"Organizing for America"

"It is time we start organizing for America," the President recently declared. It is a practical expression that affords more than hopeful inspiration. It recognizes the political-economic maelstrom we face reduces to dependance on a singularly independant variable: organization.

The Supreme Court's decision to extend the corporate's virtual freedom of speech into the realm of inalienable right pushed all sensible "hope" for an equitable co-existence with the most alienating organized force on the planet over the virtual edge.

It is naive to think the corporate is organized for inclusive, participatory ontology of purpose like democracy. It is organized to isolate, alienate, from the ontological legitimacy of democratic process. It is organized for, and empowered with, a specific purpose: to limit liability, if not a direct accountability, which has always been pushed to the very limit, and now beyond.

What the lack of accountability does not provide, the limited liability of the corporate will. Its legal status of limited liability is empowered with an organizational technique that reduces the risk of a verifiable accountability to the semantics of legal argumentation. Rather than being decided in the marketplace, accountability becomes more a function of a co-optable legislative and judicial procedure than the probability of firm and market risk.

For the analyst, the corporate creates a black box that prompts all manner of technical tools to divine market trends. Analyses often resemble a divination because of the elitist, command quality built into the corporate structure. While equity price data, for example, does not lie, and should accurately reflect the alpha-risk, regression of price and volume patterns harbor hidden variables, like direct manipulations, that suggest future trends and predictable patterns of risk. The regressions are statistically significant but inferentially flawed.

Whether alpha or beta price data, regression on upper and lower indicators includes any manipulation and may, in fact, over time, technically indicate manipulation of prices. If the objective is to falsely indicate a trend over time by manipulating the technicals, however, the risk pattern becomes an infathomable fractile reduction with an ultimate probability only known to the manipulator at any particular time, dependant only on the gamma risk.

Trends, most importantly the macro trend, can be largely determined by a systematic organizational typology. Systematic trends emerge and apply with spurious and confounding, independant variables by elite directive that phenomenologizes the level of risk.

Despite the arbitrary and capricious variations by elite directive, the hierarchical regime of corporate bureaucracy renders the pattern, direction and level of risk a relatively easy, teleological inference.

Organized consolidation into large corporates to avoid the alpha risk gains capital without actually winning what the value is supposed to represent--gaining market share by expansion of the pie, not consolidation of it. The legitimacy of the capital gained and accumulated as the private property of the investors, despite having avoided the risk rather than having gained it, is nevertheless maintained along with the naturally endowed right to use it as they see fit.

The right to use property (capital) as one sees fit being evermore extended to the corporate as a "body" with inalienable rights provides a scapegoat to which the liability is attached. The system is what is blameworthy. The system motivates action and consequence, not the people in it.

By incorporating, then, more power can be gained than a person can be held liable for. Exponentially more power can be applied than one-man-one-vote can account for by organizing into a corporate "body."

Deliberate organization of the capital into an oversized corporate bureaucracy, which includes being operationalized with government enterprise (the recent bailout, for example), maximizes effective power while minimizing accountability and potential liability.

The motive to maximize profit no matter the cost, like pollution, for example, is the result of the system...we are organized to do it. In the same way, massive unemployment, forcing mass foreclosures and negative net worth to support maximum profit margin (resisting the declining rate of profit) is a systematic, organizational problem. It is beyond the culpability of individual corporate "bodies," each with an individual natural right to property and the pursuit of happiness. (Notice how pluralism of the corporate body into "individual" legal entities with discrete articles of incorporation lends the value of legitimacy. If all the corporates consolidate into one body through mergers and acquisitions, the concept of "the body" loses pluralistic legitimacy and is considered to be an illegal trust with more power than "individuals" can possibly have. It does not, however, in the name of achieving free-market "synergies" or "networked externalities," prevent corporates from being organized to sytematically operate, including the function of government, as one body referred to as "the corporate.")

Yes, the political-economic maelstrom we face is an organizational problem. We need to organize for an easy and direct accountability that the current organization does not provide.

Easy alienation of the liability cultivates an untrustworthy environment that is likely to result in a perennial "crisis of confidence" technically indicated as "too good to be true."

Bush's tax-cut policy, for example, resurrecting the so-called supply-side economics of the Reagan administration to provide both robust economic growth with low inflation (low deficits) was too good to be true. The result, The Great Recession, was easily predictable and fully indicated well in advance.

In addition to a technically inverted yield curve, general short-term reward patterns emerged with Bush's tax cuts that did not fit an empirical regression on the long-term risk factors (high deficits with low interest rates, for example), indicating risk was being avoided, accumulated, and shifted to the system. The risk was organized into what is known as the systemic risk.

