Thanks to Rolf Dobelli of GetAbstract for sending me the link to a post by Nassim Taleb at the Financial Times:

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalized; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”. Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards.

5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

6. Do not give children sticks of dynamite, even if they come with a warning. Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.

8. Do not give an addict more drugs if he has withdrawal pains. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).

10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.

My Comment

I hesitate to critique something by Taleb, as smart and terrific a writer/trader as he is.

But since it’s my job here to examine the commentariat (this is not my own phrase, but I wish it were…) with skepticism, here goes.

I agree with everything that Taleb says here, except for the bit about nationalization and the  implication that this financial crisis had to do with “Black Swans”. He himself has said clearly elsewhere that the financial crisis had nothing to do with black swans, so I think  the heading (given by some one else?) is misleading.

“. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.”

Peter Thiel at Cato Unbound.

My Comment

Thiel’s essay is one of several at Cato Unbound  on sea-steading, the Free State project in New Hampshire and cyberspace communities as possible routes of escape from statist interventions. I liked the piece because it captures my own sense that genuine libertarianism is still quite foreign to the masses of people who make up any democracy.

Thiel finds two constituencies particularly difficult –  women and welfare beneficiaries. (Am I misreading something here?).

Really? I’ll wager that the majority of the beneficiaries of  the recent government bail-out of the financial sector are male fund managers. I’d also say that most of the beneficiaries of defense subsidies are companies run by men, not women.

However, I’ll take his broader point that the more people depend on government, the less open they’re going to be to libertarian arguments.

As for women, I’d wager that they’d be very open to libertarianism if  it didn’t come wrapped up in psychologically obtuse language.

More for another blog post.

From the website of the Confraternity of the Rosy Cross:

“All manifestation exists by virtue of a process … a continuity of eternal existence that knows no beginning nor end.

This process must be one of transcendence and transformation that never permits gross stagnation or decay. It must ever be refining and improving upon itself and periodically shedding its outer skin of appearance and the density of its material expression. H. Spencer Lewis referred’ to this process early in his writings as the 108 year cycle and later alluded to it in the numerically higher degrees by allegorically referencing the well known analogy of the necessary relationship between Judas and Jesus. His referencing was to explain the necessity of a catalyst to induce necessary change and transformation.

The name ‘Rosicrucian’ seen from an initiatic perspective derives from the Latin words: ‘ros’ and ‘crucis’ and they are the true source of our name. In that they originate from the Latin also dates our history.

The process of our origins is alchemical in nature — alchemical in a spiritual sense and not material. It identifies a process of refinement and transcendence to a more evolved state not unlike the individual process of the obscure night and the golden dawn. Ros is Latin for ‘dew’ and in alchemical terms, ‘dew’ is the purity of essence refined through transcendent processes of working the power of vitriol in its highest state. Ros is the perfected result of grosser existence.

Crucis describes the attributes necessary for the process of transformation to manifest. ‘Crucis’ is a Roman instrument of torture made into a sacred symbol by the early founders of Christianity. Christians say that Jesus was tortured and died upon the cross and he sacrificed his life so that the human soul would be saved.

Our concern here is not with the religious connotations and symbolism for truly every great prophet or Saviour from each religion underwent a similar experience for the same reason.

It is that reason in which we are concerned and that reason is a PROCESS of transformation from a lesser to a higher state.

Sacrifice, represented by the color red, is the nature of crucis.

It is the state of sacrifice, of giving of one’s self for the purpose of greater evolvement which is the process. It is not for ourselves that is the primary reason why we seek truth.

We seek Truth so that ALL may be free to follow the Path of Light. That, brothers and sisters, is the greatest sacrifice and the most difficult attribute that we must learn. That process is the source of our name.

For those who have never sacrificed or learned the process may fear it. But for those who understand, they will never fear…..”

My Comment

It’s not well known that that the western esoteric tradition (of which Rosicrucianism is one branch) had a huge influence on the Indian independence movement, as well as on the Irish.

As a student in London, Gandhi ran into it.  He also came into contact with American writers like Emerson and Thoreau, who had been influenced by eastern religions. Later, during India’s struggle for independence, when he was in prison, Gandhi revisited and absorbed Tantric and other esoteric Hindu texts, and their principles informed his political practice right to the end of his life.

On the Irish end, at the turn of the century, an esoteric group, the Order of the Golden Dawn, which had Rosicrucian and alchemical elements, had an enormous influence on William Butler Yeats, the Irish statesman, poet ,and mystic.  The occult influence can be seen in poems like Mount Meru and  The Second Coming. It can also be seen in Yeats’ system of  “masks” and interlocking “gyres”  (representing cosmic dualities, played out in recurrent cycles). The gyres interpenetrate each other and move closer and farther as different cycles unfold. (Yeats was also deeply interested in astrological cycles).

