A New Road to Serfdom

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  1. Taking back our votes, taking back our data, taking back our autonomy of minds, etc…these are some of the ‘non-violent avenues of redress’ still available to us. But they are self-focused. And quiet. As Pack members, it is our responsibility to do more.

    We must Howl.

  2. Avatar for bhunt bhunt says:

    Howl. I like that!

  3. Avatar for jz1 jz1 says:

    In engineering, the order of the system is defined by how far back the system’s current output depends on historical inputs or stored states.
    The elite with high order brain power play games with the crowd who normally just remember what happened during last netflix episode.
    As long as we all accept there are high order thinking humans and low order thinking humans, the game will be played for ever. I see no hope in resisting by the crowd. Just play along and the game will reach a natural ending when finally the low order thinking crowd wake up and starts killing who pissed them off 1 minute ago and nobody will pay attention to how the game was set up 20 years back.
    That’s why the occupy wall street ended without being occupy central banks because it was too cold in winter for anybody to sit outside and we all need to go back to work to get paid a paycheck to get by next month.

    ET illuminated the common knowledge game and how it is played out across years of time frame. The low order thinking of me will forget about all of this next time my son gets a fever. And yet the elite will keep playing while we all sleep, eat, work, get sick.

    Thanks guys.

  4. Another excellent analysis and dissection of a disturbing trend. The past doesn’t necessarily repeat, but it echos and rhymes. I think J Z highlights a good point. Long term thinkers will always look to take advantage of the power in numbers that short term thinkers possess. One of the characteristics of short term thinkers is not looking down the road to see how something can go wrong. The fail to consider how a reasonable idea today can be corrupted into a future tragedy. An engineering professor I had summed up risk and reward for the engineering profession: “If you do a really good job, you will get a certificate suitable for framing and maybe an (small) equity award. When you screw up, people will die.” He then taught us how to do Failure Mode and Effect Analysis (FMEA). It taught us how to look at all the potential ways that a system could fail, what the consequences of that failure could be, how likely it was to occur, how expensive it was to prevent and then to prioritize the failures that would be the most likely, most catastrophic, or least costly to avoid.

    I don’t believe that anyone or any group of people look to empower a Despotic Strong Man. They simply fail to see how the benevolent dictator could turn into the despot. Typically, it’s not the same individual or group that changes from benevolent to despotic. The power gets vested with the benevolent and then the despotic realize that the power and control they need is available in that role, so they get appointed, elected or assigned to that position. The short term thinkers never imagine that a non-benevolent actor could take over the power, so they don’t prevent it from being granted in the first place.

    This lens is what makes me believe that the framers of the Constitution were engineers and long term thinkers. They built our system of government to be robust, redundant and self-correcting. Over time, the system has been weakened by short term thinkers. In the name of expediency and convenience, they have disabled, bypassed, or removed the safety measures. It didn’t happen all at once and no individual action seemed like a big deal, but when all of them are combined and the current system is subjected to a FMEA analysis, it becomes clear the system is much less robust and has lost much of its ability to self correct.

    Key Ideas:
    Liberty Dies with Thunderous Applause
    A Republic, if you can keep it.
    Falsehood flies and the Truth comes limping after it.

    My $0.02

  5. Thanks Rusty. " A New Road to Serfdom" is a wonderful example of what makes Epsilon so essential. Climate coverage in the media
    is the epitome of fiat news. Nearly everything we see or hear about climate is opinion stated as fact. The idea of giving the central
    banks of the world a mandate to target the composition of the atmosphere in order to maintain a preferred global temperature is beyond ludicrous. The planet doesn’t have one climate fits all. The United States alone has many different climatic regions.
    I lived in Maryland for 40 years. The average annual temperature there is 58.5 degrees F, which interestingly enough is the global mean
    temperature. Now I live in northern Florida where the average annual temperature is 67.6 degrees, 9 degrees higher than my former home. Yet somehow the people who want to plan our future believe that a 2 or 3 degree rise in temperature from now to the year
    2100 is an existential threat to humanity. That would be a big improvement for Maryland’s climate as far as I’m concerned but still
    not as pleasant as where I live now. But Rusty, as someone who moved from Texas to Connecticut, maybe your climate preferences
    are different from mine, To each his own. But one thing we agree on for sure, the central banks of the world have no business getting involved in climate discussions or policy.

  6. So just to be clear, CBs will get greater and greater control over our lives, and when that fails, a strong man will then take over. But happily, social media will color it with butterflies and puppy dogs??? Anybody else want OFF from this train?

  7. The saddest thing about this article might not be anything you’ve written. The saddest thing is that I don’t think I know a single person my age, maybe not anyone at all save perhaps one 55 yr old coworker, that I can convince to strain their patience or attention span reading this.

