What Middle-Class Programs, Chuck?

Back on November 25, Sen. Chuck Schumer (D-NY) broke from the pack and told the National Press Club that passing Obamacare was a mistake. Said he:

After passing the stimulus, Democrats should have continued to propose middle-class-oriented programs and built on the partial success of the stimulus[.]

Instead, of course, Democrats chased after their Great White Whale and passed Obamacare.

I remember thinking and writing back in 2009 that Democrats were making a strategic mistake in just executing on their 2008 platform. Sorry, chum, I thought. Before you weigh us down with new entitlements you'd probably better get the economy moving again.

But let us look at the bigger picture. Just what does Schumer mean by "middle-class oriented programs?" I mean, haven't the Democrats been passing "middle-class oriented programs" since at least the beginning of the New Deal? Isn't that what Social Security, Medicare, education, labor laws, minimum wage, unemployment compensation, training programs, disability, workers compensation is all about?  Why would there be a need for any "middle-class oriented programs" after 75 years of passing non-stop "middle-class oriented programs?"

Let's look at the reason we even needed to think about fixing the economy back in 2009. We'd just had the worst financial crash since the Crash of 1929. And why? Because of middle-class oriented programs centered on government-sponsored enterprises, Fannie Mae and Freddie Mac, that had flooded the mortgage market with sub-prime loans in accordance with government policy going back to the 1970s that had been pushed aggressively by Democrats. The idea was "affordable housing" -- for the middle class. That meant lowering credit standards and lowering down payments.

Could it be that it's the middle-class oriented programs that are the problem, not the solution?

I mean this. Suppose we decide that we've got to help the middle class climb out of the Great Recession.  What does that mean? Does it mean new regulations on business? Does it mean new subsidies for employment? A higher minimum wage?

Or do we admit that, after a great crash like that we can't just go on as before; we have to change the way government does business?

Could it just possibly be that the way forward is to dismantle all the economy-distorting programs that have been gussied up to help the middle class and try to let the price system and new businesses and good old-fashioned Yankee ingenuity solve the problem. How else does  the middle class get good jobs at good wages making and distributing and selling products and services that people want to buy. What a concept!

And we tell the truth to the American voters. There is no such thing as a lifetime job. That's not how capitalism works. Capitalism is revolution; capitalism is change; capitalism is new products putting old products out of business. Capitalism is new jobs putting old jobs out of business. If you want the prosperity that has lifted ordinary people from a life at $1 to $3 per day to $100+ per day then you have to accept the "creative destruction" of the modern economy.

Frankly, I don't know the way forward. The way you win elections is by waving some glittery thing in front of the voters, something to make them think that government cares about people like them. But all that does is pile more subsidies, more government spending, more distortions on to the economy on top of the existing subsidies, spending, and distortions.

Let's look at it another way, from the perspective of usgovernmentspending.com, using the overall government spending for FY 2014, federal, state, and local. We are talking $1.2 trillion in government pensions, $1.3 trillion in government health care, $1.1 trillion in government education, and $0.5 trillion in government welfare (excepting Medicaid). All of this spending is a handout; people are getting this stuff from the government without paying for it.

Do you think that the government handing out $3.9 trillion every year in various entitlements and welfare for the middle class and the poor might have something to do with the fact that the middle class is struggling in the aftermath of the Great Recession? Because the point is that before the middle class can earn money for themselves they first have to pay out the $3.9 trillion in transfer payments to seniors like me, to TANF recipients, to SNAP recipients, to Section 8 recipients, to the health care bureaucratic blob, to the education bureaucratic blob, to the welfare bureaucratic blob.

Now I understand Chuck Schumer. All he cares about is getting elected. If he can blame the Great Recession on greedy bankers, even though he is famously the "senator from Wall Street," hey, if it works, do it. If he can sucker the middle class with yet another "middle-class oriented program," hey, if it sells.

