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This is one of those stories that should be legend, but for some reason, I hadn’t heard of it until today.

Italian woman decides to hitchhike through the middle east wearing a wedding dress to promote peace, to prove the essential peacefulness of Islamic society, and to demonstrate the fundamental compatibility of the Muslim and European worlds.

She barely gets into Turkey before being gangraped and murdered.

It’s a tragic story, and I’m not making light of it. No one “asks for it,” not when it comes to rape and certainly not when it comes to murder. But her story illustrates an important lesson that our elites need to re-learn: reality does not care about you and it certainly does not care about your ideals.

Tragically, this woman was killed by her ideology. Death by utopianism. It would be exponentially more tragic to watch whole civilizations die by the same method.

Once upon a time, a monetary system’s unit of account was trusted to value goods, assets, and liabilities because said unit was tied to or backed by something finite and intrinsically valuable.

After Bretton Woods, the American dollar is backed by nothing. It is its own standard of valuation, allowed to exist as such because the people who say so work and live in big buildings guarded by men with guns.

In the electronic age, however, American dollars—the green, rectangular strips of paper with dead presidents on them—have amusingly and ironically come to be a new sort of intrinsically valuable item. Not everyone accepts the swipe of a debit or credit card, but everyone accepts those green rectangular strips of paper, from L.A. to Moscow. And these strips of paper are not only intrinsically valuable but they are, in some sense, in finite supply. American dollars can thus be understood—and often are understood by the public—as a new (debased) form of gold; electronic transactions are representative currency, each debit card swipe or electronic deposit representing some number of green papers with dead presidents on them.

Inevitable, then, that the electronic age would necessitate the removal of cash from the world monetary system, just as the removal of gold was necessary in 1973. The total politicization of money—which is necessary for infinite neoliberal growth—cannot suffer any unit of account in finite supply.

Thus the neoliberals are already musing that one outcome of negative interest rates may be a punitive tax on cash or, at some point, an inability to convert “dollars” into green slips of paper at all, just as today it is impossible to convert dollars into gold.

Martin Sandbu writes at Financial Times:

But what really matters is what the public wants to do. JP Koning nicely explains the “hot potato effect” of pushing central bank reserve rates below zero: banks will bid down rates on other assets in the financial system as they try to swap reserves for cash. Ultimately, they will be forced to lower rates on deposits below zero as well, so that customers will have to pay to keep their money on deposit. This is where the liquidity trap is really supposed to snap shut: will there not be a run for cash as depositors refuse to pay banks to hold their money?

But consider two things. First, it is not as if depositors as a class actually have a legal right to convert all their money to cash as it is. You cannot present a debit card at the Bank of England and demand cash. Indeed, even your own bank limits how much cash you can withdraw, as Frances Coppola has pointed out. Just read the fine print of your account terms of service.

And how could private banks honour mass withdrawals of cash even if they wanted to? No law provides for the central bank to swap client deposits for cash; only central bank reserves. And despite the huge growth of reserves in recent years, these still amount to only a fraction (about one-fifth in the UK) of bank deposits. So, to honour customers’ demands, banks would have to borrow more reserves from the central bank, which could impose terms as onerous as it wished.

And Frances Coppola at Forbes:

Of course, those who think that the only real money is the green paper in your wallet (or better, shiny yellow metal) will no doubt claim that refusal to allow deposits to be converted into physical cash is a denial of fundamental property rights. But the legal position on this is opaque to say the least. Is paying for a meal in a restaurant with a bank card “less good” than paying for it with physical cash? On the face of it, there is no difference: the nominal amount is the same in each case. If the restaurateur has to pay a fee for accepting a card payment, then cash is more valuable to him – though if accepting cards means he gets more business, electronic money may still be worth his while. But if the restaurateur can accept bank debit card payments for nothing but has to pay a fee to deposit cash into a bank account, then electronic money is worth more. Anyway, the convenience of electronic payments directly into his account may still make this form of money more valuable to him than cash, which has to be physically taken to the bank during the working day: time is money for a busy restaurateur. And the convenience of making payments with a bank card rather than carrying around wads of cash may be attractive to the restaurateur’s customers. The supremacy of physical cash is by no means clear.

