his mail order wife. The same is true of Jeff Bezos. The things that the vast bulk of Americans care about don’t depend on getting cheap stuff on-line at Amazon. The billionaire class is no more essential to society than any other luxury good. They are tolerable unless they become a burden.

That’s going to be hard for our side and it is going to be even more difficult for the sort of people attracted to the Oaf Keepers or the PoofBerries. That’s the effect of a few generations of telling people that it is un-American to think ill of the rich. Even so, part of breaking free from the old thinking will be adopting a new brand of economics, along with tackling the realities of demographics. You can be pro-white all you like, but that’s of no use if you’re a serf living on the modern version of a feudal estate, run by an oligarch.

Hollywood Math

A while back I watched the movie Kong: Skull Island on the Kodi. It was one of those impulse things. I felt like watching a movie and this one just happened to be easily accessible. Samuel L. Jackson’s angry black guy routine stopped being fun a long time ago, but I figured the movie was going to be mostly about the giant gorilla. As far as modern movies go, it was not too bad. I suspect it was better in a theater with high end sound and the giant screen to make the monsters look more monstrous.

For some reason, I got to wondering what it cost to make, so I looked it up. (I know, I know. I should not be using Wiki, but the Infogalactic page is out of date.) According to the published data, the film cost $185 million to make and generated $586 million in ticket sales. That looks like an amazing success, but movie accounting is a bit weird. The theater gets half the gross, so the distributor got about $285 million. That’s a gross simplification, but a useful one for looking at the mathematics of movie making.

Movies don’t always do so well. King Arthur was a giant flop this summer. It cost $175 million to make and grossed just $140 million. According to people who know these things, the studio lost $150 million on this one film. There were other massive flops this summer like the Aliens movie and the Amy Schumer comedy. The opacity of Hollywood accounting makes it impossible to know the final tally, but people who claim to know suggest that the big studios are posting losses this year as a result of the bombs.

Hollywood can withstand a bad year because of the high cost of making and distributing movies. Getting together $185 million to make a giant gorilla movie is not something you do on Kickstarter. It’s why Hollywood seems to be hooked on films with massive special effects budgets. It’s a niche only they can serve so they are trying to squeeze every penny from it. Dramas and documentaries, in contrast, have small budgets and small margins, so lots of small players can fight for those customers.

A common complaint about Hollywood is that they are not investing in new ideas and original scripts. Instead it is comic book movies, remakes of old films and sequels. The people in the business will counter with the fact that the losses are almost always accounting losses. The actors and directors are all getting paid. Once the accountants do their magic, often taking advantage of tax laws and special deals made with governments to shoot their films on location, the studios are in the black or close to it.

They are probably right in the short term. Hollywood is surely aware of what happened to the pornography business and what is now happening to the news business. Porn used to have a high barrier to entry. If you wanted to sell sex to the public, you had high costs due to a complex thicket of state and local laws to navigate. The Internet obliterated the barriers to entry. First came a wave of video makers who wiped out the skin mag operations. Then a wave of amateurs came through to wipe out the movie industry.

A similar thing is happening with the news and commentary business. First the internet undercut the ad business of newspapers. Why sell your car in the classifieds when you can sell it on eBay? Why advertise your job in the Boston Globe when you can use Monster? The only logical response has been for the newspapers to slowly move from their old distribution model to the internet. But, the cost of putting up a website is near zero now so anyone wishing to compete with the NYTimes can give it a go.

It’s not just the legacy media. Take a look at on-line audio and video. Joe Rogan does a one hour interview show that will get a few million viewers. His production costs are a fraction of what it cost to make the Charlie Rose program. Yet, Rogan reaches ten times the audience. The YouTube comic PewDiePie reaches 55 million people and he is essentially producing his show from his basement. Anthony Cumia was making his show from his basement until his success allowed him to rent a studio in Manhattan.

A similar thing is happening to radio. Podcasts are becoming a popular way to listen to news and commentary, that used to be the domain of radio. Buy a new car and you can sync your phone to the audio system, so you can tote around your own music and podcasts to play on the road. It will not be long before your car radio will let you listen to this stuff off the internet. Again, the low barrier to entry means a wider range of shows so the public can narrow cast to their taste. Old fashioned radio, as a result, is dying.

If you are in the media business, your number one task right now is figuring out how to keep the barrier to entry to high for that army of internet content makers. That’s why Hollywood is fixated on massively expensive super hero movies and film series based on comic books. They spend $100 million building out the infrastructure and then make five versions of Pirates of the Caribbean for $200 million a copy. Mike Cernovich is not competing with that, no matter how many Kickstarter campaigns he starts.

The beauty of this approach is that these sorts of films can easily be sold into foreign markets. The Chinese dudes watching Fast & Furious 19 don’t care about the dialogue or story. They want to see buff white dudes driving cars while shooting at bad guys. Given the level of writing for some of these movies, they may not even have to provide subtitles as no one really cares what’s being said. Hollywood is now in the business of creating giant special effects demonstrations that are viewed in movie theaters.