Chuck Schumer famously recruited good moderate Democratic candidates in the 2006 midterms that switched the Senate from Democrat to Republican. But then he stood by while the progressives executed their Big Obamacare Push that wasted 60 Democrats in the House in the 2010 midterms and has now swung the Senate back into the "R" column ib 2014. What was the point of recruiting those moderate candidates back in 2006, Chuck, if the Democratic Party is hard left progressive?

The whole point of elective politics is getting elected. Period. If we voters vote for shiny baubles, we deserve what we get. So long as voters vote for shiny things, the Chuck Schumers of the world are going to be dangling shiny things in front of us.

But sooner or later, as Margaret Thatcher said, the left runs out of other peoples' money. Because government spending is basically a waste. It is basically buying peoples' votes with other peoples' money and then giving it to them for nothing. That's not social, or economic, or fair, or just. It is just a waste. It just ends up wasting resources and wasting peoples' lives.

Here's what would really help the middle class. Privatize Social Security so that instead of paying payroll taxes people would be saving their own money for their own retirement. Privatize education so that mothers could band together to educate their children together. Privatize Medicare so that people saved their own money for their end-of-life care. Privatize welfare so that every middle class person was morally and economically contributing to the relief of the poor.

But what would be the point of that? How would a chap like Chuck Schumer ever get elected to political power if he didn't have any handouts to spread around on "middle-class oriented programs?"

Georg Simmel: Subordination under a Principle

For most of human experience we have been ruled by people. But in the modern era we are ruled also by "principle," by laws and ideas. This has an important consequence, according to Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff.

The individual who is subordinate to an objective law feels himself determined by it; while he, in turn, in no way determines the law, and has no possibility of reacting to it in a manner that could influence it -- quite in contrast to the most miserable slave, who, in some fashion at least, can still in this sense react to his master.

Nevertheless, modern man regard subordination to a principle as "the more dignified situation." But Simmel cites 16th century princes who "often met with considerable resistance" from rule "by administrative bodies... that is more nearly by laws." Aristotle and Plato both recommend government by law, but Plato recognizes that a ruler stands above the law and that the welfare of the community may require that he "act even against the laws laid down by him."

Back to start: The Unknown Sociologist.

There are principles other than law, for instance patrimony, as implemented in imperial Russia. This can result in "humiliatingly harsh... subordination", such as the peasant belonging to the land, and the child belonging to the father not because he fathered it but because the mother belongs to him.

Subordination under a principle raises an interesting question. A principle seems to have a dual influence, both as "an impersonal order to which we simply have to submit" and something that "our most private and internal impulses" impose on us.

But the principle is not just an objectivity "enthroned in an ideal realm above society and the individual." One can also think of society "as the third element, which solves conflicts between the individual and objectivity" whether objectivity is an abstract principle or a fact of nature. Thus the market economy mediates between the individual and nature; and breaks down the idea that a cultural value must either "spring from an individual" or come down from Heaven.

Simmel introduces two penetrating examples of society interposing between individual and objectivity. The first example is the attempts of the state to control the market as it emerges from local and informal production relationships. It "supplies the individual with a norm" before he comes to understand the norm as it presents itself in the interplay of market prices and relationships. This social function also works in the intellectual sphere. Individuals pick up "traditional, authoritative conceptions which are 'accepted by all'" without confronting reality in the raw or really understanding it. Indeed, individuals may prefer not to know the reality of nature and reality without the comfortable sheen that society gives it.

Finally, Simmel takes a look at the effect of subordination to a principle on actual people: superordinates and subordinates. It is important to remember that usually the personal superordination/subordination came first, gradually giving place to an objective ideal in which the superordinate "exerts his power" as the "representative of this ideal, objective force." Simmel relates the development of the power of the pater familias among the Aryans. Originally his power was unlimited, subject only to his whim and advantage. But then it developed into a "feeling of responsibility" to the family. The father became subject to the idea of the family, merely an "executor and obeyer." Thus the "commander subordinates himself to the law which he has made." We also see this in the modern economy where everyone, from the CEO to the line worker, seems to be "the servant of an objective, economic procedure." The interplay of the personal and the objective is illustrated in the notion of employment at will. This minimizes the personal subjection of worker to management, since the worker can leave at will, whereas a long-term contract implies a bond, or personal subjection. But the same senior manager at a large business that bullies his subordinates around will "exhibit serviceable and devout" behavior to the firm's clients.