In fact because of its prevalence in the modern monetary system, it would be dangerously destabilizing to regard electronic money as somehow “inferior” to physical cash. Five dollars in e-money must be equal to five dollar bills. Anything less would undermine the electronic money that is used for the vast majority of transactions and makes up almost all liquid savings. So provided that the bank still permits money to be withdrawn in electronic form, refusing to allow physical cash withdrawal cannot break the law.

This could have far-reaching consequences. The monetary policy of the last few years has been hampered by the supposed existence of the “zero lower bound”, at which (it is assumed) everyone would opt for physical cash instead of bank deposits and bonds. We already know that the lower bound (if it exists) is actually slightly below zero, since it is the point at which the cost of negative rates on deposits and bonds starts to exceed the cost of holding physical cash (vaulting charges, theft risk and so on). But if investors simply cannot obtain large amounts of physical cash because banks won’t issue it to them, the slightly-below-zero lower bound cannot bind. In which case negative rates could be very negative indeed and no-one would be able to do much about it. There would be no need to abolish or tax cash, as Citi’s Willem Buiter suggests. It could simply be ignored. Welcome to the negative-rate universe.

The “dollars” in your bank account mean something, we feel, because they are convertible into a finite, intrinsically valuable resource: gold once upon a time, and now, green slips of paper that will allow you to buy commodities in every country on the planet. But there are clearly forces and individuals at work that would like you not to be able to convert dollars into anything—they would like to see “dollars” existing only invisibly on a bank’s server, not circulating materially, freely, and thus less susceptible to any unwanted market feedback. 

 

 

Spengler and Israeli Defence Minister Moshe Yaalon both agree that partitioning Syria (I would include Iraq) is the best option.

“Unfortunately we are going to face chronic instability for a very, very long period of time,” [Yaalon] said. “And part of any grand strategy is to avoid the past, saying we are going to unify Syria. We know how to make an omelette from an egg. I don’t know how to make an egg from an omelette.”

Ram Ben-Barak, director-general of Israel’s Intelligence Ministry, described partition as “the only possible solution”.

“I think that ultimately Syria should be turned into regions, under the control of whoever is there,” he told Israel’s Army Radio, arguing that Assad’s minority Alawite sect had no way to heal its schism with the Sunni Muslim majority.

“I can’t see how a situation can be reached where those same 12 percent Alawites go back to ruling the Sunnis, of whom they killed half a million people there. Listen, that’s crazy.”

And the money quote, from Yaalon:

Referring to some of the warring sects, Yaalon added: “We should realise that we are going to see enclaves – ‘Alawistan’, ‘Syrian Kurdistan’, ‘Syrian Druzistan’. They might cooperate or fight each other.”

Spengler believes that they will fight each other regardless but that the fighting will be less violent and less likely to spread to more strategically important regions if Syria is partitioned into ethnic –stans.

As I wrote a few days ago, partition is necessary in Syria (in Iraq as well), but it’s only half of what needs to occur if the goal is regional stability. The other half is that each –stan needs to participate in a larger corporate governing structure. On its own, Kurdistan, Druzistan, Alawistan, or Assyristan simply does not have the resources—material or demographic—to sustain its own development. On its own, each –stan is destined to become addicted to international welfare, a protectorate in all but name. What is needed is for each ethnic state to be satisfied with its own regional moral rule, so that together they might devise ways to pool their economic resources: a corporate board, representing each state, that controls taxation, international trade, and infrastructure development but absolutely nothing else.

The idea is pure fantasy, I admit. The massively exogamous, out-breeding Northern and Western Europeans haven’t found a way to do it, so there’s no chance the consanguineous Persians and other inbred Islamic Central-Asians are going to do it (inbred used here in a purely descriptive, non-pejorative way). But Syria and Iraq are both in ruins, they’ve hit rock bottom as nation states, so these are natural regions in which to test the idea of patchwork, corporate-oriented governance.

 

 

Via Richard Fernandez, Real Clear Defense reports on Ash Carter’s budget- and policy-setting agenda for the coming post-Obama years. It is an agenda that continues to downplay the necessity of large scale combat operations (“boots on the ground”) in favor of cutting edge technology and surveillance. More evidence, then, for the theory that Gays and Women In Combat Units is a sleight-of-hand maneuver.