Bush's tax cuts shifted the liability from the private, corporate sector to the public sector where the legally sovereign, "We the People" reside (privatizing the reward and socializing the risk). While the benefits (assets) accrue privately, the costs (liabilities) accumulate publicly, and because it results from public policy, due process infers the distribution of costs and benefits is by the legitimate consent of the governed (the sovereign power).

While we can pin our problems on Bush's tax-cut policy, the corporate claims, at the same time, the recession will not reverse without it. What is the truth? Where is the liability?

With the liability being largely scapegoated, all that is left is the accumualted gamma risk to be managed by the Fed and Treasury with a huge budget deficit (the bureaucratic model of power and political economy).

What remains after the limited liability is a corporate waste product, an accumulated risk, to be dumped into the sovereign environment of "The People."

Like pollution, the corporate "body" is immune to the detrimental status of being a sovereign body because it is not actually a real, "organic" person. Nor can its growth--its consolidaton of power--be considered "organic." It is artificial, an "artifice" of power masquerading a massive organizational detriment (the liability) as a public good administered for the general welfare.

How can the legitimacy of the capital gained be maintained if the risk is avoided and not taken? The risk avoided then becomes the gamma risk--a systemic, organized risk that causes the need for government management and authority. Without intervention of government authority (mostly by regulatory and judicial command and control), the legitimacy fails.

In the absence of a legislative regulatory authority, the executive serves to manage the systemic risk, like President Clinton's "working group" managing the risk posed by Long Term Capital Management. While this group may have thought they had avoided the regulatory gamma risk, the risk was accumulated and organized to present as systemic risk in the future with the benefical "growth" properties of being "too big to fail." The free market failed in this case because it was allowed to consolidate (grow) into "dark markets" that are inimical to a free market system.

While the result of a deregulated and highly consolidated marketplace, replete with "synergistic" efficiencies and "networked externalities" (complex interdependencies), is the antithesis of a free market, it is still argued as the successful model of free-market capitalism. The model must be conserved lest we flirt with socialism, defeating the productive incentive of class society and expansion of the pie that allows us the freedom to choose in the marketplace. In other words, it is necessary to defeat the free market in order to preserve it? Is it paradox or a contradiction that indicates a consolidation of power into the realm of full-blown irrationality?

As long as the problem is not identified as organizational size, the solution reduces to the easy control of bivariation: choosing between either a public or private brand of authoritarianism or, more immediately, choosing between liberal or conservative, partisan ideology. The choice voters now face, for example, is being reduced to a false positive: resistance to the failure of the Democratic party is positive support for a Republican agendae by default. Rejection of one automatically realigns the electorate behind the other. In the same way, toggling between a public or private authoritarian regime conserves the macro model of consolidated power by default. The determining variable is organizational size, not partisan program variations, ideological principles, the persuasions of ponderous platitudes, or the influence of corporate money in the election process....

Organizational size determines the ability to command and control the system into a predictable and stable level of managed risk we call "the systemic risk." That risk, and the distribution of rewards, is determined by regulation of economic growth. The legitimate ontology of a free-market process is substituted with the command and control of large, bureaucratic entities organized to default into a system of rewards and deprivations. Since the distribution of risk/reward is a stable, routine task, economic expansion can be considered optimal by default of the system, or by a legitimate ontology of process like a free-market system, but without actually having it. Artfully painted red or blue, the model is effectively maintained authoritarian.

Just because an authoritarian regime effectively operates primarily from the private sector with "properly limited government" does not make it any less authoritarian or any more legitimate. The determining variable is whether the regime is authoritarian, not whether it is public or private, or both.

Since conservatives argue that business is not in business to employ people, and it is not the government's job to employ people, it certainly cannot be argued that a private sector regime is more effectively productive and economically expansive. Hard to be productive if you are unemployed.

Capitalism requires an accumulation of capital. The effect of "capital formation" is employment.

Since capital is formed (acquired) by the profit margin, employment is dependant on the margin of profit. If the profit margin is impeded, taxation for example, the supply of labor (unemployment) increases. As the profit margin increases, then, employment increases. Why is it, then, that exactly the opposite happens, resulting in crises?

Essentially, capitalism effects crises, and authoritarianism, because it does not rely on free markets to manage capital, but to acquire it.
Capitalism must cause unemployment in order to acquire (accumulate) capital. Businesses are then not investing (distributing) to employ people, but to unemploy them to "acquire" capital.
The free market must be avoided in order to accumulate capital because if markets are freely open and transparent there is a declining rate of profit that minimizes inflation and maximizes employment.