The introduction of objective principle into social life creates wonders of social interactions and complexities that are absent from simple personal super- and subordination.

Next: Degrees of Domination.

Georg Simmel: Subordination under a Plurality

The most obvious way in which people are dominated is under a monarchy, the rule of one, as Georg Simmel writes in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff. But there are other forms of social domination, including the subordination under a "plurality", or a group rather than a single individual, and here the domination reflects the characteristics of the superordinate group.

Back to start: The Unknown Sociologist.

Generally, the larger the superordinate group, the better the subordinates get treated, but not always. The deciding factor is that the personal and subjective is likely to be more important in a domination by an individual, and the objective more important in a domination by a group. The individual superordinate may be cruel or merciful, but the group superordinate will go by the book.

The foregoing assumes that the superordinate group acts homogeneously; things change when this group loses its homogeneity, either by conflict or by hierarchy. Under two warring masters the subordinate tends to "suffer severely", as a small state suffers when two large neighbor states are in conflict, or when a child suffers under two conflicting parents. Typically, there is no way out of this kind of situation, as when Antigone wrestles with the burial of her father, required by her family and forbidden by the state. Curiously, we are so used to these sorts of situations and are so used to them that we seldom experience them as conflicts. We try to compartmentalize things, rendering unto Caesar and unto God, but what if the demands conflict? This is what modern women call a dilemma.

A different situation obtains when the superordinates are not in conflict. In this case the subordinate has more room for maneuver, and can take advantage of the situation. The relationship is similar to the tertius gaudens described above in the expansion of the dyad. Thus the medieval vassal, who owed feudal loyalty to several lords, had more freedom that a bondsman. The situation is similar for a polytheist believer, who can turn from one god to another. Likewise, modern man in the city gains a certain degree of independence in the city where he can change supplier (or employer) much more easily than in a village or a small town.

A different situation obtains where the superordinates are arranged in a hierarchy, which occurs under feudalism. Under William the Conqueror, the English were both "the king's men" and subordinate to their particular lord, and the subordinate could take advantage of conflicts between his direct lord and the king. The middle rank, therefore, finds itself in conflict both with its superordinate and its subordinates. But it is also true that pressures can be transmitted all the way up and down the hierarchy. A retailer unable to sell a product pushes back against his wholesaler and so on up the supply chain. A English lord owning an estate in Ireland might increase the rent to a "head farmer", and provoke an increase, with markups, through several middlemen to the poor peasant actually tilling the field. On the other hand, a nobility interposed between state power and the individual can shield the individual from the worst excesses of state power.

Another question is that of voting. Should a dissenting group be forced to accede to a majority vote? If a minority is forced to accede to a majority vote, then it is violated by the majority. But if a rule of unanimity is required then the majority is violated by a minority that prevents action by its negative vote. The question turns upon whether the community feels that the "homogeneous will of the group" requires the agreement of each individual, or whether it obtains from the decision of the majority. This problem is best understood in the working of parliamentary democracy. "The representative feels himself to be the delegate of the whole people" even though he was elected only by a majority of those voting. In Rousseau, the group member "can want nothing else than the will of the group". Therefore the dissenting individual is "mistaken" in opposing the volonté générale.

So it is that when a group decision has been made the individual "must positively participate in the action which was decided against his will and conviction."

In this way, outvoting, far from being only the simple practical violation of the one by the many, becomes the most poignant expression of the dualism between the autonomous life of the individual and the life of society[.]

 Next: Subordination under a Principle.

Georg Simmel: Subordination under an Individual

Although we all live in the dream of freedom and equality, the truth is that in real life we relate to others in an unequal relationship. We are at least either slightly subordinate to them or slightly super-ordinate to them. In our modern age there is a tendency to regard all unequal relationships as scandalous, but Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff looks at the whole question of unequal relations are natural and social. All social relationship involves some sort of inequality.

