Sunday, January 23, 2022

What is Blogging For?

How do I tell if this is working?

Bit of a huge puzzle. Slightly enormous. While I work it out, let's devastate some more Moldbug. Don't have to think about this sort of thing too much, it happens naturally.

"got it right when he said that Adam Smith (his classical-liberal foil) was right about everything—given Adam Smith’s assumptions."
"Adam Smith is right given the assumption that the world is one giant country."

Big Brother is mad that you might be reading Adam Smith. 

Smith's "assumption" is you're not literally at war. Voluntary trade is always beneficial for both parties unless one of them is an idiot, who will get jacked. A fool and his money are soon to part, praise be. 

What is the one thing trades with Big Brother never are? Voluntary. Hence the cope.


I suppose I have to check real quick I'm not misreading Smith.

"Neoclassical economists emphasise [sic] Smith's invisible hand, [...] and classical economists believe that Smith stated his programme for promoting the "wealth of nations" in the first sentences, which attributes the growth of wealth and prosperity to the division of labour." 

...those are the same thing you idiots. Have you tried hiring economists who don't have crippling brain damage?

Division of labour causes the invisible hand. Everyone knows their own job and what they need for it, which they then demand, which causes a sum of pressures which you know as the market. Turns out, as per Adam Smith, nothing exists which is even remotely as effective for organizing an economy as this sum of pressures. 

Division of labour is inevitable.
Unless you are personally the top expert at every job and have up-to-date knowledge of all the relevant inputs in all those jobs, you don't know everything you need to know to plan an economy. You have to leave the planning to someone else, which we've just proven can be nobody. By process of elimination (Solomonoff induction) it's the invisible hand, the invisible hand, or the invisible hand. The only question is whether you're leaving tacks and acid on the things the hand needs to pick up. You can leave broken glass all over stuff and make the hand's job harder than it needs to be, or you can leave it alone.

Or, in long, Mises' calculation problem.

Or, in short, mind your own damn fucking business. Turns out "busybody" is a absurdly mild euphemism for Satanic Narcissist. 

E.g. it's not like divorce-free (real) marriage was priced out of the market, it was banned. Why? Because they're afraid the price of real marriage will rise above that above fake no-fault-divorce marriage. And they should know, shouldn't they? That's a Conquest #1. 


Big Brother particularly hates the invisible hand because it renders them redundant. All the things they say can only be provided by the Oedipal Big Brother can in fact be provided by voluntary contracts. This is a real problem. What camouflage can the Potemkin Parasite Village use if you're supposed to privatize all these services? 

Result: California is already having brownouts, and its water is like 80% powered by this one nuclear plant, which they can't rebuild because California and is scheduled for decomissioning in two years. Have fun! 

Reminder that leeching off a parasite is not only not-wrong, it's your duty and privilege. If your ship has a rat problem, develop a rat pie recipe. They're rats so this is nontrivial, but it's not impossible. 


You were always at war with Big Brother. For him, declaring peace is literal, physical suicide. So I suppose it's true that Smith's theories don't apply to Big Brother. 

"Both List and Smith were right about everything."

Hegel was right about synthesis, but if you do it correctly you find they're both wrong about everything, not right. At best they both condemn you as abomination. In this case Smith is already the synthesis, and List is some has-been who will be forgotten by history. Why not get a head start on history and forget him right now? He might be right about something but you can get all the good stuff elsewhere.

Ironically I will recommend a Moldbug piece.
If you don't get it yet, read and then you're done. Real, non-communist economics is ultra easy. Takes what, a week? Maybe spend another couple thinking about what you've read? It takes longer to learn algebra.

"We must concede the possibility that they used to be right—for the mid-20th-century."

This is what your brain looks like on high-A.

"If different parts of the world have divergent interests, Adam Smith is no longer right: parts can gain at the expense of other parts, winning in a negative-sum game."

This is what happens when you let your brain get eaten by a responsibility-atheist worm. You can't tell the difference between defection and cooperation anymore.

Why would Big Brother want you start believing defection is a kind of cooperation? Hmm. Truly, I am stumped.

"“MMT” is right given the assumption that citizens are forced to save in the state currency."

Maybe. I won't even pretend to care, since it has "forced" right there in plain English. 'MMT is right given endemic coercion/banditry.' Got a bigger problem there bud.

"“MMT” is no longer right: the “inflation tax” it depends on is straightforwardly evaded." 

