Practical refutations for the feverishly minded

Tuesday, 29 January, Year 5 d.Tr. | Author: Mircea Popescu

There's various substances listed as "dangerously addictive drugs" that "damage your health". Sugar does not figure on that list. This may seem unexplicable, especially if you're very very recently descended among people.

Speculative thought also does not figure on that list. It is true that much unlike other substances there listed you can't very well melt it on the stovetop and then pour it into a well cleaned icecube tray. You can't bludgeon your ex stripper ex wife over the head with a healthy chunk of speculative thought quite as well as you could with a twelve pound solid bit of crystal meth. Nevertheless, speculative thought is very much a substance, and often enough quite substantial. In fact, the ex stripper does not become an ex wife though the application of crystal meth ad lib, at least in any case I am so far familiar with.

To further the point, allow me to quote an example :

There is one thing we would like to bring to our readers' attention because we are confident, that one way or another, sooner or later, it will be implemented. Namely a one-time wealth tax: in other words, instead of stealth inflation, the government will be forced to proceed with over transfer of wealth. According to BCG, the amount of developed world debt between household, corporate and government that needs to be eliminated is just over $21 trillion. Which unfortunately means that there is an equity shortfall that will have to be funded with incremental cash which will have to come from somewhere. That somewhere is tax of the middle and upper classes, which are in possession of $74 trillion in financial assets, which in turn will have to be taxed at a blended rate of 28.7%.

This is standard fare, nickel and dime pie in the sky talk. It happens to be in the negative form, but that has very little bearing : a pie in the sky is a pie in the sky be it blueberry pie or shitvomit pie. Same rhethorical devices at work, same listeners, same soap box. Same shit, as the expression goes.

This particular bit has the instructive advantage that it is a little stale by now, having been published the Autumn before last. A new spring is coming and, much like the end of the Mayan calendar-world, this particular pie has not so far detached itself from its pearly supports to come hurling down towards the mouthbreathing audience. Sooner or later, as they cautiously say.

The problem with this, as with any other tidbit of speculative thought used for intoxicating rather than illuminating purposes, is that it fails to correctly account for the entire picture. Yes, it is perfectly true that the world is currently freebasing on roughly speaking 20 trillion worth of assets that can't in any practical way be allocated to anything tangible. There's nothing particularly wrong with this state of affairs : my current fortune consists inter alia of about ten million dollars (yeah, it grew since last Autumn) which exist in the intangible form of putative fiat currency value of unrealised BTC capital gains.i Thus certainly of the 20 trillion I have my fair share, and actually considering that 20 trillion comes to about three thousand dollars per capita in a seven billion strong world, my ten million dollars probably puts me firmly among the 1%.

Nevertheless, this does not particularly worry me. The fate of my putative ten million dollars does not concern me in the slightest. For one, I couldn't care less about any sum of US dollars at the current time, as far as I'm concerned you're better off with a large pile of coal. At least that can be used to write on walls. For another, I'm under no pressure to sell my BTC financial assets. I am not in debt and so I have no trouble servicing my obligations. Consequently the cash value of my intangible assets is my problem entirely. Lack of any desire to sell (because there's nothing of equal value I could be selling for) coupled with lack of any need to sell (because there's nobody I owe anything to) make my share of the twenty trillion quite very sound.

The only thing that could devalue it, of course, is if I had a change of heart. I confess that I do, some mornings I wake up exhuberant and the ten million seems to me more like a billion soon. Some mornings I wake up depressed (but this is rare, as you'd expect of someone with ten million's worth of dreams) and it seems to me worth nothing more than a large pile of coal. Which is to say, about what I'd think if I had an actual lump of cash, ten million actual dollars.

Therein lies the simple explanation : the world isn't in crisis for any concrete or definable reason. We're not going through a crisis of raw materials, or of capital goods destruction (such as for instance during a war, with factories under bombardment) or of labour (such as during the Great Plague) or anything else tangible. We're going through a crisis of confidence. Nobody has taken away ten million's worth of oil out of the tanks at night, there's not ten million's worth of machinery unaccounted for, there's not ten million's worth of slaves (wage or otherwise) who ran off to the North or the Heavens above. There's just a significant shakedown on your collected dreams and hopes. Added up over the entire span of humanity the cash value of these dreams and hopes seems likely to come to about twenty trillion dollars' worth.