Why do I bring all this up?

To show that thinking of religious or spiritual belief as something radically apart from or irrelevant to political struggle is simply delusional, at worst, and disingenuous, at best.

Church-state separation is necessary…principally to keep religion from the corruption of state power (as Roger Williams wrote).

But Religion (or mysticism) and politics have never been separate.

Note: I include under religion, atheism  – a noble, ascetic, and very worthy faith.

But, in my view, not all that creative or imaginative…..

Curiously, the  state that the American empire more and more resembles is not the one described in early modern or classical political theory.

American empire is more like the notoriously spy-ridden empire of the 4th century (BC) Indian empire of the Mauryas.

“No-touch torture,” “silent airwar,” “shadow statistics,” “endless surveillance”: these resemble nothing more than the empire of Chandragupta Maurya, one of India’s most successful conquerors.

Chandragupta’s minister, Chanakya, (Kautilya is the Greek form), is a little known theorist in the West, where he is sometimes seen as a political realist because of his most famous dictum: “the enemy of my enemy is my friend” sometimes called the Mandala theory of foreign policy.

But if by realism one means the “balance of power,” this isn’t what Chanakya wanted.

Chanakya saw the goal of politics not as maintaining peace but as augmenting power.

He advocated a ceaseless growth in power through concealed means, the strategy that seems to underlie such differing aspects of the American empire as the “white noise” of its air-power (see my piece, “America’s Downing Syndrome,”  Dissident Voice, 2006) and the increasing levels of electronic surveillance, propaganda and psyops (see another piece in 2006, “Kartoon-Krieg: War by Other Means,” Counter Currents, 2006)

Kautilya’s writing preceded by 2000 plus years the current theory of war of American empire – what some now call 5th Generation War.

5GWhas been described thus by one expert on it:

“Open source warfare. An ability to decentralize beyond the limits of a single group (way beyond cell structures) using new development and coordination methodologies. This new structure doesn’t only radically expand the number of potential participants, it shrinks the group size well below any normal measures of viability. This organizational structure creates a dynamic whereby new entrants can appear anywhere. In London, Madrid, Berlin, and New York.

Systems disruption. A method of sabotage that goes beyond the simple destruction of physical infrastructure. This method of warfare, which can burst onto the scene as a black swan, uses network dynamics (a new form of leveraged maneuver) to undermine and reorder global systems. It is through this Schumpeterian “creative destruction” that new environments favorable to opposition forces are built (often due to a descent into primary loyalties and pressure from global markets).

Virtual states (ala Philip Bobbitt). Unlike the guerrilla movements of the past, many of the 4GW forces we are fighting today have found a way to integrate their activities with global “crime.” No longer are guerrilla movements or terrorists aimed at taking control of the reigns of the state or merely proxies for states. A new form of economic sustenance has been found. This black globalization is already vast (a GDP of trillions per year), and gains momentum through weakening and disruption of states. This military/economic integration creates a virtuous feedback loop that allows groups to gain greater degrees of independence and financial wealth through the warfare they conduct.”

(more by blogger John Robb )

Robb describes 5GW as having been brewed in Iraq while Citizen Fouche at the Committee of Public Safety is blunt about the motives.

Time for the American people to quit “sleepwalking.”  Instead of clinging to the naive belief that civil society should be free of the tactics and goals of war (and that war should be open and conducted justly and legally),  the public should wise up.

5 WH proponents tell them what they need to wise up about:

War is not just violence and destruction. War is also anything you do to force someone to act against their will.

The first perspective is the perspective of Clausewitz, the second that of  pre-modern theorists like Sun Tzu and Kautilya.

All this sounds very deep and sophisticated until you strip off the jargon. Despite the exotic aura of eastern classical texts to it, I don’t see how the new strategy is anything more than a very old temptation gone one better. The temptation of power. Absolute power.

Under classical rules of engagement, in limited war, ones moral sense can remain intact.

The new varieties of total war – which is all 5GW amounts to – leave nothing intact, even among people who don’t know it exists —  because it creates a bubble of lies in which their minds are manipulated perpetually.

Turns out oriental despotism is whatso-called patriots admire.

Maybe someone should point out that America’s own republican tradition, despite all its follies, hypocrisies and failures, did at least pay lip-service  to truth and peace as the way of life proper to a society.