  8. 100% would not have commented if I knew my real name would be displayed instead of the nickname on my profile. WTF

  9. Two things:

    1. This piece brought to mind the Tragedy of the Commons (TotC) and the first woman to win the Nobel Prize in Economics, the late Dr. Elinor Ostrom (https://en.wikipedia.org/wiki/Elinor_Ostrom#Research). I can’t do her justice here but in short, her data showed preventing a TotC often hinges on engaging a “diversity of institutions” comparable in complexity to whatever Commons is being protected. Global warming is about as complex a Commons as possible, so managing it (if we decide to try) would probably require a many-layered solution (i.e. a diversity of social institutions, from local to global). Is there a role for central banks there, hypothetically? Sure; if only to ensure their policies aren’t actively exacerbating the problem. Does that require a Fed mandate? I don’t know. I do know no one can solve this alone, not even a dictator. Our choice, it seems, is between cooperative management or unbridled anthropogenic climate change. No fun either way.

    2. To the commentors who conflate climate change/global warming with their local average air temperature: What’s really being measured is average global SURFACE temperature, which includes land and ocean temps. It’s ocean temps you need to worry about, because water’s mass & specific heat capacity give it vastly higher storage & transmission capacity than either land or air. Ninety percent of the CO2-induced warming, globally, over the last 50 years has been stored by the ocean (https://tos.org/oceanography/article/the-oceans-role-in-climate). All that extra warmth is transmissible (back to you) via evaporation, circulatory changes, ice loss, sea-level rise, acidification, etc. These have powerful downstream ramifications on habitat, food supply and (least important) average air temp. Think of the ocean as a vast, heavy centrifuge with its temperature being how fast it’s spinning (i.e. how powerful it is). When something so vast accelerates this quickly (relative to historical data and the timescale of evolutionary species/habitat adaptation), it merits attention. Given mass-dampening effects, it seems we won’t even see the full impact of past pollution within our lifetimes. Our grandchildren will.

    So, let’s not be too quick to cry Fiat News! just because 5% of articles mentioning central banks also mention climate change. A better question would be: Why aren’t 5% of articles about EVERY major industry mentioning it?

  10. Avatar for tany tany says:

    Perhaps I don’t understand you JZ, are you saying that we have to accept that people are either “high order” thinkers or “low order” thinkers due to some biological or physical trait?

    If so, why must we accept that argument? Could we not equally explain the behavior and different awareness horizons you described as a product of the output of different personal realities? That is, those with more money and power have more time to think deeply about issues and more incentive to do so, so they do. Meanwhile those with less money and less power have less time and less incentive to think deeply about issues and thus do not.

  11. Avatar for tany tany says:

    An excellent point about assigning powers to the benevolent without considering the potential, couching this in the language of systems thinking and FMEAs helps make your point accessible. Thank you for your elucidation TheCoeus.

  12. Excellent article expressed well, as usual Ben. In ancillary support to the disconnect of reality from narrative, primary discussion revolves around the use of fossil fuels, which fuels or production process, etc. Though I can’t cite the science details here, conventional agriculture contributes more to global warming than the use of fossil fuels, and the issue goes way beyond meat vs. veggie protein. Our soils are sick having too often become an inert medium for chemical distribution. Consequently, they do not hold as much carbon as they should. Healthy, organic-regeneratively managed soils hold the carbon essential for health plants, whether used for food or fodder. (Of course, the oceans are even bigger and more complex to work with when it comes to climate change issues.) For an introductory reference check here: https://www.forevergreen.umn.edu/

    To address reforming agribusiness to be more green requires a breakup of financial and political power, so I do not expect to read any discussion about that by central banks. However, reducing farms to more humanly manageable size not enslaved to debt would add jobs and renew the rural economy, reviving communities with healthy social interaction as referenced elsewhere in the epsilon universe. If, somehow, the financial power centers did decide to finance the regenerative decentralization of agriculture, it could push things a bit towards the values expressed within this pack.

  13. Avatar for rguinn rguinn says:

    I think that’s just what shows up to you. FWIW I just see your avatar and chosen handle.

  14. all I see is race tam as well

  15. I only see your handle as well. Also completely agree that there are precious few who can be bothered to dig into something deep and nuanced like this.

  16. At first it did not make sense to me why such an insightful and rational thinker as Ben would get behind BITFD. But now I get it. It’s just too hard to get even a handful of people to see how twisted and grotesque the incentives, messaging and math around share buybacks have become. I even resisted it for a while. It’s just too hard to get anyone who is in a frenzy about climate change to understand that giving central banks this sort of power is a terrible idea. Once these narratives and common knowledge have taken root, it is just too easy for anyone interested in sustaining the narrative to make a right sounding case that will appeal to the reflexive masses.