Free-market economics is the opposite of capitalism. Instead of an accumulation of value that maximizes inflation and minimizes employment, free-market economics functions with a distribution of value (pluralism) that minimizes inflation and maximies employment. Instead of the profit margin effecting employment (the lowest possible to maximize the profit), in a free-market economy, employment causes the profit margin.

Instead of a direct relationship, if the correlation between the accumulation of capital and employment is inverse, unemployment and deflationary crisis has a 100 percent probability. The probable outcome is the opposite of capitalism's purported benefit to maximize employment and economic growth. Reagan's cure for unemployment, for example, was to cause unemployment. The effect, then, was capital accumulation which is supposed to cause employment. The effect, however, was crisis. Accumulation occured on the "supply side" because there was insufficient demand--because his policies caused a deep recession. It is not the model of high productivity.

It does not do much good to produce a lot of things we cannot afford to buy. It is the productive incentive of capitalism for labor to then work harder and longer for less in order to afford the product. The higher productivity at lower cost does not, however, result in a disinflationary tendency. It is deflationary because the productivity is gained as capital in the form of an accumulated oversupply (including the labor that produced the value).

According to the capitalist theory of finance, unemployment (capital formation) causes employment. Despite being supremely illogical and a thoroughly disconfirmed hypothesis the argument is nevertheless maintained as good and verifiable reasoning. It requires the secret knowlege of the power elite to make any sense (it might make sense after being pinged on the forehead with a hammer during a secret ritual, damaging the moral capacity of the prefrontal cortex) and its currency serves to indicate the power it has accumulated at the expense of "the masses."

The knowlege we need has been empiricaly tested over time. It is encoded in our organizational memory and manifested in our current crisis. Creating wealth is not dependant on mass deprivation of The People. Continuing to maintain that it does is not the product of a secret code embedded in elite knowlege where the natural world intersects with the geometric abstraction of the mind, but the perpetration of a verifiable fraud that lacks the virtue of a moral intelligence.

Organizational size is the secret code of accumulated wealth and power. Alexander Hamilton strongly opposed Jefferson's decentralized pluralism of the nation's banking system because it would not take the "big risk" to build great things. He also knew that a central bank would provide the organizational size necessary to command and control the economy, and our nation, into a plutocracy (a power elite) with a constitutionally democratic legitimacy.

Taking the "big risk" evolved into a $500 trillion overleverage by the year 2000.

The sacrifice necessary to build great things was organized to be the burden of the masses and not the privileged elite.

Maintaining a free-market system in priority instead of building capitalism would have spread the risk (prevented the accumulation of sacrifice into social class) so that everyone benefited instead of just a privileged few.

What Thomas Jefferson strongly opposed at the inception of our nation is essentially what we have now: a strong, centrally planned governance to manage, rather than to prevent, the accumulation of risk that goes with the accumulation of reward (the gamma risk that cannot be avoided). So here we are, now looking to invest small, regional banks to manage the risk and cause employment.

The result of capital formation is not employment, but unemployment. Instead of capital financing employment, unemployment is financing capital. Instead of economic growth, the result of capitalism is the classic, cyclical crisis of overproduction: economic contraction and the consolidation of wealth and power.

Instead of economic growth, the reduction of labor costs with rising productivity gains creates an economic maelstrom. The public is left with nowhere to turn but the public sector (an organized entity that is too big to fail) to reverse the spiraling trend.

As we again struggle with low-to-no-growth despite record profits, capitalism, despite the claim, tends not to be optimally productive considering it is organized to minimize employment to form "The Capital."

If business and government do not operate to cause employment, where does productivity come from?

According to conservative theory, The Capital, not labor, causes productivity. This alienation of The Capital from labor, according to Marxist theory, is artificial; labor and capital are actually the same thing.

Capitalism organizes to accumulate The Capital to be distributed by command and control authority. Deprivation of The Capital (the theory of surplus value) has an optimal productive effect and is what makes capitalism great. It encourgages expansion of the pie by depriving it, so we always have a "deflationary" surplus of goods and services labor cannot afford to buy. It is government's job to then re-inflate the economy or, in the case of the Fed (Hamilton's central bank), to balance the amount of labor-to-capital to smooth the stochastic oscillation (the boom-and-bust accumulation and distribution) of the business cycle.