Whether this is sustainable in the long run is hard to know. Kong: Skull Island made a lot of money so a lot of people must have enjoyed it. I thought it was mostly stupid, but I watched it free at home, so I got my money’s worth. As long as these things keep making money, there’s no reason to think this model will break. It also means that Hollywood will be looking for ways to make these films even dumber. If they can get global audiences habituated to enjoying two hours of explosions, it simplifies their business even further.

The Servile State

A century ago, Hilaire Belloc wrote in the The Servile State¹ that attempts to reform capitalism will lead to an economy in which the state dictates that certain people will work for others, who likewise must take care of them. Belloc called this the servile state. This is different from early arrangements in which slaves and serfs were the backbone of the economy. In those arrangements, the owner has a choice to not own slaves. It is also different from capitalism, in which everyone is politically free by law.

Belloc was a man of his age so he viewed economics through the goggles of socialism and the newly emergent industrial capitalism. In The Servile State, he was searching for an alternative to the destruction of liberty necessary with socialism and the instability inherent to capitalism. The former results in an inequality of political power, while the latter results in an inequality of material wealth. Eventually, a small number of people rule over the masses, who begin to resent their rulers, seeing them as tyrants.

What Belloc argued is that socialism is inevitably the state dictating to property holders how they can dispose of their property. The state does this either through direct ownership, or through legal requirements for the ownership and use of property. Political freedom is determined by the degree of freedom one has with regards his labor and the results of his labor.. Therefore, socialism must restrict the political liberty of citizens to the same degree that it controls property and labor of the citizens.

Capitalism puts ownership and control of property in the hands of the people. In pure capitalism or what we now call libertarianism, individuals not only control their labor and the results of their labor, they are politically free. In theory, men either labor for their own use or agree to labor for others. The state’s only purpose is to enforce contracts as all of the dealings between citizens is consensual and formalized in a contract. The appeal of capitalism, pure capitalism, is the allure of pure political freedom.

By the time Belloc was writing, it was clear that pure capitalism would inevitably result in the concentration of wealth. A small class of property owners would come to posses the bulk of the nation’s wealth. That means a class of people who were free and a class of people who were not free, because they could not own and control their own labor. This led to social instability and eventually violence. Belloc argued that attempts to reform capitalism through state action would result in something he called the Servile State.

Reforms to capitalism are always through the law. The state places limits on how the owners of property may use their property. This then leads to a negotiation between the state, which has the monopoly of force, and the property class, which has a monopoly of capital. The result is a system in which the state seeks to protect those without property by placing requirement in the capital owners. In return, the state require the masses to labor for the property class, under conditions set by the state.

The result is that the business is forced to hire people it may not wish to hire, but the state also dictates to labor how and when they can sell their labor. Put another way, the poor are forced to serve the rich, but the rich are forced to be generous to the poor, looking out for their welfare. It is a social contract enforced at the barrel of a gun. It has the inequality of capitalism and the lack of political liberty inherent in socialism. The Servile State is the worst elements of both economic systems.

Belloc could not see what was coming in the post-war era and he certainly had no idea what was coming with the technological revolution and the explosion of neo-liberal globalism. He was prescient, however, with regards to how English economic systems would evolve over time. Look around at the modern world and you see the world he described as the inevitable result of “reformed capitalism.” Today, employers hire whole teams of people who makes sure the rich and powerful follow the rules.

What’s been missing in the technological age is the other half of the equation. As the West de-industrialized, the enforcement of labor laws have fallen away. Masses of helot labor brought over from Asia into Silicon Valley, for example, worked under agreements they struck with the business owners. Tech companies love open borders as it gives them a loophole to avoid some of the constraints of the Servile State. The same is true at the unskilled end, where companies rely upon masses of labor from Latin America.

This is an untenable situation in its own right, but the coming automation of the American economy will result in an evolution of the Servile State. The Universal Basic Income is nothing more than a modern implementation of the sort of infringements on political liberty Belloc described a century ago. Property holders will be forced to care for the dispossessed and, inevitably, the state will put behavior rules on the dispossessed. The UBI will come with rules requiring the recipients to act a certain way.

You get a glimpse of this in the efforts to control political speech on-line. Social media companies get exceptions to anti-trust laws, permitting them to run monopolies. In exchange, they are tasked with policing dissent on behalf of the state. The users get “free access” to platforms like Faceberg and Twitter, just as long as they agree to the terms of service and accept discipline when they post subversive things. Imagine this system applied to the universal basic income or to access to your self-driving car.

Belloc’s alternative was something he and Chesterton called distributism. Some have argued that their economic ideas were proto-fascism, but that’s debatable. What Belloc argued for was the inverse of the Servile State. Instead of a strong central state, political authority would be distributed and diffused throughout society, while wealth concentration would be constrained locally though ad hoc arrangements and cultural institutions. The goal is to maximize liberty, while minimizing inequality.