Back to start: The Unknown Sociologist.

Now the point to keep in mind about domination is that no domination is complete. If it were, "it would annul the very notion of society." Only when "direct physical violation" is involved is there total domination; otherwise the question is merely a question of the price of freedom. Our submission to domination merely demonstrates that the price is more than we are willing to pay. Thus "coercion" is always a relative affair.

In other words, "Relationships of superordination and subordination play an immense role in social life." Take the question of "authority." In some cases a "person of superior significance or strength" may enjoy "an overwhelming weight" of power through his personal qualities. In other cases, it is the institution -- "state, church, school, family, or military" -- that "clothes a person with a reputation" for dignity and power way beyond his individual qualities. There is, in addition, a reciprocity between leader and led, which is shown in the case of the popular journalist, who must lead his readers where they want to go.

There are, writes Simmel, three kinds of subordination: under an individual, a group, or a principle. In this post we shall investigate subordination under and individual.

Subordination under an individual can be looked at in two ways. First of all there is the notion that the "will of the group has found a unitary expression or body" under its superordinate leader. Secondly, there is the resentment of the leader by the led; "the group feels itself in opposition to its head and forms a party against him." These two forces that seem in opposition are in fact both necessary, for

Man has an intimate dual relation to the principle of subordination. On the one hand he wants to be dominated. The majority of men... seeks the higher power which relieves them of responsibility... But no less do they need opposition to the leading power[.]

Thus, in politics, no matter how much people argue and conflict they have a common interest in limiting the power of the government, even in spite of the practical necessity of a strong government.

Of course, subordination under an individual does not always lead to unity. The oppression of dissidents by a central government does not necessarily unite them; the children of different mothers in a harem "are always hostile to one another."

How to unite the quarreling factions? One method is a "higher tribunal", usually an intellectual resolution of differences; alternatively the ruler can set the quarreling factions to work on a common task. Christianity, of course, subordinates all beings alike "to the divine principle." Another method is leveling, the tyrant's policy of equalizing all his subjects and preventing the emergence of any rival centers of power. The conversion of Rome from a republic to an empire reduced the Romans to the level of the peoples the republic had subjugated.

It is much easier for a single individual to dominate a large group than a small group. This is because in a large group people devolve into a "mass" but retain their individuality in a small group. Large legislatures may seem more democratic, but Alexander Hamilton pointed out that a large legislature will be run by the few.

A different dynamic applies when the ruler faces not a levelized mass but a pyramid. In this case, of course, the "power of the highest echelons withers" unless designed by the intention of the ruler, as we see in the articulation of a great army. The basic problem of a pyramid organization is that people do not always match their position in the organization, and it is hard to judge their suitability until they actually occupy their position.

But a pyramid can also grow from the bottom up, as in elective politics and business and "intellectual culture" where superior individuals move upwards in the pyramid of power. Many times downwards pushing and upwards pushing power coexist, as in feudalism, where individual small landowners might subject themselves to a local lord, and the lords use the power thus obtained to increase their power relative to the monarch.

Rule by one has an irresistible luster; the republic in the United States has its glorious president, and the republican France is ideally ruled by Rousseau's monarchical volonté générale. And even as the power of the Doge of Venice declined over the years, the Venetian elite kept the illusion of monarchy alive to prevent the emergence of a real ruler.

Yet the success of rule by one depends on the right distance of the ruler from the governed. In a small group it need not be great. But in a large group, such as a universal religion, the ruler cannot be high enough, in Heaven, so that the distance between ruler and ruled extinguishes the differences between the faithful.

Next: Subordination under a Plurality

Georg Simmel: Expansion of the Dyad

The two person, or two group "dyad" is a particularly important social grouping, according to George Simmel in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff. But what happens when you expand the dyad to three people, to the "triad?"

Back to start: The Unknown Sociologist.

"The appearance of the third party.. [means an] abandonment of absolute contrast." In Simmel's view, it introduces three kinds of group formations. The third person might be a non-partisan mediator; he might be a "tertius gaudens" or someone who benefits from a two person quarrel; and he might even be someone who uses a dispute between two people to divide and conquer them. Let us look at each in turn.