The Fed, of course, is neither a public or private enterprise, but is supposed to be an independent technical authority organized with business and government to effect optimal productive capacity through the "controlled" distribution of an accumulated capital, just as Marx predicted. Marx referred to this political-economic phase of historical ontology as "anti-socialist socialism."

By design, the alternatives, whether from the left or the right, only appear to be bivariate. It appears to reduce to a hard ontological determinism, but only if we regard ourselves as mere economic animals (homom habilis) devoid of a moral intelligence (homo sapien).

Nature does not dictate we must ontologize with an authoritarian effect.

It is entirely possible to build great things without causing the pain and suffering supposedly necessary to be productive. People are just as likely to be productive, if not more, without being deprived the full value of their production. Strikes are the result of deprivation and abuse, for example. The lack of productivity is the result of the employer looking for a free lunch that, as the capitalist comes to know very well, is not free.

Productivity, if deprived of (or alienated from) its full measure of profit, which is likely to happen in the absence of free-market mechanics (including socialism), is retributively valued.

Just as it was at the time of the American Revolution when the bourgeoise demanded they be allowed the full value of their labor and risk being converted into the king's divine right to property, the capital that has formed (the wealth accumulated, just as it was with the king) is more likely to prevent productivity than cause it.

Why be productive if the value is converted and consolidated into The Capital to be distributed by the property right of would-be kings? If the answer is, to keep from starving, then The People are being treated as mere animals to be abusively exploited by the power elite. It is not because it makes people more productive, but because it demonstrates power. It defines who is powerful (truly independent and sovereign) and who is not.

Usurpation of value and abuse of the middle class was not the right thing to do at the time of The Revolution, as the king found out when the middle class redeemed the accumulated value (the unavoidable gamma-risk ontology), and it is not the right thing to do now. The calculus is a moral intelligence that does not often obtain with the ambitions, and arrogance, of power.

Pursuit of power is an ambition that a free-market mechanism reliably organizes into the public good with minimal deprivation.

Pluralistic pursuit of power renders an ignorance of moral value the enlightened self-interest of staying in business (or staying empowered), not just making a profit that will be otherwise retributively valued. It turns the irrational fanaticism of the ambition to consolidate power, and its dystopic tendencies, into the rational pragmatism of predictive utility and renders a law of intended, rather than unintended, consequences. Power, and its pursuit, is then rendered with a genuine, built-in facility for an empirically legitimate ontology.

Last, and most important, ensuring a pluralistic pursuit of power, by providing an an easily verifiable legitimacy of the outcome with a collective ontology of process rather than a top-down teleology, prevents an accumulation of irrational arrogance.

Since being powerful means being better than everybody else, the powerful are not likely to admit being wrong. Along with being piqued, there is a benefit to be protected, like a profit margin. It is mutually reinforcing--being piqued with the skill to both gain power and keep it. Nevertheless, a stubborn, irrational accumulation of error that is likely to accumulate with power leads to a fanatical pursuit of tyranny often expressed, especially in the American experience, as the liberty to pursue happiness, or the pursuit of one's goals (teleology) to a level of incompetence (to the empirical limit of power, or failure). It is not difficult to see, then, why it is so necessary to organize into a corporate body that is too big to fail--to protect the power elite from itself. The corporate body is engineered so that it will fail safe.

Instead of allowing power, economic or political, to consolidate and be happily exercised to a massive level of incompetence, like the Great Recession, it would be of immense practical moral intelligence to organize for preventing consolidation without destroying the pursuit of anyone's happiness.

Instead of allowing the incompetence of an ever-aspiring elite to always accumulate into a zero-sum benefit--cyclically buying and selling distressed assets at a profit--that achieves an ever-higher level of incompetence (remembering that staying empowered despite being incompetent is to achieve the pinnacle of power), it is possible to organize this cycle of tragedy-to-farce into an efficient means of operationalizing ambition with the general welfare.

Ambition is an empty vessel filled with the values contained within the object of that ambition.

It is possible to turn the ambition to accumulate power into an empowered measure of competence that is not too big to fail.

If the problem as described by small businesses is access to cash, it is being deprived. Deprivation does not build wealth, it deprives it. If we are organized for deprivation, then that is the change we need.

Consolidation of industry and markets does not build wealth. It consolidates it.

If health care is to be the model of reorganization, then the Obama administration is validating a thoroughly disconfirmed hypothesis: the bigger the better. Both parties are busily in competition validating the false efficiencies of an organized economy of scale.

Whether public or private (whether the Democratic or the Republican option), organized consolidation is the problem, not the solution.