Whether or not this is possible in the modern age is debatable. Belloc and Chesterton argued that this was the natural arrangement of Europe. They also argued that it required a strong and energetic Christian tradition. That ship has sailed in the West, but maybe it does not matter. There’s no getting around the fact that neo-liberalism may be economically stable, but it is wildly unstable culturally. The experience of Europe thus far suggests it is suicidal. How to address it may lie with globalism’s last critics.

The Douche Bag Society

Inevitably, whenever I write about the new economy or new technology, I get responses like this one from reader Fred Z, taking me to task for challenging his assumptions about the morality of the new economy. Fred likes the fact he can grind his local vendors into poverty, by ordering his stuff from a stranger in America on-line. No one wants to be thought of as a bad guy, so he has bought into the neo-libertarian moralizing about so-called free trade and globalism. He’s not screwing his neighbor. He’s efficient!

Fred does not think of himself as a bad person for buying on-line, rather than buying locally. No one does. Every day we are told by our betters, through the mass media, that the only thing that matters is that you get what you want, when you want it, at the price you want it. The defining feature of the modern economy is that anything resembling value-added is stripped away, in order to turn it into a commodity. Once everything is just a commodity, then the only decision is price and when you can have it.

This is a big part of the libertarian fantasy. Everyone is a deracinated economic unit. The only engagement between humans is transactional. Fred Z feels no obligation to buy from a local vendor or even buy from a countryman. He’s just getting what he wants, when he wants it at the price he wants. His only concern is himself. If the people he ends up buying from are homicidal lunatics, that’s not his concern. If his decision to buy from strangers means his neighbors fall into poverty, then maybe his neighbors should just die.

The marketplace has always been a ruthless and unsentimental part of the human condition. The ancient Persians looked at the Greek agora as a festival of liars, robbing from brothers and neighbors. From the Persian perspective, haggling over price and quality was just one person trying to swindle the other, by telling lies to the other. The seller lied about the product and what he would take for it. The buyer lied about his opinion of it and how much he was willing to trade for it. They were right, the market is built on lies.

It is also why human societies have always put limits on what can happen in the marketplace. Life is all about the trade-offs. The socialists think they get better trade-offs with a highly regulated state economy where the excesses of the marketplace are constrained. Free market types think the trade-offs are better with much less control over market activity. They are both right to a point. That point is determined by how the people of a society want to live. What they want of themselves determines what they permit.

In the 1980’s, it was often remarked by Progressives that the Scandinavian countries made socialism work. They had high tax rates and very low amounts of inequality. The liberals were careful not to talk about it too much for fear people would notice that these countries were all white. The culture of the white people that made up these countries had a long tradition of egalitarianism and sharing so socialism worked for them. The trade-offs they preferred reflected what they loved and what they hated about the human condition.

That’s the debate we will have to have about neo-liberalism. Fred Z loves that he can get cheap stuff on-line, but he is not thinking about the trade-offs. The rich people who rule over us do think about the trade-offs, which is why they ruthlessly support a system that socializes costs and privatizes profits. The trouble for guys like Fred Z and everyone reading this is that we’re on the other side of the equation from those rich guys. We’re the ones on whom those socialized costs fall. We are getting the bill for all this.

Think about it this way. Law enforcement requires society to employ bad people to deal with the criminal element. It’s why even today, most cops are horrible people and prison guards are sociopaths. Policing deviant humans is an unpleasant task that is best done by unpleasant and cruel people, who take some pleasure in the task. Few of us could work in a prison and most of us would never want to do the things cops do every day. It also means law enforcement people get to do things the rest of us are prohibited from doing.

Even libertarians understand the necessity of having cops and jails, but they will argue that we have gone too far in an effort to make society safe. The cops have too much power and the state abuses the rights of too many people. The trade-offs are not acceptable, so libertarians argue for things like drug legalization. The costs of the police state far outweigh the costs of additional addicts. Whether or not you accept that, you have to accept the premise, that there are trade-offs and they should be debated.

The douche bag is someone that is self-absorbed and has a high time preference. He wants what he wants and he wants it now. At some level, he knows this is at odds with the rest of humanity so he takes some pleasure in annoying others. This feedback tells him he is serving himself and thus living up to his douche bag code. It’s why the douche bag laughs and mocks normal people when they point out that he is being a douche. It’s validation that he is being all the douche he can be. He’s the giant douche.

That’s what is at the heart of the global marketplace. Fred Z can be a colossal douche nozzle to his friends and neighbors, but call it mere consumerism. His friends and neighbors will eventually return the favor. The marketplace, instead of being confined to one area of our life is coming to define our lives and our common humanity. We live in an era when the stepinfetchits of the billionaire class can gleefully talk about killing poor people or deporting them. We are on the way to being a douche bag culture.