  17. Avatar for bhunt bhunt says:

    It’s been a long journey for me to get to BITFD, both the language and the sentiment, and I still have reservations about both. But it’s so hard to cut through the constant buzz-buzz-buzz … not just in the general discourse but in my own head! … that I’ve reluctantly come around.

  18. Just like CB’s failed to achieve inflationary targets it is entirely possible the results of such mandate, if realized with prolonged persistence, are worsening of ALL environmental conditions. And that’s assuming that largest 10 CB’s globally failed to reinflate tech and labor-arb. factors (I’ve never bought that). By this time we must have realized that using 1000 valid arguments will not result in successful change or alteration of characteristics that have been proven harmful to wealth distribution emanating out of CB mandates. Fedasury will never relinquish power over existing financial structure even at the cost of internal conflict because over long enough time horizon continuity of the nation, and its influence over the rest of the world who must reflexively employ the same wealth transmission mechanism, is directly interdependent on techdustry and politary. It’s flawless meat grinder and no action, collectively or individually shall be able to stop that machinery esp. when we hypocritically continue to allocate roles such as liquidity provision and market clearance to the same authority. Here is the the place of CB in the grand scheme of things we had to consider regarding a decade ahead:

    “(Fedasury<Techdustry<Politary) are larger in value than Debticits, barring dollar’s collapse, while ET’s relative value significantly smaller” (I added the ET part, as thinking of issues in isolation, in my experience, does not yield stable results)

    1 - There will not be a civil conflict in the US. Politary will succeed in calming unrest, including secession (so do not even hint at violent avenues of maintaining or gaining power). Voting, not designed to solve, will vent off pressure. Social mobility and allocation of resources will fluctuate between tech advancements causing inequality* cycles.

    2 - There will not be a global conflict, kinetically. Foreign policy will preach self-determination, aimed at protecting dominance. External obligations and internal governance will remain mutually exclusive while territorial influences and alliances subject to hysteresis effect become more fluid.

    3 - Fedasury will survive shocks and bubbles, including currency failure. Debticits will be irrelevant, relative levels of competitors will respond in line. Recessions will cause dislocations, fallout managed expertly, new wave of risk taking will resume on reformed liquidity. No UBI.

    4 - Politary** and Fedasury will remain independent. Techdustry are controlled by both. Liberal democracy*** will continue to play its role - meticulously engineered, necessitated by adversary’s political philosophy and against spontaneous internal interference. Remove techdustry controls and it will fall apart. System is self-corrective under various disequilibrium of internals, vulnerable to coup-d’tat but subject to lengthy notional persistence (and to two tail events we had mentioned previously).

    *Poverty will painfully, steadily eradicate pay-to-pay group mostly through unaffordable real estate and self inflicted harm. No action, individually or collectively, will improve their conditions. For this hopeless group, the world cannot end fast enough.

    **Politary will fail to protect population and land due to rapidity and obscurity of tail events. We clearly see hardware, including missiles, rotting away.

    *** There is a trap in constitution based on liberal democracy based on national self determination. If democracy declines tendency to act liberally rises causing applied constitution to decline. If democracy rises liberal nationalism declines causing applied constitution to rise. The result is unconstrained or inhibited liberal nationalism, both combative. If each human is potentially a nation then self determination is defined as commonality, based on subjective superiority, expunging diversity of subjective inferiority.

    This is direct result of CAPM model where risk free rate is inevitably placed relative to social, instead of natural elements - “manipulating the price of capital of issuers who fit or do not fit a particular standard”. Mandate out of CB to tackle climate change is entirely within purview of techdustry - a very much “anthropogenic” conclusion of usury.

  19. Avatar for rguinn rguinn says:

    I hear your frustration, but I don’t agree with your conclusion. Yes, of course bread-and-circuses is a thing. But history is full of both bloody and bloodless revolutions against entrenched powers playing bread-and-circuses games.

    I disagree with your lament, too! The fact that you have correctly focused your life on your children, their health and their day-to-day welfare isn’t what makes you vulnerable to the game-playing of the elite class. It is what makes you resistant to it! You are 100% right that we won’t win by pretending that we will be able to out raccoon the raccoons. So don’t. Double down on your kids, friends and family. Triple down.

  20. Avatar for rguinn rguinn says:

    Yeah, I agree with most of that.

    And it’s not that I’m not an ardent admirer of the best constitution ever written for a government of man (I am!), but it’s worth remembering that fear of would-be monarchs WAS a short-term consideration for them, too. I don’t think it’s so much that we are occasionally blessed with people capable of playing long-term games so much as there are times in history in which mitigating short-term fears coincides fortuitously with good long-term governance. (e.g. UN / free trade springing out of world wars, America’s constitution, etc.).

