Avoiding the Risk

If you are powerful, and you believe power can only be legitimately earned, and demonstrated, at the expense of others, movement toward a more consensual working model is the risk to be avoided.

A more consensual model shares power. Governance that is consensually legitimate has a more democratic than a republican aspect. The powerful are legitimate only by the verifiable consent of the governed. Power, then, is shared non-zero-sum. People that want to be powerful gain power without it being at the expense, but to the benefit, of everyone else.

When Republicans claim tax-cuts for the rich provide a non-zero-sum benefit, they mean that the inequitable distribution of risk and reward ensures the best and the brightest rule and everyone else, by nature, legitimately follows. The detriment exacted--their gain being our loss--is the general welfare verified by the inequity. So, when regressive tax policy has current value, like we have now, and our income declines against rising prices, it is really for our own good even though we are too unsophisticated to realize it. Those few among us who, being the best and the brightest, do realize the otherwise invisible, indivisible benefit of inequity, and thus having gained the secret knowledge consent to it, are more likely (naturally selected) to experience upward, class mobility and enjoy (earn) high executive compensation derived from the inequity.

Since, however, the masses (the non-elite) will always demand equity without earning it, it is necessary to come up with clever means to structure the distribution of risk and reward. Power is then structured for executive administration (with all the rights and privileges legitimately earned and enjoyed therein) that looks legitimately consensual.

This conceptual framework for structuring power essentially describes the Hamiltonian model of political-economy conceived by Federalists at the founding of our nation. It is a working, conceptual model--the practical philosophy of federalism--that survives to this day, successfully avoiding the risk proportion the upper class inherited from the king.

In order to conserve the risk proportion in the upper class, which became the "ruling class" with a revolutionary philosophy of legitimacy, it was necessary to interrupt the natural tendency to achieve pluralistic consensuality.

Working with the new concept of "natural right" to private property ("life, liberty, and the pursuit of happiness"), Federalists successfully avoided the fully assumed risk of loss that kings arrogantly, and unempirically, take for granted as divine right. They were able to ensure a more republican model and avoid the momentum toward a more consensually empirical philosophy of democratic legitimacy by arguing that democracy is inherently unstable--always on the brink of mob rule, with the French Revolution being the best example at the time.

To this day, conservatives regard democracy to be an inferior form of government, which leads their critics to accuse them of harboring fascist sentiments. Conservatives then rejoin that their critics are un-American which, as we know historically, means that anyone that does not embrace conservative philosophy must be a communist, implying that the only alternative to the overwhelming systemic risk capitalism presents is communism, and that is not true.

Again, the exchange of ideological recriminations has an anchoring effect--it is a psychological tool for limiting the probable alternatives. Our two-party system, for example, is set up to avoid the stigma of ideological recriminations--when party A reaches the threshold of voter tolerance, party B does not look so bad, and so on, ad infinitum. This binomial system is familiarly "American" and avoids being ideologically branded as "communist" or "fascist" which are objects of much fear and loathing (angst).

The effect of the angst (retributive value) is reduced (avoided and accumulated) with a system of government that produces reliable, dummy-variable results, conserving the material, economic stakes through a systematically, ideologically structured process. Power is deliberately structured to conserve the angst (the stakes), keeping the distribution of the risk proportion in a beneficially detrimental condition of boom and bust (the angst systematically determined, which we call "systemic risk").

Keep in mind that while the risk cannot be reduced, only accumulated and distributed, the angst (the feeling of being anxious) can be psychologically reduced.

Psychological tools are employed to reduce angst, which makes it appear that risk is being reduced when it is really being accumulated (repressed). Indeed, power is structured to manage the angst, which is a philosophical pursuit (managing probable ideas and beliefs), not a material pursuit (managing wealth and the probable distribution of the risk) in priority. Making people believe that tax cuts for the rich benefit those that are not rich may be a function of structuring a system of material rewards and deprivations, but it is largely a philosophical endeavor to agnosiate the verifiable evidence and vitiate the consensual will of We the People.

