Inflation, deflation, economic regulation.

Tuesday, 28 January, Year 6 d.Tr. | Author: Mircea Popescu

All economic activity is a negotiation between the representatives of two sides, unmoved, eternal, inescapable. One side is "that which is". The other side is "that which will be".

The Marxist conceit, for instance, entirely rests on misrepresenting particular and conveniently chosen sets of representatives of these two transcendent sets as "capitalist burgeoisie" and "proletariat" respectively.i While the definition of the "parasite class" may be sufficiently large to correctly include one category, the actual proletariat as a representative of "that which will be" in the economic discourse is obviously both partial and defective. As such it will necessarily pretend to "come from the future" and be all "revolutionary" and so on and so forth - as far as speech is concerned that is ; merely as an empty vocal exercise to compensate for the quite painful missing parts, much in a manner an impotent man curses a lot. That's, fundamentally, your proletariat : a guy with an insufficient penis fixing the problem by doing lots of speaking on the topic of intercourse. In practice the system fails to work at all, and exactly for the predicted reason : as the proletariat isn't in fact a very good representative of "that which will be", proletarian regimes collapse under the weight of the technical and scientific backwardness they entail. The future necessarily happens in other places, as it were.

Even without this, or any other conceitii, the problem remains and is fundamental : you either eat your pie now, or save it so you may control tomorrow (at least under the limited aspect of having a pie to eat). It permeates life at all levels, it reaches in all nooks and crannies. Whether the orb spider comprehends "economy" in any sense, nevertheless whatever caught fly he eats today won't be in there to be eaten tomorrow. The spider regulates this matter transcendentally, which is perhaps the only correct way to resolve a transcendental problem : it's not his, it's his genes', the spidey itself is not much more than an automaton regulated deterministically by stuff happening much afore it was born.

Not so with people, of course, at least for as long as the freedom of choice conceit holds. People, being people, have to make a choice. And people, being people, aren't satisfied with merely making a choice, not in the slightest satisfied. First and foremost, if only rarely, they wish to know if they've made "the correct" choice, and thus is born economy. Obviously a "correct" choice does not in fact exist, all choices being equally capable of yielding results in the future and thus being, on the face of what Nature tolerates, equally the same one thing. And yet... it's not the same to the agent choosing, which of course is not the same agent after the choice as afore it, nor over the passage of any stretch of time. So how is a choice to be judged on such flimsy grounds ? Well... that's why economy aspires to be a science. The questions it aims to answer seem, superficially, to be of the sort sciences entreat. In point of fact however they are not, and that's how economy ends up tinged with a lot of psychology - which is no science, nor could ever be, for the deviliii himself doth not know the thought of man - and bundled with the so-called social "sciences", as if.iv

Second and for shame, they all the time wish to know what choices others made, and above that to limit and control the choices others make so as their own comfort not be much intimidated by the better if more personally demanding solutions implemented by foreigners. Thus politics is born, and in case you're wondering why all stable political systems degenerate, or in case you're wondering why a "United Nations" or otherwise global government arrangement is a horribly bad and utterly suicidal utopia : the only point of politics is to make the Flunker's Convention. It's named that in recognition of the lazy US schoolchildren, who noticing that their test results are normalised, so the top answer in the class receives the top mark, quickly realised that it is against their test-taking interest to have anyone give too good answers, or good answers at all. A top of the class will exist regardless, and why make it hard on everyone by forcing them to chase a real performer ? Better if nobody throws the curve.

That's the Flunker's Convention : that nobody shall learn, that nobody shall read, that nobody shall put any effort whatsoever into it, and let the teachers sort it out as best they can. After all it's they that are paid to sort school stuff out, not the students. So let them do just that, and earn their keep.

This is what politics is and was, and forever will be : a convention as to what is "acceptable" behaviour, which necessarily narrows down possible behaviour so that third parties are forced to forego direct economic benefits they may incur in exchange for saving effort across the board. In some circumstances this is a net positive proposition, in that the localised benefit is far exceeded by the global costs.v Even so, in other instances it is a net negative proposition, and as the matter of politics is neverending (as no politician to date stepped down saying "we've done everything worth doing, there's nothing left to do") sooner or later the practice of politics will run out of the first category and move into the second. As the costs (of opportunity) mount and the benefits dwindle, the people are forced into pathologicalvi behaviours which sooner or later become economically untenable, but much before that become quite fucking ridiculous. Which is why locals had been laughing at the US tourists for many decades by the time the US actually collapsed in a pile of the rubble of its own ridiculous political conventions.

So now, in this encompassing theoretical framework, we have the ability to meaningfully represent inflation and deflation. Inasmuch as the currency is a measuring stick for the relative values of "that which is" and "that which will be", inflation is a devaluation of "that which is" in favour of "that which will be", and across the board. The idea is that a future Bitcoin is worth a lot more in things than a Bitcoin's worth of things today are. Inflation is fundamentally an economic sign of optimism, and it's the natural result of the expansion of credit (which means strictly faith, placed in the future). What inflation says is : all you have today is naught compared to what you'll have tomorrow. It favours those who do (which is at least in part the proletariat) in spite of those who have ; it favours those who will in spite of those who are. It is consequently dangerous, as all optimism, and liable to be pushed too far, as all optimism, and in principle capable to doom us all. As all optimism.

