Exculpation of the Risk

When considering the "objective reality" of capitalism, keep in mind that the pathos of private equity (in spite of objective reality) does not subscribe to labor value being integral to the profit margin.

Capitalists readily admit that they are not in business to create jobs. The prime objective of the self (what determines our fundamental, objective reality) is to make a profit, and trying to deny the self of this natural right--keeping the full measure of its achievement for yourself, like Adam Smith said--is cause for high anxiety and revolutionary sentiment.

According to capitalism, the value of labor is derived--it is organized--from the accumulation of capital. Hence, anything that encumbers the accumulation of capital (like the risk government adds) predictably deprives labor of value. It is then the job of private equity firms, for example, to re-create (reorganize to innovate) value from the destruction (the dis-integrated relationship) of labor value derived from capital (the value to be exculpated, typically with government intervention).

The reward for working to derive value, remember, is the profit--value created that would not otherwise exist--and when combined with the risk of loss yields an added margin called the return on capital investment, or a marginal profit, often referred to as "working" capital used to add more labor value. So, for example, when both liberals and conservatives agreed to expand home ownership at the margin, they reasoned that the marginal profit would add the marginal product--the labor value--necessary to pay the mortgages.

Capital, however, was put to work in dark markets using "risk-transfer vehicles." RTV's, remember, are the innovation that repeal of Glass-Steagill promised to produce, allowing the financial sector to freely enterprise--consolidate--toward general prosperity. These innovative, risk-avoidance, financial "products" created a marginal profit by starving labor of added value, effectively positioning labor to take all the risk, leaving private equity with all the reward.

Since the profit margin is based on the amount of risk taken, reaping the reward without risk is illegitimate--it is racketeering.

Disguised as free marketeers, "gangster capitalists" do not just predict outcomes, they cause them. They determine outcomes with the intent to cause harm, and the only risk left is the risk of retribution. The exculpatory claim here is that capitalism predicts nature by organizing its otherwise high-anxiety, undetermined risk, and so encumbering the free enterprise of capital increases anxiety and the risk of civil disorder.

To protect themselves from the risk of retribution, these criminals must engage in a moral narrative that exculpates the risk-value, typically arguing that prosecution deprives the talent (the psychotic intent, the selfishness, that they refer to as self-interest) needed to put capital to work. (In order to conserve the philosophy of selfishness as the moral imperative--as the prime objective--government is then used to conserve the status quo. Conserving the inherent risk in order to avoid it, which is extremely psychotic, is referred to as maintaining civil order, or reducing probable panic, by bailing out industries and markets designed to be, in everyone's self-interest, too big to fail.)

Organizing the capital for expanded home ownership resulted in massive unemployment and foreclosure. It was rigged to yield a marginal profit by causing detriment, meaning that the reward was had not by taking risk, but by making risk--making the market for its conspicuous, class-consumption. (The consumption is conspicuous because it defines--it gives objective identity--to who occupies socio-economic space. Since anybody can occupy this space by organizing risk to make a profit, like Steve Jobs, the risk is generally exculpated. So, for example, it would be a moral hazard to mandate Apple, or any other firm, make its products in the US if it wants to sell them here, or tax away the marginal profit to provide the income to buy its products.)

In the case of the mortgage crisis, instead of adding the income--the labor value--needed to pay mortgages and maintain the net worth of the middle class (if you are shipping jobs off to China, for example), the capital derived from labor (both here and in China) has been, and will be, put to work consolidating these assets into the wealth of the upper class. The added wealth is referred to as "the wealth" that measures the general prosperity "of the nation."

The accumulated wealth, naturally, overflows and generously trickles down. Surplus wealth naturally transforms into capital to provide for the less fortunate. Wealth is provided to the less enterprising who depend on the organizational skill (the capital formation that comes with the desire to make a profit derived from labor) to produce equity.

The objective to consolidate wealth (and the power derived from it) adds value ("equity," or private property that markets determine to be "fairly" valued upon acquisition). Capitalism adds private property...specifically, the private property foreclosed and resold, or that trickles down to "make" markets so that profits are generated to re-add the (fairly determined) value consolidated. Liquidation, then (a contradiction that is euphemistically described as a paradox), provides the liquidity necessary to generate the nation's wealth and the employment--the productive incentive called "labor value"--to sustain it.

Private equity, you see, and "making markets" performs a public service. It provides a public good--the capital that creates jobs. That is, according to the pathos, it derives labor value from capital that would not otherwise exist. Capitalism, rather than being the abomination that deprives labor of its full value, "objectively" provides labor with more value than it would otherwise have.

Instead of being risk prone, capitalism, in reality, Ayn Rand would say, for example, is objectively risk averse. Since liberals do not have the depth of understanding (the secret knowledge--the pathos of the unseen hand that exacts fairness) to realize the benefit private equity provides, they mistakenly try to add capital through stimulus programs.