 An excerpt from a piece by Ryan Sayr Patrico in First Things about anti-Nazi heroine Sophie Magdalena Scholl (May 9, 1921–February 22, 1943):

 “New documents unearthed by German academics have revealed that the writings of the 19th-century English theologian were a direct influence on Sophie Scholl, who was beheaded for circulating leaflets urging students at Munich University to rise up against Nazi terror. . . .

But behind her heroism was the “theology of conscience” expounded by Cardinal Newman, according to Professor Günther Biemer, the leading German interpreter of Newman, and Jakob Knab, an expert on the life of Sophie Scholl, who will later this year publish research in Newman Studien on the White Rose resistance movement, to which she belonged. . . .

Newman taught that conscience was an echo of the voice of God enlightening each person to moral truth in concrete situations. Christians, he argued, had a duty to obey a good conscience over and
above all other considerations. . . .

Under questioning from the Gestapo Scholl said she had been compelled by her Christian conscience to peacefully oppose Nazism.

Sophie and Hans both asked to be received into the Catholic Church an hour before they were executed but were dissuaded by their pastor who argued that such a decision would upset their mother, a Lutheran lay preacher.

Fr Dermot Fenlon, a priest of the Birmingham Oratory who was given excerpts of Mr Knab’s findings to include in a speech on Newman in Milan last week, said the originality of the research was that it
showed the clear “centrality” of Newman to Hans and Sophie Scholl.

He said: “Knab has identified the presence of Newman in correspondence, in diaries and in the analysis of correspondence, particularly between Sophie and Hartnagel. He has shown how that
influence became operative at a critical moment.”

He added: “The religious question at the heart of the White Rose has not been adequately acknowledged and it is only through the work of Guenter Biemer and Jakob Knab that Newman’s influence . . . can be identified as highly significant.”

The 2005 German film Sophie Scholl: The Final Days (Die letzten Tage)  shows Sophie’s adherence to a higher law than the one imposed by the state. The law of her conscience, brought out beautifully in this confrontation with Herr Mohr, the police agent who interrogates her and finds in himself an unwilling connection to her:

“Mohr: You may have used false slogans but you used peaceful means.

Sophie: So why do you want to punish us?

Mohr: Because it is the law. Without the law there is no order.

Sophie: The law you are referring to protected free speech before the Nazis came to power in 1933. Someone who speaks freely now is imprisoned or put to death. Is that order?

Mohr: What can we rely on if not the law? No matter who wrote it.

Sophie: Our conscience.

Mohr: Nonsense! [Grabbing two books, one in each hand, as though weighing them against each other.] Here is the law and here are the people. As a criminologist, it is my duty to find out if they coincide and, if not, to find the rotten spot.

Sophie: The law changes. Conscience doesn’t.”

My Comment:

As Wendy McElroy notes in this review at iFeminists.com, Sophie’s very existence is a reproach to the way of life of those around her because it forces them to confront their own responsibility for the way things have become. Ultimately that is the real reason she must be killed.

“The light shines in the darkness and the darkness did not comprehend it.” (John 1:5)

In “Transit of Venus” (“Mobs,” Chapter 3), we cite Sophie Scholl as one of the heroes who truly bring change. The messiahs of  the state, on the other hand, don’t change anything, however much they may mean to.

They simply play out their assigned parts, driven by mass emotions and mass slogans.

Sorry to keep posting on this subject.

I am not replying from my current email account altogether.

Mail that goes there will redirected and opened in another account.

My new email account will be private and not available publicly any longer.

I apologize and hope you will direct any mail to the blog  from now on. If you do not wish me to publish it, simply write as much on top.I will also set up a new email contact for anyone wishing to reach me directly for professional or media inquiries of any kind.

Note:
(1) Cyberstalking is a crime

(2) Hacking is a crime

(3) Impersonation, malicious posting, and net vandalism are crimes

(4) Slander and libel are crimes

(5) Violation of privacy and infliction of emotional distress are crimes

(6) Making threats (veiled or not) is a crime

They are also of course highly immoral behaviors that do little credit to the ideology of  the people who engage in them.

Note also:

(1) I  have a second amendment right to self-defense that I’m fond of.

(2) Several US states have concealed weapons laws.

THE GOLDEN MEAN.

Who founded firm and sure
Would ever live secure,
In spite of storm and blast
Immovable and fast;
Whoso would fain deride
The ocean’s threatening tide;–
His dwelling should not seek
On sands or mountain-peak.
Upon the mountain’s height
The storm-winds wreak their spite:
The shifting sands disdain
Their burden to sustain.
Do thou these perils flee,
Fair though the prospect be,
And fix thy resting-place
On some low rock’s sure base.
Then, though the tempests roar,
Seas thunder on the shore,
Thou in thy stronghold blest
And undisturbed shalt rest;
Live all thy days serene,
And mock the heavens’ spleen.