For a two-term president issuing his last federal budget that was dismissed before it even hit the Hill, the defense budget rollout has received unusually heavy coverage. This is driven mostly by Secretary of Defense Ash Carter’s unveiling of the “Third Offset” strategy and its official launch and inclusion in the 2017 request. Put simply, the new strategy is an attempt to offset shrinking U.S. military force structure and declining technological superiority in an era of great power competition—a challenge that military leaders have not grappled with in at least a generation.

The third offset investments fall into six targeted areas: anti-access and area-denial, guided munitions, undersea warfare, cyber and electronic warfare, human-machine teaming, and wargaming and development of new operating concepts. Much of it is weighted toward the Air Force and Navy.

The Army and the Marines will continue to train the grunts, but this latest defense budget seems to continue the trend toward putting fewer grunts in combat.

Then there’s this, from Ash Carter himself, admitting that an increased surveillance budget is very much on the agenda.

Now, at any time, if deterrence fails, then we’ll have a force that is big enough that would defeat or deny an adversary in one region in a very large multi-phased joint campaign, and have the capability to simultaneously deny an opportunistic aggressor in a second theater from reaching their objectives or imposing extreme costs on them at the same time.

Now, we concluded that we were pretty good in our force structure in that regard, with one key exception, and that turned out to be intelligence surveillance and reconnaissance. For all of those of you in this business, you know you can never have enough. It’s a constant guess. And no matter where you end up, you always need more. So we’re probably going to be — you’ll see on Monday that we’ll probably be adding more in that regard.

And later from the same speech, more on the high-tech, low-grunt ethos of future warfare:

We [need to] make significant investments in our nuclear enterprise; new space capabilities; advanced sensors, communications and munitions for power projection in contested environments; missile defense; and cyber capabilities. We are also investing in promising new technologies, including unmanned undersea vehicles; advanced sea mines; high-speed strike weapons; advanced aeronautics; from new engines to new, different types of prototypes; electromagnetic rail guns; and high-energy lasers.

Innovation on its own is useless. Who gives a damn if Edison or Tesla can electrify things in their laboratories? What matters is that they can deliver electricity to millions of people across thousands of miles of varied terrain. Who gives a damn if two brothers can get themselves in the air for a few minutes? What matters is getting everyone in the air for hours on end.

Innovation is prologue. The story that matters is what happens once innovation is socially implemented. The Chinese invented print before the Europeans, but the Chinese never figured out what to do with it, which is why Europeans wound up ruling the earth and the Chinese didn’t.

Innovation is hard, but social implementation is harder. Whether we’re talking about dams, interconnected roadways, the internet, or space programs, what is needed is not only a few nerds to figure out how things work in theory or in labs but also a massive concentration of resources to fund a large-scale implementation of the things that nerds figure out.

Contra libertarians, a central tax-levying state power has historically proven to be an efficient means by which to accumulate money for funding the social implementation of innovative technology. (However, contra progressives, private companies have also proven themselves capable of accumulating enough wealth to scale up their innovations and spread their use.)

Of course, the problem with a central tax-levying state is that the state is not only capable of delivering tech and public utilities en masse but of delivering law en masse. The accumulation of capital that calls itself Time Warner can spread internet connection from New York to California but it cannot tell people living from New York to California how to educate their children, how to run their businesses, or what substances they can’t put in their bodies. In contrast, the accumulation of capital calling itself a State or Federal Government may be capable of ensuring that everyone from New York to California has drinkable water flowing into their homes, but it can also dictate to people living in those territories how to educate their children, how to run their businesses, and what substances they can’t put in their bodies.

State governments built interstate highway systems and put men on the moon. Only the loons at GMU’s Economics Department will tell you that centralized state spending is always and necessarily wasteful and inefficient. Taxes can pay not only for the nerds who innovate but also, and more importantly, for the amassing of resources and infrastructure needed to implement innovation on a large scale. But states, unlike private enterprises, also come with the liability of social and moral control.