Liberals do not understand that by exacting economic rent from existing businesses we add (with the invisible hand) the stimulus value needed for sustainable, economic growth. By mistaking economic rent for detriment, liberals do not understand that the profit paid to form the capital (the rent), with debt acquired from the discount window at near-zero rates like private equity, hedge-fund firms, and the proprietary desks of big banks do, adds all the value we need to repair the damage of government intervention.

The profit paid to gain capital should not be taxed or regulated if we are to enjoy its fullest benefit. Instead of making big banks pay down home equity values from profits made on money borrowed at near-zero rates, for example, the market should be allowed to freely enterprise.

Private equity, "acting" in self-interest, should be allowed to freely demonstrate its power to provide liquidity (which was paid by homeowners in the form of economic rent). Private equity will solve the liquidity problem by buying up millions of homes in foreclosure whose value was essentially destroyed by RTV's and the proverbially postulated, providential hand of economy-of-scale firms invisibly operating in dark markets. Liberals, however, according to right-wing reactionaries, do not understand that beneficial value is (paradoxically) created from the destruction (the detriment) if they do not "react" by intervening in the marketplace.

(It is important to understand that given a consolidated marketplace the "invisible hand" simply refers to a lack of transparency and participation, and again, this is a contradiction--a liability--that must be exculpated by fraudulently claiming it is a paradox to be tolerated. Given an unconsolidated, free-market, organizational ontology, however, the "invisible hand" effectively acts, rather than reacts, to limit the need for government intervention.

That a free market really works if we ensure it in priority rather than supporting a too-big-to-fail ontology as a given, objective reality is the secret knowledge that capitalists don't want us to know. Capitalists don't want a free market because, without deconsolidation, arguing for limited government renders an invisible hand that visibly "ex-acts" detriment, which demonstrates who has the power to self-determine, or who consumes the detriment "ex-actively."

If allowed, by objective, to operate without a genuinely free market, the detriment that capitalists exact demands government react with intervention. Not only does it exculpate the risk-value, but consolidation results in welfare, which includes bailing out wealthy bankers, subsidizing corporate conglomerates that pay out healthy dividends, providing doctors with a very healthy fee for service, and health insurance premiums by government mandate, just to name a few.)

The secret knowledge--the reactionary pathology--is that fiscal stimulus does not add value, it adds risk, and so, according to the psychopathic predators of private equity, liberals--and their ignorant constituents--mistakenly think that capitalism deprives value when it really derives it. Not that this is wrong...capitalism does derive value that would not otherwise exist, but it is falsely derivative value that naturally tends to re-integration and causes the angst--the crises, the gamma risk--that capitalists falsely claim is added risk.

The mistake of liberalism, right-wing reactionaries contend, is the source of our anxiety, not capitalism, because it adds risk, but as we know, risk cannot be added. Risk, however, can be liberally reacted to. It can be transformed to accumulate and distribute so that the retributive value is never so high that the risk and the reward does not fully reintegrate (or converge). Labor value is conserved as a false derivative of capital formation and risk is kept consolidated in a predictable, too-big-to-fail, crisis (or gamma-risk) proportion that is always being re-acted to.

(Reactionary politics, in other words, does not allow the risk and reward to converge in the gamma dimension where the value derived from the risk is otherwise exculpated with the force and legitimacy of public authority. Acting to deconsolidate the risk in this dimension will reduce the divergence, and thus the need for government that is otherwise reacted to as added risk.)

When government authority reacts, then, to the accumulation of labor value as integral to the value of capital by retributing the value in the form of welfare (or warfare, perhaps, including class warfare, like we have now, for example), the wealth that we call private equity is there to reap the profits of the distribution. The derivative value is maintained in historical perspective and private equity then claims it is operating--deriving value--by predicting the outcome.

Exculpated by exemplum, capitalists argue that the objective is to add value by reducing risk, not immorally adding risk, and causing angst, like liberal "socialists" do.

While private equity and hedge funds may profit from the errors of liberals by predicting the outcome, capitalism, conservatives claim, does not manage capital to cause detriment by objective, and indict their critics are too "intellectually lazy" to understand the benefit it objectively provides. The detriment is really an intended benefit, but most of us just aren't smart enough to get it, and so the gangsters claim they are prone to being unjustly victimized, prosecuted, for doing the right thing.

Enterprising capitalists do not "make" a profit by "making"--or determining--markets, but by organizing it to reduce the risk, which predictably yields a profit. Never mind, however, that the risk reduction they refer to "makes" for a consolidated marketplace. Instead of reducing it, risk shifts to anyone that is, anxiously, not too-big-to-fail (which makes for the ninety-nine percent).

Always arguing for, and maintaining, an economy-of-scale efficiency of markets does not reduce risk. Instead, it keeps risk in occupation of the policy space.

Being constantly preoccupied with avoiding risk, rather than taking risk, gives us a sense of objective identity that empowers the elite with the occupation of managing what is considered to be a natural dependency, while at the same time declaring the outcome to be the result of self-determination.