Deflation, contrarily, is a devaluation of "that which will be" in favour of "that which is", its motto is "better an apple in the sack than a pineapple in the jungle". The future Bitcoin's worth of things is seen as not worth the mention, and the things themselves valued dearly, for what they are. What deflation says is : all you hope to one day achieve is naught compared to what we already have. It favours those who have in spite of those who do, and those who are in spite of those who will. It is economic pessimism, and as all pessimism dangerous, for it may yield depression, and with it paralysis and eventual death.

These two should be naturally occuring aspects of the same self-regulating, eternal coin. Unfortunately, due to the intercessions of politics, and its good (if unwelcome) sister economics, the coin isn't self regulating. The governments everywhere imagine, and clueless economists everywhere afirm as it were true, that merely behaving as if you were optimistic will not only make you optimisticvii but actually improve the future. Does this sound kind of stupid, once laid bare ? Sure. In point of fact all governance is, presently, nothing more than an exercise in implementing the Law of Attraction, as if it were a law or something to be taken seriously rather than a laughingstock. We have in fact degenerated intellectually, as a cultural space, to the degree that ideas the barbarian pagans our christian forefathers laughed at for being unrefined and primitive would decry and derride as unrefined and primitive are nevertheless our secretly held, deeply entrenched beliefs. So dear, in fact, that you don't dare say it out loud, for superstition, and neither does Obama, or Krugman, or Bernanke, or anyone. Children to the children of our children, pets to the pets of our pets, slaves to the slaves of our slaves, that's us today, that's what we've been reduced to, not many centuries hence that slavery was first enforced.

These are the bitter fruits of politics, which is not a science, akin to the bitter fruits of learning to not throw the curve, which is no topic of teaching in any school in the history or geography of Earth and nevertheless the only topic in which white kids today receive any sort of passible instruction whatsoever.

Or, as the other meaning of the word "regulation" goes, we're fucked.

We're well fucked.

  1. And various nuts like say Althauser imagine this is somehow a stroke of genius. Putting new hats on old lions and bears, this is genius now. God help us. []
  2. As if such were possible at all. []
  3. This devil reference is not, as you may imagine, spurious, a testament of the very colored manner in which I tend to write. It is in fact a learned reference, very much in tune with seven centuries of meditation of the topic of "whence science comes". Review the scholasts. []
  4. Not only aren't they sciences, much like psychology isn't a science, not only aren't they ever going to be a science no matter what happens, much like psychology isn't ever going to be a science no matter what happens. They don't even seem, in any way and to any degree, scientific. At all. Which is something that both psychology and, to a larger degree economy, at least do manage. []
  5. For instance, if nobody steals, the savings realised by not having to buy locks or anything of the sort far exceed the benefits of all the thieves added together, which is why isolated communities always move towards a "no stealing" reality. []
  6. Anything not natural is pathological, for the record. This includes your tendency to piss in a white bowl and in a white bowl only - as far as we're judging your behaviour from an ideologically neutral perspective you're quite the perverse sickie. This would be why there exists no insanity outside of the cultural norms of the individual's group, at least not in the psychology that still aims to functionally identify with a science. []
  7. An idea pop psychology shares, for that matter. []
Category: Actiuni si Optiuni
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9 Responses

  1. A hypothesis:

    Certain processes (e.g. what remains of Moore's Law) help to mask true inflation. That is, a given stick of SDRAM costs $X today and 0.6*$X next year, whereby without parasites drawing blood, it could be $0.2*X. With this process carried over to anything the expense of which is tied to that of electronics (all of industry.)

  2. Mircea Popescu`s avatar
    Mircea Popescu 
    Tuesday, 28 January 2014

    This is certainly a point of fact, due to the "allow substitutions" approach to fairytale inflation as reported by the USG.

  3. “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it”
    ― Frederic Bastiat

  4. We're all fucked, you mean Bitcoin is doomed?

  5. Mircea Popescu`s avatar
    Mircea Popescu 
    Tuesday, 28 January 2014

    @Chett Except plunder always was a way of life for men. I've yet to see a single apple with an owner's name written on it by nature.

    @James No, I mean out of about a billion people living in the "Western World" however you decide it, a million surviving in some sort of recognisable form will be nothing short of a miracle. Whether a tenth of those happen to be all those who ever owned a Bitcoin is really irrelevant at this scale.

  6. But thats the point, the theory functions even if we are talking about apples or mastadon teeth or sea shells.

  7. Mircea Popescu`s avatar
    Mircea Popescu 
    Tuesday, 28 January 2014

    Right. All plunder.

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