A state that did not exert social and moral control but still collected taxes for utility delivery and innovative technology implementation would be in essence a corporation that could force everyone to buy its services. Mildly Orwellian, but far less so than the states we live in today. That’s why I agree with Justine Tunney and Mencius Moldbug that Rule-by-Corporation is preferable to Rule-By-Elected-Leaders, even without getting into issues of long-term state solvency.

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Now, in an ethnically, religiously, culturally, and in all others ways homogeneous region, in which everyone can more or less agree on the sort of moral/social control it will tolerate, then monolithic democratic governance can be great (see Norway and Denmark). Scandinavia seems more than happy to let the state deliver its law and its water supply precisely because the only people in Scandinavia are Scandinavians. However, in an ethnically, religiously, culturally, and in all other ways heterogeneous region, monolithic governance of any sort will at best foster a fragile equilibrium of competing forces, either through strong-man rule to keep all but one of those forces from power (see pre-invasion Libya and Iraq ) or through complex Constitutional rules to ensure entropy among all the forces (see U.S.A.). It is only by continuing to deliver water and tech that such states retain stability.

At worst, though, as history shows time and again, monolithic governance of heterogeneous peoples can lead to violent conflict, whether or not the water keeps running. In the alt-right formulation: Diversity + Proximity = War.

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The regions known as Syria and Iraq are of course heterogeneous, as far from the Scandinavian model as you can get. Assyrian Christians, Kurds, Turkmen, Druze, Shia and Sunni Arabs . . . how could these groups ever agree on the social and moral laws under which they all might live? Yet that is exactly what the West is asking them to do by forcing them to live under a solitary, monolithic government system, i.e., to live in a nation state. To ask that Shia and Sunni Arabs, Assyrian Christians, Turkmen, and Kurds all agree to live under a secular, democratic monolithic system is of course the most idiotic request of the millennium.

Yet despite nationalistic bluster, it seems like each of these groups knows that forming their own ethno-states is not really a viable solution because there simply aren’t enough Assyrians, Kurds, Druze, or Turkmen in Syria or Iraq to create a state capable of becoming anything but an international ward.

Why? Resources, resources, resources. Money and manpower.

It’s everything I was just saying, a state delivers moral control but it also must deliver utilities; it implements social power but it also must implement the large scale social adoption of innovative technology. Iraq and Syria are thus in a bind when it comes to state formation. None of the groups in the regions could ever agree on what sort of law and governance should reign supreme; yet, on their own, none of the groups possesses the resources to provide material, technological benefits (of a 21st-century variety) to their own.

The obvious solution to the impasse is Government-By-Corporation. Is there a method by which all the resources of the region and its peoples can be pooled only for material, technological ends? Can the region develop a state that delivers water but not law?

The problem, at the moment, is that the most potent force in the region—ISIS—is interested in delivering moral control but not water or technology. ISIS won’t be launching a space program or building medical colleges anytime soon. What Iraq and Syria needs is an anti-ISIS: a group dedicated to uniting—not the people—but the money and resources of Iraq and Syria, providing all the benefits of technology and infrastructure of a modern state but leaving the people themselves to their own devices, just as Time Warner gives me cable and internet but doesn’t stay to tell me how to worship.

 

UConn is constructing a dorm wing to be reserved for African American males. The concern trolling is on full display: “But I thought we fought to end segregation!” “This is racist!” The honest trolls ask the right question: “Why can’t white males have a dorm to themselves?”

(Well, white males do have a way to carve out a university space for—mostly—white males: they’re called fraternities.)

Instead of whining, the correct response to this story is to give it full approval. Maybe a few academic elites are rediscovering the age-old wisdom that segregated spaces can be a good thing as long as the segregation is willing and consensual. Thankfully, it appears that UConn administrators are not defending their black dorm with anti-racist cant. They’re being honest about the value of sharing space with people just like you.

“It is a space for African American men to come together and validate their experiences that they may have on campus . . . it’s also a space where they can have conversation and also talk with individuals who come from the same background, who share the same experience,” said Hines.

Organic solidarity and segregation beat forced tolerance and connection every time. It’s a lesson progressive elites need to re-learn.