By "inflation tax" Moldbug is referring to the fact that, as a matter of accounting reality, a money-printing sovereign destroys every dollar collected in taxes, and prints every dollar in the budget. MMT depends on taxation matching inflation so you don't get, you know, inflation of prices.

This actually straight counters the taxation-by-inflation, and Big Brother doesn't draw a paycheque, so MMT works exactly as well as Communism. Probably because it's literally Communism. What are they stealing? Every dollar in the country. Haha, oops. Sometimes you're allowed to have some of them back, because it's embarrassing if grocery shelves start showing up empty. Haha! Oops!

With fiat currency, you can tax too heavily too, and get deflation. Is it plausible that every ill ""economists"" attribute to deflation is in fact a tyrannous taxation level? You know, it is. Well, nearly every one. 

"Governments are good at enforcing standards."


Oh god he's serious


"Neo-chartalism remains a special case of Austrian economics."

'I have been smoking the good stuff.'

"Here is a much simpler model of the economy. This model has exactly one financial actor: [Big Brother]. [Big Brother] is a [giant unchallenged pile of guns] which uses shares of its own stock as its [victims's] only store of value. As a stand-in brand for this "[bully]" let’s use one of my ["]favorite["] companies—Microsoft."

Sophism immediately fails against almost every form of due diligence. Knowing the art of definition and rectifying the names is a real easy one, though. 

 "If delivery is not made, Bill Gates will come to your house and install Windows 95 on your wife. You were warned, [peasant]!"

Cool, I warn you that if you don't give me your wallet, I will crack you over the head in the process of taking your wallet - it's much easier if you're not wiggling around.

You were warned! That's how this works, right?

"Let us model the USG (United States Government) as a sovereign corporation—like Microsoft, but with guns."

Neat, it's in violation of most SEC regulations and hasn't a single hope of meeting GAAP standards. But, you know, with guns. When do we start the sanctions and fraud proceedings? Remember we're just using the corporation's own rules, not trying to impose non-Communist regulations on the leviathan.

Now if someone decides to install Linux they get shot. Who's going to stop them? God help you if you prefer win7 to win10. 


"But if Microsoft were minting new shares to fund ongoing operations, Microsoft fans like me would worry!"

It's easier when you have a product and aren't just a highwayman.

As above, ""MMT"" says: you should tax exactly as much as you print, so the money supply stays the same. Or, at best, inflate a little to match ongoing wealth increases, so prices remain stable instead of going down. 

Prices going down is bad something, therefore bad. Peasants have a hard time remembering what prices are supposed to be if they keep changing? Awesome, really nailed that issue. Way to go MMT. I'm sure you're not just Keynes again, post-hoc rationalizing what Big Brother wanted to do anyway!

Admittedly under strong deflation you get regular pay cuts, even if your real wages are going up, which is annoying. Grassmonkey not suited to concrete jungle.

"On ["]fixing["] the money supply, we notice something odd: the whole economy collapses.

This is because the dollar financial system has 100 times as many promises of dollars, as actual dollars."

It's so weird that when the market sees 100 dollars and you outlaw 99 of them, bad things happen. Truly, stumped again.

Look startling your friends can be an amusing prank, but if you startle the market you're in for a bad time. If you enjoy bad times then I suppose go right ahead. I'll be standing over there, out of the way. 

Fun fact: it's impossible to outlaw hard currency, because that would mean outlawing all wealth. 

You can always buy e.g. a factory, and that factory is always going to be able to produce something you can sell for money. The classic, aristocratic example is to buy the land the factory is built on. You might have to retool the factory from time to time, but what is building a new building but retooling the land? 

"Real estate" is modernized landed aristocracy hidden at one remove by claiming to buy the house the land is built on, and it pays rents in almost exactly the same way ye olde aristocracy did, except if your tenants fuck up you can't tell them to stop and it hardly hurts your investment anyway. You're allowed to buy only the land, and not the land's people. Fuck people, right guys?

"We see that naive application of Austrian economics does not promote the public good. Rather, it looks more like some sort of demented “Hunger Games” sadism."

Big Brother doesn't want you reading Austrian economics. Instead Big Brother wants to pass off Keynesian economics as Austrian to discredit the best variety of German. Big Brother is jealous and scared you'll realize you're adopted.

"There exists this odd “semiprivate company” called “FDIC,” which, in a bold act of statistical fallacy, purports to “insure” all these promises."

Tiresome. As we found out in 2008 if you didn't already know, the Fed backs these promises. USG will go to nuclear war before allowing FDIC to fail. Just remember FDIC isn't even slightly private, and pay your tributes and/or protection money, unlike Bear Stearns and Lehman Brothers. 