The Non-partisan and the mediator. In many cases the addition of a third person can weld the two-person dyad together; the child "closes the circle by typing the parents to one another." But just as significant is the non-partisan mediator.

The non-partisan shows each party the claims and arguments of the other; they thus lose the tone of subjective passion which usually provokes the same tone on the part of the adversary.

In other words, the non-partisan "deprives conflicting claims of their affective qualities" and forces the parties to view a dividing issue more objectively than in pure adversary combat. "[A]ntagonism of the will is reduced to intellectual antagonism." Notice though that the mediator is not an arbitrator; he does not decide the issue; only the parties can do that. But the mediator must be viewed by both sides as neutral, either because he is equally close to each party, or equally distant.

Another impartial third element is the arbitrator, to whom the two parties render up the power to decide their issue. This requires not just a joint faith in the neutrality of the arbitrator, but "confidence in the objectivity of [his] judgment" beyon mere mediation.

As an example of mediation, Simmel offers the British King Henry III. His relations with the barons and prelates descended into constant conflict, and both parties came eventually to resort to a third element previously "kept out of state matters." We are talking about the beginning of the House of Commons.

The Tertius Gaudens. Here we have a third party that "draws advantage from the quarrel of two others", he is literally the third who rejoices at their difference. This party is similar to the third element that divides and conquers, discussed below, but does not need to be active in splitting the two parties. He may merely befriend one party to annoy the other. But the iconic case is two parties competing for the favor of another, as in two suitors for one woman. On the largest scale, the tertius gaudens is played out in the competition between producers for the favor of the consumer. Notice that the advantage of the consumer only applies when the producers do not collude with one another. In politics, the position of a third party is not as absolute, because a political party is not free to abandon its declared positions on the issues of the day; there is often only a narrow room for maneuver between two parties competing for the favors of a third party. A similar situation occurs in demarcation disputes between labor unions on a job site. If unions bid for their workers to do the job then the lowest bid wins. But if the unions collude to decide what pay should apply to each job then their basic interest, high pay, is preserved from attack by the employer.

Divide and Conquer.  In any three-element relationship the opportunity exists for the third element to take advantage of a quarrel between two others. In "divide and conquer" we deal with the situation where "the third element intentionally produces the conflict in order to gain a dominating position." There are many examples of this strategy, beginning with the prohibition by a sovereign ruler of any associations, thus heading of any combinations of people that might form a head of rebellion. The Anglo-Norman kings made sure that the estates of each feudal lord were widely scattered to make it difficult for any lord to become sovereign in a single contiguous district.  Similarly, employers often refuse to negotiate with a combination of employee unions. They prefer to negotiate with each one separately. The Incas liked "to divide a newly conquered tribe in two" and place a supervisor over each, with "slightly different ranks." This encouraged rivalry between the supervisors and prevented united action against the Inca. There are two basic strategies for divide and conquer. One is to get the two parties to fight each other. Where this does not work, then the third party combines with one other "long enough for the other to be suppressed, whereupon the first party is an easy prey for him."

It is easy to see why "two's company but three's a crowd."

Next: Subordination under an Individual

George Simmel: The Individual and the "Dyad"

We think of sociology as the individual and society. But Georg Simmel in The Sociology of Georg Simmel translated by Kurt H. Wolff takes us to a more basic consideration, the individual and the "dyad", or the individual as part of a two-person social relationship.

But first, consider the situation of the "isolated" individual. Actually, we are not talking here about an individual that is "physically alone" as one might be on a walk in the mountains. The feeling of isolation is much more intense

when one is a stranger, without relations, among many physically close persons, at a "party", on a train, or in the traffic of a large city.

In other words, isolation is not the aloneness of an individual; it is the separation of the social individual from the rest of society. "As a conscious feeling on the part of the individual, it represents a very specific relation to society."