When we incur the detriment, we are being told it is in the interest of being prudentially risk averse. If we do not allow the elite to gain the benefit, the detriment will be even worse, which is philosophically consistent with the belief that ensuring the welfare of the rich in priority ensures the general welfare despite the verifiable evidence--the Great Recession, for example--to the contrary. Going with the verifiable evidence is a philosophical pursuit--it is the philosophy of science in which truth is verified by replication of the results under the same conditions.

To vitiate the verifiable evidence, conservatives generally argue, for example, that the cycle of boom and bust, although not readily apparent, is really an indivisible net benefit derived from an apparent, divisible assignment of risk. Contending that the business cycle ensures we are always being led by the most competent--successful--managers is a philosophical argument systematically validated by repeatedly invoking the angst (the probability) of it being worse if abandoned (which is to psychologically manipulate the level of angst associated with an unavoidable, constant, risk proportion). The veracity of the argument is derived from the probability of abandoning the reliable assumption (the philosophical interpretation, or conceptual modeling) of the risk proportion that is never abandoned. It is a tautology that systematically goes untested and is used to falsely induce the evidence to technically support it.

When, for example, technical analysts say a weak dollar causes commodity prices to rise, the assumption (the philosophical interpretation that determines the working, conceptual model) is that too much money is pluralistically chasing too few goods. We are not, however, all-together, collectively, pluralistically, bidding up prices. Instead, the "too much money" is really money that is too consolidated, which causes a highly divisible benefit (assumed, or modeled, to be the upper class) derived from a highly structured assignment of risk (assumed by the lower class).

Technically, the indivisible net benefit is a false, philosophical argument modeled to effectively avoid the risk and accumulate it into a crisis proportion. What is characterized as the unapparent, "secret knowledge" that only the "successful" elite of society understand is but a patent, pious fraud committed to structure risk so it can be assigned on command through means that appear to be cyclically ontological.

The false, philosophical ontology is the cycle of boom and bust modeled to look pluralistically legitimate. Thus, conservatives contend, any counter-cyclical action to redistribute the accumulated value is thievery--it is illegitimate. Since illegitimate accumulation of value is naturally retributive, this tendency to thievery has the retributive value of making the down-trend of the cycle longer and deeper, which is, of course, the current conservative argument to explain why capital is not being used to create jobs--because it is being hidden, protected, from thieves.

Conservatives currently contend, philosophically, that the wealth of the nation having been successfully consolidated into the hands of the upper-class is ethically legitimate because they earned it. They are the legitimate winners of a pluralistic competition (a popularity contest) in which everyone is free to participate. Success is not inherited by divine right, but legitimately earned by popular consent.

With dollar votes "We the People" have the freedom to buy and sell, or not, in the free market. Government intervention is not necessary because a free market is a pure, direct democracy (as long as it is not allowed to consolidate) with a completely legitimate outcome from the bottom up. Risk never gains a retributive value because it is efficiently diffused (unconsolidated) and thus systemically avoided (unaccumulated in a NOT-too-big-to-fail proportion).

Government intervention into the natural, distributive-order of things is the source of systemic risk. Errors accumulate into a naturally occurring, cyclical process that is otherwise a "normal" business-cycle distribution of risk and reward legitimately earned (and consolidated, supposedly) by popular consent of the governed. Interrupting the natural distribution is a moral hazard because it corrupts the popular consent of the governed, and popular consent is the legitimacy necessary to avoid retributive valuation and accumulation of the risk (only if "the value" is not allowed to consolidate into a crisis proportion, however).

People are not governed by men, but by law--natural law. "We" are all equally governed by the law--the legitimate ontology--of supply and demand, for example (and those most apt to manage it and consolidate it, but not without the consent of the governed). Those most capable of managing the law (and avoid the risk) naturally govern, producing an indivisible, non-zero-sum benefit guided by the divisible, invisible hand of providence (the utilitarian incentive--the natural, moral imperative--to earn reward in self-interest).