Made worse IMO because he just admits the above later. If you say something you don't believe, it's called "lying" if you call your own lie you're just wasting everyone's time. (Unless it's really really funny. But, in that case, do standup, not substack.)

"Imagine a planet on which the standard money is gold, on which there are 100,000 tons of gold, but 10 million tons of promises of gold. Does this, like, make sense?"

Imagine a world where there's a standard of money and 99 out of 100 transactions use something else. We've standardized on water, using "barl" tokens to represent it, but if you want to buy milk you need an osmium coin that is not backed by water. 

If you want to talk about what should be, it helps if you start by describing what's actually there.

Unless you're running a grift, of course, in which case neither of those things are relevant, and folk epistemology is extremely relevant.

"Monetization of all securities is portfolio-neutral"

Sure, and we can just formalize the CIA's ability to defraud American elections. "You get to vote in whoever you want, unless the CIA vetoes you." Spiffy. I'm sure there will be hardly any rioting at all.

The military will "hold" to its "oaths" if you straight-up revoke democracy, right? I'm positive you can count on the national guard to follow orders and suppress the violence.

"Your broker just automatically sold everything for you and everyone else—but, magically, you all got the “market price.”"


Says "magically" right there in plain English.

"It does leave the government owning all the companies. This is fine. In general, the current management can be left in charge."

Moldbug seems to be accidentally correct here - it leaves the government owning all the companies because it's a Fascist country and the government already owns all the companies.

"These markets will even have free-market interest rates, a long-lost feature of capitalism."

In reality you can't revoke interest rates. Various "usury" laws have tried, with unequivocal failure. All you can do is confiscate the interest and give it to a third party. Someone is earning all these interests, the question is who, exactly. 

Probably not the person buying the loan, and often not the one selling it either, which makes for some darn perverse incentives. Someone started waving a (tiny) knife at the invisible hand, and now everyone is spattered in economic blood.

"In a static analysis, this transformation works.[...]In a dynamic analysis, however, it does not work."

'Actually everything I just said was full of shit. Thanks for reading!'

"How is new money created? In two ways: one, by private and government borrowing; two, by capital appreciation (“asset-price inflation”)."


I would bother to explain, but how about 'this writer has a known history of being full of shit' for a proof? Gonna escalate you to the "extraordinary claims" section, bud. In this case, the claim being he's not full of shit this time around.

Come to think this earlier part is wrong too:

"Since a normal person’s propensity to consume is a function of their personal net worth, not the distribution of their investments, they do not change their spending patterns."


"And when the government itself borrows, this is straight-up money creation."

In magic fantasy land, both borrower and lender see the loan as an asset. The borrower sees dollars, which are assets. The lender sees a promise, which is an asset. Everyone wins! Hooray!

...perhaps this is why you never let peasants at the financial instruments any more than you give your 2-year-old some matches to play with. 

In reality even peasants can at least sometimes tell the difference between an asset and a liability. See also: liquidity. "I just bought a house (giant asset) therefore I'm gonna spend more! Don't have to save for a house anymore!" 

Smoking the good stuff.

"Since the monetization turns all capital into dollars at the market price"

I thought I was joking about the whole standup suggestion.

No for real this is hilarious, do whole posts of this.

Apparently there's no good web page on "burying the corpse," a rather colourful way of noticing that trade volume directly affects the price of stocks. 

In theory, if you drive up a stock by buying up say ~50% of the available units, you just posted huge profits. (Exactly the way Moldbug's plan is "portfolio neutral.") You bought 100,000 shares, starting at $10 and now they're all worth $50! Wow! Average price you paid: $30! Hot damn, $20*100,000!

Of course if you drop ~50% of a market cap on the market at once, the price will make rocks look laid-back. The money has to come from a person, with a brain, and if they're dumb enough to buy it back at cost they lost all their money already and aren't trading anymore. 

In theory you should be able to exactly extract all the money you put in, making it a wash less transaction costs. In reality you make substantially less than you put in, because you don't sell a stock when it's 1c over your reserve price. You have to substantially overbid the current holder, then sell it back to them at their reserve price. 

Stock price is path-dependent, and this is correct.

"anything that raises the price of capital increases the number of dollars—and is as good as paying people in dollars."

Yeah it doesn't cause inflation or anything. 

Economists' motto: real wealth isn't real! Only accounting entities matter!