— Boethius, The Consolation of  Philosophy, Transl. by H. R. James,  1897

“In the presence of one individual we can decide whether he is “mass” or not. The mass is all that which sets no value on itself — good or ill — based on specific grounds, but which feels itself “just like everybody,” and nevertheless is not concerned about it; is, in fact, quite happy to feel itself as one with everybody else.The mass believes that it has the right to impose and to give force of law to motions born in the café. I doubt whether there have been other periods of history in which the multitude has come to govern more directly than in our own.

The characteristic of the hour is that the commonplace mind, knowing itself to be commonplace, has the assurance to proclaim the rights of the commonplace and to impose them wherever it will. As they say in the United States: “to be different is to be indecent.” The mass crushes beneath it everything that is different, everything that is excellent, individual, qualified and select. Anybody who is not like everybody, who does not think like everybody, runs the risk of being eliminated.

It is illusory to imagine that the mass-man of to-day will be able to control, by himself, the process of civilization. I say process, and not progress. The simple process of preserving our present civilization is supremely complex, and demands incalculably subtle powers. Ill-fitted to direct it is this average man who has learned to use much of the machinery of civilization, but who is characterized by root-ignorance of the very principles of that civilization.

The command over the public life exercised today by the intellectually vulgar is perhaps the factor of the present situation which is most novel, least assimilable to anything in the past. At least in European history up to the present, the vulgar had never believed itself to have “ideas” on things. It had beliefs, traditions, experiences, proverbs, mental habits, but it never imagine itself in possession of theoretical opinions on what things are or ought to be. To-day, on the other hand, the average man has the most mathematical “ideas” on all that happens or ought to happen in the universe. Hence he has lost the use of his hearing. Why should he listen if he has within him all that is necessary? There is no reason now for listening, but rather for judging, pronouncing, deciding. There is no question concerning public life, in which he does not intervene, blind and deaf as he is, imposing his “opinions.”

But, is this not an advantage? Is it not a sign of immense progress that the masses should have “ideas,” that is to say, should be cultured? By no means. The “ideas” of the average man are not genuine ideas, nor is their possession culture. Whoever wishes to have ideas must first prepare himself to desire truth and to accept the rules of the game imposed by it. It is no use speaking of ideas when there is no acceptance of a higher authority to regulate them, a series of standards to which it is possible to appeal in a discussion. These standards are the principles on which culture rests. I am not concerned with the form they take. What I affirm is that there is no culture where there are no standards to which our fellow-man can have recourse. There is no culture where there are no principles of legality to which to appeal. There is no culture where there is no acceptance of certain final intellectual positions to which a dispute may be referred. There is no culture where economic relations are not subject to a regulating principle to protect interests involved. There is no culture where aesthetic controversy does not recognize the necessity of justifying the work of art.

When all these things are lacking there is no culture; there is in the strictest sense of the word, barbarism. And let us not deceive ourselves, this is what is beginning to appear in Europe under the progressive rebellion of the masses. The traveler knows that in the territory there are no ruling principles to which it is possible to appeal. Properly speaking, there are no barbarian standards. Barbarism is the absence of standards to which appeal can be made.

Under Fascism there appears for the first time in Europe a type of man who does not want to give reasons or to be right, but simply shows himself resolved to impose his opinions. This is the new thing: the right not to be reasonable, the “reason of unreason.” Here I see the most palpable manifestation of the new mentality of the masses, due to their having decided to rule society without the capacity for doing so. In their political conduct the structure of the new mentality is revealed in the rawest, most convincing manner. The average man finds himself with “ideas” in his head, but he lacks the faculty of ideation. He has no conception even of the rare atmosphere in which ideals live. He wishes to have opinions, but is unwilling to accept the conditions and presuppositions that underlie all opinion. Hence his ideas are in effect nothing more than appetites in words….”

Ortega Y Gasset, The Revolt of the Masses (1930)

By being themselves. By being true to themselves. By cultivating themselves and their abilities.

And by being bigger people than the snide folk  on American Idol, who were shocked by just how well one frumpy, middle-aged woman without any Hollywood glam could sing.

I’d rather listen to Susan Boyle anyday than some of the no-talents whom nobody would listen to without the hype, glitz, skin, and sensation accompanying them.

Individualism has many faces. Ayn Rand’s isn’t the only one… or the truest one.Don’t let misinterpreted words or misunderstood theories scare you away from the one approach that has a chance of succeeding in the political climate today.