Confiscation of earned wealth (and power) is a moral hazard. It usurps the consent of the governed and corrupts its legitimate power of empirical confirmation. It robs society of its best management. It is like the king wanting to manage the affairs of middle-class merchants who know best how to network the externalities and manage the risk to produce value for the sovereign which, after The Revolution, became "We the People" (the bourgeois class of property owners who have wealth and, thus, power that the king thought "We," the plurality, were stealing).

Redistribution of wealth, then, conservatives argue, unnaturally models a retributive value. Redistribution (the consolidated value retributed, but not necessarily deconsolidated because that would effectively diffuse the risk of retribution into a divisible, micro-risk proportion and reduce the need for government) negates the indivisible net benefit that otherwise obtains. This natural-law argument used by conservatives is but the self-concept method of practically modeling the risk proportion. It is essentially the same philosophy maintained by monarchs with the divine-right argument.

Understanding the "nature" of retributive value, conservatives maintain, is the secret knowledge that is invisible to the non-elite. "The People," the otherwise unruly masses, will always mistakenly demand government spending to counter the natural detriment exacted by the business cycle without the wisdom of their "natural" rulers. Elite wisdom (self-conceptualized) is needed to collectively self-actualize. It allows our real self-interest to actualize in a necessarily representative form (acting as our super-ego).

An unsophisticated, unruly mob, retributively motivated by immediate satisfaction of the appetite against the reality of naturally limited resources, naturally depends on the "upper" class to consolidate and conserve the wealth of the nation and, thus, its long-term, economic security. It is not in the self-interest of the masses (modeled on the self-concept of the elite) to counter the long-term, ontological trend of the business cycle and the self-conceptualized wisdom of its elite managers.

The business cycle not only naturally confirms, privately, who the winners and losers are, but also determines who is more apt to represent the long-term interests of the republic, naturally acting, publicly, to counter the retributive demands of mob rule despite how unpopular that may be. So, you see, for example, it is really in everyone's self-interest to allow unlimited amounts of money be spent to ensure the best and the brightest are elected to public office. It is the job of elite republicans to exact the austerity that naturally occurs--like the Republicans are doing now with Democrats conspiring under the guise of being anchored-in to an unpopular compromise. We will find out, empirically, however, that this binomial, conspiratorial management of the accumulated, retributive value (the macro, gamma-risk proportion) derives and confirms the legitimacy of a massive benefit from a massive, zero-sum detriment with the force and legitimacy of public (republican, elitist) authority. Since the legitimacy is derived and confirmed without the consent of the governed, the value derived is even more retributive than before, not less. Technically this means that the risk is still gaining in a catastrophic, gamma-risk proportion (that is: the length and depth of the recession is being supported, not resisted, by the policies and programs of both parties).

With the recession getting more political support than resistance, we can expect equity values to continue rising along with the need for government spending, budget deficits and, ironically, low interest rates to encourage inflation (employment) rather than deflation (declining demand). Since, however, low rates are being used to bid-up commodity futures, we can expect to have both inflation and unemployment supporting equity values until demand is so depleted that there is no possible way to pay the debt accumulated both public and private. The result then will be a massive, catastrophic correction unless we change the tax code to pay down the debt from the top down and increase income from the bottom up right now...today! Since this is not an elite, republican option, however, the natural, catastrophic risk proportion will not be avoided.

The realpolitique--the real structure of power--is an elitist model, not a pluralistic one. It deliberately operates to avoid (accumulate) the risk in the guise of popular, pluralistic consent. Since the legitimacy is empirically false, the value becomes fully retributive (the value commands a massive corrective wave in a catastrophic, consolidated, gamma-risk proportion). The mob rule that conservative philosophy operationalizes with the realpolitique of the administrative state to avoid is rendered evermore sure.