    We will always be governed by recency bias and the belief that our current problems are existential and bigger than our systems are capable of handling. It’s simply too powerful a meme for ANY politician to resist. I think the trick - and this is a core idea of the Clear Eyes / Full Hearts series Ben penned - is how we keep our values, civic qualities and partnership with others during Long Nows, those periods when the divergence between those short-term and long-term interests is especially wide.

  21. Rusty - in regards to, “why am I reading this now?” It would seem to me this is the much needed first step prior to a full blown MMT regime taking place.

    1. Fed broadens mandate to include mitigating the impacts of climate change
    2. Congress issues gobs of “green/infrastructure” bonds
    3. Fed buys those bonds
    4. Commence building ziggurats

    In this way, there is no debate surrounding the merits of MMT, only Climate Change… You’re not one of those climate change deniers, Are You?

  22. With all due respect what kind of sea surface data are we extrapolating, as in how much reliable data do we have before 1950 of global sea surface temperatures? The tos article even states “Continuous climate records longer than a century or more are available for many cities, but are unheard of for the ocean. In the last 30 years, there has been great progress in expanding ocean observations to the point that we can start to address climate problems, but the shortness of the records is a constant impediment to progress.”

    I have no doubt we are disturbing the planet but this “deity” status of humans thinking they are the causes of all things good and bad, or even worse that they can solve all problems, is what scares me most. This planet survived far worse cataclysmic events than our 100 year old industrial revolution. Mother Nature is far more likely to kill us off before we come close to killing her.

  23. Avatar for rguinn rguinn says:

    I think it will be hard to differentiate between Yay, Infrastructure! and Yay, Environment! memes, both of which are insanely powerful. But yes, I think what you describe is one of the ways they could manifest. Almost impossible to combat. Some unfortunately soul on Twitter used almost the exact “You’re not one of those…” words above to express his disappointment in Ben. It won’t be the last time.

  24. Agree 100%. Earth with be fine. It doesn’t care one way or another about any of this. Climate will keep fluctuating over geological timescales with or without us, just as it presumably has in the past. That entirely misses the point.

    We, homo sapiens, are the fragile ones.

    But hey… I’m not on Twitter or FB or anything, so WTF do I know? Apparently, the real manly solution is to spam memes with #BITFD and hope for the best.

  25. Avatar for anm89 anm89 says:

    Wow this one really got me because as a Hayek fanatic and general central bank distruster I still end up trying to defend the pro CB increase in scope side here inside my head when it comes to climate change. Even as someone who is totally intelectually primed to hate this argument, climate change is the one thing that I think so deeply necisitates coordinated top down action, that I was willing to suspend my common sense and say “maybe this justifies it”.

    But it obviously doesn’t and this article helped me see it. There are a million ways to coordinate action against climate change that a involve elected officials and democratic systems . The fact that people go to the Fed and the ECB specifically when they need a strongman is indicative of just how troubling and preverse these institutions are. They are the least inventivsed to work towards real equitable solutions and due to their total lack of transparency and accountability are by a factor of 100x the most likely to turn an expanded mandate into a new and exciting way to transfer more wealth in bulk to a group of political and financial insiders(FTR I’m not anti wealth, I’m anti wealth being transferred in this manner).

    So yeah, proven for the nth time to myself, a good chunk of what you need to know about the world can be learned from Hayek, and every time you think you’ve found an exception, you haven’t.

    Great article.

  26. Avatar for anm89 anm89 says:


    Occupy wall street was never going to turn into Occupy the fed regardless of time or resources IMO.

    They could barely decide which park to sleep in more or less complex political goals. This wasn’t an individual failure of that iteration of occupy, it is a general failure of the model of people deciding to be vocally angry in public without any cohesion or agreed upon goals(ie the occupy movement.)

    HK has shown just how hard affecting change in this manner is even if you have incredible cohesion and very defined goals. Occupy never stood a chance.

  27. A long article on yet another federal agency jumping on the global warming bandwagon because they see it as a path to power and money. Even the DoD joined the global warming bandwagon years ago. The science on global warming is far from settled, contrary to what Obama often claimed. You use the term “belief” to to justify your position on global warming. That’s a term associated with religion. It is far from science. I accept that you and many others have a child like belief in global warming, sort of like Santa Clause for the under 5 year old set. Global warming is just another narrative. Narratives are often not based on the truth. They are convenient for some person or group. Narratives can live a long time with a false basis behind them. But in the end false narratives fall apart because they don’t work. The global warming narrative has peaked and is starting to fall apart. Can’t happen soon enough.

  28. Avatar for 010101 010101 says:

    Is Macroprudential really a valid concept?

    The word suggests foresight or wisdom with the macrocosm.

    The universe is larger than any actor within. It is not anyone’s to control, no matter how sage they perceive themselves.

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