If you pay someone in dollars, it's in exchange for wealth, like corn or something. Unless you're doing Moldbug's plan (or any variant of MMT) in which case you're just giving money away because you have head cancer and a money printer.

"manipulating interest rates can create arbitrary capital appreciation. This translates into people spending more money because they are using their house or their index fund as an ATM"

Does it now. And beyond meats is a profitable company that actually sells product. Sure.
It's not like nobody buys fake non-meat, but it's a negligible niche market. Overrepresented in the chattering classes, not represented by anyone who has to work instead of living off rents. Plus a bunch of the chatterers are plain lying. Who is even going to call them on it?

"and (absent natural disasters and other physical correlations) “the market” never goes up or down."

Pretty sure it goes down, because you have consistently more goods chasing the same dollars. New industries are formed, which means new companies, which means new stock. Where do they get the money for their IPO? Existing stock has to go down in price. 

No. The problem is that under true hard money, deflation instantly reveals it when Big Brother fucks with you. When deflation stops all of a sudden, you know new wealth creation has stopped. Why has it stopped? It will be super obvious. That, or Big Brother confiscated (and squandered) the wealth. 

If prices actually start to go up under a hard money regime, god help Big Brother. 

This is why Big Brother comes up with fiat currency. The above two paragraphs do not constitute mixed-state quantum mechanic states represented by partially-differentiated infinite matrices. Why there's hardly any tensors at all. Meaning: Big Brother can see it in advance without any special training.

"But capital appreciation that favors the rich, as compared to borrowing that sends dollars to schoolteachers or construction workers, is more dilutive while being less inflationary—since the propensity of the new money to be spent is generally smaller."

Opposite day. 

What actually happens is the Nazi concentration camp guards and the construction workers tend to pay down their mortgage. Banks hate it when you pay back the loans, because they poofed the money into existence and when you pay it back it poofs out again, without earning them any further rents. Result: this "inflation" is almost purely neutral. The money is instantly "taxed" back out of the system. I paid back my entire student loan the instant it started charging interest, and I'm not 100% sure why this was allowed? I just had someone else's money for a while, for free. Adjusting for a half-decade of inflation, I was paid to have someone else's money.

Sure, this isn't the usual borrower behaviour, so they can get away with letting other borrowers subsidize behaviour like mine. Regardless, this is why they always want you to have a 30-year mortgage or whatever it is, because that maximizes the interest - which, if it wasn't clear, doesn't poof out of existence upon being paid. You give it to the bank to honour them for being allowed to poof money into existence. (What's the point of privilege if you can't extract rents?) 

(Hack: get the 30-year mortgage but privately plan to pay it back within 10 years. Don't buy so much house this is unfeasible. You can upgrade later - with another 30/10 year loan, if necessary.) 

Big Brother also hates it, because every repaid loan causes deflation, which fucks with their inflation racket. 

Hack: always take every loan, but pay it back before it starts charging interest. The longer you can roll it over, the more you hack the system. Even if you do have to pay some interest, unless it's credit card 20% interest you're seeing a net gain.  

Inflation, like every lie, makes the perpetrator vulnerable. You can and should jab them right in the chink. It's your privilege and practically your duty.

P.S. By 'inject liquidity' they mean too many folk paid the loans back (or defaulted) and now deflation is threatening to trigger a panic, so they need to somehow expand the loan market. Since they poof the money into existence, supply is already infinite and loans are limited only by demand. They can use price fixing on interest rates to make loans cheaper and thus expand the market. 

Again: what's the point of privilege if you can't extract rents? In extremis, don't be surprised if loans become mandatory, to pay off banks. E.g. you have to go to a university to get any job, which is allowed to always charges you more than you can afford. 


"In olden times, generic unskilled labor was much more of a thing."

Was it? This writer is known for being full of shit. Often self-aware, no less.


"Giving free money to the rich to spend on expensive toys from China does not create any particular labor demand in Gary, Indiana or Redding, California."

Err, humans will invent jobs when none exist.
If they're allowed to and aren't whipped for being non-idle.
Marx was (nearly) right about the labour theory of value. All wealth is fundamentally an expression of labour. If you have underexploited labour, you will soon have more wealth, regardless of what the accounting tokens are doing.
If they're allowed to and aren't whipped for being non-idle. It's important, so I said it twice. 

"As the Fed pulls back on its bond purchases and lets interest rates rise,"

Interest has been negligibly different from 0 since 2008. There was a bunch of talk of negative interest rates. Good luck with that - now is the worst time since 2008 to raise interest rates. 