So what of it ?

"Well, it will have to be accounted for", I hear you say. Certainly. Those who have borrowed on a dream will still have to make very concrete payments in service of their debts. They may find themselves in due time in that very unenviable position of having to sell their dreams to feed their kids. If you're a woman old enough to have children of your own you probably know precious well what I'm talking about. So what of it ?

They will. It's not the first time this has happened, it's not the last time it will happen. Dreams crash on the jagged shores of reality all the time, it is actually what constitutes reality, that's what it is : the conglomerated pile of everyone's dreams who ever in this world has lived. The conglomerated pile of everyone's crushed dreams. That's why we even care it exists. Without its uncanny ability to leave bite marks in the most adamantine of dream materials it would cease to be.

No government particularly wants to become entangled in any of this. In fact, nobody does. Everyone's increased and increasing ability to avoid furnishing the socially very valuable service of dreamcrusher is how the dreams ballooned so in the first place. If nobody is to be routinely told exactly what a worthless, pointless accidental and undesired item they are then certainly nobody's to be told they're welcome to dream into one palm, piss in the other and see which feels warmer to the touch.

The notion that the government will intervene with a 1/3 tax on all physical assets simply because that's how much everyone's dreams are currently short is exactly the sort of amusing silly that makes for a good pie in the sky story. Why should it ? Why would it ? A one third tax on all physical assets is roughly speaking the equivalent of foreign invasion. For the average American, Frenchman or Turk there'd be no difference between the case where a) the Russians, Germans or Greeks respectively invaded, and laid their respective countries to waste and b) the government takes a third of all their physical assets.

This is nothing any government or any state can do, for the very simple reason that it's the end of them, as such. The American Confederacy, the Napoleonic Empire and the Turkish Porte all collapsed once their governments either did or allowed others to do something akin to a third tax on all physical assets. The very point of the state is preventing this, that's what they exist for. The idea that it shall do exactly what it is there to prevent is much akin to thinking that one day your fridge will impose upon you a one third tax on all the food you hold in it. Well... logically the next step is throwing out the fridge entirely and simply taking your chances with normal food decay. It on average also claims about a third of all your food, or maybe less than that, but at any rate it uses up no electricity and takes up no space.

And so it hasn't happened, in spite of being well predicted and in the shysteryest of tones. It hasn't happened last Autumn, it hasn't happened this Winter, or this Spring, or sooner rather than later, or at all. If indeed it does happen it will happen in the same manner bladders empty while fully dressed : through sheer exhaustion of the will, through failure of the muscles keeping things together. It will be part of the collapse of the state, and entirely unintentional, undesired, unplanned and unhappy. Of course, stories about old men too weak to keep their urine in don't make for good soap box operas, there has to be fire and smoke and passion and deliberate evil to irritate the nerves and inflame the adrenals of mentally youthful soap box opera audiences.

Nevertheless : practical things happen for practical reasons. If daydreams don't happen, it's also for practical reasons. A good fresh slice of lemon is, they say, the best thing for curing one's growing inclination to indulge in molasses. I guess a lemon is a very practical thing.

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  1. I defy you to attempt and prove to me that the claim to reality of much of that 20 trillion is significantly worse than this. Go ahead. []
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7 Responses

  1. throw-away12`s avatar
    1
    throw-away12 
    Tuesday, 29 January 2013

    > 20 trillion comes to about three dollars per capita in a seven billion strong world, my ten million dollars probably puts me firmly among the 1%.

    I think you have the numbers wrong. It's 3000 dollars per capita. High quality articles though. I admire your BTC wealth. RE5PECT

  2. Mircea Popescu`s avatar
    2
    Mircea Popescu 
    Tuesday, 29 January 2013

    My bad, right you are. Fixed.

  3. 900 million MPEX shares trading around 0.00065 with the BTC at 19.8 it is means you're worth 11.5$.

  4. Mircea Popescu`s avatar
    4
    Mircea Popescu 
    Tuesday, 29 January 2013

    Ya, well, the article was published more than half hour ago.

  5. If all the markets 'crash', if the bond bubble bursts, if the Eurozone falls apart, will the world have one less apple tree?

  6. Mircea Popescu`s avatar
    6
    Mircea Popescu 
    Tuesday, 29 January 2013

    I guess it mostly depends on whether any really fat guys hang from one.

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