But then there is freedom, which seems at first glance to be closely related to isolation, but it is decisively different. On the one hand we can see that society -- as  "the state, the party, the family... friendship or love -- quite naturally... would extend their claims over the whole of man." Against this relentless pressure to conform to the expectations of others, "freedom emerges as a continuous process of liberation" for personal independence and also the right to remain dependent. On the other hand "the individual does not just want to be free, but use his freedom for some purpose", including "the extension of his will over others."

Thus we see that "isolation" and "freedom" are not external to the notion of humans as social individuals, but particular instances of genuinely human "sociation." The "dyad", the relation between two individuals or two groups is equally social. And the dyad has a particular characteristic unlike the isolation or freedom of the individual or a group of three or more people; if one person drops out of the dyad, it ceases to exist. The point is that any large group can be immortal; but the dyad cannot.

Simmel writes at length about the characteristics of the dyad. He starts with triviality. We tend to value things that are unique and rare, and undervalue things that are routine and commonplace. Clearly, a dyadic relationship, with its daily repetition of the commonplace, can descend into triviality, and "the tone of triviality frequently becomes desperate and fatal."

Then there is intimacy. For Simmel intimacy refers to the "ingredients that its participants contribute to [the relationship} and to no other" if they are regarded to be essential, forming the "affective structure" which the two show to each other and to nobody else. It is clear that intimacy is closely related to the exclusive nature of the dyad; intimacy withers as soon as a third element is introduced into the relationship.

Obviously the iconic case of the dyad is a monogamous marriage, and yet is isn't. For marriage typically leads to children, and then the dyad is broken. And marriage does not exist in isolation as merely two people. There is the family in general, the children, and the fact that marriage is "socially regulated and historically transmitted." Men and women are not just confronted by each other in marriage, but by the collectivity itself.

There is another curious characteristic of the dyad. It does not permit the two members to slough off duties and responsibilities to the larger group, as when people expect society to do what is properly their own responsibility. In a dyad there is a "co-responsibility for all collective actions." You can push a responsibility on the other member, but the other member can push right back. You can't hide behind the group or blame the group, because the other person cannot be fooled. In other words, it is hard to be a "free-loader" in a dyad.

Simmel now considers the "expansion of the dyad," or what happens when you introduce an additional member into a two-person relationship. It could intensify the relationship, or it could distract it. And it could provoke jealousy. Once you introduce a third member into a dyad it becomes possible to overrule a member with a majority of the others. This is fine if you are a person with "strong individuality" that wants to fight rather than blend in. It's not fine for the "decided individual" that will avoid groups "where it might find itself confronted by a majority." Also, as soon as you expand a dyad into a group you risk the lowering of individuality to the group level that is particularly evident in crowds.

Thus the decisive change for a dyad is the first additional member: the first child to a marriage, but not the subsequent child. And the same applies to bigamy(!). The addition of the third wife is nothing compared to the addition of the second wife. Notice that in Rome there were two Consuls, not three. Yet there is a different relation between two political parties, where "who is not for me is against me." But when two parties dissolve into a single mass movement there is no room for opposition or disagreement. There is only "yes" and "no" for the whole collectivity.

Next: Expansion of the dyad.

The Shallow Conceit of the North London Luvvie

Back in the 2000s Ross Ashcroft was briefly a BBCer and then an assistant theater director. But after the crash of 2008 he has reached for bigger things and in 2012 released a documentary on all the troubles of the world, entitled Four Horsemen. It got tons of awards at film festivals. It's available on YouTube.

You would expect that it to be pathetically banal and devoid of almost anything that might qualify as an idea. Why would it? You tell me. Where in the world would a theater person in today's London ever run into someone with an idea that wasn't safely approved by the left-wing culture that dominates the minds of everyone in the arts?

But let's take a look at Four Horsemen anyway.

The Four Horsemen of this modern apocalypse are: the rapacious financial system, escalating organized violence, abject poverty for billions, and exhaustion of our natural resources. Filmmaker Ashcroft reviews these problems in four sections of his documentary.