"(and crypto!) prices actually drop."

This guy offered us bitcoin at 17 cents. I could have bought some. Didn't. Neither did he.
Difference: I am straight up admitting it, he's still doing BTC prognostications. 

I guess I am too: if interest rates rise, more money will flee to BTC, which can't be stopped without America becoming openly a Fascist terror state. Pretty sure the masters are too pansy to actually pull the trigger. 

Of course if BTC is banned and the ban is enforced, then yes crypto will drop in price. America will functionally see a negative price. This isn't an economic thing though, this is the bully flailing his fists around and managing to be dangerous only because he has eight inches on you. 

It's not implausible that BTC will drop. 

Note that the full quote is full narm:

"Capital appreciation will become more austere because capital (and crypto!) prices actually drop."

Prices will appreciate less because they're going down. Colours exist because of blue. Girls are sensitive because they can feel a lot. Fire is hot because oxygen combines with carbon.

"but global imbalances in the supply of commodities and other goods with inelastic supply"

Finally we stop talking about abstract accounting ghosts and spectres.

Remember when "John Law" knew that money is just another commodity? I 'member. Remember when "John Law" knew money is supposed to have an inelastic supply and the whole problem is that it doesn't?

Hey, let's talk about that guy for a sec.

"in which the government has had to finance itself by inflation—including the United States, with gold confiscation—it has had to prosecute any harder moneys out of existence by intrusive-governance techniques."

Hey, that's not wrong. Surprising!

"Microsoft can create or destroy its own stock as it likes—just as a neo-chartalist sovereign corporation can issue shares (“borrow”) or cancel shares (“tax”)."


"In a sane financial system, not everyone needs to be betting all the time."

Nearly true, but not quite. It's true your retirement doesn't have to be stock, but all forms of wealth are speculation, even hard, inflation-proof wealth like land.

 "This is because the whole system loses money. The whole economy is unprofitable. The whole country is unprofitable—and it is unprofitable because it sucks. This is the fundamental cause of stagflation."

Pretty close! The country is unprofitable because reserve currency status allows it to just be rich for a living. Due to democracy, the worldwide theft of assets leaks, and regular Americans get to enjoy some of the bounty. Although less all the time as a) the world slowly figures out the scam and b) the owners progressively plug more leaks.

"In stagflation, the patient has an IV and is also bleeding out. The more blood goes in, the more blood comes out. The real problem, though, is when the blood starts to go straight from the input to the output—without getting to the organs that need it. Which is what it means for an economy to suck."


We're talking wealth rather than dollars, but close enough! The Fed basically works by accounting trickery. You draw up a chart of your patient's bloodwork, then, like a witch doctor, fiddle with the chart as a way of changing the patient's pH balance. Americans are dumb enough that this in fact changes the pH - because they guzzle calcium hydroxide or something. "Oh no, my throat is burning now, darn those gyews/wreckers/white men!" It's okay, just guzzle some vinegar next, you'll be fine. "OW!" (Why are they still listening? WTF? Anyway my kickback from the vinegar factory just arrived, so...)

"Two, the Fed has pushed the dilution handle so hard that serious price inflation is actually happening."

Indeed! (Talk a buried lede tho!)

P.P.S. Was it obvious? Americans benefit from Cantillon effects when it comes to balance of trade. They're "losing" money because it's being printed and then exiting the country - usually after first being spent domestically a few times. The incentive to become a reserve currency is obvious. The drawbacks aren't worth, though.

P.P.P.S. No-divorce marriage was banned because no-fault marriage was, previously, banned. Make adultery illegal, yeah sure that's merely agreeing with what it says on the contract. Making fornication illegal is fuckin' dumb. And now we're all, literally, fucking dumb. 

P.P.P.P.S. I'm pretty sure there is no such thing as atheism in reality. If you worship nobody else, you worship Satan, as a matter of logical necessity. Ironically, Christians, who are already 80% lower Satanists, were right about atheism. You can take one to know one, I suppose.


BSRK Aditya said...

> How do I tell if this is working?

I have difficulty understanding your take downs. Can you instead state the thesis you are refuting rather then quoting? I have not made the inference you have.

BSRK Aditya said...

I get that you have some heavy reservations against what's being posted. But I don't clearly understand what they are.

1. Can you explain these reservations in a manner that Moldbug will be able to understand & avoid?
2. Are you willing to pay Moldbug to do exactly that? He just might be willing to accept.