6:30 Empires. Empires do end, and the west has not yet come to terms with its fading supremacy. And it makes sense, from Gen. Glubb's life cycle of empires, 250 years from pioneers to conquest, commerce, affluence, intellect, and ending in decadence. Imagine an overextended military, conspicuous consumption, living off the state, and an obsession with sex. And debasement of the currency. In our decadent age everyone scrambles for the spoils amid the distraction of bread and circuses. And the baby boomers did it! Meanwhile millions of people go to bed every night hungry. So why are we still struggling to distribute wealth fairly?

16:45 Banking. Is the problem "systemic?" We review the evils of fractional-reserve banking, fiat currency, and we get the usual focus on greedy bankers and Goldman Sachs, and the evil of forcing mortgages on poor people. It's all based on the notion of "growth forever." Did you know that 97% of the money in the world is "debt?"

50:51 Terrorism. Ashocroft's got a "root cause" explanation of terrorism. The "inherent iniquity in our system of money, banking and politics has not just had consequences domestically," but also globally. Terrorism is thus a push-back against western neo-colonialism. First there's the military and its contractors, then the consultants and contractors that get the contracts from foreign aid and World Bank loans. But the aid benefits the local elites, and the people have to pay back the debt. Then there is Chile. Yes, we can still haul Noam Chomsky in front of the camera to remember that the US intervention in Chile in 1973 amounted to terrorism. But with all this outrage is it any wonder that people have no recourse but to resort to terror?

1:02:52 Resources. We have got to the end of the benefits of economic growth; the more we grow the more we create poverty. It's a question of competition vs. cooperation. We need a progressive move from globalization to localization, production not consumption.

1:13:00 Progress. There's a tendency to Hollywoodization these days. Everything must be a story with a beginning, a middle, and an end. There's got to be a villain, and usually a sacrificial victim. So it's hard to see that the system is flawed.

So what's to be done? We need to make societies more equal and reduce income difference; that will help solve environmental problems. We need to understand that the problem is pretty simple. It's about power, and its about democracy. So we need to sweep away the disinformation of neoclassical economics and the academic gatekeepers with the cleansing truth of the internet. And we need to question the system of fiat money. It all comes down to a three point plan:

1. Return to gold as the basis of money, and maybe stage a debt jubilee, since debt is slavery.
   
2. Tax consumption instead of labor.
   
3. Return to a system with workers owning the place where they work and produce.

It's hard to know where to begin in analyzing such a precipitate of shallowness, but let's start with the three point program.

Yes, going back to gold and ending fractional-reserve banking is a great idea, but it's a good idea to realize why we have a fiat currency and persistent inflation. The reason is that governments are forever running out of money, or crashing the economic system with their economic interventions. The easiest way for a government to "get out of a jam" is to print money, devaluing debt and stealing the savings of ordinary people. Any big government program, whether a war on fascism or a war on poverty, ends up with a lot of government debt, and ends up with some kind of debt default.

That's why banks are such a problem, whichever party is in power. Ever since the Dutch invented the National Debt in the 16th century the government's debt has been the foundation of the credit system and the credit system has been the foundation of the rest of the economy. The banks are merely intermediaries between the government debt and the rest of the economy. The reason that bankers seem to be manipulating the system is that they are being tossed around by the machinations of the government's debt and cheap money operations. The first and most important government program is the program to sell the government's debt; that debt gets sold to bankers who are directed to use government debt for their reserves. Over time, the government regulates the banks in more and more detail, and over time the bankers learn how to manipulate their masters in the phenomenon we call "regulatory capture." Thus "greedy bankers."

In the run-up to the Crash of 2008 the government manipulation was particularly egregious because the US government had developed a policy over decades to extend "affordable housing" to subprime mortgage borrowers (i.e. minorities). The government mortgage twins, Fannie Mae and Freddie Mac developed policy to force banks to originate more and more subprime (i.e. low down payment, low credit rating) loans. But who would buy these loans from the banks and Fannie and Freddie? Simple. The investment banks like Goldman Sachs repackaged the loans and with a bit of financial trickery and sold securities that were rated AAA and could therefore be bought by pension funds and insurance companies. It all worked as long as the band kept playing.

If you read old stuff like Lombard Street by Walter Bagehot you get to understand how how the credit system works. It needs two things. And it needs debtors that can make their payments. And it needs debt that is properly collaterialized, so that the principal can be repaid if the debtor fails to service the loan.  When you get a situation where either of the two requisites are in question then you get a crisis of confidence; people start to wonder if their counterparty is sound or whether they might fail in a crash. So when the government floats about a trillion dollars in mortgages that are badly collateralized to borrowers that can't afford any downturn and maybe even can't afford to make payments right now... Well you get a financial system that is extremely fragile and will crash as soon as things start to go south and people really start to worry and take their money out of the market. Of course, you'll expose all kinds of bad apples when the market crashes, but the villain at the bottom of the story is not the greedy banker but the government that's mucking about with the credit system to give money or affordable home mortgages to its supporters.

So that's why we have fiat money. What about taxing consumption instead of labor? It's a good idea; that's what we all had in the 19th century during times of peace. But when the government gets above a certain size, consumption taxes become a real burden on the poor. And then you need to start taxing income. We could only return to a consumption tax system if we reduced government down to about 10-15% of GDP instead of the 35-40% of GDP right now. We could do it if we ended government pensions including Social Security, government health care such as Medicare, and government education.

The final item in Ashcroft's plan is to let the workers own the factors of production. There is already a government program to encourage this, the Employee Stock Ownership Plan or ESOP. But critics say that it's not such a good idea for ordinary employees to own a share in their employer's business. What happens if the company goes broke? Then the worker loses his job and his savings. There is another way to do this: privatize Social Security and let workers buy ETFs featuring the S&P 500 and the NASDAQ 100. Then workers get a part ownership in the income-generating potential of the whole economy. It's called diversification.

Now let's go back to the Four Horsemen.

Rapacious Financial System. The only way to fix this is to downsize government radically, so that government and its financing needs do not bulk so large in the financial picture. We have crazy banks because we have crazy governments.

Escalating Organized Violence. Yep, it's a problem, but it's localized at the borders of Islam. The Muslim peoples, particularly the Muslim Arabs, are having a horrific time, partly due to the west carving the Arab lands up a century ago at the end of World War I. Part of it is due to the pre-individualist, tribal society in the Middle East. Probably we are going to face a world war over Islam, and it ain't gonna be pretty.

Abject Poverty for Billions. Actually, people in the world are emerging from poverty at an astonishing rate, led by the economic growth in China and India. There has never been anything like it, ever. But then, as Deirdre McCloskey says, there has never been anything like the Great Enrichment of the last two centuries from $1 per capita per day to over $100 per capita per day in the rich countries, ever. Here's the chart on declining world poverty from the conservative think tank AEI. Don't trust the conservatives? Here's the word from the World Bank.

Exhaustion of Natural Resources. Trust the north London luvvies to be the last to know about the fracking revolution. Back in 2011 when, presumably, Four Horsemen was in production the revolution in shale oil and gas energized by horizontal drilling and hydraulic fracturing was already common knowledge. There isn't a crisis in natural resources. And if we should start to run out we have our internet billionaires that can't wait to live out their boyhood sci-fi fantasies and go mine the asteroids.

That leaves just one thing, the Glubb theory of empires and our terminal "age of decadence." To have a north London luvvie worrying about that is, well, it's a start. But, in my view, the "root cause" of decadence is the problem of creativity, the people in the arts. In my world view there are three kinds of people: Slave People --  peasants and workers; Responsible People -- knowledge workers, business people, and merchants; and Creative People. The Creative People are the big problem because they cannot be happy unless they can do something original and creative. Almost anyone can be a slave; almost anyone can learn to be responsible. But with creativity, many are called but few are chosen.

The great problem of the modern world is what to do about disappointed creative people, and to stop them before they pull down the temple in impotent rage. You could start with the problem of a 90 minute documentary that is beautifully crafted but that retails a nonsensical farrago of half-digested north London conventional wisdom.